That has very little to do with currency and everything to do with you not wanting to pay taxes.
You may think that COVID response has been a catastrophic waste of money but if you'd lost your job would you have claimed the increased unemployment benefits? I suspect the vast majority of people would have.
There's a lot to criticise in terms of government COVID response (and from your post you could be talking about any one of a number of governments!) but big government spending right now to stop even greater economic depression in the future is not some kind of wasteful accident, it's deliberate action to improve everyone's situation in the long term.
Sure they can. They are artificially inflated all the time - look at tether.
And it's not as if governments forced these shutdowns on a whim or because they felt like it. They were the result of scientific examination, and more importantly, the majority of voters were in favour of them (I think 8 out of 10 in the US in April?). In this case the government was just expressing the will of the people, whether it was your personal will or not.
[Source: a friend of mine who worked in local government disaster & contingency planning]
I don't believe that government-mandated lockdowns were ever part of any pre-Covid19 pandemic planning. It was assumed that [for instance] schools might well end up having to close if the spread of disease got so widespread that there wouldn't be enough healthy staff to keep them open, not because government would order them closed.
So if we did nothing, then P1 / B.1.351 would have reinfected the country anyway. Manaus (Brazil) got reinfected and its hospitals are overflowing with P1 infections, even after achieving 76% infection rate last year.
I say this because there's a large number of people who actually believe that "do nothing" is the correct response. Now with the hindsight of these new variants, we now know for sure that "doing nothing" is the wrong answer.
Not only does "do nothing" fail to prepare against future variants, it CREATES new variants as large masses of the population mutate the virus.
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It is increasingly looking like vaccination is our only option. (or really, has always been our only option, and we're only gathering proof today that this is absolutely the case).
For those at high risk, vaccination sounds like an excellent idea. A bit like we do with seasonal flu?
Except note that: "Flu viruses are constantly changing, so the vaccine composition is reviewed each year and updated as needed based on which influenza viruses are making people sick, the extent to which those viruses are spreading, and how well the previous season’s vaccine protects against those viruses"[0]
What do we do about those who are at low / very low risk from Covid19?
We give them the vaccine to stop the spread, once the vaccine is proven safe. After all: the vaccine slows down the spread of the disease (probably at a lesser rate than it prevents hospitalizations, but a slowdown in any case is good).
I'm not sure what you're trying to insinuate in your post. Since the vaccine has been given to over 30-million Americans, we know it is safe at this point (with issues occurring in literally one-in-a-million allergy issues, which is largely solved by just watching the patients 30-minutes after injection).
EDIT: I should note that we should vaccinate the high-risk / high-impact population first. The only reason we don't vaccinate the low-impact / low-risk population yet is because we don't have enough vaccine yet. But as Johnson&Johnson, AstraZeneca, and Novavax release their doses, things will go a lot faster.
Of course people hope that the vaccines actually do reduce transmission, the first study on that being the case for one of the vaccines appears to be less than a week old[sic] and it's not published yet.
"the study shows [for] the first time a vaccine has been shown to reduce transmission of the virus" [0]
> Since the vaccine has been given to over 30-million Americans, we know it is safe at this point[..]
I can think of a few things that were "known" to be safe that later turned out not to be quite as safe at all, let's all hope that isn't the case here.
> The only reason we don't vaccinate the low-impact / low-risk population yet is because we don't have enough vaccine yet
I'm not sure it's that simple. It's not just that there isn't enough vaccine, none of the vaccines are (yet) licenced for children.
(Full disclosure: all three of our kids are up to date on all their regularly scheduled vaccinations...)
Do you think some|most|all parents will consent to their children having one or more vaccinations against Covid19 when "the likelihood of children having significant detriment if they catch Covid-19 is very, very low" (quote from UK Health Secretary, Matt Hancock)[1]
How often do those kids see their Grandma?
Even in your grossly optimistic scenario, you're assuming that those parents (and kids) are willing to risk spreading COVID19 to their Grandparents, killing them. There's plenty of grandparents who are unable to receive vaccinations due to high-risk conditions (heck: Pregnancy hasn't been tested yet: so Pregnant parents this year are going to have to go unprotected).
