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Without the aircraft carriers, any mildly malevolent nation could print dollars. Some already try. There's no question that a large military is necessary to pre

Without the aircraft carriers, any mildly malevolent nation could print dollars. Some already try. There's no question that a large military is necessary to preserve USD as a world currency. You can't ignore this cost. Maybe the US would cut military spending, maybe not, but as long as it wants USD to be the coin of the realm, there's no choice in the matter.

bubbleRefuge 5y ago
He is right in the figurative sense that the government's power to tax and spend in its own fiat currency is what drives demand for the currency. W. Mosler, one of the founders of MMT, has this allegory: If we are in a room full of people with a single exit and I am blocking the exit with a gun in my hand and tell you you need one my business cards to exit the room, then my business card has value.
- stickfigure 5y ago
  Sure, but the issue is not demand but supply. Enforcing the scarcity of USD requires a large military. Enforcing the scarcity of BTC merely requires electricity.
  - arcticbull 5y ago
    It merely requires massive amounts of electricity and e-waste vastly disproportional to its benefit and proportional to its price. Don't mince words.
    - swader999 5y ago
      Proof of stake is just a fork that'll happen whenever there's enough force applied by the power providers. This excess low cost energy that can't be moved easily to other areas is often the only kind of energy bitcoin can use to win the economics of btc mining. It in fact subsidizes a lot of green energy and makes it more viable in the longer term.
  - bubbleRefuge 5y ago
    Not following this line of thinking now. How does the military enforce scarcity? Also, scarcity of fiat currency is relative to the amount of goods and services available for sale in the economy and the demand for them.
    - stickfigure 5y ago
      What stops other nations from simply printing your currency? https://www.google.com/search?q=north+korea+counterfeit https://www.google.com/search?q=north+korea+counterfeit
arcticbull 5y ago
This is intuitive but wrong, in three ways. (1) Domestically, the US Army does not enforce law or make sure the dollar is the "coin of the realm." That would violate Posse Comitatus act. US domestic law enforcement enforces laws, domestically - including legal tender laws. I agree you can apportion some of the strength of the US dollar to its legal system, which makes sense, as the currency is an emergent property of the state. However, shifting to BTC instead of USD will simply reallocate the expenditure not reduce or remove. Counterfeiting is an issue broadly. A small one. Of course, the expense of a Bitcoin transaction (literally 60 days of power for an average US household and 1 iPad of e-waste) far, far, far outweighs the expenditure of the secret service whose job it is to act on counterfeiting. AML and KYC rules, and a counterfeit detection pen will prevent this fake money from turning into a digital representation. The army isn't generally called in to stop counterfeiting because nation-states have basically zero incentive to counterfeit on a large scale. What good are a few fake paper bills, when the Treasury would just cut you off from the entire world financial system? (2) How do you explain that countries that do not have armies at all, like Iceland, are able to issue their own fiat currency with value? (3) If you cannot draw a direct line between switching the currency and reduction in military spending, does it really make sense to apportion value that way?
- stickfigure 5y ago
  Counterfeit USD is a small, inexpensive problem because of US military might. The biggest guy in the playground never actually needs to fight. Imagine for a moment the world suddenly adopted the Nicaraguan Córdoba as the common reserve currency. How long before it gets printed everywhere? Who is going to stop it? And how far do you think Nicaragua's AML/KYC regime would actually reach? Iceland's currency wouldn't work as a world reserve either, for pretty much the same reasons. You can get away with being small and isolationist if your currency isn't that important. Make no mistake, "cut off from the entire world financial system" requires the threat of violence. Banks get fined, countries get sanctioned, warrants are issued for people that have never set foot in the US. I don't know exactly how to apportion the cost of that enforcement, but I know you can't ignore it.
  - arcticbull 5y ago
swader999 5y ago
The reserve status of the dollar is absolutely dependent on the might of the USA military. Ask Libya what happened when they ventured down the path of trying to not use the petrol dollar to sell their oil.

bubbleRefuge 5y ago

He is right in the figurative sense that the government's power to tax and spend in its own fiat currency is what drives demand for the currency. W. Mosler, one of the founders of MMT, has this allegory: If we are in a room full of people with a single exit and I am blocking the exit with a gun in my hand and tell you you need one my business cards to exit the room, then my business card has value.

stickfigure 5y ago
Sure, but the issue is not demand but supply. Enforcing the scarcity of USD requires a large military. Enforcing the scarcity of BTC merely requires electricity.
- arcticbull 5y ago
  It merely requires massive amounts of electricity and e-waste vastly disproportional to its benefit and proportional to its price. Don't mince words.
  - swader999 5y ago
    Proof of stake is just a fork that'll happen whenever there's enough force applied by the power providers. This excess low cost energy that can't be moved easily to other areas is often the only kind of energy bitcoin can use to win the economics of btc mining. It in fact subsidizes a lot of green energy and makes it more viable in the longer term.
- bubbleRefuge 5y ago
  Not following this line of thinking now. How does the military enforce scarcity? Also, scarcity of fiat currency is relative to the amount of goods and services available for sale in the economy and the demand for them.
  - stickfigure 5y ago
    What stops other nations from simply printing your currency? https://www.google.com/search?q=north+korea+counterfeit https://www.google.com/search?q=north+korea+counterfeit

arcticbull 5y ago

This is intuitive but wrong, in three ways. (1) Domestically, the US Army does not enforce law or make sure the dollar is the "coin of the realm." That would violate Posse Comitatus act. US domestic law enforcement enforces laws, domestically - including legal tender laws. I agree you can apportion some of the strength of the US dollar to its legal system, which makes sense, as the currency is an emergent property of the state. However, shifting to BTC instead of USD will simply reallocate the expenditure not reduce or remove. Counterfeiting is an issue broadly. A small one. Of course, the expense of a Bitcoin transaction (literally 60 days of power for an average US household and 1 iPad of e-waste) far, far, far outweighs the expenditure of the secret service whose job it is to act on counterfeiting. AML and KYC rules, and a counterfeit detection pen will prevent this fake money from turning into a digital representation. The army isn't generally called in to stop counterfeiting because nation-states have basically zero incentive to counterfeit on a large scale. What good are a few fake paper bills, when the Treasury would just cut you off from the entire world financial system? (2) How do you explain that countries that do not have armies at all, like Iceland, are able to issue their own fiat currency with value? (3) If you cannot draw a direct line between switching the currency and reduction in military spending, does it really make sense to apportion value that way?

stickfigure 5y ago
Counterfeit USD is a small, inexpensive problem because of US military might. The biggest guy in the playground never actually needs to fight. Imagine for a moment the world suddenly adopted the Nicaraguan Córdoba as the common reserve currency. How long before it gets printed everywhere? Who is going to stop it? And how far do you think Nicaragua's AML/KYC regime would actually reach? Iceland's currency wouldn't work as a world reserve either, for pretty much the same reasons. You can get away with being small and isolationist if your currency isn't that important. Make no mistake, "cut off from the entire world financial system" requires the threat of violence. Banks get fined, countries get sanctioned, warrants are issued for people that have never set foot in the US. I don't know exactly how to apportion the cost of that enforcement, but I know you can't ignore it.
- arcticbull 5y ago

swader999 5y ago

The reserve status of the dollar is absolutely dependent on the might of the USA military. Ask Libya what happened when they ventured down the path of trying to not use the petrol dollar to sell their oil.