It is the term loan that is so misleading and could be misused to borrow from capitalists or abroad.Technically, it is not a loan either. The state can request that the people do the best they can and the state must help the people according to its ability. Then the state directs or helps the people by creating money and the people show that it has done the job or been helped by paying state and municipal taxes. The value of the money was the people's work and need relation to the state and when this is fulfilled, the money paid in as state tax lacks its value and is destroyed.
The state directs and helps the people again in the next budget year by creating new money.
When the Reformists and Katalys use the word loan, austerity politicians like the Social Democrats' Magdalena Andersson can conjure up the words and pretend that she doesn't want to put the people in debt.
But state money creation is not a debt but the state taking command of society's production, labor, natural resources.
When the state does not create money, then a lot of individuals from, yes the majority of, the people have to borrow from banks which are real debts that make the rich richer in ordinary times while the state cannot afford schools, care, care, culture, infrastructure, production , research or climate work.
Society can barely afford to exist when the people borrow from banks.
And then there are regularly worsening financial crises. These occur when people cannot afford to take out new loans and keep money production going. Then the people can reduce the money supply further by paying off their loans.
Government money creation is not a loan but wealth creation.
More to read
- Tax
- No government deficits – society's unnecessary straitjacket
- Resistance to deficits and investments leads to recession in Sweden
- The right tries to blame post-Covid inflation on welfare and deficit policies
- He who is in debt is not free - the untrue myth about Göran Persson and his heroic glory
- It was not the welfare that gave the race of the 90s.
- The Deficit Myth by Stephanie Kelton
- The Entrepreneurial State by Mariana Mazzucato
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But if you just make it clear that we owe it to ourselves, it shouldn't be a problem?
At the same time, it is a bit shady to claim that "The people owe the state their labor supply". That brings the thought to what in Danish is called the Competition State, see https://www.parabol.press/vi-lever-inte-i-en-valfardsstat-vi-lever-i-en-konkurrensstat/. That is, a society where our human needs are not worth anything, but where we are obliged to help the state to compete on the world market.
We might have to file the argument here. Not least in what is called "framing" in English - I don't know any good Swedish expression for how you put things into a context where you can get people to swallow even rather hard-to-digest ideas.
I must say that the state can demand from its people that they do the best they can and that the state must help people according to their ability. Loan is, however, a very bad concept for the reasons I mentioned.
There we differ radically. The state has no demand on me more than the conditional that I follow the laws and pay my taxes. Conditional, because both laws and state budgets are assembled in a way that is not so rarely controlled by upper class interests and perverse neoliberal fantasies. Which I therefore consider myself entitled to oppose, if it can be incorporated into a reasonable political popular movement strategy to change the political conditions.
But you have to get your tax money in somehow? This often requires work, job hunting or sloppy writing. I mean, I must stress that the individual has no obligation to work, but there will be problems if the whole population refuses to work.
The difference between the traditional social-democratic/social-liberal welfare state and the "competition state" that is being debated in Denmark seems to me to be that the welfare state compensates the citizen for accidents of various kinds, while the competition state lays all its powder on the citizen to work and contribute to the state's competition on the world market.
Even with the welfare state, it is of course understood that if the citizen does not make a little effort himself, it will be quite meager - but that is not a *requirement* from the state. The focus is on compensation.
Those I know who work in the social sector feel this quite well. The focus has shifted radically since the 80s.
Yes, but I meant a little more. I'm not a workaholic. What I meant is that tax is a use of the country's resources which are e.g. its natural resources, manpower, infrastructure, know-how, defence, industry, agriculture, public health etc everything imaginable but a resource is also the people's need for care as this leads to production and consumption. Human needs are the basis of all production and consumption. But late capitalism tries more to satisfy our destructive needs such as barbecue chips, processed ready-made food, fashionable clothes, while a healthy welfare state focuses on giving us what builds us into a healthy soul in a healthy body and which allows us to have equal and respectful relationships and collaborations between each other and society. I've never been a hard worker. Hard work is the most destructive and ineffective thing there is.
