An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Saturday, January 11, 2014
Authority for Dummies
J.D. Alt had a nice two part post up this week over at NEP, using his talents as an architect to draw up a graphic representation of the US Dollar system and this system's associated flows using a "fluids system" metaphorical diagram to in his words: "visualize things which are otherwise invisible".
Part 1 here, and Part 2 here.
Even with this (to me at least) fully explanatory and very understandable group of diagrams that J.D. creates in his posts, I assume there may be some who still would look at this diagram and would still think: "ahh, but where does the Federal Government get the money to put in the FG tank?!".
These people would perhaps be your typical metal-lovers, Austrian nut-jobs, Libertarians, etc... these types of people of various sorts and degree.
In order to help these people understand not so much "WHERE the money comes from?" but rather "WHY can our government institution issue U.S. dollars?", I've modified J.D.'s diagram by the addition of two other concepts of authority and subjection below:
Our institution of civil government can issue US dollar balances because this institution occupies a position of superior authority, and we as individuals or householders of lesser authority pay our taxes simply to exhibit subjection to this superior authority.
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8 comments:
" we as individuals or householders of lesser authority pay our taxes simply to exhibit subjection to this superior authority."
The "taxation is theft" people are going to love that. ;)
Bill,
For sure ;)
They are going to have to find a way to get past all of that... For them, what is probably a "fear" driven view in order for we ALL to get on top of the current injustice... they are holding humanity back imo... the blame falls squarely on this absolutely WEAK (perhaps feminine at core...) cohort within humanity.
rsp,
"we as individuals or householders of lesser authority pay our taxes simply to exhibit subjection to this superior authority"
I completely disagree.
Do you pay yours because "there is a guy at the door with a 9mm pointed at you?"
I don't.
Or for "aggregate demand management"? It will NEVER work that way.
rsp,
I certainly don't pay so as to simply "exhibit subjection to superior authority".
So that govt "has the "money" to spend" then?
To "pay down the debt"?
To "manage aggregate demand"? (I thought it is "about price not quantity"?)
Why do you have to pay any taxes under this type of system?
What are we really doing when we pay taxes under a system of state currency?
y, we run a lot of people off when we start using metaphors like "there is a guy with a 9mm at the door..." or other coercive-type statements. There is no one with a 9mm anywhere...
rsp,
"There is no one with a 9mm anywhere…"
No, it's a SWAT team now.
Tom,
Those SWAT teams are not there to collect taxes...
they are there for drugs, weapons, terrorists, warrants, etc... ie "illegal" activities...
Most tax enforcement actions are civil fines/fees...
rsp,
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