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Maybe I don't understand what a gold sink is well enough, but I don't see how IRS can be considered a gold sink. Gold spend with NPCs are not returned to the ec

Maybe I don't understand what a gold sink is well enough, but I don't see how IRS can be considered a gold sink. Gold spend with NPCs are not returned to the economy. Taxes are returned to the economy.

pests 3y ago
> Taxes are returned to the economy. I hope we don't start dropping bombs on our own cities....
- Doxin 3y ago
  The money isn't stuffed inside the bombs. The money is still returned to the economy for the most part even if the bombs are "spent" elsewhere.
  - pests 3y ago
    > The money isn't stuffed inside the bombs. I thought that was the only explanation for their prices.
- wodenokoto 3y ago
  Paying for the construction of a bomb, is participating in the economy (as opposed to outright burning the money)
  - taneq 3y ago
    Kind of a broken window fallacy (the bomb isn’t necessary in the first place) but also kind of not (the tech developed for military hardware does eventually get used for good).
benreesman 3y ago
Tax receipts are in no sense returned to the economy unless you really overload one of those words. A modern economy works by running a printing press a little faster than a furnace, with the coefficient being (under honest and competent management) a good estimate of next year being better than this year by such and such, a self-fulfilling prophecy in a good way until you like, burn the planet via carbon emissions or some hard constraint like that. And it’s a perfectly good system… under honest and competent management. It’s just easier to corrupt than systems with much lower potential (which is the distance between gold bug and ignorant, those folks have a point, they just rarely make it). This is where all the 1971 stuff comes in: no rich person does anything but advantage their less-capable kid or lover or whatever unless someone is pointing a gun at them. (e.g. Altman has a job let alone unfettered power). The gold standard has a lower maximum potential risk to the extent you can stop there being a de Beers of gold. You likewise accept 50 years from the transistor to a computer in your house even if you’re fucking loaded. The unanswered question is: can we get competent and honest leadership (after a fashion) back without the bloodshed it has required 100% of the time before? A lot of us hope so but don’t have an answer just yet, and the clock is ticking.
- whage 3y ago
  This post feels like recent movie trailers. The way you wrote it makes me believe you know what you are talking about but I have no idea. Care to give the curious reader pointers to the topics you mention? I mean the "printing press to furnace" analogy of the economy, or what you mean by 1971 or the gold bug or the 50 year transistor omg what?
  - benreesman 3y ago
    I’m just a nerd whose nerd hobbies came to encompass finance when I moved to Manhattan. I was also a party monster back then (please don’t read the book) which for a childless bachelor is a pretty reasonable way to get the most knowledge NYC has to give in a year. If you have particular questions about the monetary system, I know enough to either answer or know that I don’t know and refer you to someone who does.
    - dspillett 3y ago
      > If you have particular questions There were four fairly direct questions in the post you replied to, to which you might like to give a response: >> [what do you] mean [by] the "printing press to furnace" analogy of the economy >> what you mean by 1971 >> or the gold bug >> or the 50 year transistor The first of those I'm pretty sure I understand what you are meaning, though if I'm right about that I don't think it is a good analogy, but the others I have no context for.
      - benreesman 3y ago
        1971 (and/or 1973) is a year people often point to as when we “went off the gold standard”. Neither year is particularly great as a signal example of the collapse of what is loosely called the “Bretton Woods” monetary system, but either is a pretty good nickname for it. By “printing press” I mean the set of mechanisms in which fractional reserve deficit spending creates the money supply to notionally value future growth, and by “furnace” I mean the set of mechanisms by which we prevent arbitrary inflation as a result. You can measure the money supply in plenty of ways, but for someone who needs a glossary on my original comment, TLDR you want a number called “M2”. A “gold bug” is someone who either does or advocates the strategy of holding “precious” metals as a uniquely good asset class (no one turns down a free pile of gold, many of us think the market is pricing gold as well as we are), in particular an asset class uniquely resistant to inflation and/or the “government”. I can assure you from painful experience that “the government” gives no fucks if you have gold in your back yard when they make a clerical error. 50 years is roughly the period of time it took for at least two separate inventions of “the transistor” by a bunch of Bell Labs people, but overwhelmingly associated to a guy called Shockley, to culminate in a useful computer that a middle class person could afford to have in their living room. I learned to code on an IBM PC my distinctly middle-class grandfather owned, and it is a substantially better computer than no computer, a harder claim to make about the Apple I for example.
DeathArrow 3y ago
Doesn't matter much when money can be printed by FED (which is owned by banks, not by stste) or just made up out of thin air by banks and financial institutions. The gold in online games is fabbed the same way. The only two reasons that makes it hold value is that is the only sanctioned way to exchange goods and services and the players trust it. Once one of the two reasons does not exist, gold will not have any value, just like money in real life.
- benreesman 3y ago
  The Federal Reserve system is a quasi-public, quasi-private system. It’s a public/private partnership, which is actually a pretty sane default for how governments should interact with banks. Sloppy, leaky Venn diagrams are a fact of real life. Let’s try to avoid “Jews vote for Likud” or “nine eleven was an inside job” type oversimplification? It’s complicated but for a good set of reasons.
- PeterisP 3y ago
  As you note, the Fed lending policies do act as a money source (when increasing supply) and also as a money sink (when decreasing supply). That doesn't invalidate the parent point that taxes have nothing in common with a money sink, since that mechanism (unlike Fed) doesn't affect money supply but rather simply moves it to specific purchases/institutions.

pests 3y ago

> Taxes are returned to the economy. I hope we don't start dropping bombs on our own cities....

