3 ms·

I'll never understand protecting the middle class from "dangerous investments", but continuing to allow state-sponsored lotteries which are demonstrably scams.

toyg 6y ago
They are not scams, they are “funny taxes”: people pay extra tax and have some fun doing it. Modern fiscal politics, from VAT onwards, is all about trying to tax the poor without them noticing.
- deleted 6y ago
  [deleted]
- Normille 6y ago
  >They are not scams, they are “funny taxes” Or, as the cynics over here refer to it "The Stupid Tax". The odds of winning £1million on the UK National lottery are 14,000,000-1. If you really want to maximise your chances of winning £1million, go down your local friendly bookies and see if you can find 1,000,000-1 odds being offered on any stupendously unlikely event and put your money on that. Your bet is 14 times as likely to come up as your lottery ticket is.
- AnthonyMouse 6y ago
  > Modern fiscal politics, from VAT onwards, is all about trying to tax the poor without them noticing. The US income tax is even worse. The poor pay higher marginal rates than the rich as a result of overlapping benefits phase outs. Then there's payroll tax, which not only charges higher rates to ordinary people than billionaires, it hides half of what you're paying by pretending the employer is paying it, even though they're not -- but doesn't hide it when you're a small business owner, which provides a psychological deterrent to entrepreneurship. The whole thing needs to be scrapped.
chii 6y ago
To play the devil's advocate, lotteries are scams, but the amount lost is tiny (per person). Crypto investments are difficult to judge by the unsophisticated investor, and can easily be persuaded to invest large amounts. The loss is quite devastating for that individual. And when it happens, it makes for bad PR for the gov't and financial regulators. Better to nip it in the bud before it happens - even if it takes out investments that _would_ have been good for said unsophisticated investors. It's a conservative approach to policy making.
- trident1000 6y ago
  People should be given warnings, financial products should be required to be transparent and explained well with the risks, and scammers should be gone after and placed in prison. But people should have every right to make terrible investment decisions and lose all their money. There are investments in crypto that are good and bad just as in the stock market. Some people turn anything into gambling and thats a personal issue.
  - martin8412 6y ago
    For regular financial products that's already the case. As an example, https://www.deutsche-bank.es/pbc/data/es/hazte-cliente-cuenta-nomina-pa.html https://www.deutsche-bank.es/pbc/data/es/hazte-cliente-cuent... Every product is given a risk between 1 and 6 where 1 is the most safe.
- Normille 6y ago
  To play Devil's Advocate right back at you: it could be argued that one of the reasons cryptocurrencies are so volatile is that governments around the world seem to be lining up to try and suppress them or regulate them into irrelevance or oblivion, in one way or another. How stable do you think the prices of fiat currencies or assets such as gold would be, if governments were constantly trying to ban them, regulate them out of existence, render their use nigh on impossible, or otherwise stigmatise their usage? Governments around the world are terrified of 'the people' being able to conduct financial transactions without themselves [government] and the financial sector getting a cut. They also loathe the idea of the anonymity and pseudo-anonymity cryptocurrencies offer. Government wants to know, at all times, where you are, where you go, who you associate with, what you say or write, what you spend your money on... etc. etc. To a large extent the populace has given them much of this on a plate already by voluntarily carrying mobile tracking devices wherever we go and by paying for most of what we buy with our debit and credit cards. Widespread adoption of cryptocurrencies would really put a spanner in the omni-surveillance works and must therefore be stamped out at all costs.
- jqpabc123 6y ago
  Crypto investments are difficult to judge by the unsophisticated investor Correction: Crypto investments are impossible to judge by even the most sophisticated investor. The reason --- missing data, lack of transparency by unregulated exchanges.
_-___________-_ 6y ago
If lotteries are scams, then many types of insurance should also be referred to as scams. Personally I think this kind of use of the word "scam" spreads the meaning of the word too thin, making it much less effective when used to describe real scams.
- foepys 6y ago
  I agree with this. Lotteries are required to post the odds of winning for each ticket you buy. If that's a scam, everything non-deterministic is also a scam.
mrtksn 6y ago
It's all fun and giggles until someone brings down the society. 90's pyramid schemes in Albania are considered among the main causes of the Albania Civil war: https://en.wikipedia.org/wiki/Albanian_Civil_War https://en.wikipedia.org/wiki/Albanian_Civil_War I mean, it all boils down to the problems it causes in the fabric of the society and every society is different but when things happen at scale at dangerous rates dangerous things happen. You can be sure that if your citizens find a way to loose their savings quickly enough on lotteries you will have them banned too. If you have your citizens spending everything they have on chocolates, you will have chocolates banned despite being delicious. These things tend to be reactionary IMHO. I wish we had a better reaction to the 2008 crisis though.
- chroem- 6y ago
  But why do we still allow lotteries even if there are lots of examples of them ruining people's lives?
  - mrtksn 6y ago
    Someone managing to ruin their lives every now and then with lotteries is not bringing down the society apparently. But as things happen rules and restrictions are introduced and as a result lotteries all over the world are regulated to different degrees. Don't worry though, if you have a lottery craze with too many people putting too much money in it and only few happen to profit, you will have lotteries banned. Until that happens, people can freely loose their money and I am in favour of it. Let's not have commissions that decide where people buy their hopes and entertainment, right?
    - chroem- 6y ago
      > too many people putting too much money in it and only few happen to profit But that's the explicitly stated purpose of a lottery. The goal of the lottery is to have as many losers and as few winners as possible, in order to attract people with larger and larger jackpots.
      - 6y ago
cedilla 6y ago
The idea is that the lottery run by the state is fair, honest and less exploitative than a free market alternative. And if there's no legal lottery, an abusive free market alternative always emerges. And a bitcoin scam can rob you of thousands in a minute. That's a lot of lottery tickets.
roenxi 6y ago
This isn't about protecting the middle class from dangerous investments. It is about (quoting from the article) "preserv[ing] state sovereignty in monetary policy". Modern states don't see it as acceptable for private entities to transact however they like. There are aspects of taxation and law enforcement that are currently implemented via the monetary system and they don't want bitcoin et al to circumvent that.
- bleepblorp 6y ago
  The phrase 'monetary policy' has a specific meaning in economics. If the quote is taken literally, then the concern lies with ensuring that ultimate control over the size of the money supply, interest rates, and inflation lies with government and not with the private sector. Privately-issued currencies not backed by central banks are extremely vulnerable to liquidity crises (bank runs) and other failures. See the economic situations that lead to the establishment of central banks in most countries for examples. If private, unbacked, currencies became widely used, internal crises could trigger recessions in the real economy. Most governments would rather avoid this risk by disallowing the establishment of substantive independent monetary systems.
hyko 6y ago
A lottery may be a poor investment vehicle, but unless the results are being biased in some way, or the published odds are incorrect, it is demonstrably not a scam.

