“As monopoly issuer of the currency, the State could not collect any money from the public in payment of taxes unless it had first spent (or lent or given) that money to begin with. The first key for any successful money is acceptability, general acceptability. General acceptability is driven by the money’s acceptance by the government in payment of taxes and other obligations. Taxes are not levied for the purpose of generating revenue. A money monopolist’s spending is never revenue-constrained. This is what is meant by “tax-driven money”: taxation creates a demand for otherwise worthless currency.” – Mathew Forstater
Additional Resources:
Forstater, Mathew. “Can You Fall Off a Cliff and Hit a Ceiling?: On Shooting Yourself in Your Own Analogy,” CESifo Forum, 14 (June 2013), pp. 32-37.
Forstater, Mathew “The Natural Rate of Interest Is Zero,” Journal of Economic Issues, 39 (June 2005): 539-542.
Forstater, Mathew and Pavlina Tcherneva (eds.). Full Employment and Price Stability: The Macroeconomic Vision of William S. Vickrey. Cheltenham, UK: Edward Elgar Publishing Limited, 2004.
Nell, Edward J. and Mathew Forstater (eds.): Reinventing Functional Finance, Cheltenham, U.K.: Edward Elgar, 2003.
Forstater, Mathew “Bond Sales,” in Cynthia Northrup, ed., History of U.S. Economic Policy, 1600s-2000: An Encyclopedia, ABC-Clio, Vol.1, p.30. 2003.
Forstater, Mathew. “A General Framework for the Analysis of Currencies and Commodities” (with Warren Mosler), in Paul Davidson and Jan Kregel (eds.): Full Employment and Price Stability in the Global Economy,” Cheltenham, UK: Edward Elgar, 1999.
Forstater, Mathew. “Robert Eisner’s Common-Sense Commitment to Full Employment and Activist Fiscal Policy,” Journal of Economic Issues, 33 (June 1999).
Forstater, Mathew. “Functional Finance and Full Employment: Lessons from Lerner for Today,” Journal of Economic Issues, 33 (June 1999).
Forstater, Mathew. “The European Economic and Monetary Union: Introduction,” Eastern Economic Journal, 25 (April 1999).
