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How is it desirable that the USD is backed by the extraction/exploitation of future tax payers? Sounds like a pyramid scheme and highly unethical. I'd prefer m

How is it desirable that the USD is backed by the extraction/exploitation of future tax payers? Sounds like a pyramid scheme and highly unethical. I'd prefer my money to be backed by literally any proxy item rather than by the enslavement of our children. The current system artificially rewards centralization and in doing so, makes markets anti-competitive and monopolistic as it creates an asymmetric playing field whereby the participants who are closer to the money printer always have the upper hand over their competitors regardless of other factors. It's the Cantillon effect.

The_Colonel 3y ago
But is the gold (bitcoin/whatever) standard truly better? It's necessarily deflationary (in the long term, assuming continuous economic growth) which rewards just holding it. Rich people get richer, poor get poorer.
- jongjong 3y ago
  To some extent, yes, but because the quantity of Bitcoin is limited, at least it cannot compound ad-infinitum into the hands of the rich as is the case with fiat. The other thing which is problematic about the current system is that because the currency is constantly losing value to inflation, governments are essentially forced to invest people's pensions into the stock market which distorts the markets in favour of certain large companies... If currency held its value, governments could just keep pensions in the form of currency and would not be compelled to interfere with the markets. Governments should not get to decide how to invest citizens' money. A deflationary currency is good. It rewards people a little bit for staying out of the market. If you get rich, congrats, you've made it, now you have an incentive to step aside, cash out and let someone else have a go. Today, the incentive is to keep reinvesting your money even if you don't feel particularly strongly about any investment. Today, many people invest simply because they don't want to hold cash which loses value over time. People who don't have a vision for how to improve things should not be involved in the markets at all. There should be an incentive for such people to stay out of the markets. That's what a deflationary currency would do. There needs to be a bench on the side where rich people can sit down and catch their breath before making their next investment.
  - neffo 3y ago
    What do you think happens when the profit incentive over any length of time is to neither spend nor invest and simply hold cash? It doesn't end well for that currency or the associated economy.
    - jongjong 3y ago
      I don't believe that. The poor will always have an incentive to work hard to get rich. The poor will always keep the economy running. It would be easier for people to succeed (and more motivating) if they didn't have to compete against the massive capital of incumbents. A deflationary currency only incentivizes the rich to stop working and stop participating in the markets... Which is fine IMO. They're rich, they don't need to work anymore. The best thing they can do is step aside and let someone else have a chance. Their massive capital, when put to work, would mostly serve to monopolize markets anyway... And it's a net negative for everyone. There is a false belief that rich people are so essential that the economy would collapse without them... But if you look at history, you would see that educated poor people have repeatedly been able to pull themselves out of poverty... I.e. economic 'miracles' (e.g. Germany after WW2, Japan, South Korea...). People should get rich and retire. There are always going to be plenty of younger motivated people with fresh perspectives to take their place.
      - neffo 3y ago
        I never mentioned anything about rich or poor. Workers can't work if nobody is hiring. Businesses can't borrow, and anyone who has borrowed faces a falling real asset value with a nominal debt accruing nominal interest. (See 2007 housing market crash for a very narrow example.)
      - The_Colonel 3y ago
        > The poor will always have an incentive to work hard to get rich. To get rich you need capital. But that is hard to get in a deflationary economy - the supply is finite, the rich have only a small incentive to invest since they get wealthier just by sitting on it risk-free. As a result, getting access to capital would be very expensive with high interest rates. That applies to mundane things like mortgages as well - good luck getting a 30-year mortgage, you're destined to rent forever. Poor would stay poor, rich would get richer.
- ttoinou 3y ago
  Holding money means less is in circulation, which means the money is rarer, which is a gift to all others owners of that money, poor included. When you spend money, down the line, you ask poor people to work for you. It's not necessarily good by itself

The_Colonel 3y ago

But is the gold (bitcoin/whatever) standard truly better? It's necessarily deflationary (in the long term, assuming continuous economic growth) which rewards just holding it. Rich people get richer, poor get poorer.

jongjong 3y ago
To some extent, yes, but because the quantity of Bitcoin is limited, at least it cannot compound ad-infinitum into the hands of the rich as is the case with fiat. The other thing which is problematic about the current system is that because the currency is constantly losing value to inflation, governments are essentially forced to invest people's pensions into the stock market which distorts the markets in favour of certain large companies... If currency held its value, governments could just keep pensions in the form of currency and would not be compelled to interfere with the markets. Governments should not get to decide how to invest citizens' money. A deflationary currency is good. It rewards people a little bit for staying out of the market. If you get rich, congrats, you've made it, now you have an incentive to step aside, cash out and let someone else have a go. Today, the incentive is to keep reinvesting your money even if you don't feel particularly strongly about any investment. Today, many people invest simply because they don't want to hold cash which loses value over time. People who don't have a vision for how to improve things should not be involved in the markets at all. There should be an incentive for such people to stay out of the markets. That's what a deflationary currency would do. There needs to be a bench on the side where rich people can sit down and catch their breath before making their next investment.
- neffo 3y ago
  What do you think happens when the profit incentive over any length of time is to neither spend nor invest and simply hold cash? It doesn't end well for that currency or the associated economy.
  - jongjong 3y ago
    I don't believe that. The poor will always have an incentive to work hard to get rich. The poor will always keep the economy running. It would be easier for people to succeed (and more motivating) if they didn't have to compete against the massive capital of incumbents. A deflationary currency only incentivizes the rich to stop working and stop participating in the markets... Which is fine IMO. They're rich, they don't need to work anymore. The best thing they can do is step aside and let someone else have a chance. Their massive capital, when put to work, would mostly serve to monopolize markets anyway... And it's a net negative for everyone. There is a false belief that rich people are so essential that the economy would collapse without them... But if you look at history, you would see that educated poor people have repeatedly been able to pull themselves out of poverty... I.e. economic 'miracles' (e.g. Germany after WW2, Japan, South Korea...). People should get rich and retire. There are always going to be plenty of younger motivated people with fresh perspectives to take their place.
    - neffo 3y ago
      I never mentioned anything about rich or poor. Workers can't work if nobody is hiring. Businesses can't borrow, and anyone who has borrowed faces a falling real asset value with a nominal debt accruing nominal interest. (See 2007 housing market crash for a very narrow example.)
    - The_Colonel 3y ago
      > The poor will always have an incentive to work hard to get rich. To get rich you need capital. But that is hard to get in a deflationary economy - the supply is finite, the rich have only a small incentive to invest since they get wealthier just by sitting on it risk-free. As a result, getting access to capital would be very expensive with high interest rates. That applies to mundane things like mortgages as well - good luck getting a 30-year mortgage, you're destined to rent forever. Poor would stay poor, rich would get richer.
ttoinou 3y ago
Holding money means less is in circulation, which means the money is rarer, which is a gift to all others owners of that money, poor included. When you spend money, down the line, you ask poor people to work for you. It's not necessarily good by itself