Bitcoin and The Countercyclical Fiscal Policy

Carlton Banks

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Quote from: Ucy on June 18, 2021, 10:23:48 AM

How would a government handle the "Countercyclical Fiscal Policy" if it uses gold or other scarce precious metal as money? I guess, it either honestly buy more gold to stimulate the economy or deceptively print fake gold out of nothing (more plunking money from trees) to stimulate the economy. If the former is the answer then I would suggest the government d thesame with Bitcoin - buy loads of Bitcoin, split the coins into many part and use that to stimulate the economy.

did I mention that the OP is a false premise, based upon another false premise?

they don't need to do anything. Instead, normal people can just use their economic instincts, and some kind of market equilibrium is always found. Both fiscal and monetary policy are nothing more than the government causing unhelpful distortions to market signals. Well, helpful only to those that can influence government decisions about how and when to distort said signals.

It's plain old racketeering, not benevolence, that drives politicians and bureaucrats to manipulate marketplaces. Let me spell it out plainly: they're gangsters

Ucy

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Compare rates on different exchanges & swap.

How would a government handle the "Countercyclical Fiscal Policy" if it uses gold or other scarce precious metal as money? I guess, it either honestly buy more gold to stimulate the economy or deceptively print fake gold out of nothing (more plunking money from trees) to stimulate the economy. If the former is the answer then I would suggest the government d thesame with Bitcoin - buy loads of Bitcoin, split the coins into many part and use that to stimulate the economy.

odolvlobo

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Quote from: KingsDen on June 16, 2021, 03:29:04 AM

My question, as Bitcoin is massively adopted as a legal tender, despite being a decentralized system, does it have a design or policy that will do exactly what the countercyclical fiscal policy does?

Fiscal policy is determined by a government and Bitcoin is independent of any government. But, that doesn't mean that a government that adopts Bitcoin couldn't have a fiscal policy. Furthermore, Bitcoin is not immune to fractional reserve banking so a government can also set monetary policy by controlling interest rates, though it would be much less effective than if it also controlled the monetary base.

KingsDen

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Goodnight, o_e_l_e_o 🌹

Quote from: avikz on June 16, 2021, 05:05:23 AM

Quote from: KingsDen on June 16, 2021, 03:29:04 AM

My question, as Bitcoin is massively adopted as a legal tender, despite being a decentralized system, does it have a design or policy that will do exactly what the countercyclical fiscal policy does?
Thank you!

I don't know how you have considered that bitcoin is massively adopted as a legal tender, because it is not!

Maybe the statement should be "If Bitcoin is massively adopted..."
However, I have noted that bitcoin works on a scarcity model and also as point out by @Tytanowy and @Banks, no government does the countercyclical fiscal policy in real life. It is however surprising that things are mostly said than done in today's society.

davis196

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1.Bitcoin will never replace fiat currencies in the real world.
2.Taxes will continue to exist after Bitcoin gets adopted.The governments can still impose fiscal policy by raising or lowering the tax rates.
The banking system will continue to exist,after BTC gets adopted.The central banks can still decrease or increase the interest rates,even if BTC gets adopted as a legal tender.The only difference is that there won't be massive money printing,when BTC replaces fiat money,which will never happen,so we are just fantasizing about a potential imaginative case scenario.

avikz

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Quote from: KingsDen on June 16, 2021, 03:29:04 AM

My question, as Bitcoin is massively adopted as a legal tender, despite being a decentralized system, does it have a design or policy that will do exactly what the countercyclical fiscal policy does?
Thank you!

I don't know how you have considered that bitcoin is massively adopted as a legal tender, because it is not! I believe only Japan, El Salvador and Curacao has given bitcoin a legal tender status as of now. Bitcoin is pretty much not a legal tender worldwide.

Now to answer your question, bitcoin doesn't have a policy similar to the governments and will never have one. The reason is pretty much simple - it's decentralized and no one controls it. Bitcoin is based on a scarcity model. It has limited supply and it's mining difficulty increasing after a certain period of time to make it even scarce.

Tytanowy Janusz

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Quote from: KingsDen on June 16, 2021, 03:29:04 AM

An economy whose legal tender (money) is minted and controlled by her government, has a money-flow control system called "The Countercyclical Fiscal Policy".
The Countercyclical Fiscal Policy in simple words can mean; a situation where the government reduces interest, approves more grants, reduces taxation and pump in more money to the society when she notices that there is a looming recession. In the other hand, the government increases taxation, increases interest rate and reduces public expenditure when there is boom in the economy.
My question, as Bitcoin is massively adopted as a legal tender, despite being a decentralized system, does it have a design or policy that will do exactly what the countercyclical fiscal policy does?
Thank you!

This system was designed to work that way but is not. Never was. Mostly because of democracy. Thats why dept to GDP in US is 140% and its not going down. Not now, Not 5 years ago. Not 10 year ago. They continue to print more and more money trying to patch bigger and bigger hole using hidden tax (inflation). Economy is now so innefective that instead of spending money on innovation we are spending it for donations for boobie streamers on twitch.

Boston Dynamics was sold to Hyundai for $1.1 billion
TikTok - The sale price is expected to be in the range of $20 billion to $30 billion

Thanks to current monetary policy we are getting closer and closer to doom day. Thanks satoshi we dont have such system implemented here in bitcoin.

Carlton Banks

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Quote from: KingsDen on June 16, 2021, 03:29:04 AM

An economy whose legal tender (money) is minted and controlled by her government, has a money-flow control system called "The Countercyclical Fiscal Policy".
The Countercyclical Fiscal Policy in simple words can mean; a situation where the government reduces interest, approves more grants, reduces taxation and pump in more money to the society when she notices that there is a looming recession. In the other hand, the government increases taxation, increases interest rate and reduces public expenditure when there is boom in the economy.
My question, as Bitcoin is massively adopted as a legal tender, despite being a decentralized system, does it have a design or policy that will do exactly what the countercyclical fiscal policy does?
Thank you!

no

your question is based on a false premise anyway, no government does what you say in practice. They always borrow and spend more, irrespective of economic cycles.

That's the reason for Bitcoin's existence. Welcome to the year 2009.

KingsDen

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Goodnight, o_e_l_e_o 🌹

An economy whose legal tender (money) is minted and controlled by her government, has a money-flow control system called "The Countercyclical Fiscal Policy".
The Countercyclical Fiscal Policy in simple words can mean; a situation where the government reduces interest, approves more grants, reduces taxation and pump in more money to the society when she notices that there is a looming recession. In the other hand, the government increases taxation, increases interest rate and reduces public expenditure when there is boom in the economy.
My question, as Bitcoin is massively adopted as a legal tender, despite being a decentralized system, does it have a design or policy that will do exactly what the countercyclical fiscal policy does?
Thank you!

Topic: Bitcoin and The Countercyclical Fiscal Policy (Read 187 times)