Nima

Well that's a great question, and something someone in an earlier conversation gave me a hard time for confusing taxation with voluntary, even though I'm well aware that taxation cannot be voluntary. But I would say that indeed it would be conceivable to have such a system where the value generating drain on the tokens can be done voluntarily. Indeed, I would argue we are observing such a system's emergence right now: Bitcoin. I'm planning on writing an article about this very topic shortly and I will be arguing that the main value driver for Bitcoin is the fact that you have to pay tx fees in bitcoins to make a transaction.

No, US debt consists of Bills (~$1.8 trillion), Notes (~$8.6 trillion), and Bonds (~$1.2 trillion): https://www.treasurydirect.gov/govt/reports/pd/mspd/2016/opds112016.pdf

Interest rates are under the government's control if they want them to be. They could easily have expansionary fiscal policy and manipulate the risk free rates further upwards if they wanted to. If interest rates go up it only affects the interest payments on newly issued bonds, so current debt levels are irrelevant to assessing budget impact. That having been said, the most common sense approach IMO would be to let the risk free rate go to zero where it would naturally go anyways if the Fed didn't intervene to begin with.

If someone buys products in your country from abroad, he has to hand over his foreign currency to the Fed in exchange for newly created bank reserves that the Fed just credits to the buyer's domestic bank account at the current FX rate. The Fed puts the foreign currency in its foreign currency reserve account. In reality there are several layers in between, private banks & dealers, fx agents, who may also hold some of this money, but ultimately it ends up at the Fed as foreign currency reserves. https://en.wikipedia.org/wiki/Balances_Mechanics That's exactly right. The sectoral balance identity is a mathematical identity, it is true by definition, it's not an opinion. This is important because many people are unaware and talk like all countries can achieve budget surpluses and export surpluses simultaneously. For example you see the IMF imposing balanced budget requirements on countries without any regard for this fact. Or look at the EU's famous 3% budget deficit cap that they've all but admitted at this point is nonsense. The anecdote says that at the time French president Mitterand throught the number 3 is a nice number, reminded him of the Holy Trinity. Nobody at the table had any objections to this feat of mathematical and logical genius, and so they went with the magical number 3. Because ideally everyone just achieves balanced budgets all the time anyway, like a household, right? Well, we see now that this has been disastrously crippling for the affected economies and their young unemployed, see Austerity in Europe for example.

I wonder what this pathology is called where people can't help putting words in other people's mouths, while remaining steadfastly blind to everything they actually say. I propose: Strawmanitis? What would you suggest?