toyg 6y ago

They are not scams, they are “funny taxes”: people pay extra tax and have some fun doing it. Modern fiscal politics, from VAT onwards, is all about trying to tax the poor without them noticing.

deleted 6y ago
[deleted]
Normille 6y ago
>They are not scams, they are “funny taxes” Or, as the cynics over here refer to it "The Stupid Tax". The odds of winning £1million on the UK National lottery are 14,000,000-1. If you really want to maximise your chances of winning £1million, go down your local friendly bookies and see if you can find 1,000,000-1 odds being offered on any stupendously unlikely event and put your money on that. Your bet is 14 times as likely to come up as your lottery ticket is.
AnthonyMouse 6y ago
> Modern fiscal politics, from VAT onwards, is all about trying to tax the poor without them noticing. The US income tax is even worse. The poor pay higher marginal rates than the rich as a result of overlapping benefits phase outs. Then there's payroll tax, which not only charges higher rates to ordinary people than billionaires, it hides half of what you're paying by pretending the employer is paying it, even though they're not -- but doesn't hide it when you're a small business owner, which provides a psychological deterrent to entrepreneurship. The whole thing needs to be scrapped.

chii 6y ago

To play the devil's advocate, lotteries are scams, but the amount lost is tiny (per person). Crypto investments are difficult to judge by the unsophisticated investor, and can easily be persuaded to invest large amounts. The loss is quite devastating for that individual. And when it happens, it makes for bad PR for the gov't and financial regulators. Better to nip it in the bud before it happens - even if it takes out investments that _would_ have been good for said unsophisticated investors. It's a conservative approach to policy making.

