April 10, 2020

Infusing capital for boosting the economy is actually a redistribution of wealth

Governments are pushing huge amounts of money into economies.
People: do you realize that all this cash is in fact a loan on your future revenue taxes ?!

Infusing capital in the economy is simply a redistribution of wealth in society, controlled by the state.
We, the whole society of taxpayers, are actually handing our wealth to the government, who decides where best to use it, redistributing it back to society.


1. Money is an abstract construct. Its only value is that we can exchange it for actual products. Money exists only because somebody (all of us) trusts them.
2. A theoretical model (valid theory, I love it) is that fiat currency is in fact a loan against future taxes.
I.e. The government prints money, i.e. creates abstract value, which is not backed by anything yet. There is no "product" created. So where is the product?
The product is the taxes that we will pay in the future, using the exact same currency created by the government now.
So basically money is a form of transfer of value from society to the government.
3. So, the current infusion of capital in economies by all governments can be seen in this model as a huge transfer of value from future production, towards current economic needs.
4. But future production doesn't exist yet. So what do we actually transfer?
We actually transfer wealth from the whole current population to the current government, who is deciding where to redirect this value, infusing it back into society.

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