Most people think of the state or government as a household.
You know we get money from outside and it is a limited resource for us.
We work for it.
But this thinking is not applicable to the state. Well as long as that state is sovereign.
Which is to say it issues it’s own currency.
If you issue your own currency you have an infinite capacity to spend.
Now there are limits to what the state can expend but these are self imposed limits.
Well one that I know of. Inflation.
Which is where you have too much money (demand) chasing after to few goods (supply).
But this is never actually an issue in an economy as long as you don’t have full employment.
Basically as long as the money you issue corresponds to the goods and services you pay people to create then inflation isnt a problem.
The issue in our system is that we have 2 sources of money.
1 the state. And 2. The private banking sector.
The private banking sector issues currency by taking advantage of the fractional reserve system.
Basically if the state or us puts $10 into a bank then the bank can issue $100 in loans off the back of that 10.
Now we do have inflation in our system.
In the housing market.
And this is because most money is now issued by banks and most of that money is issued out as mortgages for houses.
This money isnt going to build new houses it is going to change ownership of the house.
Thus a massive inflation in housing price over the last 30 to 40 years.
Yeah so what it means is that the state has this massive capacity to deal with recession. Just print money from thin air… ok paper… to get people to produce the stuff needed.
The foundation of it is tax and fines.
Not for revenue.
The state never needs money from you.
The reason for tax and fines is that it’s a use of force to make people need whatever they designate as the currency.
Everyone in america has to give me dollars (it could be anything I choose) or you go to prison or cant do things you want.
The foundation for the value of money is always and has to be (on scales which are necessarily anonymous) a threat of some kind.
I’m probably boring you lol but to be fair I dont care I love listening to my nut