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Old 03-21-2020, 02:32 PM
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Default If government can print trillions of $ whenever they want-what is the point of taxes?



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A question from another forum...

If the government can just print trillions of $ whenever they want, what is the point of taxes?

---------------

My reply:

I guess they need to keep up appearances, like the paper is worth something. And to keep score to distinguish who does a lot of work or is good at cheating.
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Old 03-21-2020, 02:56 PM
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Double dipping. Keep the masses obeying and in line. To pay for the people who won't work and satisfy their 'I want more' desires.
It started out with good intentions with taxes about 3%, to pay for services and security, but after 1940 with the help of FDR and outlawing gold, it got out of control.
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Old 03-21-2020, 03:53 PM
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To keep up the facade that the US economy is actually on the level.
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Old 03-21-2020, 04:10 PM
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They can print it but if they print to much it will be worthless. I have 10,000,000 mark stamps from Germany it took that much to mail a letter when they went nuts printing money. It destroyed their economy and let Hitler take power.
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Old 03-21-2020, 04:15 PM
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Quote:
Originally Posted by slackercruster View Post
A question from another forum...

If the government can just print trillions of $ whenever they want, what is the point of taxes?

---------------

My reply:

I guess they need to keep up appearances, like the paper is worth something. And to keep score to distinguish who does a lot of work or is good at cheating.
We do both. All deficit spending is printing money. Taxes allows the govt to adjust who pays how much in a more fine grained way than printing money and at least delays inflation a little.
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Old 03-21-2020, 04:24 PM
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Looks good on the books.
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Old 03-21-2020, 04:34 PM
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Originally Posted by Jim in Illinois View Post
They can print it but if they print to much it will be worthless. I have 10,000,000 mark stamps from Germany it took that much to mail a letter when they went nuts printing money. It destroyed their economy and let Hitler take power.
Yep. If the government prints too much money it leads to massive inflation.
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Old 03-21-2020, 07:31 PM
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The US government has literally printed trillions and trillions upon trillions of dollars. When does the inflation start??


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Originally Posted by Prepper_Ed View Post
Yep. If the government prints too much money it leads to massive inflation.
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Old 03-21-2020, 07:47 PM
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Quote:
The US government has literally printed trillions and trillions upon trillions of dollars. When does the inflation start??
It already has. Look up the cost of a car/bread/house, whatever from the 1950's til now.
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Old 03-21-2020, 07:56 PM
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"We can guarantee cash benefits as far out and whatever size you want, but we cannot guarentee it's purchasing power" - Alan Greenspan
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Old 03-21-2020, 08:47 PM
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The American dollar is backed by faith in the government's future ability to tax.
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Old 03-21-2020, 09:07 PM
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Quote:
Originally Posted by slackercruster View Post
A question from another forum...

If the government can just print trillions of $ whenever they want, what is the point of taxes?

---------------

My reply:

I guess they need to keep up appearances, like the paper is worth something. And to keep score to distinguish who does a lot of work or is good at cheating.
My understanding is that money is printed when there is a borrower. In this case, when the government acts as the borrower, it has to pay back the loan, and that means combinations of borrowing more, using tax revenues, using revenues from state corporations, and using returns from investments.

Also, much of money doesn't come in the form of bank notes and coins but numbers in computers, and sometimes printed out in the form of formal documents as proof of ownership. In the U.S., something like 3 pct of money supply is made of cash; the rest are stored numbers.

Given the point of money created when someone borrows, the largest creator of money isn't the government but private corporations. Only a fraction of money supply worldwide consists of government securities; most of it consists of various financial instruments.

One of the ways this takes place is the money multiplier. You'll find more details here:


For some, it's a myth, but not in the sense that there's no such thing. Rather, banks can lend more than what they have in reserve because they can always borrow from other banks. In short, the multiplier is not fixed and can rise even with any government-required fractional reserve ratio. This explains why total money supply is many times higher than what a multiplier will allow:

https://www.theaustralian.com.au/bus...9344838103822f

And when one moves out of banking and looks at deals between private individuals and corporations outside what's reported to governments, the size of the global credit market is larger still, i.e., a notional value of over a quadrillion dollars:

https://www.investopedia.com/ask/ans...ves-market.asp

I think for an analogy someone referred to revenues for a football game (ticket sales and earnings, corporate sponsorship for televising the game, etc.) as the reported revenues of the global economy. The "derivatives" market are the side bets between those who watch the game.

In which case, the concern isn't so much the trillions that are printed by the government but the trillions created by the government when the economy borrows more. And in this case, unreported financial transactions that total over twenty times the size of the global economy itself.

Only a trillion dollars from that sizeable market was needed to bring the global economy to its knees in 2008, and there's more where that came from.
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Old 03-21-2020, 09:17 PM
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Quote:
Originally Posted by slackercruster View Post
A question from another forum...

If the government can just print trillions of $ whenever they want, what is the point of taxes?

---------------

My reply:

I guess they need to keep up appearances, like the paper is worth something. And to keep score to distinguish who does a lot of work or is good at cheating.

1. the government isn't printing money. The FED is. (the FED isn't a gov agency)

2. Don't know what the FED is? Read "The Creature from Jekyll Island"... free to read here: https://archive.org/details/pdfy--Po...ge/n3/mode/2up

3. The FED doesn't serve Main Street... it serves Wall Street.
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Old 03-21-2020, 10:31 PM
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Quote:
Originally Posted by blunky View Post
The US government has literally printed trillions and trillions upon trillions of dollars. When does the inflation start??
S&P 500 historical price
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Old 03-21-2020, 10:44 PM
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Quote:
Originally Posted by blunky View Post
The US government has literally printed trillions and trillions upon trillions of dollars. When does the inflation start??

