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ALL of the government spending has to come from taxes eventually. It can come today or tomorrow. It can be raised smartly or stupidly, but it's going to come from taxes one way or another.


Depends on how you define taxes. Also, some governments own assets and use returns from those.

(And just to be pedantic, historically there's also spoils from conquest.)

There's also government debt. I know you could argue that this has to be paid back eventually---but when interest rates are below inflation, that's a better than free loan. (And in theory they could invest in assets that yield even more, instead of just consuming the difference between inflation and interest.)

Most people buy government debt out of their own volition even at these low rates. (And if it's foreigners buying it, there's even less direct coercion via regulation involved.)




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