Another Angle On Debt

Imagine this: You and I have just started our own country! It will be a peaceful little place, making Luxembourg look like a terrorist haven.

The challenge is, we need a currency to assist our citizens in the exchange of goods and services. What do we do? Well, like all other sovereign currency issuers (Britain, US, Japan to name a few) we print up our own buckaroos. Now what? We have stacks of these in our basement, how do we distribute them and provide any legitimacy to our newly printed currency?

Here's how. We do two things simultaneously. We both spend the currency and create a need for the currency through taxation. The spending can be on labor-intensive infrastructure or care of our children. It matters none - get the currency into circulation. The tax serves only to provide legitimacy to the currency - you want to live in our country, pay your taxes, and, oh by the way, we only accept our buckaroos as payment.

Done. As you note in the very simplified example of our new country, taxes have nothing to do with the issuance of our sovereign currency. In fact, taxes come after the spending, which is how all sovereign currency issuers do business. This is not theory - it's a description of our monetary system.

There is no debt. It is an outdated concept based on gold-standard accounting practices that has embedded and grown roots in our culture.