Page "Deficit spending" Paragraph 10

Chartalists argue that deficit spending is logically necessary because, in their view, fiat money is created by deficit spending: one cannot collect fiat money in taxes before one has issued it and spent it, and the amount of fiat money in circulation is exactly the government debt – money spent but not collected in taxes.

In a quip, " fiat money governments are ' spend and tax ', not ' tax and spend '," – deficit spending comes first.

Chartalists argue that nations are fundamentally different from households – governments in a fiat money system can issue liabilities to pay off debt, and thus ( assuming they only have debt in their own currency ), need not go bankrupt, unlike households, which cannot issue liabilities.

This view is summarized as: