For reasons that I can guess at but do not fully understand a lot of arguments seem to turn around someone saying that in theory X could be true; and then someone else saying that no X never happens; and then someone else saying yeah, but X would have all of these good/bad consequences.

Yet, none of these statements are inherently contradictory.

For example, there seems to be a bit of a stir on all sides about the proposition by Modern Monetary Theorists that the government never has to issue bonds but simply can simply write checks for what it wants.

Indeed, the only reason the government ever has to collect taxes is if this process ends up stimulating aggregate demand so much that inflation is on the horizon.

I consider myself a New Keynesian but I see nothing in these basic statements that contradicts my view of the world. It’s a different frame but the basic chess pieces and their positions are the same.

Now, of course this can get you into some hot water, but I never heard the claim that this course of action was without fault, only that it was possible. And, indeed, it is possible.

In fact I can do you one better. The sovereign by virtue of being the sovereign does not even need to collect taxes or issue money. The government could simply commandeer resources by fiat

If the government needs a road built it can simply order ACME construction – on penalty of death of all employees and shareholders – to build it a road. Or alternatively it could draft men and women into a state run construction company. It would need to provide them with room and board lest they perish, but it does not have to compensate them otherwise.

That is what it means to be the sovereign.

Now whether people would go for this and whether you would retain your sovereignty under this type of governance is an open question. Though I don’t think it would be that hard. We had – and to a large extent still have – an ethos in which being drafted to kill and potentially be killed for your country was considered noble.

A civil service draft doesn’t seem that crazy. In any case, I think we can all agree that it is theoretically possible.

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