4 ms·

To the point about dollars, there very much is something the government can do about it: taxes. If the government requires taxes to be paid in dollars, that se

To the point about dollars, there very much is something the government can do about it: taxes. If the government requires taxes to be paid in dollars, that sets a "floor" on the value of a dollar as a medium of exchange - for most people in the US living a "normal" life, you have to acquire some amount of dollars throughout the year, under penalty of jail/loss of property (property tax). Then, since you already have 300m+ consumers in a massive market using the currency, odds are you'll use it too. The only way you'd truly render dollars worthless is through government action or malfeasance; the fictional scenario where every person on earth not only agrees dollars are worthless, but also agrees to forfeit all property in the US, all employment in the US, and interests in any US financial holdings is quite a few steps beyond the point where "the people just decide to rebuke the dollar's lack of backing".

immibis 1y ago
Doing this in an environment where nobody is using dollars will lead to guillotines. The dollar has to be useful for exchange first, and then they can demand tax to be paid in it.
- imtringued 1y ago
  Uhm no? This is illogical. You just declared money worthless. Nobody is gonna bring out the guillotines if the government demands worthless paper. They'll happily give the worthless paper to the government.
  - immibis 1y ago
    How will they acquire the worthless paper?
- alex43578 1y ago
  So this thought experiment isn't just that "everyone decides dollars are worthless" but also that the state is dissolved, along with all the property rights and the govt's monopoly on violence? That's more like saying "Dollars are worthless in a scenario like Fallout or The Road", rather than making any relevant point about government efforts to maintain fiat currency. In the original scenario of "people decide dollars are worthless... nothing the government can do", my point was that the government has a lot of levers to pull to backstop value, albeit at a far lower level than today's dollar.
analog31 1y ago
Any idea of an instantaneous, sweeping change, is utopian. But more gradual actions are possible. For instance the government could decide to let the dollar serve as a medium of exchange while discouraging its use as a long term store of value. They could do this by triggering a mild inflation, such as 2% per year, that would encourage people to move their wealth out of dollars and into things like land, goods, factories, etc. The dollar wouldn't become worthless, but it would become worth 2% less per year.

immibis 1y ago

Doing this in an environment where nobody is using dollars will lead to guillotines. The dollar has to be useful for exchange first, and then they can demand tax to be paid in it.

imtringued 1y ago
Uhm no? This is illogical. You just declared money worthless. Nobody is gonna bring out the guillotines if the government demands worthless paper. They'll happily give the worthless paper to the government.
- immibis 1y ago
  How will they acquire the worthless paper?
alex43578 1y ago
So this thought experiment isn't just that "everyone decides dollars are worthless" but also that the state is dissolved, along with all the property rights and the govt's monopoly on violence? That's more like saying "Dollars are worthless in a scenario like Fallout or The Road", rather than making any relevant point about government efforts to maintain fiat currency. In the original scenario of "people decide dollars are worthless... nothing the government can do", my point was that the government has a lot of levers to pull to backstop value, albeit at a far lower level than today's dollar.

analog31 1y ago

Any idea of an instantaneous, sweeping change, is utopian. But more gradual actions are possible. For instance the government could decide to let the dollar serve as a medium of exchange while discouraging its use as a long term store of value. They could do this by triggering a mild inflation, such as 2% per year, that would encourage people to move their wealth out of dollars and into things like land, goods, factories, etc. The dollar wouldn't become worthless, but it would become worth 2% less per year.