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Taxes do not funding federal government spending in the Eurozone. Money is still created by central banks, it's just the national central banks also defer to the ECB. If you read a paper published earlier this year by Dirk Ehnts and Randall Wray it goes into this in more detail. In fact national central banks in the Eurozone are still the currency issuers, just now they issue the Euro instead of Francs or Deutschmarks. The issue for nations in the Eurozone is not that taxes fund spending.. they don't. It's that those nations have a lower degree of monetary sovereignty. They are bound by rules enforced by an external authority, and have less control over their own economy. For more on that I'd suggest reading Peter Mair. He particularly highlights the case of Ireland's response to the GFC, and how the ECB constrained Ireland's democracy due to fiscal rules. Many southern-European nations have also faced similar challenges due to restrictions placed on them by the ECB.

@@PEGSInstitute Thanks for your prompt and detailed reply. If I understand you correctly, the governments (via their central banks) Eurozone members can no longer create new money, but they can still destroy it via taxation? They've effectively given up the sovereignty to create their own currency to the ECB, thereby limiting their own fiscal spending? However, their commercial banks are unaffected, as they still create new money via loans.

Where do the "private central banks" get the money to loan to the federal government? Most private entities don't have the power to create new units of a national currency at will, so who imbues the central banks with that power?

@@PEGSInstitute The assets they own is leverage against the government as they can be sold to foreign entities for a profit in the currency that they prefer. This creates a national security concern and is why the U.S treasury has a policy of always paying out national debt holders first and foremost and covering investments in Treasury Bonds. And this has happened throughout history in many instances. The U.S prints out bonds to these people, they agree on paper that they'll put up their assets as secured loans to the government on the governments good will and trust that they will guarantee a repayment on those bonds, they will pay a guaranteed interest rate, and thus the government is able to acquire new funds not allocated by congress in the federal budget, or can be put into projections on the next budget.

@@theangrycanuck8331 You're almost there. So when the Treasury issues bonds, do they borrow those from somewhere, or do they just create them out of nothing? And what about how the fed owns 16% of Treasury debt? Did the fed have to go earn the dollars they used to buy those securities from the private market, or did they simply create new dollars as needed? And when the government pays interest on the bond to the Fed, does the Fed save that money, or is it simply one side of a balance sheet being cancelled out by the other side?

@@PEGSInstitute They allocate the funds to be printed and circulated in some cases, in other cases they add in the funds to corresponding budgets and then release tender upon payment.

@@PEGSInstitute Everything is on the basis of growth. The government expects growth in each quarter to cover some of the interest. As the economy grows, they have more trust and good will as well as investments, assets to leverage in negotiating with the private sector. They also use their legislative powers to give tax credits where needed and increase taxes and tarrigs where they believe they can to raise capital on returns. If your country operated soley on currency out of thin air, why would I sell you good and services to import? Your currency has no value domestically, and if the rest of the world thinks like me, what good is your currency globally? What guarantees the USD? There's some gold that backs it though not enough and there hasn't been a proper audit in decades. The U.S military might and NATO alliance is another form of insurance that backs the USD, and the financial systems put in place that's run out of New York and London that over see multi national trade securities and can impose sanctions. With two out of three no longer having any signicant power, the US military and financial system, we see BRICS forming, the Yuan/RMB expanding and the USD being dropped. That's the literal outcome for a currency with no value based off of printing. However on a domestic scale, it's far worse. The GDP and PPP of communities is directly affected by the reintroduction of large quantities of dollars returning. This devalues US Treasury bonds, causing the good faith that the private sector to rely on to falter, causing calls in bonds, causing massive debt and loss on the part of the lenders as the US can do a currency and debt wipe; however now you'll have civil issues where people will sell assets and leave or move to other countries and bring assets with them due to bad transactional history and lack of trust in the government.

Strongly recommend this paper about the mechanisms of the ECB www.tandfonline.com/doi/full/10.1080/09538259.2023.2298448

@@PEGSInstitute Thanks!!!

Because the government is run by neoliberals who want to privatise everything.

@@PEGSInstitute You nailed it. That's been their motive since they took power.

You should look into the work of Fadhel Kaboub. He is African and has some fantastic contributions in this area.

