Simple really - sm Posted: Nov 25th, 2017 - 10:11 pm In Reply to: Excellent explanation - Sm
"Modern Monetary Theory is not a theory per se, it's a bit of a misnomer in my opinion. It's a factual description of how modern money actually works. This biggest brain blower of it all is that federal taxes do not fund federal spending...at all. The government simply enters keystrokes on a computer and money is spent into existence and thus is exactly what happens when politicians pass legislation that calls for x amount of dollars to be spent on a certain program. They are not funded by taxpayers at all. Since Nixon took us off the gold standard in '71 federal taxes no longer fund any federal projects (military, defense, healthcare, etc) because the dollar is not backed by any amount of actual gold. A dollar is legal tender and since it is the currency of the US it is the only form of acceptable payment for anything in the economy. So, although common sense tells us that money can't magically appear out of thin air, in fact the opposite is true. Money is always created out of thin air by the government so to speak. Always. State taxes are a different story because they don't actually print their own money and so any state project is funded by state taxpayers."
Starling Drake
https://www.thenation.com/article/the-rock-star-appeal-of-modern-monetary-theory/
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