(https://twitter.com/DeficitOwls/status/928489106715435008)
From our library: Unemployment Is Created By Government And Can Only Be Solved By Government.
Unemployment Is Created By Government And Can Only Be Solved By Government
Warren Mosler, one of the founders of Modern Money Theory, discussing the purpose and consequence of tax. The monetary system is a tool to move resources to the government: the government imposes a tax on its citizens for a token piece of paper that only it can issue. In order to get the money to pay the tax, the citizens must work for the government, or must work for somebody else who has gotten the tokens from the government. Unemployment is defined as actively seeking employment. So, before the tax, there was no unemployment because nobody was seeking work that paid in the government’s new money. After the tax but before the government has hired people, everybody is unemployed! As the government pays people and the money works its way to various hands, the unemployment rate drops. Since the private sector has a strong desire to save, this means the government must run deficits: the government must issue more in spending than it plans to collect in taxes, or else the private sector won’t be able to save because there won’t be any excess. If there isn’t a large enough deficit to allow people to meet their savings goals, then there will be unemployment, as people hoard money instead of spend it to create sales and jobs.
Bideoa: https://www.youtube.com/watch?v=NBgfAV78yII
2017 aza. 8
Replying to @DeficitOwls
Not only do taxes create unemployment, bit that is their purpose. Warren is the best at making it easy.
