Post from greshambouma at CHUM.LY

Taxing, borrowing and spending is highly stimulative as long as much of the borrowing or taxes comes from outside the system. When all the taxes and borrowing comes from inside the system all you do is transfer economic activity from the wealth producing (private) sector to the wealth consuming sector (public). Wait, you say, you can’t tax foreign sources! Not true, you just have to be sneaky. You do it by expanding your money supply, which is a stealth tax on anyone who holds your debt or currency in their account. As long as the market does not devalue your currency as you inflate it, you transfer wealth and the game goes on. http://chum.ly/n/3a1cce