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RE: Bitcoin Macroeconomics

in #bitcoin7 years ago

Re- your last point, see my book Setting Sun for the empirics on this. The US govmt is highly dependent on inflationary monetary policy as a method of funding itself; if alt currency largely took over, and inflation as a source of government funding was no longer an option, government finance would be in an impossible state. On the spending side, the problem is that most expense goes to transfer programs, which are hard to change. On the revenue side, the problem is that, despite trying many different tax regimes, some with tax rates much, much higher than today, the US government has been unable to raise much more than 20% of GDP as tax revenue. Also, presumably, heavy prevalence of alt currency would take away the option of a wealth tax (which I feel is a reasonable option and one that will be increasingly debated).

Points 1 and 2 don't change the fact that alt currency use is strongly against governments' interest. Given that alt currency use is against the govmt interest, they will seek to squash it. The mechanisms for doing this will tend to be random and unfair, but they can get it done in my opinion.

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