Preventing the spread through the use of vaccines is an obvious win. The studies are pending, but vaccines in the past have prevented spread (even lesser-effective vaccines, like the 2014 flu vaccine).
When we're looking at 95% efficacy against symptoms (Pfizer / Moderna's vaccines), the amount of "prevents the spread" is likely going to be very very high.
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If you have a family of 5, and the mother is Pregnant, the best way to protect the mother (and potential #6 child) is to vaccinate everyone else. The family unit achieves herd immunity (>66% vaccination rate), making it very hard for COVID19 to spread to the mother.
There's a HUGE number of untested people with regards to the vaccine. Everyone who has been proven safe with the vaccine should be vaccinated. For the sake of pregnant mothers, cancer patients, and yes children (for now). Hopefully, when children are tested and proven safe, we can vaccinate them too afterwards.
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Alternatively, we can start testing at-risk patients, like pregnant women and cancer survivors. Which seems like the "greater evil" in my opinion. It makes more sense to test children and inoculate them, than to test higher-risk groups.
Joking aside, are we really seeing a data-driven approach to dealing with Covid19?
(Un)fortunately we still have our elected politicians holding the levers of power, and they have a habit of wanting to manage the narrative.
> Pregnant parents this year are going to have to go unprotected
I can't quickly find the appropriate data, but would imagine it's worth looking at the pre-Covid19 risk of dying in pregnancy vs dying as a result of Covid19 for an otherwise healthy woman in her 30s.
Data on leading causes of death by age group can be pretty eye-opening, I'd recommend everyone take a look.[0]
When and where on the charts do we think Covid19 is going to end up placing once the 2020/21 data is available?
1. Dying in pregnancy WITH COVID19 because you can't breath seems like a higher-risk situation.
2. Reducing oxygen levels is likely bad for the baby.
> Joking aside, are we really seeing a data-driven approach to dealing with Covid19?
We can't afford a data-driven approach. It takes months to answer questions with a study. We still don't technically know if vaccines prevent the spread of COVID19 for instance (even though its widely assumed).
I don't see any evidence that contradicts the assumed vaccine protection (vaccines protect us from other diseases). So why not assume until data proves otherwise?
Big government spending is absolutely a waste of economic resources, and will make the situation worse. The REAL problem is that most americans don't have enough money saved to take care of themselves during hard times. Why might that be?
The FED's influence has resulted in our entire economic structure discouraging saving. This is specifically a problem bitcoin tries to solve (by having a specific and tapering inflation curve that results in deflationary pressures).
Or inflation will be used to reduce inequalities now that taxes have been made unacceptable by the rich (who wouldn't pay taxes). It's more a replacement than a sum.
Elected officials don't have much of a a choice when the economy goes to trash and the poor becoming poorer to a point where violence becomes a good solution for the poor to have some control over the economy (who should serve society and not the other way around).
> The REAL problem is that most americans don't have enough money saved to take care of themselves during hard times. Why might that be?
Because they already went through economic crises than got them near bankruptcy?
The rich tend hold their wealth in stock, land, and other assets. Most of which inflation is mostly neutral or beneficial to. The dollar value of TSLA goes up in response to general inflation, but the purchasing power generally remains the same.
> You may think that COVID response has been a catastrophic waste of money but if you'd lost your job would you have claimed the increased unemployment benefits? I suspect the vast majority of people would have.
Do our expenditures like unemployment benefits actually have any relationship with tax revenue at this point?
There's a lot more than this, but at the heart of this debt system is a war machine.
Debasing a currency is not a normal tax. Currency debasement is extremely regressive.
- The poorer someone is, the more of their assets are likely to just be some cash in the bank.
- it is a permanent loss of quality of life for people on fixed incomes.
- it doesn’t exempt people a normal tax code does (low income, blind, high dependent count, etc)
> it's deliberate action to improve everyone's situation in the long term.
This is the justification for nearly every government action.
Wouldn't call it extremely regressive.
> The poorer someone is, the more of their assets are likely to just be some cash in the bank.