Here is the record of increases in US currency:

https://www.uscurrency.gov/life-cycle/data/circulation
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Old 03-21-2020, 10:44 PM
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If want to know what happens when you simply keep printing money without any financial backing look up post WWI era Germany....

People had to have wheelbarrows to carry the money from cashing their checks... It was cheaper to start your fire with money than it was to buy paper to start it with.... The inflation that causes is out of this world, the more you print the less and less it is worth.. Soon the paper to print the money on is worth more than the monetary value of the money...

Have they stopped teaching these economic principles in school and stopped showing the historic examples of how we learned about these economic principles?

Here is an article on the hyper inflation of the German mark after WWI when it went from 4.2 marks to the American dollar to 4.2 trillion marks to the American dollar, in a span of just a few years.

https://mashable.com/2016/07/27/german-hyperinflation/
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Old 03-22-2020, 01:01 AM
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Quote:
Originally Posted by blunky View Post
The US government has literally printed trillions and trillions upon trillions of dollars. When does the inflation start??
Good question. The U.S. government has been creating money at approximately the rate of nominal economic growth, although the amount of money created has grown at a faster rate since mid-2019. If the U.S. were to radically increase money supply, then it would probably lead to high(er) inflation.

You can find money supply data here:
https://fred.stlouisfed.org/series/M2
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Old 03-22-2020, 02:56 AM
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Quote:
Originally Posted by Steverino View Post
1. the government isn't printing money. The FED is. (the FED isn't a gov agency)

2. Don't know what the FED is? Read "The Creature from Jekyll Island"... free to read here: https://archive.org/details/pdfy--Po...ge/n3/mode/2up

3. The FED doesn't serve Main Street... it serves Wall Street.
The US Treasury has the printing press. The Fed controls the money supply.
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Old 03-22-2020, 03:34 AM
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The number of wrong beliefs about money is beyond counting.
With respect to American law -
1. A unit dollar is a silver coin, a one ounce gold coin (double eagle) is equivalent to 20 unit dollars.
2. A federal reserve note (dollar bill) is an IOU (debt) denominated in dollars, but has a minus value until redeemed. Congress repudiated redeeming them in 1933 - they have no par value (worthless).
3. No dollars have circulated since 1933, once "St" FDR liberated / stole all the gold money from the people and gave them worthless notes in exchange. (Silver was demonetized in the Coinage Act of 1873)
4. To make worthless IOUs into legal tender, FICA was created. All enumerated contributors are obligated parties on the national debt and cannot object to the tender of "their own notes."
5. Pursuant to 12 USC Sec. 411, to authorize printing more IOUs (dollar bills), CONgress must run a deficit. Failure to have a deficit turns off the spigot and the money drought gets nasty - like when it caused the Dot Com Bust 1999-2000.
6. The 23+ trillion dollar national debt is a giant fraud, but no one can challenge the validity of the debt, pursuant to clause 4, 14th amendment, USCON.
7. Not only is there not enough paper currency (notes) to handle all outstanding obligations, there is not enough gold in the world to pay off the national debt. And when the debt is abolished for fraud, so are all dollar bills. Billionaires become zero-aires over night.

NOTE: "Dollar bills" are NOT fiat. Fiat has value by decree. Notes are debt, and have no value until redeemed.

= = = =

References:
US Constitution
Coinage Act of 1792, et seq
Federal Reserve Act of 1913
Title 12 USC Sec 411
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Old 03-22-2020, 03:52 AM
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Quote:
Originally Posted by fistfulladirt View Post
The US Treasury has the printing press. The Fed controls the money supply.
(Article 1, Sec. 8, Clause 5) states: "The Congress shall have power To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures"

Not print it.

(Article One, Section Ten) states that "legal tender" in any State may only be gold or silver coin).

That means no paper.


Through the Federal Reserve Act of 1913 the federal government delegated its power to create U.S. money to the private banks that comprise the Federal Reserve System, and in doing so ceded control over the money supply.

Once done, Congress was longer fulfilling its constitutional responsibility to regulate the value of our money (ceded to the FED), the vast majority of which private banks and, shadow banks create through private-interest-bearing debt.


From Investorpedia:

Quote:
https://www.investopedia.com/article...ates-money.asp

The Federal Reserve is the central bank of the United States and is arguably the most influential economic institution in the world. One of the chief responsibilities set out in the Fed's charter is the management of the total outstanding supply of U.S. dollars and dollar substitutes. The Fed is responsible for creating or destroying billions of dollars every day.

Despite being colloquially charged with running the printing press for dollar bills, the modern Federal Reserve no longer simply runs new paper bills off of a machine. Some real dollar printing does still occur (with the help of the U.S. Department of the Treasury), but the vast majority of the American money supply is digitally debited and credited to major banks. The real money creation takes place after the banks loan out those new balances to the broader economy.

To sum up. The FED (comprised of twelve private regional Federal Reserve banks) originates and retires money within the US economy.

NOT THE TREASURY.


Woodrow Wilson was the President, and signed the Federal Reserve Act of 1913 into law.

His deathbed thoughts on it:

Quote:

I am a most unhappy man.
I have unwittingly ruined my country.

A great industrial nation is controlled by its system of credit.
Our system of credit is concentrated.
The growth of the nation, therefore, and all our activities are in the hands of a few men.

We have come to be one of the worst ruled,
one of the most completely controlled
and dominated governments in the civilized world.

No longer a government by free opinion,
no longer a government by conviction and the vote of the majority,
but a government by the opinion and duress of a small group of dominant men.
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