Common Good Economics – The Real Purpose of Taxes

YouTube has the video Common Good Economics – The Real Purpose of Taxes.

Doug Pagitt and resident Economics Professor Fadhel Kaboub discuss the real function of taxes at the Federal level.

You can always get a great explanation of the way money works when a knowledgeable person interviews Fadhel Kaboub. It all went well until they started talking about the money private banks create. Fadhel went right back to the standard fiction. I can’t convince MMT experts to stop doing this. I have tried.

Private banks don’t create money. They create promises of money. If too many people want actual money in their hands, the banks have to get that money from the Federal government. As long as people trust banks to hold their money, the promise to give it to you when you need it is good enough (until it isn’t, then the economy freezes up as it did in 2008.) If private banks create money, what was the crash of 2008 all about?

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