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I no longer worry about the US federal debt being unpayable. It’s easily payable.

How? Government can manufacture financial conditions such that they guarantee themselves 28% of all capital gains. Or at least 28%.

How? Alternative Minimum Tax. If you’re wealthy, meaning earn more than $86,100 dollars a year, AMT guarantees you will pay a minimum of 26% of all income over $86,100. If you make over roughly $250,000, you pay 28% on that income. And if you make over roughly $600,000, you get 28% tax on the originally exempt $86,100 and pay that extra 2% on income between $250k & $600k.

When bitcoin shoots up 100x in price over the next 30 years, that’ll be roughly $100T they’ll tax at 28%. Problem solved.

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Discussion

MRbtc 5mo ago

You know that the debt can’t be paid right?

Dr. Bitcoin, MD 5mo ago

I just showed you how easy it would be. Presuming bitcoiners pay their taxes.

Dr. Bitcoin, MD 5mo ago

You see, they essentially own 28% of all American wealth.

MRbtc 5mo ago

The only real money is Bitcoin, all the rest is debt.

Dr. Bitcoin, MD 5mo ago

Which means the debt isn’t real either.

MRbtc 5mo ago

Correct, but has real negative impact in peoples lives.

Dr. Bitcoin, MD 5mo ago

All it means is they have to steal more. It’s inherently evil.

BTC_P2P 5mo ago

You’re not factoring in several realities. The U.S. debt will continue to pile up likely at an accelerating rate. Most bitcoin hodlers won’t sell. Stealing more money from productive individuals isn’t a viable “solution” and that course will drive many to leave or evade the government sanctioned theft in myriad ways.

The U.S. government will never satisfy its debts. It will just inflate the underlying unit of debt toward zero and eventually the usd will lose reserve status and become increasingly irrelevant.

Dr. Bitcoin, MD 5mo ago

I agree it’s possible that the US could choose to make its future debt unpayable by increasing it, but as of now, it’s easily paid: eventually bitcoiners will die and as death is a taxable event, the government would collect massive amounts of tax.

And even if federal debt were much higher, then the only thing that is needed is another asset to massively inflate. Maybe even just massively inflating bitcoin again.

US debt will never be too much until they start borrowing bitcoin.

BTC_P2P 5mo ago

U.S. federal debt has compounded at > 20% for the last 54 years. It’s compounding at an accelerating rate now. It will never be paid back, period.

Dr. Bitcoin, MD 5mo ago

Unless bitcoin moons and bitcoiners pay taxes at least upon death.

When you own 28% of everything and you control the price of money, you can steal any amount you can borrow.

BTC_P2P 5mo ago

You’re also not factoring in the reality of Bitcoin being a global asset held by people of all nationalities.

And upon death can be 50+ years out for many Bitcoiner’s. Which doesn’t factor in heirs and/or no inheritance plan and lost coins.

Factor in > 20% compound annual growth on 37,000,000,000,000 for 40 years lmao and there is the answer. The fat lady is singing.

Dr. Bitcoin, MD 5mo ago

Fat lady is singing or she needs to raise a herd of cash cows for dinner. One or the other.

BTC_P2P 5mo ago

Redo your calculations with the debt compounding at 22.5% per year. Let’s see what would have to be stolen above 28%.

Dr. Bitcoin, MD 5mo ago

It could all easily be done at 10%. All ya gotta do is raise bitcoin price high enough.

My main point is this: regardless of the size of the debt, for any tax rate greater than zero, there exists a price they can pump bitcoin to that will suffice to pay off the entire US debt and even more…

Again, contingent upon bitcoiners paying taxes. And as death is a taxable event, only mass non-compliance makes federal debt unpayable. Even a small fraction of people complying could pay off debt.

BTC_P2P 5mo ago

There are a lot of problems with your analysis. I’ve pointed some of them out, others I haven’t touched on, but I’m over it. Enjoy your Sunday.

Dr. Bitcoin, MD 5mo ago

If you don’t see my point, I’m not being clear enough. I’m arguing a tautology…and it explains why the debt is payable. That doesn’t mean inconsequential. Specifically, the consequence will be a higher bitcoin price.

halalmoney 5mo ago

Interesting.

