Many people may not realize this, but things such as the police, fire departments, the military, public schools, the post office, etc. are all Socialist policies by default. All of these respective institutions are funded by taxes collected from the population.
Neither of these assumptions is correct, but both are the prevailing perception of our government and our money. The longer the 99% believes the fairy tales of the 1% and their lackeys in government the worse their situation will become, but they not only believe it but double down on it with animosity toward both “their” government and anyone who benefits from it.
Government creating currency for the common welfare is not only “not” socialism, but it is one of the top purposes of any government with a sovereign currency. In microeconomics, it often appears that wealth is created by the private sector, but any macro view proves that only the government itself can create the currency and give it value as a method of denominating commerce and a store of that value to allow savings. It does so by levying and collecting taxes that are only payable in the currency it creates at will, thus drawing resources into the economy to be available to provision the government on demand.
Taxation also allows the government to control the economy by removing demand to prevent inflation, but the use of tax “revenue” (in reality an oxymoron since all revenue for the currency issuer is zeroed out by the debt that it was created from)to fund spending would be counterproductive and impossible to achieve. Currency must first be created before it can be collected or borrowed so neither represent true “revenue” for a government that has no need for revenue. Without a commodity or fixed exchange rate pinning the currency anything that is potentially available, including the unused labor in the private sector, is “affordable”. Only when resources the money is deployed to purchase become scarce does its creation become inflationary.
Taxing for revenue became obsolete when we abandoned the gold standard domestically in ’34. This was proven by a paper written by the Chairman of the New York Federal Reserve, Beardsley Rummel, in ’45 and titled “Taxing For Revenue Is Obsolete”. Once one realizes the monopoly position the federal government has in creating “net” money to serve to denominate commerce, set prices, and provide a store of value able to retire private sector debt or be net saved the absurdity of a “balanced budget” becomes obvious.
This is especially true of a nation that is a net importer and allows extreme accumulation of wealth, both currency drains from the private sector economy. The only way the economy can grow is if the government spends in deficit large enough to fund both plus the GDP growth it desires. Anything less than that produces deflation, a much more dangerous condition than inflation for the 99%, but beneficial to the 1% who largely make money from their money.
