I’ve seen a few posts here on Hexbear where people lament their taxes being used for things they don’t like. I get the sentiment, but I think it’s mistaken because it’s not a zero-sum equation where the state must have a monetary revenue equal to or greater than expenditure.
In a state with monetary sovereignty, the taxes citizens pay are not what enables the state to spend money and procure weapons etc. If US citizens paid a billion less in taxes, for example, it would make no difference for military spending.
It’s also a rhetorical mistake in that it plays into right wing framing that justifies austerity, and implies the idea that the wealthy who pay more in taxes are the ones who keep society running and support the poor.
It doesn’t align with reality, but it’s a more accurate picture of how money in fed gov actually works at this time. That just means that the fed gov isn’t operating with a good understanding of reality.
The basic flow as I understand it is the gov makes whatever money it needs by printing money or getting dollars paid for bonds to foreign countries, who need dollar balances for energy and trade (increasingly less so these days, hence some of the more rabid adventurism US has been embarking on).
Since creating new money supply causes inflation, you avoid some of that via debt (bonds) and taxes, which function as a method of destroying monetary supply. Think of resource “sinks” in an MMO. There’s no, like serial code that links the money I pay in taxes, to the payment to Raytheon for a weapon; it’s all a big black box spreadsheet and you just massage it based on the outcome vibes you get out the other end. What I like about MMT is that it puts the lie to the nonstop deficit hawks. They’re not completely wrong, but it’s for the wrong reason. As long as we have a fiat currency untethered to a real asset, so like energy, it’s all made up, and essentially a Ponzi scheme.
Worth noting that this behavior is largely only functional at all because of reserve currency status and the worldwide grift/tax we exert via that. Basically we get a piece of the action across the globe where the transaction is in dollars (not exactly correct, just saying it this way to emphasize that we get financial benefit via exploitation of our currency status). Some of this function is tied up in how the gulf oil system works.
Surplusenergyeconomics.com has a very good way of explaining the disconnect between the material and financial economies. But the basic is that money = a claim on some portion of material, goods but mostly energy since that is sort of the baseline need for economy and goods, so obviously if you spin the financial market off and inflate it, as we’ve done, untethered to material reality, that claim per unit of currency keeps getting smaller and smaller—as long as enough people don’t try to cash in, it stumbles along and generates paper wealth, but the material stock/energy supply doesn’t change regardless of what your financial system is doing.
I’ve probably fucked up some of the details pretty badly there, so welcome corrections from anyone that has a better sense for my own understanding, been a moment since I was investigating it.