The Surplus's effect on money supply

Ian Murray seamus2001 at home.com
Thu Aug 23 18:40:28 PDT 2001


After carefully considering

the complexities of reserve accounting, it is argued that the proceeds

from taxation and bond sales are technically incapable of financing

government spending and that modern governments actually finance all of

their spending through the direct creation of high-powered money. The

analysis carries significant implications for fiscal as well as monetary

policy.

============

Mat,

What's high powered money, seignorage in the old fashioned sense of creation 'ex nihilo'?

Ian



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