"1. Increased deficit causes increased savings, because that is the method for money creation in the system." That is correct, only I'd clarify that we're talking about NET saving here. (private sector claims on the public sector) "2. Banks do not create NET currency within the system, because for every asset created, there is an opposite but equal liability created." That is correct, only I'd clarify that we're talking about NET saving here, not "NET currency". "You answered my next question before I could ask it, which is: if the private sector defaults on its bank-created loans, wouldn't that mean that extra money was released into the system without the need to pay it back? You're saying that when banks are bailed out from their toxic liabilities by the government (i.e. the private sector is not giving back the money the banks created), because the government is creating money out of thin air by selling bonds, this just converts point #2 above into point #1." It's possible that the borrower defaults on repayment, but the bank essentially eats the cost this may entail, counterbalanced by hopefully lots of performing loans. Furthermore the borrower may face some hardships, loss of collateral, etc. The checking account money created on the loan will remain in the system. This in itself in small numbers I don't see being a big problem, but at one point it MAY create SOME clearing pressure on bank reserves (essentially banks' money, needed for interbank clearing, tax payments, and cash withdrawals). That's why the Fed is always there to lend bank reserves at some interest (a cost to the borrowing bank) if any bank is short and can't obtain them on the interbank lending market, which in turn usually is only the case because the Fed intervened in the first place by draining the system of bank reserves to force the interest rate above zero (where it would naturally be if the Fed hadn't intervened in the first place). "i.e. the relationship between the bank and the borrower is total net zero, but the relationship between government and tax payer is total net whatever the deficit is. First, because the reason the borrower defaults on the debt is because he's spent the money and is unable to pay it back, the money floats out into the private sector amongst the tax payers." That's an interesting point, I guess maybe you could look at it that way, in that that money leaks into private sector net saving, but I'm not sure if it's a statistically relevant amount. Also at some point some bank may have to borrow from the Fed to cover for lack of reserves, so there's then a counter balancing drain of net saving in the form of interest paid to the Fed. "Second, because the government issues bonds to generate the money used to buy the bad debt from the bank (a bailout), the original loan essentially gets converted into a bond (a swap), held by a bond holder. The end result is a relationship where the tax payer pays the bond holder, exactly the same way the government issues any other bond to create money. Am I getting this right, here?" You're now examining the scenario of a bailout for banks that made bad loans. That's not the routine scenario. Routinely banks eat losses from non performing loans, as I described above. Also the government doesn't issue bonds to generate money, it credits private banks accounts. "What is inflation caused by, then? Why did the Weimar Republic hyperinflate and the US hasn't in the last 8 years?" In the following I define inflation as an increase in the aggregate price level. Very briefly, the demand pull inflation that just comes from added demand without matching supply, according to MMT mostly comes from excessive government budget deficits, that is deficits that grow larger than needed to satisfy private sector saving demand. Another important and source of inflation are spot price increases by monopoly suppliers, e.g. Oil. Thereis also routine inflation which I've written about more here: http://www.economicsjunkie.com/alternative-inflation-theories/ Regarding Hyperinflation: Weimar Germany was on a gold standard at the time (ironic, isn't it?), and huge foreign gold debts were imposed on the country. So the government had to print money to buy enough gold to pay its debts. Then on top of that France occupied Germany's coal-rich Ruhr Valley in 1923 and siphoned off lots of output, adding further to the upwards price pressure through output shortages. The general response is: Every single hyperinflation in history always has some political causes, such as disastrous wartime situations, and/or occurs when the government's currency is backed by another asset or foreign currency that it cannot itself issue. "Regarding export surplus, how does this inject extra savings into the private sector?" In any fiat money system there are 3 functional sectors: the issuer of the currency, the users of the currency, and users of someone else's currency. In the aggregate, if you achieve an export surplus it just means that some government somewhere is deficit spending for you. I've explained this in a bit more detail here: http://www.economicsjunkie.com/sectoral-balances-and-private-saving/ "For private sector banks, what about the interest charged on loans? Does that create money or take it out of the system (assuming it's paid back properly)?" It becomes part of the bank's corporate profit, and is distributed to shareholders or re invested in the business. It doesn't change the private sector's net position. "At what point is the government overspending? Does it have any way of differentiating between stupid projects ($4bil for Air Force One plane) and good projects (roads)?" It's overspending when the deficit grows so large as to go beyond the private sector's demand for net saving, causing demand pull inflation. The parliamentary process, and subcommittees etc., is the only process where the government can decide which projects are stupid and which aren't. The size of the government and what exactly to do are essentially political decisions, not economic ones. Some decide on a smaller public sector than others. MMT economists just say that the government's taxation then needs to be below the agreed upon spending sufficiently to allow for sufficient private net saving and thus full employment.

