4 ms·

This is all fine and good, but here is a more important question: Why should this system exist at all? Why doesn't the government provide banking services wit

This is all fine and good, but here is a more important question: Why should this system exist at all? Why doesn't the government provide banking services with unlimited insurance? They wouldn't need to lend it out or anything to make a profit. They could literally just hold the cash for you until you need it. Since there would be no risk, it could be free and guaranteed. Let you get the money at the post office, which has branches everywhere, if you don't want to do it online. Why do we rely on private banks to hold our cash money with a need to make a profit off of it, and therefore have to do risky things like loan it out? Private banks could still exist in this system. They would loan out the government's money instead of their depositor's money. Their profits would come from the interest, and if they make bad loans they would get the collateral and have to sell it and maybe lose money. Heck they could even get a fee for bringing in new cash to the government holding system and dispensing cash to people who need money. Functionally the system would work exactly the same to the consumer, the bank would still make their profits, but people wouldn't be at risk of losing their balance if the bank goes under. They just move their balance to a new bank.

ashwagary 4y ago
>Why doesn't the government provide banking services with unlimited insurance? Or atleast increase coverage at regular intervals. Thanks to inflation, the amount of real value that is FDIC insured halves every so many years.
- jedberg 4y ago
  It does change once in a while. It last changed in 2008 (2.5x the previous limit set in 1980). https://americandeposits.com/history-and-timeline-of-changes-to-fdic-coverage-limits/ https://americandeposits.com/history-and-timeline-of-changes...
  - ashwagary 4y ago
    Depending on your method of measuring inflation, a US dollar may have lost ~50% of its value since 2008. They should probably increase the frequency of adjustment or atleast tie it to CPI in some way.
AstixAndBelix 4y ago
Public banks should also be needed for a cashless society. How can you expect people to be deprived of cash if they have to rely to a private corporation to simply survive? Give a state issued and guaranteed bank account to every citizen
philjohn 4y ago
They do - it's called buying T bills.
- jedberg 4y ago
  I can't pay for groceries or rent with a T bill. I still need a bank account with a checkbook or debit card to do those things.
  - t0mas88 4y ago
    That bank account only needs to hold about 1 month of expenses. Not a lot of people have over 250k monthly expenses...
    - jedberg 4y ago
      A lot of businesses do though. Also, what if you're buying a house? You might want to keep the down payment around in cash for a quick purchase when you finally find the house you want. Or what about if you need to pay out some large expense and have to liquidate your investments. You shouldn't have money at risk just because you need to hold a large cash position. That's the problem. There should be a risk free place to hold unlimited cash.
      - deleted 4y ago
        [deleted]
Asparagirl 4y ago
> "Why doesn't the government provide banking services with unlimited insurance?" They do, kind of: it's TreasuryDirect.gov. It's only accessible through a horrible web interface straight out of 1999, but it's the real thing. TreasuryDirect lets you buy, hold, and sell Treasury bills, Treasury bonds, I Bonds, EE savings bonds, and other securities. Yes, you can also buy some of these, but not all, through your regular brokerage (Fidelity, Schwab, etc.), but here you can buy them all and titled in your own name -- or you plus a second person, or you POD to a third person, etc. And you can buy in smaller denominations if you want, not just big lots. You can also open up linked accounts for your minor children and hold some of those securities and savings bonds in their own names. And like UTMA accounts, the property becomes theirs to manage when they turn eighteen. And -- important in the context of the current SVB situation -- you can open a TreasuryDirect account for your company, including S Corps, C Corps, and even single-member LLCs. And the interest you earn on all of these securities they sell is completely state tax free. You usually don't even get a 1099-DIV or 1099-INT from them unless you had a sale in the year, which you may not if you were holding long-term I Bonds, etc. (You might get one if you had an interest payment on a marketable security like a T-bill, though.) Note that securities at TreasuryDirect do not have FDIC insurance nor SIPC insurance, because you're buying directly from the US government itself. But note that if they ever failed to honor their (our) own Treasury bills, repudiating our own debt, we would all have much, much bigger problems on our hands.
- jedberg 4y ago
  Treausurydirect is a great investment vehicle, but it doesn't replace a bank account. I can't deposit my paycheck there, I can't get a debit card and pay for groceries with it. I can't write a check to pay my rent. Unfortunately doing those things requires a private bank.
  - Asparagirl 4y ago
    Actually, you can get some or all of your paycheck auto-deposited there! The Payroll Savings Option: https://www.treasurydirect.gov/research-center/communication-materials/for-employers/payroll-savings-option/ https://www.treasurydirect.gov/research-center/communication... Some or all of your paycheck gets sent to a non-interest-earning account that is supposed to be used to buy I Bonds or EE Bonds. But you could, hypothetically, leave the funds in there without doing that step... But yeah, I see your point about daily use. Perhaps your initial idea and the existing TreasuryDirect could be combined and expanded into the Postal Banking idea that other countries have had for a long time?
propogandist 4y ago
Every central bank is working in a digital currency (CBDC); the insurance and safety will be one of the value propositions pitched by the government. CBDCs will enable governments to control money at the individual level, also, if needed. Then, when the next lab-virus leaks, those that don’t comply with government mandates will be programmatically forbidden from spending their digital coins.
- krapp 4y ago
  Wow. Name definitely checks out.
  - propogandist 4y ago
    Every country’s central bank is at a different stage of CBDC adoption. You can elect to put your head in the sand pretending this isn’t happening or assess initiatives underway and policies being promoted. Some examples: >[1] Nigeria bans ATM cash withdrawals over $225 a week to force use of CBDC > [2] Deputy Managing Director of the IMF sharing how central bank digital currency (CBDC) would allow the government to precisely control what people can and cannot spend their money on. > [3] Former UK Prime Minister Tony Blair calls for a digital database to monitor who is vaccinated and who is not for a future “pandemic” at WEF23 [1] https://cointelegraph.com/news/nigeria-bans-atm-cash-withdrawals-over-225-a-week-to-force-use-of-cbdc https://cointelegraph.com/news/nigeria-bans-atm-cash-withdra... [2] https://twitter.com/TimHinchliffe/status/1581058535609495552 https://twitter.com/TimHinchliffe/status/1581058535609495552 [3] https://twitter.com/DrewHLive/status/1616109951264653312 https://twitter.com/DrewHLive/status/1616109951264653312 https://www.bankofengland.co.uk/the-digital-pound https://www.bankofengland.co.uk/the-digital-pound

