5 ms·
We should stop all taxation and use inflation to pay for everything instead. Much simpler and no one can get out of it.
by rorykoehler 5y ago
We should stop all taxation and use inflation to pay for everything instead. Much simpler and no one can get out of it.
- juandazapata 5y agoCan you expand on this? How would this work?
- deleted 5y ago[deleted]
- rorykoehler 5y agoGovernment sets an annual budget and then creates the money to pay for it out of thin air every year.
- jefftk 5y agoThe idea is that the government prints money to cover expenses. If you could somehow force everyone to hold all their wealth in cash, this would act as a wealth tax. This doesn't work, however, because with very high planned inflation no one wants to use your currency, and without taxation there's no reason they have to.
- rorykoehler 5y agoThey use your currency because they get paid in it. Government spending doesn't disappear into a black hole never to be seen again. [FALSE]>>> Also it's illegal to use other currencies as tender in (probably?) all countries in the world (Zimbabwe uses/used(?) the US dollar but I'm not aware of any other instances).
- Lionga 5y agoPeople of Venezuela would like to have a word with you
- rorykoehler 5y agoThey are doing it illegally. My point still stands.
- wwtrv 5y agoGenerally it’s only illegal in countries which have unstable currencies and strict capital controls.
- TimPC 5y agoVenezuela did a lot of things to restrict the use of the US dollar including forcibly converting all USD accounts at their banks to their own currency at an unfavourable ratio.
- pimterry 5y ago> Also it's illegal to use other currencies as tender That's generally not true - it's not the case in the US (https://mises.org/wire/use-us-dollars-mandatory-united-states https://mises.org/wire/use-us-dollars-mandatory-united-state...) or the EU (https://ec.europa.eu/info/business-economy-euro/euro-area/euro/use-euro/euro-legal-tender_en https://ec.europa.eu/info/business-economy-euro/euro-area/eu...). It is impractical in most places of course, but only because there isn't much demand for it, so it's hard to get bank accounts, contracts or purchases denominated in foreign currencies. Companies and individuals are free to do so, but they don't because using the predominant local currency is useful and convenient for everybody (usually). The places where using foreign tender is illegal or tightly controlled are generally places where they have huge problems with inflation of their primary currency, like Venezuela. Venezuela is an illustrative example of the original point here: in practice, if you make your official currency very inconvenient/impractical/expensive, people _absolutely_ will switch to an alternative. Even though paying for things in dollars in Venezuela is illegal and awkward, everybody goes through convoluted mechanisms to do so anyway because the official alternative is worse.
- rorykoehler 5y agoThanks for the correction. I always assumed legal tender meant the other are illegal. OT side note: if anyone from HN team is reading this it would be great if the upvote from the parent poster to a comment would be signified visually in some way (like green usernames for 2 week old accounts).
- wwtrv 5y agoI’m not sure this true in most countries which don’t have strict capital controls. In most (all?) European (and I assume other developed countries) you’re free to use any currency you want as long as both parties agree on. iirc in the UK the pound is only legal tender when settling debts and merchants are not even legally required to accept payment in pounds and can demand any other currency they want.
- fxtentacle 5y agoWon't work because all truly wealthy people can secure their wealth against inflation, while poor people cannot. As a simple example, consider owning a house vs. renting. If you own the house, the actual number doesn't matter. If you're renting, the ratio between rent and salary is highly critical for your lifestyle.
- rorykoehler 5y agoAdd a UBI and it would work. There needs to be an economic floor which ensures there is no destitution. The aim isn't to get rid of wealth. The system now isn't working because wealthy people are securing their income and wealth without paying tax at the expense of social and civil programs.
- tgv 5y agoThen UBI fails and everyone becomes a beggar. No thanks.
- rorykoehler 5y agoIf it fails you can always revert to the current failed system.
- tgv 5y agoIn my country, UBI is supposed to go hand in hand with dismantling all social welfare, subsidies, whathaveyou. Once all the laws have been changed, and the civil service has been completely reorganized, it's a titanic fight to get them reverted, and after that, all the institutions still have to be put back in place. It would take 20 years.
- rorykoehler 5y agoThere are no hard rules on structure of other programs in relation to ubi. It would be foolish to remove support for special needs etc. Unemployment benefits, public pensions etc can go away but the rest must be looked at on a case by case basis.
- pjc50 5y agoMMT does actually require a "sink" where the government takes in money.
- robjan 5y agoInflation hurts people who hold mostly cash more i.e the poorest in society
- medvezhenok 5y agoThe poorest mainly have a negative net worth so I'm not sure the inflation would hurt them as long an min wage and/or UBI kept up... Realistically we need a private debt jubilee - inflation is just one way to get there.
- macspoofing 5y ago>We should stop all taxation and use inflation to pay for everything instead. Much simpler and no one can get out of it. You just buy assets, like stocks, gold, property, etc.
- deleted 5y ago[deleted]
- pydry 5y agoThis is what Lenin did IIRC.
- rorykoehler 5y agoWe need to do it without the central planning the economy (which incidentally Lenin also wanted to do on a local/cottage industry level).