Sorry..... calling "BS" on someone should require a more detailed explanation of your logic especially when the original posters comment is backed by a degree in economics(disclaimer: 3.0 gpa so I am by no means an expert lol).
Ahh.. Didn't realize I needed to post my credentials. I do have a degree in economics (its a minor, hope that counts). And a 4.0 GPA. Not kidding. Not that it matters. Never been asked to show it before on a forum.
But if you need a more in-depth description than I can provide, these professional economists have an extensive primer here:
http://neweconomicperspectives.org/modern-monetary-theory-primer.htmlWe have a certain amount of money in the economy and if the government needs more money then it usually issues bonds or raises taxes.........The government literally takes $20 out of my pocket and gives it to "Joe the job creator" for a partial payment for an aircraft carrier.
That is the way it USED to work when our country and the rest of the world was on the gold standard. Nearly all of your misinformation and misinterpretation of the way things really work now, stem from the fact that we have monetary policy, like issuing bonds, that are basically relics of the gold standard era.
But in those days there really was a "certain amount" of money in existence, as determined by the amount of gold.
Surely you can acknowledge that we are no longer on the gold standard???? If you acknowledge that, that dollars are just dollars, created by fiat.... then what sense does it make for a government to issue bonds or raise taxes to get more of it. Seriously. Think about it. People pay their taxes and buy bonds with dollars, right? Where do you think those things came from?? They had to come from somewhere. If the government can only pay for an aircraft carrier after it gets a dollar from Joe, where did Joe get his dollar? The one that you believe he's "loaning" to the government??
Bonds bring money into the government not from the inside but through the outside(China for example)........Moreover if your "printing to funds things" theory was correct we would not owe China trillions of dollars.
This doesn't make any sense! Bonds are owned by whomever buys them. US citizens own some, China owns some. China buys them for the same reasons that US citizens buy them. Because they have dollars. They have dollars because (usually) they provided goods/services to someone and got paid with dollars. They'd like to exchange those dollars for interest bearing assets.
"We" don't owe China trillions of dollars!!! Who told you this and why did you believe it? I'd love to hear the answer.
China has trillions of dollars. It has dollars because it sells things to people with dollars (Americans). And just like investors on this forum, Chinese businesses and the Chinese government aren't foolish enough to hold a portfolio of trillions of dollars in cash when it could hold a portfolio of interest-bearing bonds instead.
"Money has to get created before it can get returned as tax"......I agree with you on what "came first the chicken or the egg" comment :)
What?? So you are in agreement that money gets created?? But only after you insist that it isn't the government that creates it??? You'll have to explain to us how this money gets created before it gets used to buy bonds or pay taxes to fund the government.
It does not take our money, burn it, and then print more money.
Well, it's actually a lot more like this than you realize. Since we pay our taxes with checks against bank accounts, the IRS does not have the need to actually destroy money. But the point is, yes we do just "print" money, yes we do just "impose" tax, and yes we "destroy" money when we pay it back in taxes.