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The federal government does not spend money


When you buy a coke, you pull a dollar from your limited supply, put it in the machine and as far as you are concerned, it is gone forever. If you want more dollars you have to go get some more. In reality, your ownership of the dollar and trading it away is only a small part of that dollar’s travels. The entity that sold you the coke now has the dollar and will spend it again. If it were not for taxes that dollar would circulate forever.

A government dollar is different. If the US government buys a coke, it immediately gets a portion of the money back through taxes. The fellow that sells you the coke pays income tax, social security tax, sales tax, employment tax, property tax, business tax, etc. out of that dollar. After the taxes are taken out there is only 30 to 60 cents left for the coke seller. When he buys something with what is left,


Added: Jan-27-2010 
By: boomersooner
Tags: Money, Wealth, Federal Reserve, Goverment, boomersooner
Views: 8253 | Comments: 11 | Votes: 1 | Favorites: 1 | Shared: 1 | Updates: 0 | Times used in channels: 1
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