Here's quote from former Federal Reserve Vice Chairman Alan Blinder: "What bad practices would have been prevented if Glass-Steagall was still on the books? I've yet to hear a good answer."[1]
You know that saying: generals always prepare to fight the last war.
Finantial Regulations are like that too. We don't know where the next crisis will come from, and so we don't know if we're ready for it.
[1]: https://www.npr.org/sections/thetwo-way/2015/10/14/448685233...
Crisis would happened anyway for sure, but the scale could have been smaller. But it's hard to do what-ifs.
If letting retail banks take depositors' money and gamble with it was a bad idea then, it's almost certainly still a bad idea now.
You get most of the safe custody benefits of CBDC whilst minimising the costs of restructuring the banking system. Customers could still use all the same banking apps and branches.
Such a program could even be eased in over time by steadily increasing the proportion of bank balance sheets allocated to short dated government debt.
[0] - https://johnhcochrane.blogspot.com/2018/09/fed-nixes-narrow-...
But this shifts risk from your FDIC insurance to your SIPC insurance.
In the UK, banking is normally free, but on the continent, you normally pay for the account itself and any cards you may hold. Some banks may offer fee waivers for those whose salaries get paid into the account, or if you have a cardless account etc, but it is fairly common practice to charge a small fee for the bank account itself.
Would this result in more efficient spending of taxes in a corrupt economy? Not immediately. A lot of shitty people would get reach fast in the meantime, but the system would balance because people would no longer participate in the corruption directly as they used to.
Yes, you remove some freedom, but I am convinced that for societies that have a trust disconnection between the government and the people would be a net benefit (assuming democracy).
> I reckon we could fund universal basic income just from whitening the economy, in any given country.
I reckon that no economy, no matter how advanced, is so productive that you can provide a systemic incentive for everyone to not produce anything yet still be guaranteed to be supported. Will some work even when they don't have to? Sure. Will more people not work than before? Almost definitely. Will this effect compound over time and topple the system sooner rather than later? Guaranteed.
It is much more likely that the effect will fade over time, as people who are traumatized and exhausted from being forced to work terrible jobs for inhumane hours recover and once against find themselves ready to do something more active and productive.
You have to actually implement Universal Basic Income on a large scale, and keep it going for decades.
If you aren't willing to support doing that because "there isn't permanent, universal evidence", then you're creating a catch-22.
There is evidence that is robust and scientifically rigorous. That should be enough, at the very least, to say that we should be doing larger, more extended trials, and to at least plant a seed of doubt about this idea that humans are inherently lazy selfish slobs.
As for "real humans", I've talked to plenty. I know multiple who are constantly frustrated that they are not allowed to work productively, because of disabilities they have that make them inconvenient to employ (as with many disabilities and chronic illnesses, they have good days and bad days: they can work very well some of the time, but can't commit to a schedule that the company controls, because they can't even commit to a schedule that they consciously control).
I don't personally know a single person who, if given the chance, would choose to abandon work of all kinds forever.
The point isn't "glorifying work". It's that people don't actually want to be couch potatoes. They want enrichment. They want activity. They want meaningful stimulation.
Look at us more like zoo animals and maybe it'll make more sense: we know that giving tigers a pumpkin full of meat is more beneficial for their mental health than just dropping the same meat in front of them to eat with no effort. Humans aren't that different.
Even beyond that, though, humans want purpose. We want our lives to have some meaning, and it's pretty hard for most people to find that in sitting around doing nothing all day every day unless they have no other choice.
Perhaps it would also help to note that "work" isn't synonymous with "go to an office and file insurance claims for 8 hours" or anything like that. Writing is work. Acting is work. Making video games is work. Helping old people get around is work.
But the other thing is...if you would, if given the chance, just sit back and relax all day every day...then I hope that you get that chance! I believe that every person should have the opportunity to do what feels most fulfilling to them, and not just be required to work at specific kinds of jobs for specific types of schedules simply to be allowed to continue existing on this planet.
> Writing is work. Acting is work. Making video games is work. Helping old people get around is work.
All true, but keep in mind that value is created when work produces something that someone else wants to consume. Enrichment and meaningful stimulation to one may not produce anything useful to another, and in fact can often come from consumption. The alternative to being paid to be at a job you don't want to be at isn't sitting around doing nothing all day; it's being out there, enjoying themselves, living life, consuming products and services that others produced.
Would you rather clean toilets (providing what is desired by others, i.e. having a clean bathroom) for five hours or go do your favorite leisure activity, be it playing basketball, hiking, or spending time at a museum (consuming to fulfill your desire), for the same five hours, if you got the same universal basic income payment regardless of your choice?
