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0 sats \ 15 replies \ @denlillaapan 28 Oct \ parent \ on: Which is Worse: Taxes or Fiat Money? econ
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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.
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so the first premise is just off: under fiat (i.e. USA today) isn't paying with new money.
- M2 is flat
- Fed balance sheet is shrinking
- and Fed seigniorage revenue to Treasury was always minor (and in the last 3 years has been negative).
There IS NO MONEY PRINTING FOR BONDS
So, fiat needs taxation to avoid debasement, which I think was my original point.
Even so, that doesn't work/answer OP's question...
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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