The poor generally have less cash in the bank than the rich.
> - it is a permanent loss of quality of life for people on fixed incomes.
Those living of fixed incomes are rarely the poorest, either. Pensions in many countries are tied to inflation.
> This is the justification for nearly every government action.
Yes, and in many many cases, that justification is entirely justified. Where it isn't, the problem typically is bad government, not government.
As a percentage of total assets, absolutely not.
> Those living of fixed incomes are rarely the poorest, either. Pensions in many countries are tied to inflation.
No, this is incorrect. There is a ton of middle class retirement based on fixed payment annuities. Additionally, the “cost of living adjustments” for things like social security are often completely incorrect due to the spending patterns of elderly being impacted by some categories far more than others.
> The poor generally have less cash in the bank than the rich.
The OP said the only assets some poorer people will have will be some cash [in the bank]. Is this not correct? I’ve been near broke before. The only assets I had besides a dying car was money in between Venmo, PayPal, bank account, and actual cash.
Honestly, all the fretting about the debasing of value of a poor person's small pile of cash seems like outright misdirection to me. You have to look at the whole picture, and that whole picture is that the poor person might be trading say a <$10 loss to inflation on a small savings account for a $1000 stimulus check. That's a good bargain.
More broadly, the hard money/bitcoin people seems to want exchange the elimination of their hypothetical fear of (hyper)inflation for a very real likelihood of lingering recessions due to austerity policies. That doesn't seem like a good bargain to me.
The current stimulus checks are certainly great because it hasn’t shaken confidence in the USD so borrowing rates are cheap. But if inflation takes off because of oversupply of money or a cash shortage (due to hawkish positions) then debasement is a real fuck you to everyone paid in USD.
Similarly, your second paragraph to me is fear-mongering. Not based in actual reality.
The unemployment stimulus and expansion to include gig and freelance workers has been amazing. In a state like my New Jersey, you were able to get a minimum $831 a week with the April-July 13 week $600 stimulus. And currently $531 and $631 a week if Biden’s stimulus includes $400 extra a week.
A family member shut down their business at the beginning of the pandemic. All the minimum wage no benefit receiving former employees were able to make more through July 2020 from unemployment.
Adding on to what you said - the hard money/Bitcoin people like many other people, will blame a recession beginning in 2021 or 2022 on the other side regardless of the reasons.
Currency fundamentally requires trust - at the very least it requires trust that the asset you are receiving is roughly equivalent in worth to the asset you're giving as part of the transaction. In the case of centralized banks, you have to trust the bank to help ensure the value of the currency. In the case of bitcoin, you have to trust the network, its participants, the exchanges, etc. Knowing that your transaction itself is secure is only a part of the actual, practical issue. You also have to be confident you can then use that asset to purchase an item of equivalent worth in the near term future. Trust doesn't stop, it simply moves. Centralized banks have made mistakes most certainly. They have also been around for hundreds of years. Bitcoin has perhaps fewer disappointments (although certainly not zero). It has also been around for a tiny fraction of that. How much of the extra confidence in Bitcoin is purely attributed to its otherwise relatively limited history as a store or exchange of value?
I won't opine on which one is "better" (if such a description even makes sense). However, it does seem at times that people rail against central banks while turning a convenient blind eye to the challenges of decentralized banks. Is it the case that only decentralized banking problems can be solved, and centralized banking problems cannot?
Checkout uniswap. Which is a decentralized exchange which the smart contract ensuring you get X asset for Y btc.
My point is not to say that the problem can't be solved on a technical level. It's that it still requires trust. That problem doesn't get eliminated, it simply moves.
Fluctuates relative to what? If BTC becomes the unit of account (as it already apparently has in certain channels of international trade), then it’s only fiat money doing the fluctuating, while goods and services are priced in BTC.
In other words: the mass public is unlikely to become Bitcoin-first until they can gain confidence in the stability of Bitcoin. This is notwithstanding the fact that stable governments likely will not accept BTC as a national currency, meaning citizens will still need USD/EUR/GBP/their local currency for paying taxes and transacting with the government.
