The government spend and tax circuit

If you are interested in how money works and why a teacher (or police officer) costs a lot less than their salary then have a look at this.

And here’s a diagram that may help visualise the spend and tax circuit that we discuss.



  1. Peter May -

    Normally the emphasis is on the money payment to the bearer. It really helps to get over the idea of what money is by focusing instead on the promise and highlight that as the most important word on your fiver.

    1. Charles Adams -

      Thanks. Yes, it’s odd isn’t it, we see money everyday but hardly ever stop to consider the words on every banknote. I used to think

      all money is debt

      but now I think I prefer

      all money is a promise.

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