You apparently do not have sufficient background to understand what I have posted and I have no more time at present to go into more detail with you. Introducing the forex trading of currencies, which determines the exchange rate of currencies one to another, is an externality not necessary to the understanding of the concepts I posted on. Taxes give currency value in the sense that you will work to obtain whatever currency you are required by your government to pay your taxes in or go to jail. My posts here have dealt only with the most basic concepts imaginable, and there has been no discussion of inside or credit money. I limited my discussion to what economists call the money created by government that is not offset by a private sector liability. This net money, which I and others call "outside money," is available to pay taxes. When taxes are paid, the public reduces its outstanding tax liability which is exactly equal to the reduction of its holding of government fiat money. Simple logic tells you that you can not pay your taxes until the government has created the money needed to do that by spending it into the economy via purchasing goods, services and assets or used it to provide transfer payments which retire government liabilities. Once the government has spent fiat money into the economy it becomes available to be transferred back to the government to meet tax liabilities. You have a choice . You can go to jail or you can pay your taxes. thus fiat money the government created and spent into the economy acquired a certain value to you, as it could keep you out of jail! [see for example: Wray, L. R., "Understanding Modern Money," pgs 155-176, Edgar Elgar, Cheltenham, UK , 1998.]
Money initially represented the goods and resources in an economy, then it was backed up by a commodity like gold or silver and then it generated its own value by being trade on an exchange. You seem to be using taxation and the future income flow that taxation generates as a resource to base the value of the currency against like using gold or silver. Money has moved on since that model, when money became a traded commodity in its own right it advanced itself and became something that could be traded with, rather than simply something that can enable trade. I don't like your position that the resource used to back up the currency is forced asset seizure, which would result in a jail term if people do not pay it. I also find this understanding of money archaic and ignorant of how money operates on the international currency markets on the global arena. Your position of money is that it is valued by the confiscation of the future wealth of the population and a tool that enables trade. My position of money is that it is a commodity in its own right that is traded to purchase other commodities, it is no longer simply a tool that enables trade but a tradable resource in its own right. This argument detracts from the original point, that the government debt can be outgrown by increasing economic growth which will shrink the government debt as a percentage of GDP. On this matter you seem to agree with me and I would hope that you would see the value of the new economic growth techniques that I have presented to the government over the last decade, which have been successful in application. The other methods of dealing with the high government debt will either be consequential or end in inflation, which I would like to avoid to protect pension fund values.
According to my understanding, this novel coronavirus has affected almost every nation of the world. Most nations applied stringent lockdown to curb this, but due to the lockdown, cross country trades suffered, that directly affected the exports and imports and disturbs the BOP equilibrium. Considering the current scenarios, some nations have effectively managed to overcome the financial stress.
It depends on what you class as money, because originally it was just gold and silver and before that it was barter. I find your position of money archaic because it follows a principle of being backed up by taxation receipts, rather than having its own value because it is traded on an exchange. I am more interested in how money behaves as a commodity that is traded on an exchange to understand its nature when certain factors are altered.
In the United Kingdom government debt has rocketed to over 100% of GDP. This is what I am trying to address in the report. I am putting forward alternative solutions to pay off the government debt and also to find a way of keeping the interest payments low by finding other ways of controlling inflation and keeping the interest rate low.
This is hilarious, because modern governments that use fiat currency -- or its equivalent -- do not have "debt" in anything like the traditional meaning of that word! Instead, they have deficits which is the positive difference between the money created and spent into the economy minus the money taxed back out. Positive Deficits are of two types: necessary and un-necessary. The necessary deficit is the deficit needed to maintain a stable buying power of the currency. The un-necessary deficit is any amount above that. The balance between these two types of deficits is determined by the quality of government's money management. If your government pays off, or attempts to pay off, necessary deficits, your economy will be starved for the money it needs for commerce, savings, and investment, and will be thrown into recession. If you try to pay off this type of deficit by growing the economy without a corresponding growth in deficit, the result will be the same, i.e., recession. An un-necessary deficit is the only kind of deficit that your government may pay off by growing the economy without a corresponding increase in the deficit. Until you can understand this most fundamental aspect of modern fiat money and how it must be managed by government, your economic thinking will be mired in the same murky place as the thinking of Conservative British politicians. [note that consideration of sovereign bonds is not needed to understand this basic principle underlying the management of fiat currency that I have outlined above.]
Why is that hilarious, if the economy grows at a greater rate than the government borrows then the government debt shrinks as a percentage of GDP. Find new ways to stimulate economic growth and you can reduce the government debt as a percentage of GDP.
See the post #17 immediately above yours. This will explain why it's hilarious -- in the typical instance at least.
Your understanding of fiat currency is that it needs taxation to back the value of the currency up. The currency is a commodity that has a value in itself because it is traded on an exchange at a certain price regardless of any other factor. Your position indicates that a government has to run some form of deficit for the money in the economy to be worth anything or for the currency to be issued in the first place. You are seeing the currency as something that is issued by the process of government spending and not as a product in its own right. Perhaps your way of seeing it would require an increase in economic growth to be able to reduce the deficit to the necessary deficit rather than running an unnecessary deficit.