It feels as though your post just handwaved away all of the practical issues with actually making the world BTC-first and then asked why I cared about them. Because, in order for the world you're proposing to exist, we almost certainly have had to solve them.
Classic example of buying a good using BTC: say it costs 100 satoshis. By the time I click and purchase, and by the time the BTC arrives at the seller's address, the value may have changed for the better (BTC price goes down - hence I paid "less") or for the worse (BTC price goes up - hence I paid "more"). For the most extreme example, imagine how people that bought a pizza with Bitcoin when it was worth 5$ feel right now. A 15$ pizza in 2009 or whatever is worth ~150K USD now.
The pizza was 10k BTC (now ~$443M). Tesla bought about 25k BTC.
A 15$ pizza in 2009 or whatever is worth 18.10$ now.
So which currency should you be spending or which one should you be saving?
When the amount of goods and services you can buy in any country swings by 10% in a day, you’re nowhere near being treated like a currency.
On the topic of price fluctuations, I'd like to point out that not only are there a plurality of stablecoins pegged against and collateralized with dollars, there are also synthetic assets like DAI which follow in Satoshi's footsteps - using game theory, economics, and finance, to novel and practical effect.
I highly recommend reading the Bitcoin, Ethereum, and DAI whitepapers (in that order).
https://bitcoin.org/bitcoin.pdf
For Bitcoins, concerns about trust are warranted. Currency requires trust that it retains value; that is not given for Bitcoin and its countless clones at all.
Stablecoins collateralised by actual dollars quite obviously require trust, namely in the entity providing and holding the collateral.
Stablecoins collateralised by "the algorithm" have never been seriously tested, in my opinion, and it not clear to me at all whether you can manufacture stability algorithmically. DAI, SAI, MAI, whatever, are only collateralised by "assets" on the Ethereum blockchain, so ultimately self-referential (or, if collateralised by something tied to something real, require trust there.)
https://crypto-anonymous-2021.medium.com/the-bit-short-insid...
DAI specifically is collateralized with ETH using smart contracts - it's over 100% collateralization is incontrovertible.
So effectively, you've linked DAI to the value of a coin that is set by tether. That being the case, the actual value of the collateral is in question.
That's why I replied that way.
The gold standard attracts a lot of people because of the naïve view that the government can't debase gold like it can fiat. However, that view is naïve: the gold standard doesn't prevent debasement, it just means that the government has to make a choice between maintaining the gold standard or pursuing the fiscal policy. (And the moment of decision can be delayed a surprisingly long amount of time.)
Yet, historically, when forced to make the choice, governments have almost always chosen continuation of fiscal policy over the gold standard. Many times (e.g., the early 1930s), governments chose the gold standard only for things to get even worse and instead opt for fiscal policy. In the long run, every country has ultimately abandoned the gold standard.
This. There's a lot of very very smart people who are totally lost among the trees on the technicalities of Bitcoin who don't get this 1 simple aspect. It's never happening.
On the contrary, it's made me more firm in my position: fiat is better than bitcoin because fiat is responsive to the demands of democracy, while bitcoin is responsive only to a protocol written in the late aughts.
There's a lot of issues with American democracy, but it's still democracy. I can vote, and theoretically any root problems can be fixed with constitutional amendments. The only way to do something similar with bitcoin is a hard fork, which just proliferates additional coins like bitcoin cash.
If global democracy fails and is replaced with authoritarianism I'd be all on board with crypto, but until then I'm happy with a currency where I'm a part of the decision making process, even if it's just a tiny little part.
No thx
Try paying your taxes in Bitcoin. Then you'll find that it has nothing to do with trust and everything to do with avoiding having your assets stripped by the IRS.
You want to live in a jurisdiction, then you pony up the tokens that jurisdiction demands. Or you lose your liberty and everything you own.
It's happening already: https://www.swissinfo.ch/eng/-crypto-valley--canton-to-accep...
> You want to live in a jurisdiction, then you pony up the tokens that jurisdiction demands.
