MMP Blog #33 Responses
Comments and responses on the Modern Money Primer Part 33.
Milton Friedman was a conservative economist and a vocal critic of “big government” and of Keynesian economics. Yet, in 1948 he made a proposal that was almost identical to Lerner’s functional finance views.
Even if the government ties its hands behind its back and its shoes together, it makes no difference – the balance sheets still balance.
We should not be fooled by such self-imposed constraints. We should be able to see through them to understand that since they are imposed by government on itself, they can be removed.
The best kind of payment is an obligatory one—one that must be made to stay out of prison, or to avoid death by thirst. An obligatory payment that must be made in the sovereign’s own currency will guarantee a demand for that currency.
In short, to avoid the penalties imposed for non-payment of taxes (that could include prison), the taxpayer needs to get hold of the government’s currency.