- 'My understanding on this is flaky; enlighten me if you're able. Under the current US system, my current understanding is that private banks also have the power to create currency through fractional reserve lending (under the dictate of the government, of course).' This is correct: Imagine you have the power to declare a tax in a token, and spend the token into existence. It follows that people may also approach you to borrow some tokens into existence temporarily, given that they're a good medium of exchange. Banks are essentially the state's registered lending agents. The original purpose of such bank lending (and technically still its purpose), has been to allow entrepreneurs to employ people in sectors that don't produce consumer goods, but rather machinery to improve worker productivity. Since these workers still need food at the end of the day, and don't have much use for machines, they use that same money that consumer sector workers use to buy consumer goods. - 'I see the point that in a system where money is initially created by "borrowing" it from the Federal Reserve, the total amount of money available must be equal to the amount of debt "owed" back in taxes. Under this I totally see your "right to a government job" point. However, when you add fractional reserve banking into the mix, the private sector, once it is able to get its hands on money distributed to government employees and contractors, is able to further create money. This is where my understanding is gathering friction with the new information I'm getting from you and what you're posting; why is the total amount of money equal to the national deficit if private banks have a hand in creating money? And, if there is a "private sector method" of creating government money, wouldn't that affect the "right to a job" idea you've proposed?' Great point. The crux here is that private bank lending doesn't generate net private saving. The private sector's net position doesn't change when a private bank makes a loan: The borrower receives an asset (a checking account markup, which is a claim on bank reserves), but also incurs a liability (repayment plus interest). Conversely, the bank receives an asset (a loan on its books, owed to it), and incurs a liability (the borrower's checking account markup, which is a promise on the bank's part to convert into bank reserves or cash at any time). Note I didn't say money itself was the critical item to look at, but rather net private saving. The only way the private sector can incur net saving is either a government deficit, or an export surplus. I am totally with you on all of this. I've also seen this model and how he starts it and it runs for several seconds actually, and then suddenly the charts make big moves. Very impressive! It's true, it's actually not that complicated once you see through the fog and confusion: You could actually implement such a fiat money system (maybe minus the cruelty of enforcing taxation violently ) at home with your kids, pay FamilyBucks for chores (public sector work), and impose a weekly tax or something like that, and offer "foreign currency" (actual $) in exchange, and the watch what effect fiscal policy (playing with spending & taxes) has on foreign exchange values. I recommend this book: http://neweconomicperspectives.org/modern-monetary-theory-primer.html Wray also basically has a free version right at that link online, but I spent the few bucks to buy the book so I could comfortably read it on the train. When people say the "national debt" they usually mean the money owed by the government, independent of private sector debts. So I just want to make sure we're clear on what you mean when you use that term. The national debt in that sense is just the sum total of all past government deficits minus bank reserves. A government deficit manifests itself in bank reserves left in the private sector. Then some of those bank reserves are converted into longer term assets because people like to earn interest, and the government offers interest bearing bonds (this is not mandatory by economic or natural law or anything like that, by the way, the government does it by choice or out of legal necessity). People who don't understand this are still scratching their heads why some of the the most indebted fiat governments in the world (e.g. Japan) are able to have zero or even negative interest rates. So the total national debt is traditionally just the total of all government bonds in circulation. I would actually even add bank reserves to this as well, but that's just a matter of minor classification and not material. The reason is just that philosophically government bonds as well as bank reserves are a government liability. Bonds are the government's promise to pay future bank reserves. Bank reserves are the government's promise of acceptance in settling tax liabilities. (India just broke that promise by the way, essentially defaulting IMO) There is a difference. Government spending in exchange for a contract job is money that ends up in private sector hands with no strings attached, and without debt attached to it. Bank lending is different in that it creates an asset on the recipient's balance sheet, but also a liability because the money is owed back.

