Conversation
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@mjd do you think your counterargument still applies if a government accepts taxes in BitCoin as *one option*, not the only tax currency?
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@strypey The government only issues and accepts cash or central bank (RBA/RBNZ) credits. When we pay tax our private sector bank credits (the bank's liabilities) are marked down, as are the bank's central bank assets ("reserves").
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@mjd surely if there is a will there is a way? eg the tax department could batch sell BTC within the country for its own currency
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@mjd or the government could use it to pay down government debt to foreign actors willing to accept it
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@mjd I'm not arguing for this though, to be clear, I'm just saying it would change the status of BTC from proxy currency to money
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@strypey Government debt is money. There's no virtue in paying down government debt unless you think there's altogether too much money floating about. That's not a complaint I hear often.
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@mjd I think you're confusing 'budget deficit' (what you're talking about) with 'balance of payments' (what I'm talking about)
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@strypey If #NZ sells stuff to #AU in $AU, AU doesn't have a problem; AU got a real asset in exchange for an accounting record. It's like an uncashed cheque; collect as many as you want. Frame them and hang them on the wall. There's more where that came from.
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@strypey The same transaction in #Bitcoin means #AU has to acquire Bitcoin somehow. And where someone who's left holding $AU ends up buying stuff available in $AU, usually from AU, someone who's holding Bitcoin has no incentive to make a reciprocal transaction.
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@mjd "The same transaction in #Bitcoin means #AU has to acquire Bitcoin somehow" in this hypothetical, by accepting it in payment of tax
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@mjd again, I'm not arguing for this. It would only be likely if #BTC was used frequently in real transactions not just currency speculation
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@mjd at present #BTC engineering is controlled by BitBugs, who are using it as a store of value or a speculative hedge
http://qttr.at/1r1c-
@mjd they do this at the expense of engineering #BTC to be a useful internet currency for buying small amounts of actual goods and service
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@strypey I agree, but I think the objective of "useful currency" requires an organised political constituency behind it, which #Bitcoin and most complementary currencies don't have.
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@mjd I'm not sure how you define "organised political constituency" because it appears to me to have a very organised constituency
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@mjd i.e the people who are organising to make sure core code development optimizes store of value over medium of exchange
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@mjd a currency doesn't need state backing to be useful, but it does need to be practical for buying and selling lots of things people want
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@mjd proxies currencies can be just a useful as a medium of exchange as state-backed currencies if they are accepted widely enough
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@strypey My thinking on complementary currencies is evolving rapidly ATM. This from the BoE is useful context, though Smith's commodity currency story is a bit iffy (as I think #Graeber or the #MMT crowd would agree). http://ur1.ca/qotce
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@mjd when our governent buys "cloud" services from MS, this creates 'balance of payments' debt just as it does if I buy MS services from NZ
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@mjd paying the government portion of such balance of payments debt doesn't reduce the amount of money in the domestic economy AFAIK
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@mjd running a budget surplus does, so in hard times govt. deficits are a good idea, which is one reason austerity is "handbag economics"
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@strypey In that operation, we lose our bank's dollar-denominated credits, our bank breaks even, and the gov. has its previously-issued IOUs disappear in a puff of accountancy.
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