>> >> Exactly wrong: People who have earned money ARE the productive economy.

>> Not when they're getting richer just by sitting on cash they are not. That's not producing anything, any/all productive work they did was in the past.

If they are getting richer just by sitting on cash, it means - by definition - that the economy is increasing in size. If it ever comes to a point where too many people just sit on their savings, then the economy will retract, and all these people will start to lose wealth.

There's a balance in the system: when the economy increases too quickly, it will incentivize people to stop producing (because they can live off their savings), and when the economy starts contracting, it incentivizes people to start producing (because their savings are getting worth less).

The size of the economy is the volume exchanged, not the sum of the market value of hoarded assets.

>> If they are getting richer just by sitting on cash, it means - by definition - that the economy is increasing in size.

FAIL.

It might just mean that more people are sitting on currency and less is in circulation.

Nursie, you are to be commended for understanding my argument, it gets tiring arguing against people who don't understand.

OK, now SOMEBODY has to have economic power- So it can't be people who have earned money (as it is with bitcoin) and it can't be the owners of the printing presses (apparently I'm not allowed to say that)...

...so who's left? Should we create a currency that immediately bursts in flames unless it is provably handed to another person within 24 hours? Wouldn't that still be deflationary without printing presses?

EDIT: Maybe you want all the economic power to be with cryptocurrency miners, via an inflating cryptocurrency? So now we're back to giving the power to those who own the presses (the miners, in this case)

People who have earned money are perfectly entitled to have their earned economic power, they just aren't entitled to keep getting more powerful off everyone else's back simply by sitting on cash. Sitting on cash is not an economically useful activity, it's a null operation, and setting a system up to reward it is foolish.

At the moment at least if you want to use money to make money you invest it, and by doing so you enable further economic activity.

Ideally a currency would expand at a rough pace with the economy it serves, making it a reasonable store of value but a better fit for its primary function - a medium of exchange. The two purposes (fixed supply asset, medium of exchange) are not really compatible AFAICT.

But then I'm not horrified by the idea* of central government controlling currency anyway, in theory it allows them a mechanism to smooth out some of the lumps and bumps in the economy. And while currency inflation above and beyond economic growth does effectively constitute a tax, I have no issue with reasonable* taxes.

So in summary - I think BTC would be worse choice than what we have now, but neither is perfect.

(*I said the idea, and I said reasonable, I know there's a hell of a lot wrong with how various governments handle their currency and the amount of wasted taxes)

> People who have earned money are perfectly entitled to have their earned economic power, they just aren't entitled to keep getting more powerful off everyone else's back simply by sitting on cash. Sitting on cash is not an economically useful activity, it's a null operation, and setting a system up to reward it is foolish.

So tell me. If I work for a year and save up $10,000, and when 10 years have passed a car can be made using only 50% of the labor that was required 10 years ago - and, consequently, the car is cheaper than it was 10 years ago - who is more entitled to this increased in wealth than me?

The increased productivity has to benefit someone. I don't think money producers deserve the benefit more than the saver.

That's entirely different from gaining purchasing power by sitting on a fixed proportion of the currency supply, and you know it.

I disagree. That's exactly what happens when you sit on money: because productivity increases, the same amount of money will buy more in the future.

Again, if the saver is not the appropriate recipient of the added purchasing power that an increase in productivity leads to, who is?

No, it's not. Not all goods become cheaper over time, productivity gains do not magically make everything cheaper, only some items. Economic growth is not purely based on making stuff cheaper or more efficiently, it is also based on increased economic activity. With a fixed supply currency a hoarder gets richer in the absolute, not just where efficiency gains are made on particular products, they become richer directly because other people are working harder. This is not the case in the situation you seek to describe.

Not something I'm willing to sign up for.

Right. There are plenty of situations where a saver becomes richer, one of them is if an employer can make his employees work the same for less.

But you still haven't answered my question: why is the money producer - who makes sure we have inflation - a more deserving recipient of the increase in wealth from increased productivity than the money saver?

>> Right. There are plenty of situations where a saver becomes richer, one of them is if an employer can make his employees work the same for less.

That's certain goods getting cheaper, not an appreciating hold over the economy in general that a deflating currency represents.

>> But you still haven't answered my question: why is the money producer - who makes sure we have inflation - a more deserving recipient of the increase in wealth from increased productivity than the money saver?

Deserve? That sounds awfully like a moral judgement...

But I don't think you'll find I said that either one deserves it. I said that I'm not going to, by choice, buy into an economy where my effort enriches currency-squatters. That's not my idea of fun. A currency that inflates roughly in line with economic expansion is more pragmatic.

And frankly, if it goes to the money-printers, well that's the government and in theory they get to use it to build useful stuff we all use. I have no issue with reasonable taxes.