trident1000 6y ago
People should be given warnings, financial products should be required to be transparent and explained well with the risks, and scammers should be gone after and placed in prison. But people should have every right to make terrible investment decisions and lose all their money. There are investments in crypto that are good and bad just as in the stock market. Some people turn anything into gambling and thats a personal issue.
- martin8412 6y ago
  For regular financial products that's already the case. As an example, https://www.deutsche-bank.es/pbc/data/es/hazte-cliente-cuenta-nomina-pa.html https://www.deutsche-bank.es/pbc/data/es/hazte-cliente-cuent... Every product is given a risk between 1 and 6 where 1 is the most safe.
Normille 6y ago
To play Devil's Advocate right back at you: it could be argued that one of the reasons cryptocurrencies are so volatile is that governments around the world seem to be lining up to try and suppress them or regulate them into irrelevance or oblivion, in one way or another. How stable do you think the prices of fiat currencies or assets such as gold would be, if governments were constantly trying to ban them, regulate them out of existence, render their use nigh on impossible, or otherwise stigmatise their usage? Governments around the world are terrified of 'the people' being able to conduct financial transactions without themselves [government] and the financial sector getting a cut. They also loathe the idea of the anonymity and pseudo-anonymity cryptocurrencies offer. Government wants to know, at all times, where you are, where you go, who you associate with, what you say or write, what you spend your money on... etc. etc. To a large extent the populace has given them much of this on a plate already by voluntarily carrying mobile tracking devices wherever we go and by paying for most of what we buy with our debit and credit cards. Widespread adoption of cryptocurrencies would really put a spanner in the omni-surveillance works and must therefore be stamped out at all costs.
jqpabc123 6y ago
Crypto investments are difficult to judge by the unsophisticated investor Correction: Crypto investments are impossible to judge by even the most sophisticated investor. The reason --- missing data, lack of transparency by unregulated exchanges.

_-___________-_ 6y ago

If lotteries are scams, then many types of insurance should also be referred to as scams. Personally I think this kind of use of the word "scam" spreads the meaning of the word too thin, making it much less effective when used to describe real scams.

foepys 6y ago
I agree with this. Lotteries are required to post the odds of winning for each ticket you buy. If that's a scam, everything non-deterministic is also a scam.

mrtksn 6y ago

It's all fun and giggles until someone brings down the society. 90's pyramid schemes in Albania are considered among the main causes of the Albania Civil war: https://en.wikipedia.org/wiki/Albanian_Civil_War https://en.wikipedia.org/wiki/Albanian_Civil_War I mean, it all boils down to the problems it causes in the fabric of the society and every society is different but when things happen at scale at dangerous rates dangerous things happen. You can be sure that if your citizens find a way to loose their savings quickly enough on lotteries you will have them banned too. If you have your citizens spending everything they have on chocolates, you will have chocolates banned despite being delicious. These things tend to be reactionary IMHO. I wish we had a better reaction to the 2008 crisis though.

chroem- 6y ago
But why do we still allow lotteries even if there are lots of examples of them ruining people's lives?
- mrtksn 6y ago
  Someone managing to ruin their lives every now and then with lotteries is not bringing down the society apparently. But as things happen rules and restrictions are introduced and as a result lotteries all over the world are regulated to different degrees. Don't worry though, if you have a lottery craze with too many people putting too much money in it and only few happen to profit, you will have lotteries banned. Until that happens, people can freely loose their money and I am in favour of it. Let's not have commissions that decide where people buy their hopes and entertainment, right?
  - chroem- 6y ago
    > too many people putting too much money in it and only few happen to profit But that's the explicitly stated purpose of a lottery. The goal of the lottery is to have as many losers and as few winners as possible, in order to attract people with larger and larger jackpots.
    - 6y ago

cedilla 6y ago

The idea is that the lottery run by the state is fair, honest and less exploitative than a free market alternative. And if there's no legal lottery, an abusive free market alternative always emerges. And a bitcoin scam can rob you of thousands in a minute. That's a lot of lottery tickets.

roenxi 6y ago

This isn't about protecting the middle class from dangerous investments. It is about (quoting from the article) "preserv[ing] state sovereignty in monetary policy". Modern states don't see it as acceptable for private entities to transact however they like. There are aspects of taxation and law enforcement that are currently implemented via the monetary system and they don't want bitcoin et al to circumvent that.

bleepblorp 6y ago
The phrase 'monetary policy' has a specific meaning in economics. If the quote is taken literally, then the concern lies with ensuring that ultimate control over the size of the money supply, interest rates, and inflation lies with government and not with the private sector. Privately-issued currencies not backed by central banks are extremely vulnerable to liquidity crises (bank runs) and other failures. See the economic situations that lead to the establishment of central banks in most countries for examples. If private, unbacked, currencies became widely used, internal crises could trigger recessions in the real economy. Most governments would rather avoid this risk by disallowing the establishment of substantive independent monetary systems.

hyko 6y ago

A lottery may be a poor investment vehicle, but unless the results are being biased in some way, or the published odds are incorrect, it is demonstrably not a scam.