this post was submitted on 07 Jun 2024
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If 90% of the countries in the world are in debt and corporations have more money than god, then clearly the system isn’t ideal.
$34T is insane for one single country.
As for infrastructure, proper taxation of corporations would raise more revenue to fix such things. If Amazon is contributing to the breakdown of roads due to all the couriers then they should be paying more tax.
Look at the water companies in the UK. Paid out their shareholders for decades and did nothing to improve the infrastructure which is now likely to end up with them being nationalised after they’ve looted what they could.
I'm as much of a leftist as you are, and I'm sorry if I sound a bit pretentious here but the analysis you're doing of debt is wrong.
States generally create their own currency, and generally get indebted (i.e. issue state bonds) in their own currency. You can see how a state that creates its own money doesn't really need debt to be able to pay for stuff, debt is just a political decision, sometimes misguided by people who don't really understand it properly, sometimes properly guided by experts.
A state doesn't need taxes to fund itself either. If it needs to build roads, it can literally create the currency to hire the workers to extract the resources, plan the roads, and build them. Taxes have many purposes such as removing money from the private sector to prevent or reduce inflation, disincentivizing certain behaviours (for example tobacco taxes), lowering inequality (for example progressive income taxes), or even making people use your currency instead of another (people in the private sector will end up using your currency if they are forced to pay taxes in that currency).
Taxing companies and rich people is useful because you place the burden of reducing money for inflation purposes on them instead of on the lower income people, and therefore you reduce inequality, so I obviously support at the very least heavy taxation of income and wealth of private individuals and companies, but the state really doesn't need taxes to fund itself since it creates its own currency and pays in that currency.
So I preface by saying finance isn’t my forte, but I would like to raise a few thoughts I had whilst reading this.
The first is that the state can just create more currency to pay for things, which to my understanding is not always the case, if you saturate the market with your currency it becomes less valuable and we end up with runaway inflation.
The other point is on the no need for taxes and that we tax the richest and the corporations to remove some of the money supply, clearly this isn’t something that happens as taxes for both of these is rarely raised at the same rate it is for regular people.
Finally, we have most people, in the western world at least, living literal pay check to pay check whilst the likes of Microsoft have gone from less than $2B to over $3B in a few years. The same can be said for Nvidia and many many more.
Edit: I guess my point is, just because this is how things work doesn’t mean things shouldn’t change. Clearly something is broken.
That sort of thing can happen in extreme situations. Zimbabwe and Weimar Germany are the most prominent examples. Both examples involved not having enough stuff. When there aren't enough necessary goods to buy and people have plenty of money you're going to get inflation. Using the right combo of subsidies, government run production, purchase quantity limits, reserves, vouchers, and price fixing you can ensure the supply is stable and eliminate inflation even if there's lots of money.
That's true. That happens because people are stuck in the narrative of the government needing a balanced budget, just like a household. It also happens because the owners and the corpos use all their money and power to ensure workers pay taxes and thus decrease worker money and power.
Yeah, if the population was educated on MMT the ability to bring corpos to heel would be significantly increased. People arguing for it are fundamentally arguing for a change in how we think about money.