Weekend Economists Pull Timmy Out of Well (and Throw Him Back In)May 30-June 1, 2014

[Demeter]

30. DO WE NEED TAXES? THE MMT PERSPECTIVE By L. Randall Wray

http://neweconomicperspectives.org/2014/05/need-taxes-mmt-perspective.html



What do you get when you drop taxes? Well, Bitcoins.

.........EXTENSIVE, RATHER DISJOINTED PALAVER.......



Just how long would you be able to dupe some dope into taking the bank IOUs in payment?

Probably not too long. Same story with taxes. Abolish taxes and see how long the dopes who don’t need US currency to pay taxes will continue to sell stuff to get US currency. Oh, it could go on a while. If PT Barnum was correct, there’s a dope born every minute. Sixty an hour. It adds up.

Witness Bitcoins. ‘Nuff said.

I don’t need Bitcoins to make any obligatory payments. And no Bitcoin issuer is required to take them back. Bitcoins are not redeemable.

Unless you are involved in illegal activity or trying to hide income and wealth, there’s really only one compelling reason to accept them: you really do believe in the greater fool theory. You’re going to dupe the dopes and ride that Bitcoin up and pray that a) you don’t lose your wallet; b) your exchange doesn’t go bankrupt; and c) you can sell out of Bitcoins before the whole thing crashes.

...This means government can buy stuff by issuing its currency since taxpayers need it...Are taxes needed to “pay for” government’s spending? No. Taxes are needed to create a demand for the currency...We are not making this up. Read Marriner Eccles, Beardsley Ruml, and Frank Newman. All of them — FDR’s Fed Chairman, President of the NY Fed and former Deputy Secretary of the US Treasury, respectively, have said EXACTLY the same things we’re saying when we talk about the role of taxes.