11/n This is also a short and sweet primer on functional finance/mmt: https://www.mmt.works/mmt-taxes-do-not-fund-government-spending/ #cdnpoli #mmt

10/n Anyway, this episode of the MMT Podcast really helped me think hard about why it matters how the story of money is told: https://www.patreon.com/posts/episode-199-wing-131820648?utm_medium=clipboard_copy&utm_source=copyLink&utm_campaign=postshare_fan&utm_content=web_share #cdnpoli #mmt

9/n None of the above means that the federal government can just spend whatever it wants ... because inflation could become a problem. But at the same time, we do not have to accept the premise that in order to spend on programs 'we' want the federal government has to cut other programs #cdnpoli #mmt

7/n I mean I know we hear about Canada 'borrowing', but the country's publicly available accounts show that that borrowing is almost entirely in the form of the country's own treasury bills and bonds, all of which are payable in Canadian dollars --- Canada cannot 'run out' of the currency it is the sole issuing authority of. #cdnpoli #mmt

6/n

A federal budget is a plan for a given fiscal year proposed by the finance minister and then voted on by parliament. The money in that proposed budget does not come from taxes previously collected. It comes from the currency issuing authority (the Bank of Canada, BOC). BOC does not have a pile of dollars lying around in a vault from taxes collected the year before or whatever. If parliament votes to approve the budget, the finance minister just instructs the BOC to credit the relevant accounts literally with keystrokes. #mmt #cdnpoli

5/n Federal government spending and taxing is not like a household. I think that matters because it can change the story about whether 'we' can or can't afford to do this or that thing. I guess what I mean is that I hear talk on both the left and the right that presupposes cuts are necessary in order to fund other or new federal initiatives. #cdnpoli #mmt

4/n To be clear I'm not bringing any of this up because I'm some sort of pro- or anti-tax person. It just seems weird that people on both the left and the right keep talking about federal government taxing and spending by relying on a household metaphor. #cdnpoli #mmt

3/n Federal taxes can be collected for other reasons (e.g. to discourage some behaviours (smoking) or encourage others (charities)), but those reasons are secondary to the two primary reasons for federal taxes. #mmt #cdnpoli

2/n Federal taxes are collected only for two basic reasons: one, to create a demand for the national currency (Canadian dollar) because people have to pay their taxes in that currency and two, as a way to control inflation, including inflation that could be caused by the government's own spending. #mmt #cdnpoli