MMT Green

Jan 5, 2022

@wbmosler

Europeans in Africa: A Base Case for Purposes of Analysis

• The British wanted to force the domestic population to grow coffee
• The British created a scrip and imposed a ‘hut tax’ on all dwellings payable in a that scrip
• Huts were burned if the tax wasn’t paid
• Scrip could be earned by working at the coffee plantation

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The MMT Money Story

1. The state desires to provision itself
2. The state imposes a tax liability
3. The tax liability creates sellers of goods and services seeking the state’s currency- the tax credit- in exchange
4. The state then buys the goods and services it desires
5. Taxes can then be paid (and state securities purchased)

The Currency is a Public Monopoly

• The funds to pay taxes come from the state
• State spending precedes the payment of taxes and the purchase of state securities (bonds)
• State spending is limited only by what tax liabilities cause to be offered for sale
• Tax liabilities are the cause of unemployment
• The price level is a function of prices paid by the state when it spends