Imperial Master of the Ming Dynasty

Chapter 161 Xia Yuanji’s confusion

Under the new crooked neck tree.

"Mr. Jiang, what's the point? Even if the discussion comes out, what will happen? I don't understand."

Zhu Gaoxu scratched his beard and asked the same question as his father.

Jiang Xinghuo said nothing, but Xia Yuanji woke up.

"very meaningful!"

Xia Yuanji deduced on his own: "This equivalence principle, no need to ask, everyone knows that it must be wrong."

"Indeed." Jiang Xinghuo smiled, "After all, we have to take care of the present, so how can we have time to think about the distant future? We can't ask everyone to take such a long-term view."

Zhu Gaoxu became more and more confused: "Then why are you discussing something wrong?"

"It's wrong." Xia Yuanji patiently explained: "But the problem is that it reflects the principles of economics of the country and the people."

"What's the point?"

Xia Yuanji said: "The significance of this equivalence theorem proposed by Mr. Jiang is that when the imperial court issues Ming Dynasty treasury bonds, do ordinary people regard the Ming dynasty treasury bonds issued by the imperial court as part of their own wealth?"

Zhu Gaoxu was stunned for a moment and replied without hesitation: "It must be!"

"No, the key point of this equivalence theorem is that if all ordinary people feel that the Ming Dynasty national debt needs their future taxes to repay, then the Ming Dynasty national debt in their hands is actually meaningless, so it will not be looked at As part of your own wealth, you won’t spend money on it. In this way, the flow of money will naturally not accelerate.”

Xia Yuanji became more and more rational: "In other words, in the face of taxation and the issuance of Ming government bonds, whether ordinary people will take different behaviors is of great significance to the fiscal strategy of the Ministry of Household Affairs!"

"Only if we can prove that this equivalence theorem is completely wrong, it means that the issuance of Ming Dynasty government bonds will make people consume more and money will flow more. In this way, more taxes such as commercial tax, vehicle and vessel tax can be created, and it can also The premise of recovering the excess treasure money in the hands of the people as soon as possible through the issuance of Ming Dynasty National Bonds proves that the Ming Dynasty National Bonds have a stimulating effect on people's consumption!"

After months of careful teaching by Jiang Xinghuo, Zhu Gaoxu is not very stupid now. When he heard this, combined with the currency lesson he taught before, he also felt a little enlightened.

"I understand!"

"In other words, only by proving that this equivalence theorem is wrong can the issuance of Ming government bonds be guaranteed to be effective. Otherwise, the issuance of Ming government bonds will be in vain?"

Jiang Xinghuo smiled and nodded.

"This is the meaning of this equivalence theorem. Only by letting you know what is wrong can you learn what is right."

Jiang Xinghuo briefly explained what was wrong with the equivalence theorem.

"First of all, in fact, the ordinary people who bought the Ming Dynasty treasury bonds may not have any motivation to bequeath, because they may not have children. Or they may not care about their children at all. Therefore, when the court uses treasury bonds to replace taxes, ordinary people will not Leave the national debt to future generations so that it can be used to pay for increases in future tax burdens.

On the contrary, since the additional taxes required to repay the principal and interest of Ming Dynasty's national debt will not be levied until after his death, the present value of the tax burden he has to bear decreases, which is equivalent to an increase in his current wealth. Therefore, the current consumption expenditure of ordinary people is completely possible. will increase accordingly. "

Jiang Xinghuo wrote six more words on the ground.

——Marginal propensity to consume.

Then, he explained: "It means, every time the disposable income of ordinary people increases or decreases by one penny, the consumption changes."

“In other words, it’s different consumption choices when you have money but don’t have money.”

Both of them said they understood.

Jiang Xinghuo continued: "Secondly, the assumption supporting the equivalence theorem is that the court reduces the tax burden by the same amount for each ordinary person, and there is no difference in the marginal propensity to consume for each ordinary person. But in fact, for each ordinary person , the amount of tax reduction by the Ming Dynasty cannot be the same, and there are differences in the marginal propensity to consume among ordinary people."

Afraid of saying that they didn't understand, Jiang Xinghuo continued to use the example just now, with slight changes to explain.