It has less to do with paying the taxes in the currency used by the State and more with protecting your wealth at the same that you can keep yourself liquid. If you ever experienced hyperinflation you would understand. Growing up in the 80's in Brazil, I remember how every 5th of the month (when my dad and my mom would get paid) was very busy.
- Pay school, bills as early as possible to try to get a discount. Prices were adjusted 20-25% every month and if you paid earlier you could get some 5-10% off.
- Going to the supermarket to buy 3/4 shopping carts of groceries.
- Fueling up the car. I remember the traffic(!!) caused by car lines backed at the gas stations, waiting to get fuel before the prices went up.
- If we needed any clothes / school stuff, head to the mall.
As soon everything was paid that month, my father would get whatever money was left in the bank and would buy US dollars. For him it was worth the 5-10% spread between the black market rate and the official rate because the alternative was to see all his melt away.
He would still pay his taxes in local currency.
But not enough clearly given the lack of saving and underdeveloped productive capacity, otherwise there wouldn't be inflation.
"If you ever experienced hyperinflation you would understand."
By analogy because planes crash due to bad piloting heavier than air flight is clearly completely impossible and we shouldn't attempt it.
Moreover we should design planes based solely on lurid tales from those who have survived plane crashes and are suffering PSTD from it not by listening to those who have studied aeronautics and actually understand the physics involved.
Your experiences may be sad, but you have the cause and effect completely wrong in your mind. Like those who believe 5G causes cancer.
What we need are better trained pilots. Preferably those who know they are flying an aircraft, not driving a bus.
How much more you think they should be paying in taxes for the absolutely shitty public services provided?
You are right, part of the issue to solve inflation was related with increased taxes. So now the average Brazilian pays taxes like they are in some Western European country, but still get the same shitty public services and we have removed the ability for the middle class to save.
> By analogy because planes crash due to bad piloting heavier than air flight is clearly completely impossible and we shouldn't attempt it.
No. The analogy is that we shouldn't board into any plane where the pilots have parachutes for themselves but not for the passengers.
The lack of aligned incentives between Government (and its elites) and the governed is the problem.
> Your experiences may be sad.
Actually, no. There is nothing sad about it. Looking back, my (relative) standard of living was never as high as it was then. Two-parent family income was "needed" to afford private schools and our own home, but I'd wager that even if we depended only on my not-college-educated mother salary we would be better off then as the standard single-income family of today. And that comparison applies to even living in Europe like I am today.
> What we need are better trained pilots.
Yes, the old "We havent't tried real socialism/communism/my-favorite-pet-theory-of-everything". Piss off, will ya?
well administered flexible ms > fixed ms > badly administered flexible ms.
So, let central bankers do their job, unimpeded by politicians.
Case in point: the USD your father bought were fiat with a flexible money supply, administered by the Fed.
The issue then becomes of how to have "well administered flexible money supply". Is it working in the US? EU? China? Turkey? Lebanon? Japan? Argentina? Brazil? Venezuela?
Besides the financial elites, are people seeing their work turn into prosperity? Are people from lower income nowadays more capable of saving and investing, or is it becoming something available only for the rich?
Even if we consider the rich countries: do we really want to live in a world where the majority of people depend on welfare and a perpetual money printer running to keep people consuming crap that no one really needs and enabling governments to fund armies to fight over resources across the globe? How sustainable is this?
> So, let central bankers do their job, unimpeded by politicians.
You might have trust in a bunch of technocrats, I don't.
Alternatively, let people make experiments with different crypto currencies, different governance models, different technologies, different requirements and different values. Evolutionary processes are more reliable/less fragile than a rigid central-planning structure. Haven't we learned anything from the almost-century-long experiment called USSR?
This is not to me saying "all flexible money supplies are crap, let's get rid of it." Only Bitcoin maxis would say something silly like that. What I am saying though is that Bitcoin was the first successful attempt at decentralized governance and that has a lot of value and (to some) is better than many of the existing central banks.
Central bankers are unelected wonks with no more idea about what is happening than the politicians. The cult of central bankers has become a religion.