@@PEGSInstitute thank you!

It is, and always has been ruclips.net/video/3IhxYSImsW8/видео.html

@@PEGSInstitute your own definition is: a medium of exchange, yes? Who is a gold eagle a debt to? It's as if you forgot that some mediums of exchange have intrinsic value as goods. Please explain if I'm missing something about the non-debt currency, money.

Our sources are in the description of each video if the short videos don't provide enough detail.

@@PEGSInstitute I quoted your definition of money, then gave you an example of a common medium of exchange which has an intrinsic value beyond only being a currency. Referring me to another claim isn't proof. Please explain how gold coinage is debt.

I assure you that no length of RUclips comment will be as convincing as the anthropological evidence mitpressbookstore.mit.edu/book/9781612199337

Not entirely true. As we saw in the aftermath of the GFC, the ECB imposed debt limitations on member states, so they were limited in their capacity to spend on recovery. The example of Greece being particularly pertinent there, but Spain, Italy, and Ireland also languished due the spending limitations imposed by the ECB (see this lecture from around that time where a reduction of democratic sovereignty was discussed as an impact of the restrictions imposed on the Irish economy by the ECB ruclips.net/video/mgyjdzfcbps/видео.html ). The southern European states are still feeling the aftermath of that, so it's hard to argue they have full market control. As we saw in the last few years though, the ECB does seem to have learned some lessons from that period, and the limitations seem to be less enforced. It's true that the national central banks are still technically the currency issuers, in that they don't have accounts with the ECB. But the national central banks of the Eurozone are not monetary sovereigns as they still have policy restrictions imposed on them by the ECB. The Euro does seem to be making tentative progress towards being a monetary union that preserves sovereignty for member states, but it's not there yet. We would recommend reading this recent peer-reviewed journal article for more detail. www.tandfonline.com/doi/full/10.1080/09538259.2023.2298448

That's not what he said.

Because 1: it's not "debt" in the same way the rest of us have debt ruclips.net/video/mEwivQeD0Q8/видео.html And 2: they're a currency issuer. Every single time they spend they're creating new money ruclips.net/video/tvgKbSuI5kY/видео.html

Because this is no new money that is printed. I can explain you in a simple example, lets pretend nobody prints money ever and there are 2 houses in your country which each is worth 1 million and those 2 million are all the existing moniey that exists. Niw i come and i build a house, the 3rd house in this country. Since nobody printed new money this house is now worth either nothing (no new money exists) or it derives from the worth of the other 2 houses (1 million each) so the 2 old houses are worth less now because all existing money (2 million) is split between 3 houses now instead of 2, so each of the 3 houses are now worth €666.666 instead of 1 million each. But why would the houses be worth less? There is no point as a house is standing forever basicly. Thats why a new 1 million must be printed to reflect the new "asset" this country has which it posseses. The country economy now is no longer 2 million (2 houses) but 3 million (3 houses) and that new worth must be printed into a currency reflecting this new worth. You understand niw why we print money? Because we grow each year our evonomy with companies, solars, energy, roads, houses etc. Each growth needs new money that reflects th value of the new growth. If we print no money a growth is imoossible since nobody would invest or open companies and the only way to earn money is by taking it from someone else away.

That is what usually does happen

I agree it's badly explained in this short, but the point does stand. Different countries with different economies all using the same currency causes the currency to be too expensive for some countries.

@@MotorsportTukkerExcept printing money only dilutes the value of the currency. It doesn't create value, so no matter how much money you print, you won't be able to pay the debt purely by doing that

@@dionoviche It doesn't. The reason these countries can't pay up their debt is not because they share a coin with rich countries, it's because it's harder for them to produce as much value as the other countries. Currency has nothing to do with it. If the countries still used different currencies, the problem would be the exact same, but with a currency exchange in the middle. And that's besides the fact that debt is almost never a problem of producing value, and almost always a problem of managing it

@@cirogarcia8958 Ah yes, the quantity theory of money. The tautology that refuses to die. Unfortunately it's based on a fundamental misunderstanding of the origin of money. Markets and monetary exchange did not evolve out of barter, and money has always and everywhere, for thousands of years, been a creation of governments. ruclips.net/video/3IhxYSImsW8/видео.html Money is not a finite resource, it's more akin to a measuring device. You wouldn't say that measuring something with extra centimetres devalues the existing centimetres.

no the basic fact is true, states no longer control their monetary policy under the Euro the way they could if they issued their own currency. Common sense.

