Bill Mitchell has a good summary of how a modern monetary system works in general terms, hence the analogy of government as a big firm or household is false. It begins here:
The statement “recharging the fiscal batteries” which is sometimes expressed in terms of “building a war chest, or in negative terms as “running out of bullets” etc is commonplace in the public debate.
I hear expressions such as these used every day by politicians, commentators, academics, and citizens.
It is a demonstration of how ill-informed the public debate really is and why when it comes to exercising our obvious choices those choices do not seem to be so obvious to most of us.
It is a total fallacy to suggest that the government has some stockpile of “spending capacity” that it has to recharge and buildup just in case it needs to “turn the lights on” in the future.
The fundamental principles that arise in a fiat monetary system are as follows:Read it at Bill Mitchell — billy blog
We do have a choice – we just need to identify it
by Bill Mitchell
This is the basis of MMT as a general theory of modern money.