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This was fhe promise of the gold standard before the world wars. The gold standard would force governments to be financially disciplined, right? Wrong, as soo

by Aicy 4y ago

This was fhe promise of the gold standard before the world wars. The gold standard would force governments to be financially disciplined, right? Wrong, as soon as governments needed to drop the gold standard they did it. Why wouldn't they do the same with the bitcoin standard?

JumpCrisscross 4y ago
> gold standard would force governments to be financially disciplined, right? This is such a weird belief. Is the claim that prior to the 20th century there were no wars of conquest or colonies? No kings and countries running up ruinous debt?
- 5040 4y ago
  The claim is that these things were much more difficult to do.
imtringued 4y ago
Why does the government need to drop the gold standard? Why does it happen so many times? I am under the impression that it is the gold standard that is flawed. After all, it didn't fail for a lack of trying. It was adopted and abandoned so many times. What surprises me is that people think that the problem is evil/incompetent governments mismanaging the currency. Wouldn't it be more productive to think of reasons why such mismanagement is inevitable instead of just sweeping it under the rug? Greece did austerity and it didn't work. If Greece hadn't done austerity, it could have gotten a few more years of 5% growth. Austerity ended up increasing indebtedness instead of reducing it by massively reducing the GDP of Greece. It's only rational to "mismanage" your economy away from such a financial crisis. The real question should be, why is growth required every single year? Why can't we just stand still for a year and then pick up growth again? In my opinion it is quite simple. Savings and debts must equal in the global economy. So if the government introduces a debt brake, the private sector must reduce the amount of savings it holds. If those savings are held as cash, the government can't do anything about it. It can't just recall the bank notes. So debt can't go down. If it does anyway, then the money that is currency circulating, moving around from person to person is saved as cash until the amount of money that is actively circulating shrinks so much that daily transactions can't be made. That is what recessions are. A sudden malfunction in the medium of exchange function of money.

by Aicy 4y ago

JumpCrisscross 4y ago

> gold standard would force governments to be financially disciplined, right? This is such a weird belief. Is the claim that prior to the 20th century there were no wars of conquest or colonies? No kings and countries running up ruinous debt?

5040 4y ago
The claim is that these things were much more difficult to do.

imtringued 4y ago

Why does the government need to drop the gold standard? Why does it happen so many times? I am under the impression that it is the gold standard that is flawed. After all, it didn't fail for a lack of trying. It was adopted and abandoned so many times. What surprises me is that people think that the problem is evil/incompetent governments mismanaging the currency. Wouldn't it be more productive to think of reasons why such mismanagement is inevitable instead of just sweeping it under the rug? Greece did austerity and it didn't work. If Greece hadn't done austerity, it could have gotten a few more years of 5% growth. Austerity ended up increasing indebtedness instead of reducing it by massively reducing the GDP of Greece. It's only rational to "mismanage" your economy away from such a financial crisis. The real question should be, why is growth required every single year? Why can't we just stand still for a year and then pick up growth again? In my opinion it is quite simple. Savings and debts must equal in the global economy. So if the government introduces a debt brake, the private sector must reduce the amount of savings it holds. If those savings are held as cash, the government can't do anything about it. It can't just recall the bank notes. So debt can't go down. If it does anyway, then the money that is currency circulating, moving around from person to person is saved as cash until the amount of money that is actively circulating shrinks so much that daily transactions can't be made. That is what recessions are. A sudden malfunction in the medium of exchange function of money.