ashwagary 4y ago

>Why doesn't the government provide banking services with unlimited insurance? Or atleast increase coverage at regular intervals. Thanks to inflation, the amount of real value that is FDIC insured halves every so many years.

jedberg 4y ago
It does change once in a while. It last changed in 2008 (2.5x the previous limit set in 1980). https://americandeposits.com/history-and-timeline-of-changes-to-fdic-coverage-limits/ https://americandeposits.com/history-and-timeline-of-changes...
- ashwagary 4y ago
  Depending on your method of measuring inflation, a US dollar may have lost ~50% of its value since 2008. They should probably increase the frequency of adjustment or atleast tie it to CPI in some way.

AstixAndBelix 4y ago

Public banks should also be needed for a cashless society. How can you expect people to be deprived of cash if they have to rely to a private corporation to simply survive? Give a state issued and guaranteed bank account to every citizen

philjohn 4y ago

They do - it's called buying T bills.

jedberg 4y ago
I can't pay for groceries or rent with a T bill. I still need a bank account with a checkbook or debit card to do those things.
- t0mas88 4y ago
  That bank account only needs to hold about 1 month of expenses. Not a lot of people have over 250k monthly expenses...
  - jedberg 4y ago
    A lot of businesses do though. Also, what if you're buying a house? You might want to keep the down payment around in cash for a quick purchase when you finally find the house you want. Or what about if you need to pay out some large expense and have to liquidate your investments. You shouldn't have money at risk just because you need to hold a large cash position. That's the problem. There should be a risk free place to hold unlimited cash.
    - deleted 4y ago
      [deleted]

