I would say not as safe as Pokerstars but safer than FullTilt.

Not terribly surprising that Satoshi chose a method that didn't rely on government selected constants.

http://en.wikipedia.org/wiki/Nothing..._sleeve_number

Yeah that's kinda krugmans point. Can't really understand how you missed it.

Krugman merely flings poo like a confined monkey. Finding gold and digging it up is unproductive, but burying dollar bills in jars in coal mines will stimulate the economy.

And no one is arguing that mining Bitcoins or gold for the sake of mining is productive. Mining gold is productive because it produces gold. Mining Bitcoins is productive because it makes the network difficult to attack and solves the Byzantine Generals problem.

He did not say digging up dollar bills is productive, he was trying to show that digging up dollar bills is essentially equivalent to digging up gold. There are some things government can do to stimulate the economy that no private individual has the risk tolerance or resources to do.

Take an example of a hi-speed rail from Vegas to LA, not many private individuals would like to assume the risk of the billions of dollars this would cost. But imagine the economic multiplier of a prostitute servicing a client in LA then traveling to Vegas with him cheaply and quickly on hi speed rail. Previously the cost and time preference would have been too great to make the journey by plane or car. But now with hi-speed rail those LA hooker dollars can circulate throughout the Vegas economy and vice-versa. Also, the Hoover Dam, government built during Great Depression, allowed the creation on an entire city in the middle of a desert, how's that for public funding leading to private wealth creation? The private sector would never build something like the Hoover Dam.

Except mining produces something productive that was not available, and digging up printed dollar bills does not. And mining gold isn't done to "stimulate the economy", it's done to get gold. He counts on intellectual lightweights to not see the distinction, and fall for it.

No one said that the public dumping money into a project can't lead to positive things. It's the seen vs. the unseen. Instead of the Hoover Dam, we could have had something more productive built. But it's unseen, since it didn't happen. Same thing with the high speed rail boondoggle projects. The private sector is smart enough to see it's an idiotic idea and wouldn't be a wise investment, but the public sector is smart enough to see that it's a great handout to those who put it into power.

You do not even understand what he's saying, yet he's the one that's flinging poo?

What part don't I understand? To me, he sounds confused, contradictory, and all over the place, with random attacks that are based on lies or complete misunderstandings.

Excellent, this is another idea that always needs debunking. If something cannot be made profitably, including accounting for risk, it should not be built, even by the government. If people won't pay enough to make the rail profitable, it should not be built. If the dam cannot be profitable, it should not be built.

Just because there is now a big dam and a city in the desert doesn't mean that project was an economic benefit. You have to look at the costs. And you have to discount the future benefits to present value to decide whether the project is cost effective. Even if the dam lasts forever (it won't, and also requires constant maintenance), that does not give it infinite value, just as an infinite stream of constant annual payments does not have infinite value.

What happens if the government does not build these things? Then all of the labor, land, capital, and raw materials are available to private industry, at a lower price due to greater supply. These can now be used profitably for some projects that might have been unprofitable before. It's a classic case of the seen and the unseen. We see the dam, the city in the desert, and the rail, but we don't see the better things we could have had instead, had these not been built.

"What happens if the government does not build these things? Then all of the labor, land, capital, and raw materials are available to private industry, at a lower price due to greater supply. These can now be used profitably for some projects that might have been unprofitable before. It's a classic case of the seen and the unseen. We see the dam, the city in the desert, and the rail, but we don't see the better things we could have had instead, had these not been built."



Unfortunately in times of economic depression the private sector does not pick up the slack. Investors become extremely risk averse and retreat to their bunkers and look for just enough ROI to beat inflation. You can create all the goods you want, but if there is no demand for them you might as well have been digging holes in the ground and filling them up again. I know now they'll say "well if public stimulus is so good why not just do it all the time?" It's because when demand is strong the private sector is strong, one should only stimulate with public funds when demand becomes weak. This is only a concern if you care about people as a whole. I imagine the whole supply side bias is based around "fu*k you, I got mine!" And I know I will never change the mind of Tim or Tom, but I might change the mind of someone on the fence reading this thread.

