In PI class no. 6 Dr. N'dongo Samba Sylla explains the meaning and function of taxes in tax driven currency regimes. The government doesn't need our taxes to provide for itself as they are the issuer of money. They need us to need their money to create demand for payed labor. The government needs our labor power and supplies we produce with our labor. Taxes drive the need to earn the only currency the government accepts as tax payments.
It's crucial to understand that trading goods and services precede financial operations. The Chinese are not lending USD to the U.S. nor do they lend out RMB which later the US would purchase their products with. A Chinese trade surplus with the US does accrue USD tokens at the Bank of China's reserve account held at the US FED. As the Chinese due to sanctions are not allowed to purchase US companies, land or industrial goods they would need, their only option is to swap the USD from non interest bearing Reserve accounts to interest bearing Treasury accounts. Portraying the Chinese as funding US expansionism is nonsensical. It's always about real resources, never about the money. If the Chinese deliver critical minerals needed for the US electronics and defense industries this would be of real concern. But if they trade solar panels and consumer goods, it's less likely that those become means of US imperial wars. As much as I appreciate Richard's views on democratizing the economy - he does not understand money and debt in national accounting.
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Wolff👍
Excellent.
See also, my essay and podcast:
Global Tectonic Shift
In PI class no. 6 Dr. N'dongo Samba Sylla explains the meaning and function of taxes in tax driven currency regimes. The government doesn't need our taxes to provide for itself as they are the issuer of money. They need us to need their money to create demand for payed labor. The government needs our labor power and supplies we produce with our labor. Taxes drive the need to earn the only currency the government accepts as tax payments.
It's crucial to understand that trading goods and services precede financial operations. The Chinese are not lending USD to the U.S. nor do they lend out RMB which later the US would purchase their products with. A Chinese trade surplus with the US does accrue USD tokens at the Bank of China's reserve account held at the US FED. As the Chinese due to sanctions are not allowed to purchase US companies, land or industrial goods they would need, their only option is to swap the USD from non interest bearing Reserve accounts to interest bearing Treasury accounts. Portraying the Chinese as funding US expansionism is nonsensical. It's always about real resources, never about the money. If the Chinese deliver critical minerals needed for the US electronics and defense industries this would be of real concern. But if they trade solar panels and consumer goods, it's less likely that those become means of US imperial wars.
As much as I appreciate Richard's views on democratizing the economy - he does not understand money and debt in national accounting.