55
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 ...
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 ...
- 43.9k
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 ...
- 22k
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 ...
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 ...
- 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 ...
- 89.2k
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 ...
- 245
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 ...
- 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 ...
- 1,799
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, ...
- 133k
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 ...
- 104k
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 ...
- 13.8k
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 ...
- 16k
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 ...
- 89.2k
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 ...
- 89.2k
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, ...
- 89.2k
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....
- 43.9k
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 ...
- 5,610
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 ...
- 411
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 ...
- 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 ...
- 6,908
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 ...
- 258
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 ...
- 200
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 ...
- 1,607
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 ...
- 587
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 ...
- 133k
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 ...
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 ...
- 252
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 ...
- 89.2k
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