Work is often hard and stressful. People have to deal with irate customers. People have to sweat and lift heavy things and have their bodies ache afterwards. People have to struggle and wrack their brains to solve a technical problem under a deadline. People have to do all sorts of things that they may not want to do in the immediate moment. Currently, the incentive for that is remuneration for time and labor performed. When you take that incentive away, who remains to do the work that is hard, isn't enjoyable, and may not be fulfilling?
What's that you say -- humans want their lives to having meaning, and this will somehow result in all of that stuff being done, anyway? All against the backdrop of a culture that is steadily moving away from one that values hard work in a moral sense? I'm skeptical.
To quote patio11: "The optimal amount of fraud is non-zero". The financial system needs slack, otherwise it destroys itself.
https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...
I haven't heard the term before, and thought maybe it had something to do with racial BS. (or maybe a teeth whitening campaign?)
Ask south europe how well it worked for them having no power over their monetary policy.
The people should control the money and that's only possible with Bitcoin.
Why would a bitcoin billionaire's money be distributed more than a traditional billionaire's? At least a traditional billionaire will invest his fortune in assets like stocks and thus help fund some innovative companies to protect his fortune from inflation. The bitcoin billionaire can just hold his fortune in bitcoin forever since it's deflationary.
Every time I see a bitcoin backer talk about finance, the things said fly in the face of Econ 101 and basic common sense. I guess I "just don't get it".
Edit: Modern economics seems to require more mental gymnastics than a Bitcoin standard. We invent things no one really understands until the rug gets pulled one day and the scam become clear. Then we move on to the next scam. Financial instruments seem to be designed to fool the common man into believing we need these complications while what's really happening is that someone is simply stealing money until something breaks and we bail them out.
The deflationary model favors savers over consumers, giving benefit back to people who are willing be patient by forgoing immediate consumption.
You seem concerned that early adopters stand to gain disproportionately from mass adoption. Well, what outcome would you prefer and how would we get there?
This can't work with bitcoin. If your country can't export things in a premium you are F'ed. You can't print money to stimulate demand for local goods, your only option is to violently reduce the average quality of life enough that you will be wiling to work for less. Printing money creates inflation but it can also kick a positive spiral of demand/supply. While "austerity" has been shown to just make the problem worse by gutting demand in general
This makes zero sense. A CBDC doesn't have a stronger "guarantee" than normal central bank money, yet it has all kinds of negatives like total surveillance and control.
> only a central bank can fully guarantee a deposit
The buck stops at the government, as we are seeing with changing laws to allow Credit Suisse acquisition or by Biden and European representatives statements abou "doing whatever is needed" or similar.
Not to mention the majority party in the US House is threatening default.
As they say, the deficit hawk is a seasonal bird.
Certainly, all the notable debt ceiling crises listed here[0] were instigated by Republican Congresses.
[0] https://en.wikipedia.org/wiki/United_States_debt_ceiling
Not safe from the moralizing pricks (of which there is a surplus in our midst) who the executive or legislature will inevitably try to cozy up to by stealing my money on the basis of some attribute or box that I check.
https://www.investopedia.com/terms/c/central-bank-digital-cu...
See Credit Suisse.
Similarly, the App Store mixes "Store" with "Content filter". We should be able to choose both independently.
That's cash. CBDC is if you want no control over your money. At the flip of the switch you can be put on a denial of service list. Except unlike when PayPal does it, you can't just switch providers.
> Bank: If you want to lend your money in return for a yield. And as with any lending, you take the risk of a borrower defaulting.
Ideally, depositors in a CBDC would also get at minimum the central bank rate.
At no point has anyone been advocating for a Central Bank Digital Currency (CBDC) and furthermore the only people who stand to gain from this are the powers that be. I'm vehemently against a CBDC purely because I like to play a thought experiment if I were from the 18th century and landed in the present day, how hard would it be for me to engage with society. A CBDC is 100% the anti-thesis to creating and supporting people.
In short, boo to OP, I doubt their legitimacy.
Keeping money safe, whether physically or digitally, comes at a cost. Banks absorb this cost because they make money through credit creation, maturity transformation, and interchange fees. They even pass on some of that profit to depositors. However, each of these banking activities create risk, which is passed onto the deposit holders and is offset, to an extent, by deposit insurance. In low to zero-interest-rate scenarios, banks act as pure custodians as their revenues decline, which is why we saw EU banks charging negative interest rates, i.e., a fee, to maintain customer deposits.
There's a delicate balance and an inherent conflict between keeping money safe and earning yields, the two functions performed by a commercial bank. Customers don't perceive this conflict unless a bank breaks down as SVB did.
I think this crisis is the strongest yet reason to push for CBDCs as only a central bank can fully guarantee a deposit. In terms of systems design, this is a clear delineation of responsibilities.
CBDC: If you want safe custody of your money.
Bank: If you want to lend your money in return for a yield. And as with any lending, you take the risk of a borrower defaulting.