I don't think anyone argues that no taxes are necessary? No taxes would mean no currency, because taxes create the demand for money (see Wray's book, etc.).
I do subscribe to the Lerner functional finance view that all that matters are the *effects* of any particular relation between G and T, that deficits can be too big, but they can also be too small, and that the purposes of taxes and bond sales are different from the 'financing' function under a gold standard or a currency board or dollar peg or the like. I truly think that the authors of that statement are taking advantage of some common misguided fears of deficits and the debt to try to sell their argument, and that besides being untruthful (though some of the signers probably believe it), can backfire when the times call for larger deficits and a growing debt. I also subscribe to the Eisner view that "for every buyer there is a seller, for every debtor there is a creditor" and that the government deficit shows up on the other side of the balance sheet as a private sector surplus (given the trade balance), so that if you want to decrease the deficit you are going to have to live with a lower private sector surplus and if you want to run surplus and pay down the debt you are going to have to live with a private sector deficit and smaller national wealth. I no nothing more on the Mosler tax thing than what was in the one article I saw and nothing has changed here at UMKC. Mat -----Original Message----- From: Doug Henwood [mailto:[EMAIL PROTECTED]] Sent: Thursday, February 13, 2003 7:01 PM To: [EMAIL PROTECTED] Subject: [PEN-L:34718] Re: FW: Economists' statement opposing the Bush tax cuts Forstater, Mathew wrote: >This statement is so frustrating--"chronic deficits" "exacerbating the >long term budget outlook" "reduce the capacity of the government to >finance"... Just keep backing yourselves further an further into the >corner, so you can never support common sense budgetary policy again, or >only do so at the risk of having this thrown back in your face. Why not >just criticize it for what its real problems are, instead of exploiting >the misunderstandings about federal budgetary matters? Mat, are you one of those folks who think that deficits don't matter at all? Do you go as far as other Moslerites and think that the government doesn't even need to tax people? Speaking of Mosler, I read that he's in big tax trouble. This mean problems for the UMKC group? Doug