"Still with the example of 100 copper coins just now, for the convenience of explanation, assume that the beneficiaries of the Ming Dynasty's tax reduction policy are half of the common people in the world, and the current tax burden of the beneficiaries is reduced by 200 copper coins. This is a different change from the previous example. "

“Then the inconsistency in the range of Ming government bond holders and tax burden bearers, and the inconsistency in the proportion of Ming government bond holders and tax burden bearers between their Ming government bond holdings and the tax burden bearers, makes social resources [ It has been transferred from the people whose tax burden remains unchanged to the people whose tax burden has decreased."

"wait wait wait!"

Zhu Gaoxu interrupted quickly.

"What do you mean? Mr. Jiang, can you give an example?"

Jiang Xinghuo met the students' requests considerately.

"This means that A and B are both wealthy households in the village, but A's family has more money and B's family has less money."

"Then it's the same purchase of Ming Dynasty treasury bonds, and the same tax reduction. A, who has a strong family background, can afford to buy Ming treasury bonds that are twice as much as B. So, does A's holding ratio of Ming treasury bonds be higher than B's?"

Zhu Gaoxu nodded.

"It's also a tax cut. If the money spent by B on buying Ming government bonds is the same as the money spent on reducing taxes, will B's tax burden remain the same?"

Zhu Gaoxu nodded again.

"So for A, buying a Ming Dynasty government bond that is twice the amount of B, deducting half of the cost, and offsetting the tax cut. It is equivalent to A using the money from this year's tax reduction to buy the same Ming Dynasty government bond as B. , and because his family had money, he bought another one."

"So compared to A and B, does the tax reduction reduce A's tax burden?"

Zhu Gaoxu nodded again, seemingly understanding.

Jiang Xinghuo continued.

"As a result, the beneficiaries of the tax cut will increase their current consumption, and the losers will reduce their current consumption."

"Whether this change in the consumption structure will have an impact on aggregate demand depends on the comparison of the marginal propensity to consume between the beneficiaries and the losers. Three situations will arise."

"The first one, if the two are equal, will not affect the total social demand."

Zhu Gaoxu nodded. If A and B are equal, they cancel out.

"Second, if the two are not equal, and the former is greater than the latter, total social demand will increase."

Zhu Gaoxu nodded again. The number of people like A is greater than the number of people like B, so they still have a lot of Ming Dynasty national debt after offsetting the tax cuts, so they regard the bonds as wealth and spend money.

"Third, if the two are not equal and the former is smaller than the latter, the total social demand will decrease."

Zhu Gaoxu finally understood.

If a person like B, that is, uses the money he needs to pay less taxes after the court reduces taxes, to buy Ming treasury bonds, there will be exactly the same number of people than those who hold more Ming treasury bonds, then those who want to spend money will not enough.

Jiang Xinghuo wiped his sweat.

He was afraid that they wouldn't understand, and he was a little afraid of what he said.

"Of course, the reason why I use this equivalence theorem as an introduction is to let you understand the significance of taxation to the country."

Jiang Xinghuo used his hand as a ghostwriter and slowly wrote a line of words on the ground.

——Taxes are wealth, taxes are also debts.

"Can you understand?"

Looking at these words on the ground, Xia Yuanji's voice suddenly had a detectable tremor.

"The first half of the sentence is easy to understand. Mr. Jiang is saying that the money collected from taxes is the wealth of the country."

"How do you understand the second part of the sentence?" Jiang Xinghuo asked, looking at the extremely talented Mr. Qiu.

"Taxation is debt, which is the tax-treasury debt equivalence theorem just now!"

It's really a winding path, and then suddenly enlightened!

Xia Yuanji suddenly realized why Jiang Xinghuo used the seemingly absurd, ideal, and nonsensical equivalence theorem as an example.

because.

Can make them understand.

Why are taxes equal to debt?

Although the pricing theorem is doomed to fail, they also understand that to a certain extent, taxes are approximately equal to debt!

Then another conclusion can be derived based on "taxation is wealth, taxation is also debt".

"For the country, the country's current debt is also its future wealth?" Xia Yuanji asked in disbelief.

