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Being able to print money easily is an essential feature of a successful national currency. It gives the power to central banks/government to react to event by
by IMTDb 4y ago
Being able to print money easily is an essential feature of a successful national currency. It gives the power to central banks/government to react to event by adapting the supply of money to the economy. Bitcoin takes that away.
If we take the COVID example, most countries significantly supported their economy by printing truckloads of money to allow companies to pay their employees despite their activities basically disappearing overnight. Some even gave that money directly to the population (eg: stimulus checks). This was only possible because money is a mouse click away, all we needed to decide is how much we wanted to print, since printing money has consequences. The only question was the balance, not the capacity.
Remove that ability altogether, and COVID would have been an absolute bloodbath. Without any help from government/central banks, unemployment rate would have skyrocketed. More people on welfare and limited supply of money would also have meant that the benefits would have had to be lowered/dropped. A dire perspective compared to the relative "calm" we had if you consider that the economy almost stopped for two years straight.
It's easy to bash on central banks and governments, but they serve an essential purposed in piloting the economy, slowing things down when they turn crazy, and supporting them in times of need. They aren't perfect - of course - but the alternative of having no one the driver seat is absolutely terrifying and will lead to catastrophic situations that were the default few decades ago.
- MarkPNeyer 4y ago> if you consider that the economy almost stopped for two years straight It wasn’t Covid that did this. It was government mandates in response to Covid. Printing money let everyone who supported these government actions ignore all of the tradeoffs involved and obfuscate what, under hard money, would be a direct comparison. What you are arguing for is a kind of financial authoritarianism. You are using words like “driver’s seat” and “pilot” to describe an intense amount of power in the hands of unelected persons. Financial authoritarianism can be used to pay for other kinds of authoritarianism like lockdowns, concentration camps, or a war spanning multiple decades and the entire globe. The First World War would have ended much sooner if the belligerents were unable to steal the wealth of their populace by printing money. The arguments you are making, that recessions need money printing - those arguments were going to be made by government-funded academics who obviously have an incentive to argue that governments should not be constrained in their budgets. Hard money makes the cost of government action immediate and legible. Hard money puts constraints on what the government can do without taking money directly from people who feel the cost immediately. This is why authoritarians really don’t want hard money.
- JumpCrisscross 4y ago> First World War would have ended much sooner if the belligerents were unable to steal the wealth of their populace by printing money Historically, warring kings just took the money. Our ancestors used hard money. This didn't keep them from being brutal. Pretending hard money saps authoritarians of power or war-making ability is a good pitch, but it's hollow.
- seibelj 4y agoKings were limited by the nobility. The English monarch was an extremely weak king. Not all monarchies were despots like in North Korea.
- MarkPNeyer 4y agoThe kings who stole money from their nobles soon found themselves surrounded by nobles who were all suddenly impoverished, and bordered by newly wealthy neighboring countries whose banking sectors and suddenly and inexplicably took off. See, for example, the fail of Spain and subsequent rise of the Dutch.
- JumpCrisscross 4y ago> kings who stole money from their nobles soon found themselves surrounded by nobles who were all suddenly impoverished The historical record is littered with banking panics from over-leveraged crowns. The crown didn’t go bankrupt. They just busted their bankers. (If the king asks for a loan, you give it.) > the fail of Spain and subsequent rise of the Dutch Spain lost the Netherlands due to internecine warfare [1]. [1] https://en.m.wikipedia.org/wiki/War_of_the_Spanish_Succession https://en.m.wikipedia.org/wiki/War_of_the_Spanish_Successio...
- ztrww 4y agoyou probably meant to link https://en.wikipedia.org/wiki/Eighty_Years%27_War https://en.wikipedia.org/wiki/Eighty_Years%27_War
- 4y ago