Nice article. A little long. Not sure I agree with all of your points. You left out something very important. I think you could also discuss the theory of money in the US, or any country that prints its own currency. Money is representation of value that is pushed into the system. Then taxes and interest rates are used to regulate the spigot of money. A trend over the past 40 years has been the consistent lowering of income taxes and the steady increase in sales taxes. This slow trend has lessened the amount of money higher earning and higher net worth individuals pay in taxes and pushed that burden onto people in lower income tax brackts because they spend 80-100% of their income.
When I was a child in Tennessee, our sales tax rate was 4%. Today it is 10%. And....TN no longer has an income tax. It was essentially a shift of 6% additional tax burden for middle to lower income families.
Another key point is that US govt debt is basically fiction. For every dollar that is put into circulation, a dollar of debt is created. AS a population grows, it needs at least the same amount of currency per person to have 0% inflation or deflation. But, even with holding the currency value steady, debt will continue to increase, which we presume would deflate the currency as interest is paid.
So we have three major levers - interest rates, money supply and taxes. If these were used to help the general population, as seen in the 50s-60s, (Not considering the massive discrepancies for minorities and women) we have less income disparity and a higher standard of living. So, the problem with fiat currency is more who controls the levers than the method of value itself. Gold supply can be controlled and affect a society the same as paper money. Compare the increasing value of gold to the increasing value of the entire money supply. I haven't done this, but I would believe that the value of the global money supply has increased faster than the value of gold. This would imply that there is some value in using fiat currency. But, like all methods of acquiring or sharing power, it depends on the entity that controls it and their intentions.
Right now, the powerful are slowly and steadily controlling and accumulating the vast majority of the country's wealth. And bitcoin will not prevent that from continuing.
Nice article. A little long. Not sure I agree with all of your points. You left out something very important. I think you could also discuss the theory of money in the US, or any country that prints its own currency. Money is representation of value that is pushed into the system. Then taxes and interest rates are used to regulate the spigot of money. A trend over the past 40 years has been the consistent lowering of income taxes and the steady increase in sales taxes. This slow trend has lessened the amount of money higher earning and higher net worth individuals pay in taxes and pushed that burden onto people in lower income tax brackts because they spend 80-100% of their income.
When I was a child in Tennessee, our sales tax rate was 4%. Today it is 10%. And....TN no longer has an income tax. It was essentially a shift of 6% additional tax burden for middle to lower income families.
Another key point is that US govt debt is basically fiction. For every dollar that is put into circulation, a dollar of debt is created. AS a population grows, it needs at least the same amount of currency per person to have 0% inflation or deflation. But, even with holding the currency value steady, debt will continue to increase, which we presume would deflate the currency as interest is paid.
So we have three major levers - interest rates, money supply and taxes. If these were used to help the general population, as seen in the 50s-60s, (Not considering the massive discrepancies for minorities and women) we have less income disparity and a higher standard of living. So, the problem with fiat currency is more who controls the levers than the method of value itself. Gold supply can be controlled and affect a society the same as paper money. Compare the increasing value of gold to the increasing value of the entire money supply. I haven't done this, but I would believe that the value of the global money supply has increased faster than the value of gold. This would imply that there is some value in using fiat currency. But, like all methods of acquiring or sharing power, it depends on the entity that controls it and their intentions.
Right now, the powerful are slowly and steadily controlling and accumulating the vast majority of the country's wealth. And bitcoin will not prevent that from continuing.