122
Who gets all the tariff money about to be collected from US citizens buying products from Canada?
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this post was submitted on 05 Mar 2025
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No one.
Remember, the government is the issuer of the currency. They don’t need to collect dollars in order to spend them.
Imagine a referee removing a point from a participant.
The point doesn’t go anywhere, waiting to be reused, it just gets deleted. The next point to get added isn’t the “same point” in any sense, even though the point total is the same and maybe even some physical point token got reused.
Conceptually, sovereign currency is always on a one-way trip from being spent into existence to being taxed into annihilation.
This is an inaccurate metaphor because the referee doesn't normally earn points but governments absolutely spend money.
The money is collected by the government and funds budgets.
The referee assigns points to teams, but doesn't need to collect those points from another team or earn them to assign them out.
It's a decent metaphor.
No it isn’t because the economic theory at the core, Modern Monetary Theory, is very much NOT accepted as valid in academic economic circles because so much of it relies on unfalsifiable concepts.
It’s a bad metaphor because the core of it is completely incorrect. If MMT was valid why did the bankruptcy of the USSR play out the way it did?
It sounds like you're saying that when an entity pays the government what they now owe in tariffs, that money simply ceases to exist and is never counted or accounted for again.
Or used for other purposes.
Yup, that worked a treat in Zimbabwe.
“They don’t need to collect dollars in order to spend them” does not mean “They ought to spend dollars and not collect them”.
I’m only describing that collecting X amount from tariffs does not imply that spending must necessarily increase by X somewhere due to some kind of conservation of dollars that the OP seemed to assume.