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Joined 1 year ago
Cake day: June 11th, 2023
  • workerONE@lemmy.worldtoNo Stupid Questions@lemmy.world•US Question. Will the people that have to wait until 70 to get Social Security ever get what they paid in to it back out before they die since men's life expectancy is only 77 now?
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    1 year ago

    Federal Reserve Bank Chairman Ben Bernanke says that money is spent by the federal government simply by changing numbers in bank accounts.

    "For further support we can just listen to Federal Reserve Bank Chairman Ben Bernanke. When asked “Is that tax money that the Fed is spending?” he replied, “ It’s not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed.” Mosler says, “the Chairman of the Federal Reserve Bank is telling us in plain English that they give out money (spend and lend) simply by changing numbers in bank accounts. There is no such thing as having to ‘get’ taxes (or borrow) to make a spreadsheet entry that we call ‘government spending’.”

    It is that simple. How does the government spend? “Keystrokes,” says Wray. The money does not come from anywhere, it is created by the currency-issuer. Thus, taxing and spending are functionally two completely separate operations. The government issues the money with a few keystrokes at the Fed first, and then it taxes, removing some from circulation."

    https://medium.com/@nicholasadiaz7/on-the-role-of-taxes-mmt-707fb4b3b80b

    When the government approves civil projects such as infrastructure projects, the payments are considered issuing of currency according to modern monetary theory.

    From Wikipedia regarding governments with Fiat currency: “When a government spends money, its treasury credits its operating account at its central bank and deposits this money into private bank accounts. This money increases the total deposits in the commercial bank sector.”

    https://en.m.wikipedia.org/wiki/Modern_monetary_theory