Loans are purely technical to the country's economy.
Deficit another name for the fact that we are in the red since deficits are financed with loans and these are governed by our n policy which interest we have to pay on the loans. If we show future prospects for Sweden, we get less interest. and better loans. It is politics that governs Sweden through the decisions made in the Riksdag and forms the deficit.
No, the deficit only needs to be that the government creates money in the budget totally interest-free. If the state wants to borrow from private individuals like bonds, it is a form of quantitative easing where you stimulate the people's purchasing power. But creating money in the budget is completely interest-free.
If you haven't calculated in the budget where the money will be taken, it will be from taxes. Then taxes need to be raised and not lowered if we are to have money for welfare, health care, schools, housing.
Read The Deficit Myth by Stepahnie Kelton and I think you will change your mind. My belief is that you are wrong. Your statement presupposes that money would have value in itself. It's not like that.
Of course, we agree there. As long as an abundance of money and too little to use it for creates inflation, there is no problem. Even moderate inflation is not a problem – South Korea had inflation of 30 percent a year during the period it rose from poverty to more than the global middle class, according to Ha-Joon Chang.
This is not to say that money creation is the solution to all problems – the real limitation is the availability of skilled people and tools.
Labor and capital create results just as for the farmer sowing is worthless if it is not plowed into the field and plowing into the field without sowing. Since the 1970s, society has been told that the money is missing, so that the resources have been left unused or worn out to create money in the bank, swimming pools and luxury villas for Capital.
Like Fröding's farm pin:
(....)
And she was too stingy to feed the pigs
— and the pigs starved to death.
And grain for chickens was to waste and waste
— and the chickens died anyway.
And he was too stingy to give the fields corn,
and fertilizing was far too expensive
— and the dyke became pasture, and the field became wood,
and the meadow became a marsh again.
At last the stately homestead lay desolate,
and barns and stables were deserted
— the stingy, they were like deaf and dead
and did not notice the decay of the farm.
(....)
Otherwise, I consider money to be a lubricant and nothing else. There should be as much as needed. Too much just gets messy. Too little and it gets stuck.
Then there is an unknown point of how much extra money can be spent. Low- and middle-income earners need to be able to save for major purchases or periods of illness and unemployment. But when society focuses on saving, as with societies that aim for financialization, it is destructive.
Please read the posts below about taxes and deficits and feel free to comment on what you think
https://www.redjustice.net/skatt/
Maybe this post can explain better http://www.redjustice.net/skatt
I agree in principle, but as I understand it, neither this post nor Stephanie Kelton gives a true picture of the real conditions. The Swedish state is not allowed to create its own money (due to EU rules?) but must "borrow" from banks. The only real Swedish kronor the Riksbank creates are the cash, coins and notes, and Riksbank money that is in the banks' accounts within the RIX system. It is on the basis of this real money that the private banks create means of payment in the form of "loans", i.e. a promise to cough up coins, cash, when requested. It is requested quite rarely, but you usually just move the numbers between accounts at the different banks. The private banks deal with counterfeiting. Only the state should have the right to put new means of payment into circulation.
I know others familiar with money creation who support me that the state can create money.
Here is a post on this, from someone more in the know –
https://penningreform.blogspot.com/2023/06/mmtare-ar-medvetna-eller-omedvetna.html
"The problem with MMTers is that they cannot distinguish a debt of kroner from kroner - they bundle them together in the same concept: "money". The banks invent credits (ie their own debts in kroner) but falsely claim that they "lend" in kroner to customer accounts. Most people can tell the difference between trading with chalk and trading with money, but not MMTers. The banks' debts in kroner to customer accounts can be used as means of payment through the banks' account system, but are not kroner."
The post you linked to said that satten could create pneg. Then the value of money is just a debt.