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Date: Tue, 4 Feb 92 14:07:21 CST
From: [email removed] (Steve Higginbotham)
Subject: (3652) more Navy/merchant bickering...
>> 100% of GNP in taxes is the maximum they will get, and even long
>>before that their return will begin to decrease with increased taxes.
>I take it they don't do "deficit spending" over there. That is the
>process of spending money you don't have. Most governments use it, and
>make up the difference by printing money. This is called "inflation".
I hope this was some kind of joke? Deficit spending is done by the
government borrowing money and/or selling bonds that they cannot
reasonably expect to pay without borrowing. The amount of actual
cash money that is printed by the government has nothing to do with
either its income or its outlay, especially in a modern economy where
90+% of all government transactions are either electronic or paper
(not cash) transactions. In point of fact, I believe the actual
amount of cash money in circulation has been dropping, as the government
prints/coins less than it destroys as outdated and estimates is lost/
destroyed in private hands. Inflation and deficit spending are linked,
true, but neither has anything to do with printing money.
Lyle