1. With the repetitive Quantitative Easings we've experienced throughout the Obama years, why have we seen a decrease in savings even though the deficit has skyrocketed? Or has there actually been an increase in savings and I'm simply not looking at the data correctly? Quantitative easing doesn't add net private saving. It's a swap. Someone in the private sector swaps a bond for bank reserves. So the private sector's net position doesn't change as a result of QE. But let's talk about the development of net saving since the crisis of 2008. Due to a shrinking trade deficit, reduced tax revenue (because of the recession), and slightly increased public spending, private net saving has indeed hit multi year record highs since then, which I believe is part of the reason why we haven't seen a recession since 2008: https://beinglibertarian.com/private-sector-saving-recessions/. And here I explain a little more how private sector, public sector, and foreign sector are related by mathematical identity: http://www.economicsjunkie.com/sectoral-balances-and-private-saving/ 2. Assuming deficit has gone up and savings have gone down during the Obama years like I mentioned, what difference would there have to be in Trump's actions to have a positive correlation between government spending and private sector savings? For example, I saw the news recently that Trump canceled a $4bil plane from Boeing for Air Force One. Assuming the government simply doesn't spend that money on something else, that represents $4bil that doesn't go out into society to spend and save with. However, I cannot help but feel that this is a good thing (moral questions aside), because that $4bil was used to cause a massive amount of work and resources to go towards unproductive ends. Are there right and wrong things to spend government money on when it comes to increasing the savings of the private sector? You're hitting the nail on the head with this question. First of all, more spending is not the only way for government to increase the deficit and thus inject net saving. It can also happen simply via tax cuts. And that's where Trump's proposed tax cuts can make a big difference. In my opinion it is indeed preferable not to spend money on wasteful projects that allocate spending power to corrupt & politically connected people, and to make sure you get them maximum bang for the buck. You just need to make sure taxes (the money they are forcefully taking back out of the private sector's hands) are low enough to account for the reduced spending. These are decisions that are supposed to be made in parliament: the total size of the government, its projects and departments, etc, and then the government can proceed to spend the money into existence to fund those projects. They just need to make sure the total level of taxation accommodates the private sector's demand for net saving, given a certain level of public spending and a certain export surplus (=the other possible way to inject net saving into the domestic private sector). 1. Fiat means backed by nothing, which by definition is valueless. Theft is destruction of individual wealth and therefore, again by definition, is not the preservation of value as was your claim. Taxes are what gives fiat money value. Without taxation it has no value indeed. But the imposition of the tax makes almost everyone want the money because almost everyone owes taxes. 2. Strawman or moving the goalposts. You've introduced spending here, when I was responding to your claim of theft. You know taxation is theft, right? Yes, taxation is theft, as I've said from the very beginning. 3. I quoted you just fine. When backed into a corner regarding theft, you started talking about spending. It's indicative of a mental block. Meanwhile, you're painting theft as benevolent, preservative... It glorifies and legitimizes the State. Talking about taxation as if it needs to be replaced with a voluntary version shows a fundamental lack of understanding of what taxation is. OK, if you're going to claim I said anything about taxes being "benevolent", without actually supplying any evidence or quotes of mine, and then try to Jedi mind shift people into believing you "quoted me just fine", then good luck to you.

Ah ok nice, very cool! This is a post I wrote that Steve Keen himself promoted to peers because he liked it so much: https://www.economicsjunkie.com/modern-monetary-theory/

By the way, when I pasted the link to the clip I wanted to show you it made it into an embedded clip, losing the mark where I wanted it to start. The crucial part begins at the 1h 52m mark, just FYI. Yes that is exactly right! It all begins with taxation. Taxation is inextricably tied to the fiat money system. See my replies below: "1) Isn't the more basic issue taxation - and by that I mean, shouldn't we question the chief's the right to impose a tax in the first place (and in that way)?" Yes, it all starts with the imposed tax. This is at the core of any fiat monetary system and has been for about 4000 years as far as we know. Of course you can still make the case that taxation is theft. I'm just observing the mechanics of the system after the fact, knowing that taxation is occurring. "2) Suppose taxation and the right to a job are justified - for arguments sake. Have you solved the problem of raids? Why can't you do this... you announce a daily tax of 1 NimaBuck and give people a job, but pay them 1 NimaBuck a week. Now are your raids are justified." I don't think so because now I'm still not supplying sufficient tokens to allow everyone to pay the tax and have sufficient net saving (=claims on the public sector) to feel comfortable enough to spend. Empirical evidence shows us that whenever the private sector's net saving drops noticeably or even goes below zero, a depression ensues. "How about... you announce a daily tax of 1 NimaBuck and give people a job and pay them 500 NimaBucks a week. Then you gradually increase your tax until it exceeds 500 NimaBucks." The first half of what you said is what's generally recommended, at least conceptually: as chief you want to leave sufficient tokens in private sector hands to allow for a large private sector to develop from there. In your example the deficit may be so large that it would lead to demand pull inflation. So you as the chief would need to increase the tax gradually to a point where the deficit is just sufficient to satisfy private sector net saving demands. "3) How many ways are there for you to cheat in this system?" Counterfeit would be one obvious way. Another one would be if the tribal chief ended up not accepting the tokens he introduced, which is synonymous to default in such a monetary system. In fact it is the only way to default when you're the creator of the currency. Hi, INDIA, I'm looking at you! ಠ_ಠ "4) Do you have any good arguments for taxation (as a chief)?" If you don't pay the tax, SABERTOOTH TIGERS will eat you all!! (Or whatever false flag arguments the first governments in the world used) Joking aside, all tribes as far as I know had some sort of communal organization with a chief, etc. One of the biggest takeaways from understanding MMT is that today's fiat money is not, as many Austrians and gold bugs like to suggest, a "fake" money with "no intrinsic value", etc. It's more like this is how fiat money systems have always functioned, with occasional experiments with gold/silver buffer stock programs, which are essentially just government programs to stabilize the price of those commodities, somehow leading people to believe that their money is backed by gold and that gold is the only true money.

