Pharaoh
Brigadier General
- Messages
- 20,331
Since I'm not seeing very many direct answers to my questions, I've made the question marks (?) bold for easier visibility.
It looks like you want to take this past some sort of blockchain ecurrency and throw in a complete overhaul of how the US operates. Yes, increases in R&D for key sectors is good, but you are trying to do MANY different things at once while also overhauling the financial system and significant parts of the goverment while also somehow convincing/forcing the rest of the world to go along for the ride (for only a modest $10 billion fee for your efforts).
Just because you could hypothetically digitally create and monotor the movement (to the last $0.00000001) of $3.4 QUADRILLION dollars via blockchain does not magically grant you or anyone else the unearthly power to unleash over 120 times the annual GDP/M3 money supply without triggering massive inflation.
Yes, Blockchain can create as many coins at whatever rate (or instantly) as the code is told to allow. One thing blockchain will not do is resolve the bidding wars when I and some rivals decide to fight over who gets to buy the entire global production of M&Ms next month, nor will it cause the factories that produce M&Ms (and everything else) to increase production 120 fold.
Here's a simple way to make this more understandable. Download this:
(Image from https://www.dreamstime.com/print-image209841041)
Modify it so that you only the 500, 1000, 5000, and 10,000 notes. Shink them so you can get 30-50 notes per page. Print out 100 pages and slice them up into individual notes. Next, get a Monopoly game (of you don't already have one). Gather 3 willing people and tell them you want to see what happens if the amount of money is increased..
At the game start, give everyone 100 times the amount in the official rules. Passing Go is now worth $20,000 instead of $200. Keep all the other rules the same. Buying properties from the bank costs the same as the game rules say. Rents/rewards/penaties are the same as the game rules say. Building houses and hotels are the same cost the game rules say. So, what we've done here is grant the players crazy wealth while locking down prices of everything. Well, almost everything. Will you let us all know what happens when a player tries to buy a piece of land, a railroad, or a utility already owned by a different player? Per the rules, the players have to reach a mutually agreeable deal and the bank has no say in the price. I'll bet the agreed price will be FAR in excess of any such deal in a game using the normal amounts of cash.
So, how do you hand multiply the amount of money by 120 or so without causing some very unusual things to happen? How do you keep a group from trying to buy up all of something important (like M&Ms!) straight from the factories and then sell them for as much as the market will bear? It really comes down to two basic choices:
1. Forcing a price freeze on EVERYTHING and have vast teams of investigators to make sure that no one is paying the official price while sending a lovely "gift of thanks" via harder to track channels.
2. Strap in tight, sit back, and watch how fast things get really weird.
Which will you chose or what other solution will you offer?
Here's another question I doubt I'll get an answer to: If giving everyone 10 million dollars per year would create a nation of happy millionaires and not result in hyperinflation, why hasn't even one country succeeded in doing this? There are already well-established methods to track digital purchases (Credit/Debut cards being the biggest examples). Zimbabwe had 100 Trillion Dollar banknotes. Those sell for a few dollars on eBay and are worth even less in Zimbabwe. The US government already prints and borrows far too much money. Cranking up the presses more will only drive inflation harder and make borrowing even more expensive.
Blockchain is a useful tool. It can track things. It can make sure a very large and important database survives a nuclear exchange (which is pretty much the concept it evolved from). It can let your wife (or wives) follow your spending more closely than checking your credit card statements. What it is not is a magic wand. The rules of supply and demand do not bow down before blockchain. Vast sums of money injected into an economy will cause vast amounts of inflation without regard to whether money is processed via blockchain. Since your hypothical FedCoin is issued by decree instead of being mined, at least money won't be wasted on electricity and computing power to generate it, but as it tracks each and every transaction in what you hope is a rapidly growing economy, each copy of the database will have ever-expanding demands for processing power and storage. Unless you've already got an economical way to bring fusion reactors to practicality, how will you power something so vast?
And, there's the utopic vision of all basic production being handled by AI, so everything will be cheap (or even free!). Except for one small detail. Those people from Boston Dynamics, Tesla, Starpery, or wherever want to make big fat profits selling robots, and the factories that "employ" robots want to make big, fat profits by using robots (which are more economical than human workers in the long run). After you've locked up all the senior bankers for sedition (or worse), will you then send troops to seize control of the factories that use robots and/or make robots? What happens to your grand plan if the AI robots just need a few more years of development work when you need each one doing the work of 20 humans right now to keep your whole plan from failing?
Back in the real world, let's look at what can be done without blowing up the banking system while triggering hyperinflation and wars with bankers and robotic manufacturers:
UBI is showing progress. Denver experimented with giving homeless recipients $1,000 per month for a year. They also tried larger lump sum payments with smaller monthly payments. There was good news and bad news.
The good news is that this program got housing for almost half the recipients, It also reduced the number sent to jail as well as other measurable economic costs to society.
The bad news is that the significant savings were well below the outlay. But, it is possible that if this results in better education and better jobs over a longer time frame, the savings and other benefits to society could outweigh the costs. What is needed now is sufficient funds to continue experimenting with different amounts and payment plans to find the combination(s) that produce the best long term benefits for the smallest cash outlay.
https://www.cbsnews.com/colorado/news/denver-basic-income-project-first-year-report-significant-improvements-housing-outcomes/
If a plan could be proven to provide real, sustainable savings in 5 years or less, getting funding from both government and private sources would be far easier.
Creating laws to ensure that workers gain equity in a long term savings plan would also be a huge step towards building a better society. Equity generally grows faster than income, so the sooner one starts bulding it the better one's long term financial prospects are. Many companies already do this in various way (Employee Stock Purchase Plans - ESPPs - being one example), but a combination of laws and tax incentives would spread this sort of thing further and faster.
