I’m not proposing anything this is how all economies work. This is just the accounting reality.
Gov can’t take a loan when people don’t have money. Spending will always come before income. That part is just standard Keynesian economics. Keynes limited it to private sector but it’s exact same for Government.
Please tell me, a new country is formed on another planet. The newly formed state wants to spend, it imposes tax obligations. How will people pay taxes when money hasn’t been spent yet?
What you’ve described definitely doesn’t sound regular. Interest rates don’t exist, printing more and mormoney to pay for stuff doesn’t cause inflation etcc.
Spending before income, sure. But this plant isn’t actually making an income since it has to fight against Chinese, American manufacturing and they can out-subsidise their manufacturing so much so that your domestic manufacturing isn’t competitive anymore. That’s the whole issue.
Now as it stands, the government takes a loan they have to pay interest on to subsidise manufacturing and they’re hoping to get the money back (unless they want to keep taking loans) through taxes. You’ll just lose out money without any tangible benefit. You could use that money to pay for roads at least!
You are suggesting the country can set the interest rate and will get loans against that rate. Even when the loans pile up and the outlook on paying that loan off in agreed on time gets worse.
The idea that a country can set their own interest rate one-sidedly with global creditors and receive endless credit against that rate is just a fantasy.
I’m not proposing anything this is how all economies work. This is just the accounting reality.
Gov can’t take a loan when people don’t have money. Spending will always come before income. That part is just standard Keynesian economics. Keynes limited it to private sector but it’s exact same for Government.
Please tell me, a new country is formed on another planet. The newly formed state wants to spend, it imposes tax obligations. How will people pay taxes when money hasn’t been spent yet?
What you’ve described definitely doesn’t sound regular. Interest rates don’t exist, printing more and mormoney to pay for stuff doesn’t cause inflation etcc.
Spending before income, sure. But this plant isn’t actually making an income since it has to fight against Chinese, American manufacturing and they can out-subsidise their manufacturing so much so that your domestic manufacturing isn’t competitive anymore. That’s the whole issue.
Now as it stands, the government takes a loan they have to pay interest on to subsidise manufacturing and they’re hoping to get the money back (unless they want to keep taking loans) through taxes. You’ll just lose out money without any tangible benefit. You could use that money to pay for roads at least!
Interest rates exist. It’s set by the central bank.
Please read the book to understand more. This has been a long thread.
You are suggesting the country can set the interest rate and will get loans against that rate. Even when the loans pile up and the outlook on paying that loan off in agreed on time gets worse.
This will go on forever, I’m just describing reality. Please read the book.
Regards.
The idea that a country can set their own interest rate one-sidedly with global creditors and receive endless credit against that rate is just a fantasy.