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13 sats \ 26 replies \ @Undisciplined 27 Oct \ on: Which is Worse: Taxes or Fiat Money? econ
Taxes are the "full faith and credit" part of fiat and I think it dies pretty quickly without them.
Fiat is not the dollar.
The dollar was once pegged to gold.
I didn't say the dollar. I said Fiat.
Guess I should have been more clear. Common confusion.
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Additionally, you could eliminate the FED and NOT eliminate the Treasury. Coining money is not fiat.
See most people have no clue about how the dollar works. I'd say most bitcoiners don't. And I'm not an expert in the slightest. But the many hours I've spend learning about the history of the US money system and economy I know that we once had a non-fiat system here.
Banks issued notes. Dollars are just notes issued by the treasury and were backed by gold. Of course there is trust involved but its entirely different from fiat.
Today since bitcoin exists and doesn't require trust (other than in the protocol / network) we could and likely would eliminate the dollar.
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The bank notes were not totally backed by gold.
Fractional reserve banking existed during the gold standard too
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Good point. I think there were periods with high reserve rates, though
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True but I am sure that number varied between banks and seasons etc
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Coining money wouldn't be fiat if the denominations matched the value of materials used.
Pennies and nickels are worth more than their face values, but dimes and quarters much less. Dimes and quarters are fiat because their value comes from government decree.
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Sure. But again, you are describing fiat and mixing that with the coinage. It would be fiat if the coins were traded for arbitrary set amounts. Unless they were treated like paper notes. IE, backed by a physical asset. After all, even paper has a value. Its just very small.
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I get you, but I think fiat currencies would fail much faster without taxing authority behind them.
Part of the demand for fiat is that people have to pay their taxes in it and a lot of the willingness to buy the bonds that are part of creating more fiat is knowing theft can be used to guarantee the nominal yield.
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The root of the problem is government spending which can only be minimized by minimizing taxation of all kinds
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Maybe. I can see that being possible.
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no
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Where has fiat worked without taxes?
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taxes have existed since sovereigns have; fiat is new and shallow.
You can very well have both (or either), and comparatively, taxes are worse.
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I'm not sure what your disagreement is, then
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taxes are not in any way "part of fiat" (unless you, Saif like, redefine everything bad to equal "fiat")
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Ok, here's an attempt to clarify.
I'm saying that part of why bond issuance works at all is because bond holders believe they will be repaid more purchasing power than they lent and part of that belief comes from the ability to tax money for repayment away from the citizenry.
When they say "full faith and credit" that's inclusive of the willingness and ability to loot the public.
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OK, making progress... but then there's still no connection to fiat, since what you describe works perfectly fine on hard money too, and indeed did during the GS.
(I would even quibble a little bit from the ZIRP era, when people were willingly buying negative-yielding bonds not caring about that, but only USTs useful in collateral + ability to shove off to next sucker)
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With hard money, they have to loot the public to make loan payments, but that's not related to the value of the payment.
With fiat, they either loot the public to make the payment or pay with new money. Paying with new money causes devaluation, though.
You're right that taxation is part of both, but the alternative is different under fiat vs hard money. Under hard money, there's no repayment without taxation but under fiat there is still repayment via debasement. So, fiat needs taxation to avoid debasement, which I think was my original point.
That brings me to my comment on this post.
If you get rid of the TAXES, they’ll have to print even more FIAT! Hahaha.
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Taxes are in the open. Fiat is hidden. This is the base of my case for killing fiat being more important.
The best argument against this is that bitcoin will do this over time anyway...
Actually, the biggest threat to bitcoin is a return to sound money...
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To me, it's much more clear that taxes are immoral. They're just theft.
Printing up pieces of paper that say "10 Schmurples", or whatever, isn't immoral in and of itself. We'd have to connect other aspects, like requiring people to accept the fiat in trade at some particular exchange rate.
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They wouldn't have to. My preference would be they just go away, which is an option.
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ahahah! You know damn well that's not gonna happen!
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Indeed. Good question.
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