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> Say the United States decides to allow decentralized cryptocurrencies to become the dominant medium of exchange in the US; say it even gets rid of the $USD. W

> Say the United States decides to allow decentralized cryptocurrencies to become the dominant medium of exchange in the US; say it even gets rid of the $USD. What problem do you think this would solve? (assuming the US gov desires to continue all other operations in exactly the same manner as it does currently). I don't think the second condition "assuming the US gov ..." is compatible with the first. My objections to fiat and my fondness for cryptocurrencies is much more in line with what the slide's authors seem to be saying -- specifically, I feel that it gains in ethics, rather than effectiveness. The problem that would be solved is that the US government would no longer be able to continue operations in exactly the same manner. Bailouts for failed companies are no longer a given -- the money has to come from somewhere, and if the government comes to your door and says "give me 10 bitcoins so that I can give them to these idiots who lost billions of bitcoins making bets on the real estate market, but they also get to keep the billions they made while those bets were winning", you're going to do your best to vote those people out on their ear. Similarly when it comes to financing a state of perma-war against the very concept of being afraid.

emiliobumachar 9y ago
Printing money would indeed no longer be an option for governments. But their main source of income are taxes. And why would taxes change? >and if the government comes to your door and says "give me 10 bitcoins [...]", you're going to do your best to vote those people out Why would that be different with 10 bitcoins than with 10 thousand dollars?
- andrewla 9y ago
  Main source of income is taxes, but it got close there -- in 2009 the federal deficit got up to 1.413 trillion, which made debt a larger source of income for the government than income taxes and corporate taxes combined. Even without emergency spending like that, the gradual deficit increases are going to mean that soon receipts will not be sufficient to cover interest on the debt. My point about "coming to your door" was not bitcoins vs. dollars, but taxes vs. FOMC. If the government really wants to give away the value equivalent of trillions of dollars, they have to get the money from increasing receipts, rather than just monetizing debt. They can take on debt, but they have to pay for it, rather than use accounting tricks to borrow at zero interest to support zero interest "loans". That said, you're probably right; no effective political action is going to be taken in opposition to tax levies, especially if they're aimed at the "1%" -- by the time the 1% becomes the 30% (vis a vis AMT) people will have forgotten why they cared.

emiliobumachar 9y ago

Printing money would indeed no longer be an option for governments. But their main source of income are taxes. And why would taxes change? >and if the government comes to your door and says "give me 10 bitcoins [...]", you're going to do your best to vote those people out Why would that be different with 10 bitcoins than with 10 thousand dollars?

andrewla 9y ago
Main source of income is taxes, but it got close there -- in 2009 the federal deficit got up to 1.413 trillion, which made debt a larger source of income for the government than income taxes and corporate taxes combined. Even without emergency spending like that, the gradual deficit increases are going to mean that soon receipts will not be sufficient to cover interest on the debt. My point about "coming to your door" was not bitcoins vs. dollars, but taxes vs. FOMC. If the government really wants to give away the value equivalent of trillions of dollars, they have to get the money from increasing receipts, rather than just monetizing debt. They can take on debt, but they have to pay for it, rather than use accounting tricks to borrow at zero interest to support zero interest "loans". That said, you're probably right; no effective political action is going to be taken in opposition to tax levies, especially if they're aimed at the "1%" -- by the time the 1% becomes the 30% (vis a vis AMT) people will have forgotten why they cared.