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“The monetary system is a tool to move resources to the government: the government imposes a tax on its citizens, payable only by a token which only comes from the government.”
“In order to get the token (money) to pay the tax, the citizens must work for the government, or must work for someone else who already has the tokens.
A government deficit is when the government spends (gives out tokens) more than it taxes (takes tokens back)”
A government deficit is when the government spends (gives out tokens) more than it taxes (takes tokens back)”
“The extra tokens that the government gives out but does not take back ends up as savings in private hands.
If private citizens don’t want these extra tokens, then they will try to buy things with them instead of holding on to them.”
If private citizens don’t want these extra tokens, then they will try to buy things with them instead of holding on to them.”
“On the other hand, if they desire more savings in tokens, then they will cut back their spending in an effort to save.
If the government deficit isn’t large enough to provide for these savings desires, then the people desiring to save will leave unemployment in the economy:”
If the government deficit isn’t large enough to provide for these savings desires, then the people desiring to save will leave unemployment in the economy:”
“There’s not enough total spending to purchase all the goods and services that could be produced with everyone working who wants to.
So the unemployment that we actually see in the economy is the result of government failing to run large enough deficits”
So the unemployment that we actually see in the economy is the result of government failing to run large enough deficits”
“to provide the savings that private entities want to accumulate. The only way to eliminate unemployment is for the government to have a proper sized deficit and to do so without causing inflation, requires a #JobGuarantee programme” #MMT
@wbmosler