The private sector could pick up the slack during a recession with tax cuts/credits, no?

What about projects that generate benefits which outweigh their costs, but whose benefits can't all be captured by their maker? Like, if I do basic research into a cell's biological functions, that information might someday be used in a totally unforeseen way to help cure a disease.
Or... roads.

Tax cuts? No. If a venture would not have been profitable in the first place (due to aggregate lack of demand) then cutting taxes to 0% will not make it profitable.

Tax credits, yes. That's basically another way of saying government spending, administered through the tax code.

This is indeed very good if you're wealthy, but the demand from the rest of the masses will still be depressed. With weak demand the extra money will still be put (correctly) into low risk, low ROI return investments. This does not help the masses as only high risk and large investments will stimulate their demand to previous levels. With the masses demands reinvigorated it is much easier to recognize low to medium risk high ROI returns. And in the long run maybe this increased ROI from better investments outgains the tax cut route. That much is admittedly uncertain and it probably would be slightly better overall for the wealthy to have perpetually low taxes. But I bet it's a lot closer then you think, and It would certainly make things way worse for everyone who isn't wealthy.

Like I said "fu*ck you, I got mine." I understand completely, if I had mine I would probably feel the same way.

I don't really understand what's being argued here. Whether it's good for the government to print money during a recession or not?

With a fractional reserve system it seems like the great depression makes a strong argument for it being a good thing. It also seems the the fractional reserve system and goverment backstops themselves are the root cause of the depressions/economic crises. No country in the world uses a full reserve system so there's not really any sample size to draw conclusions from using this alternate system.

Whether inflation is good or bad? I made a thread about this in BFI which I can dig up if you guys want to argue that.

depends where that money goes


does it stay in the banks?

Are yoy saying a lump sum tax credit to every American during a recession wouldn't reduce unemployment and the amount of wasted productive capital? I'm pretty sure even Krugman believes this.

Krugman and others like him advocate loose fiscal policy and deficit spending, as I understand. You can do this with tax cuts or increased spending. I believe government spending, particularly the discretionary kind at the margins, is often nonproductive or counterproductive and corrupt. Not to mention it's extremely difficult to reduce government spending and dismantle newly formed programs when the economy picks back up. Any form of government spending invariably "creates jobs" and becomes politically entrenched if only for that reason alone.

The type of fiscal policy I'd prefer is one that lets private actors determine how to use resources and spend money.

I have little confidence in the Federal Reserve to exercise effective monetary policy and much less confidence still I'm Congress to exercise effective fiscal policy, though, so the fact that the bitcoin supply and interest rates aren't controlled by any central authority is something I'm excited about.

I actually did a bit of googling on Full Reserve System if anyone's interested

https://www.khanacademy.org/economic...eserve-banking

Apparently, after the great depression many economists proposed and agreed with going back to a full reserve system but never got implemented - just a bunch of watered down measuers. Sounds a lot like 2007 actually.

http://en.wikipedia.org/wiki/A_Progr...onetary_Reform
http://en.wikipedia.org/wiki/Chicago_plan
https://docs.google.com/gview?url=ht...ary_reform.pdf

This is from the memo written in 1939

What if I plant a pretty rose bush in my garden and my neighbors might enjoy looking at it?

Do you think the private sector is acting rationally or irrationally in this case? Usually when people do something, it's for a reason.

Disagree w/ this and I think it can be easily disproven. What happens when the government adds a substantial tax to something, lets say cars? Car sales (and production) go down. What happens if the government cuts taxes on cars? Car sales and production go up.

It might be a profitable venture to make and sell cars at a certain price point (where demand exists) before taking taxes into account, and an unprofitable venture to sell at that price point after taking taxes into account.

Yeah but... To the mooon!

omg this thread is pure AIDS right now.

Can we talk about something important? Like how rigged Peerbet dice is? I've lost 8 coinflips in a row.

Nasa launched the New Horizons spacecraft 8 years ago and in 1 1/2 years it will make it's closest approach to Pluto. It will continue on through the Kuiper Belt.