The Fed's real rate thing is a fixed fx and not floating fx construct, where the nominal rate is market driven as borrowers compete for limited reserves. It's not applicable to (non reserve constrained) floating fx with the cb setting the policy rate. With fixed fx rates reserves are the object of convertibility and the monetary system is continuously reserve constrained by design. Treasury competes with other borrowers= interest rates are market determined. It's presented operationally here; moslereconomics.com/wp-content/upl…

Increasing taxes is NOT to 'remove $ to prevent inflation' as $ can't be spent into the economy w/o prior tax liabilities to create sellers. Increasing $ tax liabilities does function to increase the economy's need to sell goods and services for $ which is a 'deflationary bias.' Money story: Tax liabilities function to create sellers of goods and services seeking $ in exchange so gov can spend its otherwise worthless currency. So hiking tax liabilities increases the # of $ sought/increases nominal demand for $/increases the need to sell goods/services.

Well stated:
drive.google.com/file/d/1-u2uzH…

@ewarren It doesn't reduce aggregate demand so it doesn't add any fiscal space... :( @ewarren So it doesn't at all address the real issue- excess consumption by 'the rich' (or anyone else), and, in fact is a useful distraction for 'the rich' that works to delay resolution of this real issue. :(

Responses to 'how are you going to pay for it?': 1. The Tsy instructs the Fed to credit the appropriate account. 2. The $ to buy bonds or pay taxes comes only from the gov and its agents, so gov spends first, and then taxes are paid or bonds paid for. 3. So gov borrowing supports rates, it doesn't fund expenditures. 4. Likewise interest is paid by instructing the Fed to credit the appropriate accounts, and likewise those $ are paid first, and then taxes are paid or bonds are paid for.