Zhu Gaoxu was stunned.

Why is current debt the future wealth?

Shouldn't we turn it around and say that for people who borrow money, the debts to be repaid in the future are the wealth in their hands now?

strangeness.

——————

Puzzled.

Extreme confusion hung in the air of the chamber.

The emperor and two ministers could still follow the lecture's ideas just now.

Now I am completely confused.

The two clerks Guo Jing and Chai Che who followed the record were not much better. At this time, they both bit their pens and fell into thinking.

"Master Daoyan."

Seeing that the two ministers had no hope, Zhu Di turned around and asked.

"What does it mean - for the country, the country's current debt is also its future wealth?"

Facing the emperor's question, Daoyan didn't answer for a long time. He seemed to have fallen into some kind of strange meditation.

Zhu Di called out again, and Dao Yan just came back to his senses.

That is to say, Dao Yan, Zhu Di would not be used to it if someone else was distracted in front of him.

"Oh, this question is actually very simple."

Hearing Dao Yan's words, Jian Yi and Ru Yu looked a little worried.

What does it mean to be actually very simple?

Of course, Dao Yan didn't need to care about the opinions of the two ministers. He turned the rosary in his hand and explained slowly.

“The reason why Ming Dynasty’s current national debt is its future wealth.”

"That's because, since the equivalence theorem mentioned by Jiang Sheng just now does not hold, it means that as long as the imperial court issues Ming government bonds, it will stimulate people to spend money, and the total wealth of Ming Dynasty will increase, and in the future it will be repaid After excluding the principal and interest of the national debt, the total amount of wealth generated by the spending of tens of millions of ordinary people is still increasing compared to the current situation."

"This is why Jiang Sheng said that the current national debt is the future wealth."

"Because national debt can indeed stimulate the economy and create wealth."

If you talk about marching and fighting, Zhu Di is the best in the world.

Zhu Di can also handle government affairs at an above-average level.

However, the principle of managing the country and benefiting the people is so convoluted, which really embarrasses Zhu Di.

Zhu Di said simply: "I didn't understand the last sentence. Please explain it in detail, master."

Dao Yan said calmly: "That's what Xia Shangshu said. Since the people do not realize that the court will increase taxes in the future to cover the principal and interest of the national debt, or realize that they do not intend to consider future generations, then he is holding the Ming Dynasty national debt, and his wealth is increasing. Now, when you have money, you should consume, and people will benefit from consumption, and those who benefit will continue to consume, and the overall wealth of the entire Ming Dynasty will increase, that's all."

Zhu Di hesitated again and finally came to his senses.

The two ministers also understood at this time.

The thoughts in Jian Yi's heart were a little complicated: "Jiang Xinghuo's mastery of managing the country and benefiting the people is so profound."

While they were having a conversation, the following explanation also started inside the wall.

——————

There was a strange look in Jiang Xinghuo's eyes.

He whispered in Xia Yuanji's ear like a demon.

"Now that you understand that the country's current debt is also its future wealth, then you should understand that the country should actually create more debt within a controllable range, right?"

Xia Yuanji nodded confusedly but clearly.

Confused because he felt something was wrong.

Sober, because according to Jiang Xinghuo's logic of "current debt is future wealth", what Jiang Xinghuo said is right.

"So, as more debt is created, does it mean that people need to consume more, otherwise the wealth cycle cannot be realized and the wealth will increase?"

Xia Yuanji nodded, then shook his head subconsciously.

Jiang Xinghuo's demonic whispers continued.

"So, is the meaning of life for the people of the Ming Dynasty just to consume?"

"Oh, no, if we are [absolutely rational], we can also see that the ordinary people of the Ming Dynasty, who are like numbers, have other values."

"Yes, that's right!" Xia Yuanji murmured.

Jiang Xinghuo suddenly stood up and shouted sternly.

"Right to what?"

Xia Yuanji came back to his senses from the economic world that Jiang Xinghuo built for him.

Xia Yuanji stared at each other blankly.

Aren't these right?

In theory, it's all right.

Jiang Xinghuo shook his head in disappointment and said.