Doxin 3y ago
The money isn't stuffed inside the bombs. The money is still returned to the economy for the most part even if the bombs are "spent" elsewhere.
- pests 3y ago
  > The money isn't stuffed inside the bombs. I thought that was the only explanation for their prices.
wodenokoto 3y ago
Paying for the construction of a bomb, is participating in the economy (as opposed to outright burning the money)
- taneq 3y ago
  Kind of a broken window fallacy (the bomb isn’t necessary in the first place) but also kind of not (the tech developed for military hardware does eventually get used for good).

benreesman 3y ago

Tax receipts are in no sense returned to the economy unless you really overload one of those words. A modern economy works by running a printing press a little faster than a furnace, with the coefficient being (under honest and competent management) a good estimate of next year being better than this year by such and such, a self-fulfilling prophecy in a good way until you like, burn the planet via carbon emissions or some hard constraint like that. And it’s a perfectly good system… under honest and competent management. It’s just easier to corrupt than systems with much lower potential (which is the distance between gold bug and ignorant, those folks have a point, they just rarely make it). This is where all the 1971 stuff comes in: no rich person does anything but advantage their less-capable kid or lover or whatever unless someone is pointing a gun at them. (e.g. Altman has a job let alone unfettered power). The gold standard has a lower maximum potential risk to the extent you can stop there being a de Beers of gold. You likewise accept 50 years from the transistor to a computer in your house even if you’re fucking loaded. The unanswered question is: can we get competent and honest leadership (after a fashion) back without the bloodshed it has required 100% of the time before? A lot of us hope so but don’t have an answer just yet, and the clock is ticking.

whage 3y ago
This post feels like recent movie trailers. The way you wrote it makes me believe you know what you are talking about but I have no idea. Care to give the curious reader pointers to the topics you mention? I mean the "printing press to furnace" analogy of the economy, or what you mean by 1971 or the gold bug or the 50 year transistor omg what?
- benreesman 3y ago
  I’m just a nerd whose nerd hobbies came to encompass finance when I moved to Manhattan. I was also a party monster back then (please don’t read the book) which for a childless bachelor is a pretty reasonable way to get the most knowledge NYC has to give in a year. If you have particular questions about the monetary system, I know enough to either answer or know that I don’t know and refer you to someone who does.
  - dspillett 3y ago
    > If you have particular questions There were four fairly direct questions in the post you replied to, to which you might like to give a response: >> [what do you] mean [by] the "printing press to furnace" analogy of the economy >> what you mean by 1971 >> or the gold bug >> or the 50 year transistor The first of those I'm pretty sure I understand what you are meaning, though if I'm right about that I don't think it is a good analogy, but the others I have no context for.
    - benreesman 3y ago
      1971 (and/or 1973) is a year people often point to as when we “went off the gold standard”. Neither year is particularly great as a signal example of the collapse of what is loosely called the “Bretton Woods” monetary system, but either is a pretty good nickname for it. By “printing press” I mean the set of mechanisms in which fractional reserve deficit spending creates the money supply to notionally value future growth, and by “furnace” I mean the set of mechanisms by which we prevent arbitrary inflation as a result. You can measure the money supply in plenty of ways, but for someone who needs a glossary on my original comment, TLDR you want a number called “M2”. A “gold bug” is someone who either does or advocates the strategy of holding “precious” metals as a uniquely good asset class (no one turns down a free pile of gold, many of us think the market is pricing gold as well as we are), in particular an asset class uniquely resistant to inflation and/or the “government”. I can assure you from painful experience that “the government” gives no fucks if you have gold in your back yard when they make a clerical error. 50 years is roughly the period of time it took for at least two separate inventions of “the transistor” by a bunch of Bell Labs people, but overwhelmingly associated to a guy called Shockley, to culminate in a useful computer that a middle class person could afford to have in their living room. I learned to code on an IBM PC my distinctly middle-class grandfather owned, and it is a substantially better computer than no computer, a harder claim to make about the Apple I for example.

DeathArrow 3y ago

Doesn't matter much when money can be printed by FED (which is owned by banks, not by stste) or just made up out of thin air by banks and financial institutions. The gold in online games is fabbed the same way. The only two reasons that makes it hold value is that is the only sanctioned way to exchange goods and services and the players trust it. Once one of the two reasons does not exist, gold will not have any value, just like money in real life.

benreesman 3y ago
The Federal Reserve system is a quasi-public, quasi-private system. It’s a public/private partnership, which is actually a pretty sane default for how governments should interact with banks. Sloppy, leaky Venn diagrams are a fact of real life. Let’s try to avoid “Jews vote for Likud” or “nine eleven was an inside job” type oversimplification? It’s complicated but for a good set of reasons.
PeterisP 3y ago
As you note, the Fed lending policies do act as a money source (when increasing supply) and also as a money sink (when decreasing supply). That doesn't invalidate the parent point that taxes have nothing in common with a money sink, since that mechanism (unlike Fed) doesn't affect money supply but rather simply moves it to specific purchases/institutions.