You are right that if the money system changes there's a possibility that the right to a job would go away. But the right to self defense or to demand restitution for inflicted harm through aggression doesn't go away. Look, just imagine a very simple example of the beginnings of a fiat money economy, as is empirically documented: I announce a daily tax of 1 NimaBuck in my tribe of 50 people. No NimaBucks existed up to this point. Nobody has any. Now the next day comes along and I do nothing, don't hire anyone to work for me, in other words I don't provide any means for individuals to earn the tokens I demand tax payments in. Now I start taking people's things forcefully to settle their tax debts. An individual affected by my raids could make the case that he has a right to be supplied with the tokens via a tribal chief (=government) provided job so he can keep his property. So my tribe members' right to a government job goes away if I don't demand the tax as tribal chief. But I started it, I initiated the institutionalized aggression that the token system is tied to, I owe my people a job so they can earn the tokens! I always recommend this clip segment here for an illustration.

Haha, I don't know if I'd call it a "maneuver", but maybe it is somehow. For example, why does an aviation engineer study the mechanics behind a plane? I'd say I'm examining and making empirical and logical connections about the functioning of the mechanics of the machine called the "fiat money system", if that makes sense? I think lots of Austrian economists try to do this all the time, they just make terrible mistakes in my opinion, impelling them to go on public TV and make fools of themselves by predicting hyperinflation, etc. I'd just like to retain the ability to make more sober predictions for my own finance's sake, if that makes sense? That is precisely correct. The idea of guaranteeing a government job in a fiat money system is not so the jobs created from there will lead to magnificent productivity growth, it's rather for mechanical reasons, e.g. supplying the net saving people need in a fiat economy to feel comfortable about the level of government imposed taxation, and then those people will hopefully soon find a better paying job in the private sector sooner or later. It's a stepping stone more than anything. But empirically, in a fiat money economy the first thing that happens is that the government spends money before collecting it, and before any private bank lending can ensue (private bank lending being the only other means by which fiat money is created). We're all familiar with the barter theory of money, where at first people exchanged cattle & beans, but then through an efficient process of market selection arrived at gold and silver as the best media of exchange, only to have the government & banks move in and screw it all up with bank notes in lieu of gold, which they would then refuse specie redemption on. The problem with that latter hypothesis is that there's little to no empirical evidence for it, while there's plenty for the former. One striking example are the so called split tally sticks in medieval England and beyond. People have even uncovered clay balls from much earlier eras that constitute evidence of fiat money, given value via taxation, fines, etc., and then spent into existence. But empirically, in a fiat money economy the first thing that happens is that the government spends money before collecting it, and before any private bank lending can ensue (private bank lending being the only other means by which fiat money is created). We're all familiar with the barter theory of money, where at first people exchanged cattle & beans, but then through an efficient process of market selection arrived at gold and silver as the best media of exchange, only to have the government & banks move in and screw it all up with bank notes in lieu of gold, which they would then refuse specie redemption on. The problem with that latter hypothesis is that there's little to no empirical evidence for it, while there's plenty for the former. One striking example are the so called split tally sticks in medieval England and beyond (https://en.wikipedia.org/wiki/Tally_stick#Split_tally). People have even uncovered clay balls from much earlier eras that constitute evidence of fiat money, given value via taxation, fines, etc., and then spent into existence. But empirically, in a fiat money economy the first thing that happens is that the government spends money before collecting it, and before any private bank lending can ensue (private bank lending being the only other means by which fiat money is created). We're all familiar with the barter theory of money, where at first people exchanged cattle & beans, but then through an efficient process of market selection arrived at gold and silver as the best media of exchange, only to have the government & banks move in and screw it all up with bank notes in lieu of gold, which they would then refuse specie redemption on. The problem with that latter hypothesis is that there's little to no empirical evidence for it, while there's plenty for the former. One striking example are the so called split tally sticks in medieval England and beyond (https://en.wikipedia.org/wiki/Tally_stick#Split_tally). People have even uncovered clay balls from much earlier eras that constitute evidence of fiat money, given value via taxation, fines, etc., and then spent into existence. But empirically, in a fiat money economy the first thing that happens is that the government spends money before collecting it, and before any private bank lending can ensue (private bank lending being the only other means by which fiat money is created). We're all familiar with the barter theory of money, where at first people exchanged cattle & beans, but then through an efficient process of market selection arrived at gold and silver as the best media of exchange, only to have the government & banks move in and screw it all up with bank notes in lieu of gold, which they would then refuse specie redemption on. The problem with that latter hypothesis is that there's little to no empirical evidence for it, while there's plenty for the former. One striking example are the so called split tally sticks in medieval England and beyond (https://en.wikipedia.org/wiki/Tally_stick#Split_tally). People have even uncovered clay balls from much earlier eras that constitute evidence of fiat money, given value via taxation, fines, etc., and then spent into existence. But empirically, in a fiat money economy the first thing that happens is that the government spends money before collecting it, and before any private bank lending can ensue (private bank lending being the only other means by which fiat money is created). We're all familiar with the barter theory of money, where at first people exchanged cattle & beans, but then through an efficient process of market selection arrived at gold and silver as the best media of exchange, only to have the government & banks move in and screw it all up with bank notes in lieu of gold, which they would then refuse specie redemption on. The problem with that latter hypothesis is that there's little to no empirical evidence for it, while there's plenty for the former. One striking example are the so called split tally sticks in medieval England and beyond (https://en.wikipedia.org/wiki/Tally_stick#Split_tally). People have even uncovered clay balls from much earlier eras that constitute evidence of fiat money, given value via taxation, fines, etc., and then spent into existence.

