Notes on the Money Supply, Taxation, Fiscal and Monetary Policy

How does the government create fresh money?

. Entitlement payments

* Welfare Payments

* Social Security Payments

. Government Employees / Employment

. Military Spending

. State spending

. Loans to Banks

. Bond interest payments






What is the purpose of Selling Bonds?

. To establish interest rates

* To set the base rate for the USD.

. To take money out of the economy – reduce inflation, reduce the money supply



What is the purpose of Taxing the Citizens:

. To reduce the money supply

. To control behavior

. To motivate certain behavior

. To direct behavior

. To create demand for the US Dollar Currency, ie. create legitimacy for the currency

* You make it NECESSARY to have US Dollars because you must pay taxes in USD.

Note:  If it wasn’t necessary to pay taxes using USD, it would be “easier” to usurp the USD with an alternative currency.  The USD would be replaceable with another currency.  By making the USD the currency required to pay taxes, it creates the necessity to have USD and use USD.



What is the Most Efficient Way for the Federal Reserve and the Govt to Expand the Money Supply?

. Build the military

. Build Infrastructure: Roads, Highways, Bridges, etc..

. Sell Bonds – Pay back interest to expand the supply

. Fund Technology / R&D



What is a more efficient way to Tax the Citizens?

. Flat Tax Rates

. No Deductions, no write offs

. Simplify the tax code

. Create a universal sales tax – no income tax









. Sales Tax

. Tariffs

. Income Tax

. Property Tax

. Sin Taxes (Cigarette / Drugs / Gas)




Is there another way to legitimize the US Currency without having to Tax the Citizens?

. Make it Illegal to use alternative currencies in the USA

. Make USD the only currency allowed to pay any business located in the USA