The government has no source of revenue, except the taxes paid by the
producers. To free itself—for a while—from the limits set by reality, the
government initiates a credit con game on a scale which the private manipulator
could not dream of. It borrows money from you today, which is to be repaid with
money it will borrow from you tomorrow, which is to be repaid with money it
will borrow from you day after tomorrow, and so on. This is known as “deficit
financing.” It is made possible by the fact that the government cuts the
connection between goods and money. It issues paper money, which is used as a
claim check on actually existing goods—but that money is not backed by any
goods, it is not backed by gold, it is backed by nothing. It is a promissory
note issued to you in exchange for your goods, to be paid by you (in the form
of taxes) out of your future production.