Here is an excerpt from my latest post analyzing what the market's reaction to Trump's victory tells us about investor expectations: So in summary, it looks like investor expectations of inflation remain low, while their expectations of corporate profits have jumped significantly, prompting them to sell gold and long bonds, while adding to their stock positions. You can read more on the components contributing to aggregate corporate profits in this post about the Kalecki equation, which basically reveals that mathematically corporate profits can only be derived via the following spending/saving decisions made by different entities: Corporate Profit = Investment + Dividends – Household Saving - Government Surplus + Export Surplus There are several reasons why investors expect boosts to corporate profits, just to name a few: Donald Trump has promised a significant corporate tax cut, which, all else being equal, will boost corporate profits noticeably. (In the equation above it would manifest itself in the form of a smaller budget surplus or a larger deficit). Furthermore, the elimination of arbitrary and scientifically unwarranted CO2 emission restrictions will likely boost domestic investment in oil, coal, and natural gas, which again, all else being equal, constitutes a net positive for corporate profits. (In the equation above this would affect the "Investment" component.) It remains to be seen where household saving is headed, and also what happens to the trade balance, and other government spending programs which, if unmatched by tax hikes, could provide a further boost to corporate profits.

You say it "requires no explanation" but in the next sentence you happily provide an explanation. Interesting. I have also provided my explanation and I've supplied empirical evidence & logic to back it up.

I agree. And it has absolutely nothing to do with what I wrote. It is true that the government can't allocate resources as well as competing entrepreneurs, which is why we want to allow for a big private sector. The purpose of deficit spending is just to supply the private sector with net saving which it seems to have a certain ongoing demand for (empirically, you can observe that for the majority of history the private sector has been running surpluses, and the 6 out of 7 times it didn't, a catastrophic depression ensued, the 7th time being the Great Recession of 2008). The government just happens to be the sole monopoly supplier of such net saving. We do want a large private sector to develop from there of course, with private investment spending to grow productivity etc., and there is nothing that prevents that, even in a fiat money system, but it can't happen without the necessary net saving, that's just what we observe in the game called "fiat money capitalism".