Asparagirl 4y ago

> "Why doesn't the government provide banking services with unlimited insurance?" They do, kind of: it's TreasuryDirect.gov. It's only accessible through a horrible web interface straight out of 1999, but it's the real thing. TreasuryDirect lets you buy, hold, and sell Treasury bills, Treasury bonds, I Bonds, EE savings bonds, and other securities. Yes, you can also buy some of these, but not all, through your regular brokerage (Fidelity, Schwab, etc.), but here you can buy them all and titled in your own name -- or you plus a second person, or you POD to a third person, etc. And you can buy in smaller denominations if you want, not just big lots. You can also open up linked accounts for your minor children and hold some of those securities and savings bonds in their own names. And like UTMA accounts, the property becomes theirs to manage when they turn eighteen. And -- important in the context of the current SVB situation -- you can open a TreasuryDirect account for your company, including S Corps, C Corps, and even single-member LLCs. And the interest you earn on all of these securities they sell is completely state tax free. You usually don't even get a 1099-DIV or 1099-INT from them unless you had a sale in the year, which you may not if you were holding long-term I Bonds, etc. (You might get one if you had an interest payment on a marketable security like a T-bill, though.) Note that securities at TreasuryDirect do not have FDIC insurance nor SIPC insurance, because you're buying directly from the US government itself. But note that if they ever failed to honor their (our) own Treasury bills, repudiating our own debt, we would all have much, much bigger problems on our hands.

jedberg 4y ago
Treausurydirect is a great investment vehicle, but it doesn't replace a bank account. I can't deposit my paycheck there, I can't get a debit card and pay for groceries with it. I can't write a check to pay my rent. Unfortunately doing those things requires a private bank.
- Asparagirl 4y ago
  Actually, you can get some or all of your paycheck auto-deposited there! The Payroll Savings Option: https://www.treasurydirect.gov/research-center/communication-materials/for-employers/payroll-savings-option/ https://www.treasurydirect.gov/research-center/communication... Some or all of your paycheck gets sent to a non-interest-earning account that is supposed to be used to buy I Bonds or EE Bonds. But you could, hypothetically, leave the funds in there without doing that step... But yeah, I see your point about daily use. Perhaps your initial idea and the existing TreasuryDirect could be combined and expanded into the Postal Banking idea that other countries have had for a long time?

propogandist 4y ago

Every central bank is working in a digital currency (CBDC); the insurance and safety will be one of the value propositions pitched by the government. CBDCs will enable governments to control money at the individual level, also, if needed. Then, when the next lab-virus leaks, those that don’t comply with government mandates will be programmatically forbidden from spending their digital coins.

krapp 4y ago
Wow. Name definitely checks out.
- propogandist 4y ago
  Every country’s central bank is at a different stage of CBDC adoption. You can elect to put your head in the sand pretending this isn’t happening or assess initiatives underway and policies being promoted. Some examples: >[1] Nigeria bans ATM cash withdrawals over $225 a week to force use of CBDC > [2] Deputy Managing Director of the IMF sharing how central bank digital currency (CBDC) would allow the government to precisely control what people can and cannot spend their money on. > [3] Former UK Prime Minister Tony Blair calls for a digital database to monitor who is vaccinated and who is not for a future “pandemic” at WEF23 [1] https://cointelegraph.com/news/nigeria-bans-atm-cash-withdrawals-over-225-a-week-to-force-use-of-cbdc https://cointelegraph.com/news/nigeria-bans-atm-cash-withdra... [2] https://twitter.com/TimHinchliffe/status/1581058535609495552 https://twitter.com/TimHinchliffe/status/1581058535609495552 [3] https://twitter.com/DrewHLive/status/1616109951264653312 https://twitter.com/DrewHLive/status/1616109951264653312 https://www.bankofengland.co.uk/the-digital-pound https://www.bankofengland.co.uk/the-digital-pound