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gwbas1c 7 months ago

Do you mean that the government could merely print money instead of collecting taxes?

That would trigger higher inflation, which would have some very nasty consequences. Assuming you're thinking of the EU or US, it would effectively kill the Dollar / Euro's status as a global currency.

kbolino 7 months ago | parent [-]

Monetary inflation happens when the money supply grows too fast. To reduce inflation, the government pulls money out of circulation. Taxes are one way to do this, but not the only way. Interest rates are another way, and increasingly are the primary way.