It looks like you want to take this past some sort of blockchain ecurrency and throw in a complete overhaul of how the US operates. Yes, increases in R&D for key sectors is good, but you are trying to do MANY different things at once while also overhauling the financial system and significant parts of the goverment while also somehow convincing/forcing the rest of the world to go along for the ride (for only a modest $10 billion fee for your efforts).
Just because you could hypothetically digitally create and monotor the movement (to the last $0.00000001) of $3.4 QUADRILLION dollars via blockchain does not magically grant you or anyone else the unearthly power to unleash over 120 times the annual GDP/M3 money supply without triggering massive inflation.
Yes, Blockchain can create as many coins at whatever rate (or instantly) as the code is told to allow. One thing blockchain will not do is resolve the bidding wars when I and some rivals decide to fight over who gets to buy the entire global production of M&Ms next month, nor will it cause the factories that produce M&Ms (and everything else) to increase production 120 fold.
Here's a simple way to make this more understandable. Download this:
(Image from https://www.dreamstime.com/print-image209841041)
Modify it so that you only the 500, 1000, 5000, and 10,000 notes. Shink them so you can get 30-50 notes per page. Print out 100 pages and slice them up into individual notes. Next, get a Monopoly game (of you don't already have one). Gather 3 willing people and tell them you want to see what happens if the amount of money is increased..
At the game start, give everyone 100 times the amount in the official rules. Passing Go is now worth $20,000 instead of $200. Keep all the other rules the same. Buying properties from the bank costs the same as the game rules say. Rents/rewards/penaties are the same as the game rules say. Building houses and hotels are the same cost the game rules say. So, what we've done here is grant the players crazy wealth while locking down prices of everything. Well, almost everything. Will you let us all know what happens when a player tries to buy a piece of land, a railroad, or a utility already owned by a different player? Per the rules, the players have to reach a mutually agreeable deal and the bank has no say in the price. I'll bet the agreed price will be FAR in excess of any such deal in a game using the normal amounts of cash.
So, how do you hand multiply the amount of money by 120 or so without causing some very unusual things to happen? How do you keep a group from trying to buy up all of something important (like M&Ms!) straight from the factories and then sell them for as much as the market will bear? It really comes down to two basic choices:
1. Forcing a price freeze on EVERYTHING and have vast teams of investigators to make sure that no one is paying the official price while sending a lovely "gift of thanks" via harder to track channels.
2. Strap in tight, sit back, and watch how fast things get really weird.
Which will you chose or what other solution will you offer?
Here's another question I doubt I'll get an answer to: If giving everyone 10 million dollars per year would create a nation of happy millionaires and not result in hyperinflation, why hasn't even one country succeeded in doing this? There are already well-established methods to track digital purchases (Credit/Debut cards being the biggest examples). Zimbabwe had 100 Trillion Dollar banknotes. Those sell for a few dollars on eBay and are worth even less in Zimbabwe. The US government already prints and borrows far too much money. Cranking up the presses more will only drive inflation harder and make borrowing even more expensive.
Blockchain is a useful tool. It can track things. It can make sure a very large and important database survives a nuclear exchange (which is pretty much the concept it evolved from). It can let your wife (or wives) follow your spending more closely than checking your credit card statements. What it is not is a magic wand. The rules of supply and demand do not bow down before blockchain. Vast sums of money injected into an economy will cause vast amounts of inflation without regard to whether money is processed via blockchain. Since your hypothical FedCoin is issued by decree instead of being mined, at least money won't be wasted on electricity and computing power to generate it, but as it tracks each and every transaction in what you hope is a rapidly growing economy, each copy of the database will have ever-expanding demands for processing power and storage. Unless you've already got an economical way to bring fusion reactors to practicality, how will you power something so vast?
And, there's the utopic vision of all basic production being handled by AI, so everything will be cheap (or even free!). Except for one small detail. Those people from Boston Dynamics, Tesla, Starpery, or wherever want to make big fat profits selling robots, and the factories that "employ" robots want to make big, fat profits by using robots (which are more economical than human workers in the long run). After you've locked up all the senior bankers for sedition (or worse), will you then send troops to seize control of the factories that use robots and/or make robots? What happens to your grand plan if the AI robots just need a few more years of development work when you need each one doing the work of 20 humans right now to keep your whole plan from failing?
Back in the real world, let's look at what can be done without blowing up the banking system while triggering hyperinflation and wars with bankers and robotic manufacturers:
UBI is showing progress. Denver experimented with giving homeless recipients $1,000 per month for a year. They also tried larger lump sum payments with smaller monthly payments. There was good news and bad news.
The good news is that this program got housing for almost half the recipients, It also reduced the number sent to jail as well as other measurable economic costs to society.
The bad news is that the significant savings were well below the outlay. But, it is possible that if this results in better education and better jobs over a longer time frame, the savings and other benefits to society could outweigh the costs. What is needed now is sufficient funds to continue experimenting with different amounts and payment plans to find the combination(s) that produce the best long term benefits for the smallest cash outlay.
https://www.cbsnews.com/colorado/news/denver-basic-income-project-first-year-report-significant-improvements-housing-outcomes/
If a plan could be proven to provide real, sustainable savings in 5 years or less, getting funding from both government and private sources would be far easier.
Creating laws to ensure that workers gain equity in a long term savings plan would also be a huge step towards building a better society. Equity generally grows faster than income, so the sooner one starts bulding it the better one's long term financial prospects are. Many companies already do this in various way (Employee Stock Purchase Plans - ESPPs - being one example), but a combination of laws and tax incentives would spread this sort of thing further and faster.
