this post was submitted on 04 Nov 2023
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A Boring Dystopia

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[–] [email protected] 10 points 1 year ago (2 children)

So money goes in and gets deleted, and then they create money and they give it away?

When I think of it, I do the same thing every time I buy something.

The money in my bank account doesn't get transferred, the bank just deletes it on their servers and then they create money and give it to the store.

[–] [email protected] 2 points 1 year ago (1 children)

As far as I understand that's the definition of fungibility, right? Every dollar is interchangeable and identical?

So there's no functional difference between deleting $1 and creating $1 except semantics, compared to moving $1, as long as the total value doesn't change.

The government just deleting money and printing money to pay for whatever it wants suggests that those things aren't equal, which would be the problem if it were true.

[–] [email protected] 3 points 1 year ago

That’s what causes inflation. When you print more than you delete, at a rate faster than total economic growth.

[–] [email protected] 2 points 1 year ago (1 children)

Yes, they both create and delete money. That doesn't mean that the two processes need to be equal or balanced.

Your purchases do, or someone is owed their portion of the transaction. That's not the case when the government is writing bonds or appropriating funding to programs. They can create money freely, regardless of the tax they collect. Taxes serve a different purpose.

[–] [email protected] 2 points 1 year ago* (last edited 1 year ago) (1 children)

That would increase inflation drastically, which is something governments absolutely don't want.

They want inflation to be around 1-2%. Less is no good, because rich idiots would just hoard money instead of investing it. More is also no good because saved money would just disappear quickly.

[–] [email protected] 1 points 1 year ago* (last edited 1 year ago)

Tell that to Japan. One of the highest spenders. Still stuck in perpetual de flation for over 20 years at this point.

It's not that simple.