Thursday, October 6, 2022

Fiscal flows explained

 

Here she actually exhibits a better introductory understanding of these flows than most Art Degree PhD economists and  Jurist Doctorates:




Doesn’t give herself enough credit and gives up too easily but she’s starting to exhibit a better understanding than the morons in charge we see out there everyday...

7 comments:

Peter Pan said...

When private entities do this, its called rent-seeking.

Eventually, each time you take a breath, you'll be taxed.

Peter Pan said...

When the Mafia does it, its called a shakedown.

Joe said...

So the person she got the money from, got the money from someone else who paid taxes on it, and that person got it from someone else who paid taxes on it,....., ....., ......, and the person who they got it from was a weapons contractor who paid taxes on it at a very low rate when they got it from the govt.

mike norman said...

What she's explaining is that all money will disappear via taxation unless the government continues to supply a net positive flow of money. It has to.

Ahmed Fares said...

This^^

Neil Wilson explains it well with his "stone skipping across a pond" metaphor. I did a Google search:

A government has a credit card on which it can spend. However it has a magic cashback deal which means that not only does it get a percentage when it spends, but a percentage when anybody else spends the same money. Since one person’s spend is another’s income, the money will skip around the economy like a stone across a pond with a percentage deducted at every step. It’s a mathematical progression to zero.

So for any given positive tax rate, if a government spends £100 on its magic credit card it will *always* get £100 cash back in taxation.

The issue is when it will get that tax back. If everybody spends everything they earn instantly then when the government spends £100 it gets £100 back instantly from all the transactions induced. The only thing that can stop that from happening in any accounting period is if somebody somewhere along that chain saves something.

And that is the only reason we have a deficit. From all the government spending, lots of people saved something. They deferred the taxation that would have balanced the budget. And if they’re saving, they’re not spending – so how can there be any inflation?
—Neil Wilson

Matt Franko said...

Mike that puts her in the 99.9999 percentile imo…

Joe said...

"One person's spending is another's income"

Most important economic fact there is, yet very few actually understand it or its implications. Most people think everyone, including the govt, should all simultaneously bring in more money than they spend. Every entity run a surplus simultaneously. Surplus=good deficit=bad is as sophisticated of thinking as it gets.