54 votes

How is printing money different from taxing people?

I can see one difference between taxing the people and printing currency. Taxing the people only takes money away from the people in that country, as the people outside the country don't have to pay ...
Ekadh Singh - Reinstate Monica's user avatar
42 votes

How is printing money different from taxing people?

Taxation Taxes are usually paid on some sort of economic activity (earning income, purchasing goods or services, etc). In other words, they have value because the underlying activity has value. In ...
Machavity's user avatar
  • 48.4k
36 votes

How do governments keep track of their issued currency?

Bank notes have serial numbers. The mint keeps track of what's been issued, and also the quantity of notes that have been taken out of circulation and destroyed. Back accounts are another matter. In ...
pjc50's user avatar
  • 22.1k
28 votes

How is printing money different from taxing people?

Even allowing for similarities, the two differ in at least one important aspect: The government controls its taxes, assuming it is efficient in collections. Therefore it can lower taxes rather ...
Italian Philosophers 4 Monica's user avatar
16 votes

How is printing money different from taxing people?

tl;dr– There are idealized-scenarios in which the government printing-cash would be largely equivalent to the government collecting taxes. This answer considers such an idealized-scenario, then ...
Nat's user avatar
  • 2,067
15 votes

The US has done lots of Quantitative Easing, so why does it not do the same for its debt?

Inflation When the Federal Reserve uses quantitative easing, it adds more money to banking ledgers and removes investment opportunities. The amount that they can do is limited by the reality of the ...
Brythan's user avatar
  • 89.6k
14 votes

How do governments keep track of their issued currency?

For example, I have $100 in the bank. I pay $50 to someone else, so the bank is supposed to take $50 away from me and add it to the other person's balance (or send it to their bank). How does the ...
Tanner Swett's user avatar
11 votes
Accepted

Why don't governments follow the "save in good times, spend in bad times" rule?

There is some debate about whether it's a good rule in the first place but there is a number of reasons why governments don't do this: Because they don't have to. Governments have in their taxpayers ...
Peter S.'s user avatar
  • 280
10 votes

How is printing money different from taxing people?

Not only is printing money different from taxing people, it is in fact the exact opposite. Since you talk about "printing money," I assume you are talking about a country with a fiat ...
cjs's user avatar
  • 2,275
9 votes
Accepted

How does the United Nations get information on North Korea's economy?

I'm not sure about this year, but for 2017 the figure from the UN WESP report (-3.5%, table A.3) coincides with the one from BOK (the Bank of South Korea), which regularly publishes such statistics, ...
the gods from engineering's user avatar
8 votes
Accepted

Who limits the euro issued in each eurozone country?

Only the ECB has the right to issue Euro banknotes (p. 103). States can issue coins up to a total value set by the ECB. At some point during the initial creation of the Euro, and during the accession ...
o.m.'s user avatar
  • 109k
8 votes

How do governments keep track of their issued currency?

There isn't a central registry with any detailed information on how much of any particular currency is in circulation. Governments have estimates for physical currency in circulation, but most money ...
Ryathal's user avatar
  • 13.9k
7 votes
Accepted

How much of North Korea's economy is supported by the black market?

I have no hard data, but to give you an idea of the legitimate market's comparative strength, prior to 2013, the Choco Pie snack cake (a brand of Moon Pies) had entered into the North Korean Black ...
hszmv's user avatar
  • 16.1k
6 votes

What are taxes for since law forbids printing of money?

Printing money causes inflation, which is an implicit tax. Worse, inflation is self-reinforcing. So if you print $3.8 trillion one year (USA federal spending), you have to print $7.5 trillion next ...
Brythan's user avatar
  • 89.6k
5 votes
Accepted

Who decides what can serve as reserve for fractional reserve banking?

In the United States, the Federal Reserve (central bank) publishes the reserve requirements. Reserve requirements must be satisfied by holding vault cash and, if vault cash is insufficient, also ...
Brythan's user avatar
  • 89.6k
5 votes
Accepted

How do governments stop hyperinflation?

Runaway or hyperinflation occurs when there is a lot more money than there are goods at current prices. In theory, you could fix this two ways. First, you could flood the economy with goods, ...
Brythan's user avatar
  • 89.6k
4 votes
Accepted

Can the U.S. government cut a check to taxpayers by printing more money?

You're correct. The government technically can never run out of money because it runs on the fiat standard Fiat currency is legal tender whose value is backed by the government that issued it. The U....
Machavity's user avatar
  • 48.4k
3 votes

How is printing money different from taxing people?

Yes and no. Let us start with the no answer. They are no different from taxes. The net difference between the cost of producing the money plus the depreciation in the value of existing bonds is a tax ...
Dave Harris's user avatar
3 votes

How is printing money different from taxing people?

First, it is good to know that "printing/minting money" is usually not how the modern governments cheat when taxes cannot adequately fund the policies envisioned. What they do is to play ...
fraxinus's user avatar
  • 6,100
2 votes

The US has done lots of Quantitative Easing, so why does it not do the same for its debt?

This is an excellent question and it speaks to the fact our media and our schools teach and speak to this topic as if we did not have the worlds' reserve currency. Also, we have been living in a time ...
Daniel's user avatar
  • 225
2 votes

The US has done lots of Quantitative Easing, so why does it not do the same for its debt?

QE was FED buying medium and long-term bonds. The effect of that was to reduce the interest rates of long-term bonds. The question's premise was that this was done to help banks, but it wasn't. It ...
grovkin's user avatar
  • 6,956
2 votes

How do governments keep track of their issued currency?

Making Money While a government can issue currency, in most cases it is issued by a Central Bank. These banks are often government owned, but could also be private entities. While interesting, this ...
cpcodes's user avatar
  • 258
2 votes

How is printing money different from taxing people?

Both taxes and printing-press inflation are a transfer of purchasing power from the people to the government, so in that matter they are the same. The chief difference lies in the strategies that the ...
EvilSnack's user avatar
  • 1,593
2 votes

How does the United Nations get information on North Korea's economy?

I don't know about the United Nations specifically, but (as hinted at in Fizz' answer) remote sensing offers multiple methods that can be used to estimate the size of an economy: Agricultural land ...
zinfandel's user avatar
  • 200
1 vote

How is printing money different from taxing people?

I think taxation is much more stable and more predictable for people to manage their financial life. When you pay tax, although it may (and it is) be unfair, but it is finished. You subtract the ...
Amir reza Riahi's user avatar
1 vote

How much of North Korea's economy is supported by the black market?

There's no firm data on this because NK is not publishing much if any info on its economy. But there are some expert estimates: Not only does North Korea not publish economic data, but it has an ...
the gods from engineering's user avatar
1 vote

How do governments keep track of their issued currency?

"If a government issues currency and it ends up in bank accounts abroad, what stops banks from making a 'mistake' during a transfer, accidentally duplicating the currency?" Short answer: Nothing ...
Kristopher Noronha's user avatar
1 vote

How do governments keep track of their issued currency?

What you describe is exactly what happens. Banks create (virtual) money. Namely, if a bank actually "has" (whatever that means in this context where we do not talk about cash) a certain amount, then ...
Hagen von Eitzen's user avatar
1 vote

How do governments keep track of their issued currency?

Federal Reserve There are two ways to track United States issued currency. One is by the currency itself. If you have actual paper or coin currency, then clearly you have a valid claim. The other ...
Brythan's user avatar
  • 89.6k

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