How are dollars different from undated promissory notes - say issued by the
same govt.?

On Wed, 16 Sep 2020 02:16 nysa71, <
[log in to unmask]> wrote:

> Hello ToK Community,
>
> So far, I've mentioned a few key points about MMT:
>
> One, to make a distinction between currency issuers and currency users...
>
> For a currency issuer, the spending must logically precede taxation. That
> is, the currency must be spent into existence first before that currency
> can be taken back in taxes. The taxation (clearly) has nothing to do with
> "funding" the spending of such a currency issuing government. The function
> of taxes is to create aggregate demand for the intrinsically worthless
> currency. After that, they function as a fiscal management tool, (e.g., to
> keep inflation under control).
>
> I've also mentioned Sectoral Balances. Simply put, in regards to a
> currency issuing government:
>
> Government deficit = (Domestic Sector surplus) + (Foreign Sector surplus)
>
> That is, a deficit is when the government spends more than it taxes. But
> on the other side of the equation, this necessarily means that the combined
> domestic and foreign sectors are the recipients of a surplus exactly equal
> to that government deficit...right down to the penny. It's just basic
> accounting.
>
> So how does (for example) the U.S. government create dollars? By the act
> of spending.
>
> Simply put,
>
> Dollars are *created* every time the U.S. government *spends*, simply by
> *crediting* accounts.
>
> Dollars a *destroyed* every time the U.S. government *taxes*, simply by
> *debiting* accounts
>
> Here's a short 6 and a 1/2 video with economics professor, Randall Wray,
> explaining the basics, (with a cool anecdote about how Colonial governments
> issued currency.
>
> Have a good one,
> Jason Bessey
>
> https://urldefense.proofpoint.com/v2/url?u=https-3A__www.youtube.com_watch-3Fv-3DZzw8AO4vTqc&d=DwIFaQ&c=eLbWYnpnzycBCgmb7vCI4uqNEB9RSjOdn_5nBEmmeq0&r=HPo1IXYDhKClogP-UOpybo6Cfxxz-jIYBgjO2gOz4-A&m=0-jNNMXqwmcHVHdF3nsW5bpRLJ6INuNziShOJ90QYoo&s=FC2LjsLjv20-Vl1N2ucXpiSxX_8FKNtAJ-zdF9cPhoo&e= 
> <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.youtube.com_watch-3Fv-3DZzw8AO4vTqc&d=DwMFaQ&c=eLbWYnpnzycBCgmb7vCI4uqNEB9RSjOdn_5nBEmmeq0&r=HPo1IXYDhKClogP-UOpybo6Cfxxz-jIYBgjO2gOz4-A&m=G028qyZbUuiM5XRZRLsmqCPvcnnJ4Io8LAqICVrd8cY&s=BkHb8vd6GTiDINAJc2wTiC08goEMeACRWUjECM5h-Rg&e=>
>
>
>
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