Truth To Power wrote: Crucially, the geolibertarian system can reconcile full individual liberty rights with a fairly large government, because the government is funded purely voluntarily, through recovery of the value its spending on desirable infrastructure and services creates at the local level, augmented by seigniorage on issuance of legal money at the national level.
quetzalcoatl wrote:National governments are not funded by taxes (in any system where debts are denominated in a sovereign national currency).
That claim is absurd. National governments are indisputably funded by taxes to the exact extent that those taxes transfer purchasing power from the private to the public sector.
"Those who can make you believe absurdities can make you commit atrocities." -- Voltaire
The more interesting corollary of Voltaire's penetrating observation is that those who would make you commit atrocities first try to make you believe absurdities.
The actual functional purpose of taxes (as opposed to the oft-cited rhetorical purpose) is to act as a feedback control (thermostat).
Another absurdity. The purpose is to transfer purchasing power directly, openly, and with minimal disruption, rather than indirectly, surreptitiously, and destructively through inflation.
Raising taxes destroys money in the economy,
It does no such thing. Where money has been created as debt, repaying that debt destroys money. Though "Modern" Monetary Theory correctly describes the creation of money as debt to private commercial banks, it totally misunderstands the relationship of money to taxes.
while lowering them frees up money.
No, it doesn't. It simply changes who gets to spend the money next.
Taxes do not act to "fund" government operations, they are entirely unnecessary for that purpose.
More absurdity. Taxes fund government operations to the exact extent that they transfer purchasing power from the private to the public sector. Of course, you could just print money, but that would quickly result in hyperinflation. Or you could do everything with corvee labor and expropriation, avoiding the hyperinflation. But those are very harmful and inefficient alternatives. Taxes are just a more efficient and convenient way to ensure government can operate without excessively disrupting the private economy.
So the voluntary nature of government funding is an illusory problem (so far as the federal government is concerned).
Nonsense. Government needs purchasing power, and it has to come from somewhere. Inflation surreptitiously transfers purchasing power from creditors and money holders to debtors and money issuers, but it would be dishonest to say that transfer is effected voluntarily.
Similarly, debt is issued in order to provide interest bearing savings for the private sector;
Garbage. The money banks lend to governments is not saved up by anyone, it is created by the bank when it is lent into existence. The debt issuance is to give banksters money for doing nothing.
there is not functional requirement, per se, for deficit spending to "finance" government operations.
True: the debt is to provide interest income to private banksters in return for nothing.
Debt issuance to offset 'deficits' is a legal and institutional arrangement, of course, but it is not functionally necessary to accommodate government spending.
True, the money could be issued by the government instead of private banksters, but the inflationary impact would be much greater, unless the banks' money multiplication privilege were removed.
Government could, under a system such as you describe, simply issue enough debt to accommodate private savings demands irrespective of budget issues.
You mean, to satisfy the wealthy's desire to get interest income in return for nothing, without taking any risks or bothering to identify productive avenues of investment?
Since decreasing spending is functionally equivalent to raising taxes,
It's only equivalent in its effect on government debt.
it would in principle be possible eliminate taxes altogether - simply by using national spending as the sole feedback mechanism. To do so would, obviously require dispensing with legislatures determining spending levels and turning that function over to a technocratic agency able to act quickly to raise or lower spending as inflation increases or subsides. (The legislatures could still control where money is spent, just not how much.)
Presumably that would be through establishment of an independent Mint whose sole mandate was price stability (or consistent low inflation), which would print money as needed to maintain price targets, and ship it to the Treasury for the executive to spend into circulation. This is the same as the Greenbackers' proposal as far as it goes, but if it were the ONLY source of federal government revenue, it would mean, in effect, limiting federal government spending to the amount of money needed to accommodate economic growth plus the allowed level of inflation. I.e., in practice, a much smaller federal government. That might be possible and even desirable, but although it would provide a nice negative feedback to the monetary system, the mechanism you propose would result in a federal government unable to budget, as it would not know how much money it had to spend from week to week. Just in the interest of stability and being able to budget, the federal government should probably levy some taxes that are inappropriate for local jurisdictions, such as luxury consumption and excise taxes, which are otherwise easily avoided by moving the tax base to a friendlier jurisdiction.
The present system of central banks controlling interest rates, and also functioning to "stimulate" spending is not workable.
Or at any rate, the debt money system is inherently unstable, its positive feedback loop effectively making the boom-bust cycle inevitable.
Unfortunately libertarians are joined at the hip to Austrian economics, so they are cognitively blind to such realities.
Feudal "libertarians" are, but geolibertarians are not, which is why they -- uniquely -- are capable of knowing and understanding reality.