No need to stop the debt train, just make it disappear.

BTC_P2P 5mo ago

Gubmint doesn’t have the ability to choose the spot price of corn though. It’s a global open spot market. They can impact price, but don’t get to choose a number.

Dr. Bitcoin, MD 5mo ago

But they do get to choose a number. Well, any number high enough. The constitution gives the federal government the authority to coin money and regulate the value thereof. If the coin enough money, and/or regulate its value low enough, they can set the price of bitcoin high enough above market price to essentially become the market. Everyone choosing to sell at the highest price they can get will sell to the feds for the newly coined money.

This would have massive consequences for those without bitcoin. Their savings and debts become worthless and they’ll have to start again in that new financial system.

BTC_P2P 5mo ago

By creating more USD the debt increases proportionally. So it doesn’t erase the debt, it adds to it. Bitcoin will increase in spot price as well but it won’t necessarily outpace mounting debt. That’s not choosing the spot price of bitcoin.

The debt has to continue to pile up no matter what and as it does, the purchasing power of each unit will decrease. Thus reducing debt burden on a real basis - this is what the money masters will continue. It’s the politically palatable route. An ancillary result of increasing debt/liquidity/money supply is Bitcoin (gold, stonks and real estate too) will nominally increase in value as well.

Debasement is the perfect route out. Normies think they’re getting rich. Government and their politically connected friends do get rich. Debt reduces on a real basis.

Dr. Bitcoin, MD 5mo ago

To take my argument to the extreme, the federal government can create more USD without creating more debt, legally at least. The federal government could literally mint a $37T coin and sell it to the Fed.

BTC_P2P 5mo ago

The Federal reserve doesn’t have 37,000,000,000,000 though. The Fed creates new money to buy treasuries and other assets, or in this hypothetical, a 37T coin. So that 37T is a liability, one that would destroy Fed credibility and cripple the USD fiat system. The liability wouldnt be on the M2 chart but it would still be new liquidity and would have extreme consequences for the system.

Dr. Bitcoin, MD 5mo ago

Federal reserve notes are the liability of the Fed. The $37T coin is the asset.

Totally agree this destroys credibility. Hence why it makes more sense to puff up asset prices instead.

BTC_P2P 5mo ago

They’ve been pumping asset prices for 54 years and liabilities have outgrown tax receipts by a substantial amount. The same will continue.

The fiat system is essentially a controlled demolition. The only question is how long can they keep the scam going.

Dr. Bitcoin, MD 5mo ago

I think they can continue until revolution. Our standard of living is already far off the 1850-1950 trend. When standard of living reverts to pre-1950, people will start again with government.

BTC_P2P 5mo ago

I think they can continue until they blow up their scam and there is a viable alternative. Complete currency collapse has happened many times in the past and it’ll happen again. Well on the way (to collapse and to having a viable global alternative) already.

Dr. Bitcoin, MD 5mo ago

I think we will see a 1930’s style depression…but all the poor people will be millionaires.

BTC_P2P 5mo ago

Dr. Bitcoin, MD 5mo ago

And because you can always make it disappear, you never have to.

But this does mean the government will always become a greater fraction of the economy…

halalmoney 5mo ago

Hmmm…

debt management is a mere distraction,

an ever growing State is the goal

0x 5mo ago

Except debt isn’t taxed. Bitcoiners can leverage asset appreciation as collateral to live off like UHNWI do. The meta game is broken for the common man that assumes everyone plays fairly. Governments can’t even collectively block capital flight.

Dr. Bitcoin, MD 5mo ago

Except debt doesn’t destroy tax obligation…you can theoretically pledge 100% of your bitcoin as collateral for a loan but that doesn’t mean the lender gets to keep the collateral just because you failed to pay. You see, 28% of the minimum collateral needed to repay the loan belongs to the government when used to pay the loan. Just because one loan can be paid with another just delays the inevitable: eventually a person will pay off their final loan. And then they will die. And as death is a taxable event, they will pay 28%.

Neal 5mo ago

I’m still a fan of the fed printing all the dollars needed to make everyone whole, buy US gov bonds, US makes everyone whole but the fed, then abolish the fed.

Play fiat games, win fiat prizes.