Government Spending, Taxes, and Inflation: Debunking Misconceptions

The chapter delves into the misconceptions surrounding government spending, taxes, and inflation, highlighting how the government, as the monopoly issuer of its currency, can spend without being constrained by funds. It discusses the weaponization of the question 'how are you going to pay for it?' against left-wing governments seeking to increase social spending and explains the role of money creation in controlling inflation. The chapter also addresses the ingrained worry about inflation in political culture and debunks the misconception that the government needs to borrow money or sell bonds to cover expenditures not covered by taxes.