There’s an entire branch of economics and associated taught controversy dedicated to deficit spending by governments.
On the one hand, there are welfarists and other bleeding hearts who imagine that money grows on trees from whence it can be costlessly plucked and redistributed based on neediness, that paragon of idealistic virtue. Sometimes there’s more than enough to redistribute, sometimes not. For when there’s not, these folks are very much in favour of deficit spending by governments and totalitarian iatrogenics in particular as a means of smoothing out the economic booms and busts created by their earlier interventions into matters of import. This translates to large-scale infrastructure investments, loans to private industry, bail-outs, and grants as a means of kickstarting the economy and upholding the social contract. How very mean.i
On the other hand, there are the war-mongering world police who imagine that money grows on trees from whence it can be costlessly plucked and redistributed based on the particular monster waiting under your bed on that particular day.ii Sometimes there’s more than enough to redistribute, sometimes not. For when there’s not, these folks are very much in favour of Diocletian’s proven formula of a fear-driven war-time economy as a means of smoothing out the economic booms and busts created by their earlier interventions into matters of import.iii This translates to large-scale military investments, loans to private industry, bail-outs, and grants as a means of kickstarting the economy, which is arguably just as mean as the first, though if done correctly, it does have the economic advantage of appropriating resources that can then be funnelled back to the empire.iv Not to mention the resulting inventions. Less mean, but not all that much less corrupt.
Both sides in this little debate are quite in favour of deficit spending when push comes to shove, primarily because it’s a politically expedient manner of concentrating wealth from the hands of the productive and narrowly connected to the hands of the merely well connected.v The similarities are the avenues of extraction : taxation and inflation. The difference lies primarily in the specific industries and individuals that have the good fortune of being on the receiving end.
At the end of the day, while both sides may argue as to the circumstances necessitating deficit financing, where the future is mortgaged against the perceived needs of the moment,vi both are perfectly content to construct a sufficiently persuasive position from which they can launch their attacks. This is at least how it works in the conventional paradigm of democratic fiat nation states, those lecherous old men with desperately empty eyes.
Outside of this narrow range of dead-end possibilities lies La Serenissima, capable of running up deficits thousands of orders of magnitude greater with nary a fuss and no possibility of sublimated violence as a means of reconciling its debt.vii This is possible because Bitcoin, The Most Serene Republic Of~ is a based on voluntary rather than coercive taxation. Remember the tithe³ ? Ya, that thing.
So while revenues are decentalised and therefore off the book, expenses are for the greater good and therefore on the book. So it’s not that B, TMSR~ is tripping on LSD and thinks it’s supercallafragically invented a way to extract more juice from a single lemon than there has ever existed in all the lemons that have ever lemoned, it’s that voluntary agreements between gentlemen open up new understandings of accounting that flip the fiat fuddy-duddery right on its head and expose it for the contrived perversion that it is. Isn’t it incredible what can happen when incentives are aligned ?
So, as ever, the idea that deficits are bad mkay very much depends on who’s running them. Not all are created equal.
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- Mean, which is to say, ignoble, small-minded, inferior in rank, and mostly damning : average. [↩]
- At least this is the current manifestation of a “conservative.” They used to be goldbugs, back when shiny metal was a thing worth the bother as a means of limiting inflation. Not that it worked, mind you. At least it didn’t hold back Kings Henry VIII and Edward VI. [↩]
- Don’t have an enemy at the gates ? Make one. This isn’t always figurative either, as the US has aptly demonstrated in the Middle East, over and over again. [↩]
- Note that in this sense peacekeeping is an utter waste of resources, at least in the social media age where citizens are already mentally taxed at 100% and have never been less reliant on government for distracting headlines. [↩]
- This is what you get for electing broke-ass politicians ferfucksake. [↩]
- Governments with control over their currency, such as pretty much every nation state extant, can of course wriggle their way out of debts by printing more currency with which to pay back their creditors. Individuals – meaning Mr. 30-Year-Mortgage over there who just “invested” in real estate because his money was burning a hole right through his pocket and into his skull and his money-burned noodle now imagines that a multi-decade bet against interest rates rising was the definition of a grown-up – have no such privilege. Which is why Mr. 30YM is fucked. He doesn’t see hyperinflation coming. “No one could’ve foreseen another Weimar.” [↩]
- How does a five quintillion seven hundred and ninety-eight quadrillion seven hundred and ninety-six trillion eight hundred and fifty-seven billion nine hundred and sixty-seven million four hundred and ninety-six thousand eight hundred thirty-four percent deficit hit you ? Because that’s what it is. [↩]