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1/ Federal taxes don't fund federal spending.
Federal spending funds federal taxes.
[ #LearnMMT thread v.1.1]
![1/ Federal taxes don't fund federal spending.Federal spending funds federal taxes.[ #LearnMMT thread v.1.1]](https://pbs.twimg.com/media/EIYoJ-aXkAAVOnG.jpg "1/ Federal taxes don't fund federal spending.Federal spending funds federal taxes.[ #LearnMMT thread v.1.1]")
Federal spending funds federal taxes.
[ #LearnMMT thread v.1.1]
2/ Federal taxes don't fund federal spending.
Federal spending funds federal taxes.
It's not a cute statement. It's precisely true.
Federal spending funds federal taxes.
It's not a cute statement. It's precisely true.
3/ And remember the order of operations: You cannot pay your taxes *until* you get money from the government. https://twitter.com/MMTResources/status/1188962328072589314
4/ Here's @StephanieKelton, senior economic advisor for Bernie Sanders' presidential campaigns, from the abstract of her 1998 paper, "Can Taxes & Bonds Finance Government Spending?" ( http://www.levyinstitute.org/pubs/wp244.pdf ):
(When she says "technically incapable," she means "impossible.")
(When she says "technically incapable," she means "impossible.")
5/ Economists Pavlina Tcherneva ( @ptcherneva) and L. Randall Wray: federal taxes do not fund federal spending.
6/ @StephanieKelton, from the same paper: "It is further argued that the proceeds from taxation and bond sales are not even capable of financing government spending since their collection implies their destruction." https://twitter.com/MMTResources/status/1188959650026344449
7/ Destruction in **the same way** as the 100 is "destroyed" in this subtraction problem:
1,000 - 100 = 900 https://twitter.com/MMTResources/status/1188984809730793477
1,000 - 100 = 900 https://twitter.com/MMTResources/status/1188984809730793477
8/ All federal spending is – and has always been – financed with created currency.
All federal spending is – and has always been – spent for the very first time. https://twitter.com/MMTResources/status/1188940801004527621
All federal spending is – and has always been – spent for the very first time. https://twitter.com/MMTResources/status/1188940801004527621
9/ All federal spending is financed with created currency.
Which means. Which **logically extends** that
federal taxes do not, and cannot pay for anything. https://neweconomicperspectives.org/2014/05/taxes-mmt-approach.html
Which means. Which **logically extends** that
federal taxes do not, and cannot pay for anything. https://neweconomicperspectives.org/2014/05/taxes-mmt-approach.html
10/ Evidence: Americans had no
to tax during the Depression, which is exactly when the US "paid for" the most ambitious programs in its history: WWII & FDR's New Deal. Economist @FadhelKaboub discusses this at ~21 min in this interview with @grahamelwood
to tax during the Depression, which is exactly when the US "paid for" the most ambitious programs in its history: WWII & FDR's New Deal. Economist @FadhelKaboub discusses this at ~21 min in this interview with @grahamelwood
11/ Federal taxes don't pay for anything.
**because**
All federal spending is financed with created currency.
**which is proven by**
the realities of reserve accounting. https://twitter.com/MMTResources/status/1188960407345684481
**because**
All federal spending is financed with created currency.
**which is proven by**
the realities of reserve accounting. https://twitter.com/MMTResources/status/1188960407345684481
12/ And that is exactly the purpose of @StephanieKelton's paper: it is an analysis of reserve accounting in the US. Notice the sentence that comes just before:
"After carefully considering the complexities **of reserve accounting**..." these are the conclusions we draw.
"After carefully considering the complexities **of reserve accounting**..." these are the conclusions we draw.
13/ Federal taxes are very important, but they don’t fund government spending. They can’t. It’s not possible. https://twitter.com/mmtresources/status/1188988696256765953?s=21
14/ Finally, the idea that federal taxes pay for stuff isn't just wrong, it's really, really sinister.
[END] https://twitter.com/MMTResources/status/1190609729669812225
[END] https://twitter.com/MMTResources/status/1190609729669812225
15/15 To #LearnMMT in general, here is a good place to start. https://twitter.com/MMTResources/status/1251199513324400642
Response that was left orphaned when I recreated this thread: https://twitter.com/TiernanMurphy8/status/1190668953334550528?s=20
