In a sufficiently late-stage money printing regime that the US finds itself in, taxes levied are increasingly irrelevant. Right now, 76% of all income tax goes to pay the *interest* on the government's debt. So Bukele is not wrong that the US runs on printed money, and not taxes.
Discussion
The dollar is still accepted because of the faith people have in it (which I think is based on US taxes and military force), and this also gives it some value because there is demand for dollars.
But if taxes are irrelevant then I'm all for a movement to scrap them!
I would add, some of this demand for dollars is still there because the US is still paying interest on its debt, which comes from the taxes, as you point out. But if the US stops servicing its debt or declares bankruptcy, the demand for the dollars will be gone, and then the money printing will no longer work, right?
There is and will continue to be demand for dollars because it is a dollar-backed global monetary system. The US really fucked the world with it. The US is infinitely rich with dollars, so it cannot default. Paying taxes creates confidence in the system because it makes people think they are sustaining it, and all that is needed is to balance the budget. π€‘
Hope everyone understand that Fed is forced to increase the interest rates because the buyers demand higher interest .. a direct implication of printing more .. In the process Fed loses money .. in billions ..
So printer is not without cost - even to US ..
Most people think Fed is fighting the inflation - that is just an aftereffect !
Interest rates are supposed to freely float, not be set by some clowns pretending to be protectors of the economy.
But why? They intervene for our benefit, with professionalism. Donβt you feel the benefit of inflation? The benefit of increased taxation?
Rates are determined by investors - not the Fed ... If Fed wants to give a negetive yeild - do you think anyone would buy T Bills today ? Its like selling a home - you can list a price but auction will determine weather you can sell or not ... isn't that free -float ?
The point being , the way a securtites investor watches Apple price and make a call - similiarly soverign investors (and banks ) watch the fed .. They watch the money supply , wasteful spending and available opportuniities in the international market .. even retail investors can participate ..
So the idea that Govs can simply print money is bogus .. there are checks and balances ... saying it any other way is misguiding the naive public ..
I mean - if that was true - Venezuela would buy all the real estate in America :-)
Love your satire. Well done ππ