Thursday, November 11, 2010

The difference between Government spending and Consumer spending

  The consumer can not sustain the economy. If the consumer lacks the income, then there just is not much room left for economic growth. The consumer could write out more checks, but those checks require a backing by legal tender notes. If that legal tender does not exist, its counted as a bounced check.

   When the government issues a note however, it does need to be backed by anything since legal tender is legal tender in it of itself. 
 If anything, legal tender is backed by the state. You can not force someone to accept your checks, but the state can force its citizens to accept its legal tender. 

  Eminent domain (United States), compulsory purchase (United Kingdom, New Zealand, Ireland), resumption/compulsory acquisition (Australia) or expropriation (South Africa and Canada) is an action of the state to seize a citizen's private property, expropriate property, or seize a citizen's rights in property with due monetary compensation, but without the owner's consent.

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