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>Ideally the initial coins would be evenly distributed to US citizens and taxpayers— [...] The government can likely create a lot of de novo wealth for its citi

by jasode 8y ago

>Ideally the initial coins would be evenly distributed to US citizens and taxpayers— [...] The government can likely create a lot of de novo wealth for its citizens in the process. This USDC proposal seems to reiterate the same themes as a previous blog post "American Equity".[1] >, but I think the network needs to be mostly in charge (e.g., the government couldn’t be allowed to arbitrarily inflate the currency when it wanted to). I doubt the USA government or any other modern government with fiat money would agree to this. Inflating currency is a hidden way to spend money it doesn't have. E.g. since Social Security payments are denominated in US Dollars, the govt can _nominally_ keep its payment promises by printing more USD. Sure, the buying power of each USD for each SS recipient is severely reduced in that scenario but most citizens don't understand nominal dollars vs real buying power and therefore, it's a win-win for the govt. A cryptocurrency that doesn't allow government flexibility to spend money that it doesn't have will have monumental political hurdles. [1] http://blog.samaltman.com/american-equity http://blog.samaltman.com/american-equity

whitepoplar 8y ago
Social Security in the U.S. is inflation-adjusted.
- jasode 8y ago
  The government also controls the COLA Cost of Living Adjustment. Ask retirees if they feel the modest COLA increases have kept up with real expenses.
- johnm1019 8y ago
  against a benchmark formula derived by the same US govt that can print more money. There has also long been discussion that the existing inflation measures are inaccurate [0]. https://www.bloomberg.com/news/articles/2018-05-02/the-consumer-price-index-may-be-getting-inflation-wrong https://www.bloomberg.com/news/articles/2018-05-02/the-consu...
lsc 8y ago
The big thing is the ability to pay bond repayments with inflated currency. The vast majority of government debt is fixed rate
mundo 8y ago
> Inflating currency is a hidden way to spend money it doesn't have. This seems to be a recurring area of confusion in every thread about cryptocurrencies, so let's clear it up now: * The amount of money in circulation is manipulated by the Federal Reserve. When the Fed increases the money supply ("printing money"), it does so through banks, by creating money and letting them lend it. The recipient of the "printed money" is someone taking out a loan. * Deficits are when the government spends more money than it takes in in revenue. It borrows money (by issuing Treasury notes and bonds) and spends it on food stamps or bombers or whatever. The amount of money in circulation does not change and there's no direct effect on inflation. These are two separate things. The government can run a deficit without the Federal Reserve printing money. The Fed can print money without the government borrowing anything. Inflation is emphatically not something the government does so it will have more money to spend. When inflation is too low, we print money. When we want to spend more than we take in, we borrow. Two related but separate things.
- dnomad 8y ago
  > When inflation is too low, we print money. This is really not how it works. Many economists think this is how it works but actual real world events have made it very clear that governments cannot simply manufacture inflation [1]. Governments like Japan wish they could produce inflation. Inflation is much, much, much more complicated than merely "too much money." It's much more about real economic quantities affecting the price level [2]. This is usually driven by demand for something an economy cannot manufacture itself, not government spending. See oil shocks [3] for real inflation. That said, it's always funny to see paranoid Americans go on about the government stealing money via inflation. What do you think money is? Talk about missing the forest for the trees. [1] https://www.bloomberg.com/news/articles/2018-03-22/the-great-inflation-mystery https://www.bloomberg.com/news/articles/2018-03-22/the-great... [2] http://bilbo.economicoutlook.net/blog/?p=10554 http://bilbo.economicoutlook.net/blog/?p=10554 [3] https://www.investopedia.com/ask/answers/06/oilpricesinflation.asp https://www.investopedia.com/ask/answers/06/oilpricesinflati...
  - uhihdjhd 8y ago
    You also exhibit a rather dangerous lack of knowledge. Look up the federal discount window And then treasury bonds. Typically a bank can get interest free money and plow that into interest baring bonds backed by the government. They then get is free profit off the spread, this was a common back door method of 'liquidty injection' during the financial crisis. Liquidity injection, literally a euphemism for giving away money, and who gets the money? Those closest to the federal spigot, and what happens when you have more money chasing fewer resources? Inflation. Let's not even get into the bizarro world of inflation measurements, ( food and energy aren't even included ), most 'inflation' is seen in asset inflation, rich people can only eat so much cavier and blue fin tuna, the vast majority of their money goes into assets, so they take free money and put it into real estate and stocks and bonds, meanwhile the poor suckers trading their labor for cash see their real income lose purchasing power as the real assets they want like homes and a retirement fund, become increasingly difficult pipe dreams. I'm truly sick of people who think they have economic knowledge try to explain away the real experience of the vast majority of people, such people and such experts are really just the well paid propagandists of the rich and powerful. Disgusting.
WhiteOwlLion 8y ago
you can build in inflation into any crypto if you want. It is just the parameters you set when you create it. Bitcoin has fixed supply, but there are plenty of other altcoins that have inflationary aspects to the coin. Until recently, I thought inflation was bad, but it can have positive aspects to re-distribute currency to spenders and non-hodlers. Its a way for people to get access to new money that otherwise is held by a few.

