It is clear that a significant role of taxation –and a central proposition of Modern Monetary Theory (MMT)- is to create a demand for the currency.

However there has to be the capacity as well as the willingness to supply real goods & services in return for government spending. In a fiat currency system, taxation functions to promote offers from private individuals to government of goods and services in return for the necessary funds to extinguish the tax liabilities.

Not being a #libertarian doesn't mean loving the state; it means accepting complexity. The real world is a monstrously complicated place; there's not just one thing wrong with it, nor just one thing that can be changed to fix it. Things like prosperity and freedom don't have one cause; they're a balancing act.
Here's an alternative theory for you: original sin. People will mess things up, whether by stupidity or by active malice.

• Federal government's spending is not constrained in the way households or businesses are. When the government wants to spend more, it simply creates more dollars by crediting bank accounts. There is no need to raise taxes or issue bonds first. • While the federal government creates dollars out of thin air, it needs real resources and labor hours in order to spend those dollars on actual goods and services. If spending is too high, it can cause demand to outstrip supply, resulting in inflation.

🧵1/9 The Cost Problem:

High private sector debt leads to significant debt service payments, reducing purchasing power and contributing to the cost of using money 🧵2/9 Expensive Purchases:

Increased credit usage by businesses results in higher prices for consumers, exacerbating the cost problem.

Q: What is the most significant of all of economic forces?

A: Cost.

Q: What has the most influence on economic performance?

A: Cost.

Q: What is the limiting factor in every transaction?

A: Cost.

Q: What gives importance to the factors of production?

A: Cost. The economy is composed entirely of transactions. In every transaction, cost is a consideration; often it is the most important consideration. This is the reason that factor costs are important. And that is why the factors of production are important.

The taxpayer money myth is a dangerous and outdated belief that must be challenged and dispelled. It wrongly assumes that federal taxes fund government spending, and its persistence undermines the possibility of progressive policies. (1/4) This myth is dangerous because it reinforces the false notion that welfare recipients are taking advantage of taxpayers. Furthermore, it implies that taxpayers are a privileged group, thereby legitimizing the idea of cutting welfare programs.(2/4)

Here is a thread about understanding GDP, Federal Spending, purpose of Federal taxes, Influence of Rich and wealthy on public policies, and Ignorance of the voters. 1/15: GDP measures the economy and spending; it's not rocket science, but politicians, media, and economists often pretend not to understand it to avoid government spending growth.

The Dangerous Myth of 'Taxpayer Money'

The U.S. government, which is the issuer of our money, works differently:

Congress votes to spend “new money” on something, then the Treasury and the Federal Reserve credit the relevant bank accounts, &...that’s it -new dollars are created The government has spent new money into existence. Later, Congress may tax “old money” back out of existence, but it isn’t collecting money in order to spend it. It’s “offsetting” earlier spending.

Does “printing” money cause inflation? Or is so-called “printing” money the best way to cure inflation? 1. The federal government does not print money. It printsFederal Reserve Notes (FRN), which are not dollars, but rather are bearer certificates: Titles to dollars.Only a small percentage of dollars are represented by FRNs.

At the beginning of what we call “America,” the government wrote laws, one such set of laws created the US dollar.
Because the federal government created the US dollar, you might think the Fed Govt’s understand that US dollar banking is the responsibility of the dollar’s creator. But, seemingly, the federal government (and the public) don’t get it. Allowing for-profit, private banks to handle that responsibility, competently and without stealing, requires an impossible level of supervision along with a naive belief in the purity of the human spirit.