Yes, but tax revenue stream is largely a function of price level, which is itself a function of central bank policy. People buy treasuries because they believe the central bank won't devalue the currency (they search for 'real' return). The 'collateral' is thus <b>faith</b> in sane management. Meaning the government instills faith that the central bank won't devalue at a whim.
I make a product, and sell it for more than my costs and salaries. I've created a situation where my net assets are more than my liabilities, and thus have equity.
We are talking real world here not some academic mumbo jumbo. Go find someone in the real world that loans money on faith as opposed to revenue.
By the way, I assume you are implicitly talking about the Federal reserve balance sheet ... http://www.federalreserve.gov/Releases/H41/Current/ Notice the capital account (although relatively small). That is your equity equivalent account. Where do you come up with this stuff?
a fishhook is a fishhook, whale blubber is whale blubber, there values move up and down, money is a means of exchange,its value goes up and down,its easier to exchange for a 3rd good, if you need anything beyond fishhooks or whale blubber, It's value is based on goods needed,those goods are real, money is not real, it is just a means of taking an imagined value and creating a tangible marker for it, the value changes with perception, so does the marker. The fed can imagine anything it wants,i am no economist but in laymans terms, they have made enough imaginary money to keep the economy afloat,i am sure in their imagination the plan will be for all the currencies to change in value over time so as to even out the values,the whaler needs the fish hooks and the fishhook makers need the whale oil to produce them. As this evaluation process happens everything will go down in value, or at least to the point where the both merchants will still be in business,without them the imaginary money assessors are out of a job this is all babble,obviously , but you get the underlying gyst
Governments don't have shareholder equity and in governmental accounting "equity" is simply a plug number.
??? The only reason "someone in the real world" would loan to the US govt is if the real returns on their money were positive. That means they need to have faith the dollar will not devalue at a rate that exceeds their interest payment. And for another example, the faith one (particularly a ratings agency) has that their capital will be returned directly affects the perceived credit rating of an issue.
How much would our debt go for if there was no revenue to service it?? How can one have faith in a debt instrument that is not backed by the ability to service it? It's amazing the disconnect that exists between what is perceived as reality and what is actually real.
I would argue that it would, as those "productive assets" need imports - ie, assets not denominated in USD - to work at all. Not to mention many of the "productive assets" are located off shore. I agree with what you're saying for a closed system, but any economy with a large trade component, and especially one with a massive trade deficit, is nowhere near a closed system.