> However, the medicine they prescribe once a recession occurs, namely allowing the money supply to contract and letting many businesses fail, is not only inhum

> However, the medicine they prescribe once a recession occurs, namely allowing the money supply to contract and letting many businesses fail, is not only inhumane but less effective at encouraging recovery than the Keynesian approach. I think this is a pretty fair criticism of Austrian solutions. But like telling a drug addict that he must get clean, there is no way out of it other than to get clean. Some drug addicts can quit cold turkey (which is what Austrians recommend), others need to switch to a different less addictive drug (like Methadone etc) until they get completely clean. I believe (and has been my belief for past few years) that Cryptocurrencies will play a major role this recession, acting as 'methadone'. How? I will explain it from two different point of views: - Krugman-Keynesians: Recessions are caused by liquidity crunch and liquidity must be pumped into the market by the fed and the govt in order to clear the market. Govt should also absorb excess unemployment by hiring people and shut down those programs when the market recovers and private sector can absorb the labor. These Keynesians are also great fan of artificially created liquidity (to get out of the liquidity trap) by Capitol Hill Babysitting Co-op [1], Alternative currencies issued by various cities during the Great Depression [2]. My claim is that in the next recession in the 'liquidity crunch', people will find it easier to switch to Cryptocurrencies and tokens, perhaps even issuing it themselves on local level. Bitcoin has a problem with having a fixed money supply, but at least the first switch from Fiat to crypto would happen without issues, but for the next to next recession, bitcoin would represent the same liquidity trap as fiat does, in fact worse. Due to this, many people will dump the dollar, but it also would ease up the liquidity crunch of the dollar economy. Therefore bitcoin and fiat economies being headlocked in a duel, until people decide to come back to the dollar again. - Austrians: The single most important thing which needs to happen (and generally does not happen in recessions) is that the real wages must move downwards (fast enough). Govts try to solve a recession by pumping more credit and money into the markets, esp to keep people employed and wages up, but it doesn't really happen. Eventually some real wages move down enough and some inflation of the assets which starts a new bubble causes the market to 'recover'. My claim is that in the next recession people will switch to more inflation-proof cryptocurrencies for salary but for a 'lower real wage' (potentially because they will either perceive crypto to be better medium or it would be the only expanding economy or/because dollar is losing value compared to crypto). This allows markets to get cleared faster and recovery to happen. But more of this effect results in an avalanche effect with people fleeing from dollar jobs to bitcoin based jobs and faster clearing of the markets. 1. https://en.wikipedia.org/wiki/Capitol_Hill_Babysitting_Co-op https://en.wikipedia.org/wiki/Capitol_Hill_Babysitting_Co-op 2. https://www.armstrongeconomics.com/history/europes-economic-history/alternative-currencies-of-the-great-depression/ https://www.armstrongeconomics.com/history/europes-economic-...