@@Citadin that is not entirely true, every state has a member on the board of the ECB and they vote on what they consider the best. Just like in the past every single state had his own central bank and members who voted. It was never the decition of one person only just as it is not now.

So you're saying that member states of the Eurozone can control the monetary policy of other states, so long as they have a voting majority? So a member states on the losing end of such a vote is therefore not in control of its own monetary policy, and does not have monetary sovereignty, right?

@@PEGSInstitute i see this is leading nowhere in your mind. Sorry to have wasted my time. Just so you know why i wont waste my time on you anymore: so basicly if netherlands had its own fiscal policy based on majority vote and rotterdam (a netherland city) is opposing the majority vote.... then rotterdam has not the monetary sovereignity? Okok... lets say rotterdam supports the monetary policy of the netherlands but Hans van der Beek living in street Dammstright 12 in rotterdam oposes it, so he has no monetary sovereighnity? But what if Hans van der Beek supports it but his hampster does not? Ok now i see where you are going..... nowhere and with a very stupid argument/question

@@thomaskonig4713 I'm not sure you're grasping what monetary sovereignty is. Neither the Netherlands, nor Rotterdam, nor its citizens, nor their pets are currency issuers. All of them are currency users. They can not possibly have monetary sovereignty.

Who decides what is "over" spending? How is the private sector descending into recession if the government is overspending?

Blame the banks if you want, but government has the power to change things, and they choose not to.

@@PEGSInstitute I do blame the government, you're the one making excuses for them. Acting like the government borrowing billions of dollars from the banks and then paying them back at interest doesn't cost us anything. The national debt is a direct representation of how much more the government is stealing from us than they're allowed to take in taxes. This is exactly why everything is expensive and why your dollar is losing value constantly, the government is outbidding you with money that they've just written into existence out of nothing.

How are you arguing that the government is simultaneously creating money out of nothing, and also that the government is "stealing" from the private sector through borrowing? Government debt is just an asset swap of dollars for Treasury Bonds. The interest the government pays when the bond matures is actually an injection of currency into the economy. It is incoherent that the government is "stealing" from the private sector by spending money in to the private sector.

@@PEGSInstitute an "injection of currency" that they pulled out of their arse, thus reducing the value of all the existing currency by that amount. The purpose of government borrowing is to consume resources which they could otherwise not afford, thus increasing the scarcity of those resources and their price. In the long run this also distorts production, causing industry to produce more of what the government wants and less of what the rest of us want to spend our hard earned money on. Then for facilitating this gross theft, the banks make a tidy profit.

That sounds like a claim that needs a citation.

@@PEGSInstitute “Why Price Controls Should Stay in the History Books” March 24, 2022 By Christopher J. Neely St. Louis Federal reserve. I could name thousands of economic papers, books, and economists. You’re welcome to site me as a reference anytime. “Price controls always lead to shortages of the goods being controlled”. -Steven K. Odland March 20th 2024.

@@PEGSInstitute I don’t see any citations for your statements. Rules for me but not for thee?

Did you check the video descriptions? And the bit at the start of the video where it says citations in the description? Given the article you cite uses axiomatic models, while the articles it references as inspiration for this rebuttal examine real-world evidence, I think I'll defer to reality, rather than the musings of people who study horses from the comfort of their office chairs.

@@PEGSInstitute I think you’ll continue finding the evidence that your confirmation biases lead you too…… and unsurprisingly it will align with your ideologies. I recommend any writings from Economist Milton Friedman or Thomas Sowell to broaden your education on economic theories and practice. If you chose not to……well ignorance will be your choice. For your information I study horses from the saddle……..literally. Now you’re more the wiser…….

Whether they understand it or even acknowledge it, Modern Monetary Theory is descriptive, not prescriptive. It is an analysis and framework for understanding how economies like Canada and Australia operate. If those managing the system choose to read a different operating manual, that's up to them.

@PEGSInstitute that sounds like a "yes".