No, actually not at all. I'm talking about the very economy that you and I are living in right now and for explanations of phenomena that we observe therein and ways to cure those. Government budget deficits are a real thing, sectoral balance flows are real events, net private savings are objectively quantifiable, recessions and depressions are very well predictable from those things, unemployment is occurring in many places and affecting many people's lives all over the world. But feel free to make your case as to where I veered off into fantasy land.

... that's correct regarding the kidnapping analogy. That's basically the nature of the situation here. The goal I have here is to explain the causes of unemployment in the real world, not "having non-violence as the baseline", whatever that is supposed to mean.

If you're just observing the individual case you're correct. On the aggregate it doesn't matter how exactly you arrive at depriving the private sector of needed net saving. What matters is that if you do, you cause unemployment because you're monopoly supplier of net private saving. I've explained this in more detail here: http://www.economicsjunkie.com/sectoral-balances-and-private-saving/ https://beinglibertarian.com/balanced-budgets-can-create-unemployment/

A right is a universally defensible claim. You are right that in a state of peace and without any preconditions I don't have the right to a job. But if someone imposes a tax in his currency and then demands that I pay him a tax in his currency, and is threatening to seize my property if I don't, then I can make the case that even legally he is responsible for making sure that the tokens he demands in tax payments are sufficiently introduced into the economy. It is he who initiated the threat of aggression, I as a taxpayer am just responding, if that makes sense. I'm an anarcho capitalist, so you don't need to preach to the choir with me. I notice these kinds of reactions and taking it to a higher moral realm every time I post something that presupposes a fiat money system. A fiat money system is aggression from the outset. There is no morality involved in this examination, it's merely to understand what goes on in the world as it exists around me, and to make investment choices that protect me in the long run.

I don't see how that follows given that communism flat out denies any and all rights to private ownership of the means of production which, aside from moral implications, is important to facilitate competition & quality of output, even in a fiat money system.

In my most recent article on Being Libertarian I explore the idea of how someone could make the case that he has a "Right to a Job" in a fiat money system, where people are usually forced to pay tax in a specified medium of exchange that only the government can net inject: Input/thoughts/violent smackdowns appreciated as always!

1. Taxation has EVERYTHING to do with why said fiat money has value, I've explained this in detail here: https://beinglibertarian.com/mmt/ 2. No, we cannot "stop pretending" that fiat money spending leads to growth, if all available evidence and logic shows us that this is the case under certain circumstances. 3. Maybe it would be easier if you quoted from what I actually wrote? Where did I say "the State is valid", or that "theft is benevolent"? I'm not saying any of this. I'm saying that IF a group of people starts a fiat money system by declaring a tax in a certain currency, then they HAVE to inject said money into the economy before people can pay taxes in that money, and they HAVE to leave some money in the private sector (via a government budget deficit), IF they want to allow people to save enough to feel comfortable enough to spend enough to allow for full employment, and all past historical evidence shows us that the private sector does indeed have a propensity to net save. Declaring the tax is the moment when people become unemployed. WHERE AM I ASSUMING BENEVOLENCE OR MORAL VALIDITY IN ANY OF THIS?? Like I said in an earlier comment, think of it like a prison. Let's say the government throws you in prison for no reason. I don't agree with them doing that. But IF they want you to survive they now have to spend money on feeding you. This is a logical, causal connection, I'm not saying any of this is benevolent, or morally justified.

I've made a more detailed case, along with quantitative evidence, in this post: https://beinglibertarian.com/balanced-budgets-can-create-unemployment/ In a fiat money system the sufficient amount of net private saving is that amount where there's no unemployment, to put it as concisely as possible.

If there was no taxation at all, then the money introduced into circulation could not retain its value, and hyperinflation becomes a real possibility, but I agree in that to achieve full resource utilization & employment, it should be as close to no theft at all as possible. For example, there have been early US currencies that lost practically all its value because of a lacking taxation enforcement regime. Look at it more like a bell curve. But it may be conceivable that in some stateless future there will be a monetary system like Bitcoin where tx fees replace taxation altogether. I'm not sure where you think I said anyone is being "benevolent", but just to be clear, benevolence doesn't have anything to do with what I'm talking about.

#FalseDichotomy