Karl Smith explains what negative yields on Treasuries means, and asks why the federal government is still collecting taxes right now:
Ezra’s points about roads, schools, water systems and teachers is exactly right. However, it can also lead people to believe that this is just some slight of hand way to expand the size of government.
Which is why I insist on pointing out that the US government is costing itself money by collecting taxes. That is, the more taxes the US government collects, the more money it loses.
This is not because of some dubious super supply side effect. Its because the deficit earns a profit. Lets say that again because its so counter to folks baseline intuition.
THE DEFICIT EARNS A PROFIT!!!