"I totally disagree with your Austrian pseudo-theory that money is debt. When the Fed creates dollars by increasing the balances of the members banks, those dollars are not "owed" to anyone."
The term debt simply satisfies the need for every asset to be balanced with a negative in another sector. In the case of a sovereign currency issuer that debt represents a promise to accept the issuer's currency back in payment of taxes. The Austrian school presumes the people and their government are equally responsible, which defies all rules of sectoral balance with spreadsheet accounting.
"Taxation does not 'remove' assets, it redirects them, since the government buys services and employs people in the real economy. "
This can only be argued in the case of a deficit budget that removes less in monetary assets than it spends into the private sector. A balanced budget leaves no store of value from our commerce to compensate for the resources and labor the federal government consumes, and a surplus budget goes farther to remove prior payment as well.
Given that no "net" money exists to pay tax or lend to the government until it is created by that government via spending in the private sector, it then holds that spending "funds" both tax payments and lending, not the other way around. This is how sovereign governments assure they can provision themselves and provide for the general welfare regardless of revenue. Taxation serves many purposes, among those is the ability to create an equitable economy, but "funding" the government is not one of those.
This may appear as nit-picking semantics, but within the difference of our viewpoints lies a government reliant upon its wealthiest to fund the general purpose and one that can “afford” anything that is priced in the currency it can create at will, regardless of revenue or past spending. I know that my choice is the latter, and I believe it would result in much higher taxation and less tolerance for evasion from the wealthy than has resulted from thinking we “need” their money.
