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Central government policy is based on a misguided understanding of the macroeconomics of a modern, fiat-currency economy. As the owner/issuer of a nationʹs currency, a central government has unlimited spending power. Moreover, taxation exists as nothing more than a means by which a central government can destroy the spending power of the private sector. In the process of outlining some of the policies required to facilitate the transition to a steady-state economy, this paper does not recommend that central governments should spend wildly and irresponsibly. To the contrary, this paper explains how a central government can use its unique spending and taxation powers in a disciplined and policy-effective manner, yet in a manner that is being largely overlooked.

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Studia Iranica

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