It's even simpler. In any country that controls its own currency, the government spends by printing new money. Then, they *usually* borrow the same amount of money back. I say 'usually', because sometimes they will borrow slightly more or slightly less, in order to manage inflation Government borrowing is primarily done to manage the inflationary impacts of the printing that happens immediately prior to the borrowing Similarly, taxes are used to collect money that was spent earlier, *not* to collect money that will be spent in future. Remember, governments cannot borrow or tax (fiat) money that doesn't exist yet; they have to create it first Some people dislike what MMT economists say about various things, but the MMT folks are the only people who have actually researched the mechanics of how fiat printing and borrowing work! #Macro #Economics