It's like putting your faith in the pope rather than Henry the Eighth.
https://www.coindesk.com/miami-mayor-previews-favorable-cryp...
So far even attempts are seastading failed due to traditional countries destroying them militarily (one italian attempt for example was just bombed until nothing remained, and an attempt the pacific resulted in nearby countries landing troops on the built islands and kicking people out)
Some entity (state) has to have the monopoly on violence to enforce laws or there are no enforceable laws.
When there was some kind of micronation-mania some years ago, with multiple mainstream papers mentioning Sealand and that Australian farmer and whatnot, I went to check, and found out that the UN itself is quite dangerous, in fact is why being "UN recognized" as a country is so important (for example why Taiwan would want to be a country officially), the UN navigation laws state that everyone that is a member of the UN has several rights of navigation, and the US for example is one of the main enforcers of these (US warships patrol around the world to ensure "free passage"), but the way those rigths is written, imply that if you are NOT a member of the UN, any member can sink you without any penalty.
Thus the only way to be anywhere on the sea while not being in the UN, is if you are ally of the US (Taiwan), because otherwise you are at risk of being shot at.
I don't think China has yet the navy needed to counterbalance that.
Then the Big Man with the most guns and the heaviest mates becomes the jurisdiction. And you don't get to vote for him.
Because when it boils down to it human beings are just Strategically Shaved Chimps.
https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...
https://fred.stlouisfed.org/series/M2
Yet consumer price indexes do not appear to have been greatly affected
https://fred.stlouisfed.org/series/CPILFESL
The dollar has however lost ~9% to the euro
As for me, I loved the original promise of bitcoin. A decentralized peer-to-peer electronic cash. It's not that though, and it never will be.
There are lots of fascinating blockchain projects though, and we have bitcoin to thank for that.
Do you have a list? Here [1] is a 2018 article from The Register titled "Blockchain study finds 0.00% success rate and vendors don't call back when asked for evidence", and here [2] is a 2021 article titled "IBM Blockchain Is a Shell of Its Former Self After Revenue Misses, Job Cuts: Sources" saying that
> “There is not really going to be a blockchain team any longer,” said a person familiar with the situation.
> Expectations for enterprise blockchain were too high, they said, adding that IBM “didn’t really manage to execute, despite doing a lot of announcements.”
[1] https://www.theregister.com/2018/11/30/blockchain_study_find...
[2] https://www.coindesk.com/ibm-blockchain-revenue-misses-job-c...
Alternatively, if Bitcoin was our currency, we'd be in a deep depression because it'd impossible to increase the money supply and people would hoard. The government would have had to confiscate Bitcoin, like was done with gold in the 30s.
I have been skeptical of the MMT people but now wonder if they might be right. One way or the other, the policy will be taught in economics books.
Inside its borders the US Dollar also derives value from chartalism, but the currency clearly has other sources of de facto value.
BTC doesn't have that (there's some BTC-denominated debt, but it's relatively thin and/or unenforceable) and so future demand is based on fickle wants rather than established needs. I'd be more inclined to trust the long term value of cryptocurrency if it was issued as repayable debt, but I'm not sure how you begin to achieve that in a decentralised, anonymous and enforceable way.
A currency is literally 'trust' - it's a social contract. it's trust in the economic system where the currency prevails.
If you don't trust it, you don't trust where it comes from.
It's impossible to have a currency that is not use widely in some economy, and it's almost impossible to not have some management of that currency. For example, if any nation officially adopted BTC as their currency, as opposed to some fiat, they would be in for a difficult ride with a complete lack of any monetary policy. Nations that use the USD are actually leveraging the value of the US system. In general, the US system has more credibility than their own, so it's a benefit, and they are generally small.
As a store of value it's monopoly money.
The 'allure of not having to trust' people is a total myth, for any currency, even the hardest ones back by gold, land etc..
If this isn’t resonating with you after the past year, I don’t know. I was forced to watch my government bungle a pandemic in the worst possible way and then asked to pay for it for decades. No I don’t think I will. Bitcoin is a way for me to step outside that debt I did not want or deserve.
https://fred.stlouisfed.org/series/M1