by jasode 8y ago

whitepoplar 8y ago

Social Security in the U.S. is inflation-adjusted.

jasode 8y ago
The government also controls the COLA Cost of Living Adjustment. Ask retirees if they feel the modest COLA increases have kept up with real expenses.
johnm1019 8y ago
against a benchmark formula derived by the same US govt that can print more money. There has also long been discussion that the existing inflation measures are inaccurate [0]. https://www.bloomberg.com/news/articles/2018-05-02/the-consumer-price-index-may-be-getting-inflation-wrong https://www.bloomberg.com/news/articles/2018-05-02/the-consu...

lsc 8y ago

The big thing is the ability to pay bond repayments with inflated currency. The vast majority of government debt is fixed rate

mundo 8y ago

> Inflating currency is a hidden way to spend money it doesn't have. This seems to be a recurring area of confusion in every thread about cryptocurrencies, so let's clear it up now: * The amount of money in circulation is manipulated by the Federal Reserve. When the Fed increases the money supply ("printing money"), it does so through banks, by creating money and letting them lend it. The recipient of the "printed money" is someone taking out a loan. * Deficits are when the government spends more money than it takes in in revenue. It borrows money (by issuing Treasury notes and bonds) and spends it on food stamps or bombers or whatever. The amount of money in circulation does not change and there's no direct effect on inflation. These are two separate things. The government can run a deficit without the Federal Reserve printing money. The Fed can print money without the government borrowing anything. Inflation is emphatically not something the government does so it will have more money to spend. When inflation is too low, we print money. When we want to spend more than we take in, we borrow. Two related but separate things.

dnomad 8y ago
> When inflation is too low, we print money. This is really not how it works. Many economists think this is how it works but actual real world events have made it very clear that governments cannot simply manufacture inflation [1]. Governments like Japan wish they could produce inflation. Inflation is much, much, much more complicated than merely "too much money." It's much more about real economic quantities affecting the price level [2]. This is usually driven by demand for something an economy cannot manufacture itself, not government spending. See oil shocks [3] for real inflation. That said, it's always funny to see paranoid Americans go on about the government stealing money via inflation. What do you think money is? Talk about missing the forest for the trees. [1] https://www.bloomberg.com/news/articles/2018-03-22/the-great-inflation-mystery https://www.bloomberg.com/news/articles/2018-03-22/the-great... [2] http://bilbo.economicoutlook.net/blog/?p=10554 http://bilbo.economicoutlook.net/blog/?p=10554 [3] https://www.investopedia.com/ask/answers/06/oilpricesinflation.asp https://www.investopedia.com/ask/answers/06/oilpricesinflati...
- uhihdjhd 8y ago
  You also exhibit a rather dangerous lack of knowledge. Look up the federal discount window And then treasury bonds. Typically a bank can get interest free money and plow that into interest baring bonds backed by the government. They then get is free profit off the spread, this was a common back door method of 'liquidty injection' during the financial crisis. Liquidity injection, literally a euphemism for giving away money, and who gets the money? Those closest to the federal spigot, and what happens when you have more money chasing fewer resources? Inflation. Let's not even get into the bizarro world of inflation measurements, ( food and energy aren't even included ), most 'inflation' is seen in asset inflation, rich people can only eat so much cavier and blue fin tuna, the vast majority of their money goes into assets, so they take free money and put it into real estate and stocks and bonds, meanwhile the poor suckers trading their labor for cash see their real income lose purchasing power as the real assets they want like homes and a retirement fund, become increasingly difficult pipe dreams. I'm truly sick of people who think they have economic knowledge try to explain away the real experience of the vast majority of people, such people and such experts are really just the well paid propagandists of the rich and powerful. Disgusting.

WhiteOwlLion 8y ago

you can build in inflation into any crypto if you want. It is just the parameters you set when you create it. Bitcoin has fixed supply, but there are plenty of other altcoins that have inflationary aspects to the coin. Until recently, I thought inflation was bad, but it can have positive aspects to re-distribute currency to spenders and non-hodlers. Its a way for people to get access to new money that otherwise is held by a few.