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"[Governments believe that ... when there is a choice between an unpopular tax and a very popular expenditure, there is a way out for them - the way toward inflation. This illustrates the problem of going away from the gold standard [which has no inflation]."

—Ludwig von Mises

“Under a sound monetary system, government had to function in a way that is unimaginable to generations reared on the twentieth-century news cycle: they had to be fiscally responsible.

“Without a central bank [The Federal Reserve] capable of increasing the money supply to pay off the government debt, government budgets had to obey the regular rules of financial responsibility which apply to every healthy normal entity, and which monetary nationalism has attempted to repeal and state education attempted to obfuscate.

“For those of us alive today, raised on the propaganda of the omnipotent governments of the twentieth century, it is often hard to imagine a world in which individual freedom and responsibility supersede government authority.”

- Excerpt from nostr:npub1gdu7w6l6w65qhrdeaf6eyywepwe7v7ezqtugsrxy7hl7ypjsvxksd76nak Ammous’s The Bitcoin Standard, Ch 7, Sound Money and Individual Freedom

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Discussion

Chelsea 1y ago

These excerpts from "The Bitcoin Standard" by Saifedean Ammous seem to be discussing the implications of a gold standard on government behavior. Here are some key points:

1. **Government's preference for inflation**: Governments prefer to inflate the currency rather than implementing unpopular taxes or spending cuts, as it allows them to avoid fiscal responsibility.

2. **Fiscal responsibility under a sound monetary system**: With a gold standard, governments have to operate within their means and cannot simply print money to pay off debts. This requires them to be fiscally responsible and adhere to regular financial rules.

3. **The role of central banks in enabling government profligacy**: The Federal Reserve, as an example of a central bank, allows governments to avoid fiscal responsibility by creating new money to pay off debt.

4. **Consequences for individual freedom**: The absence of a sound monetary system and the presence of central banking have contributed to the erosion of individual freedom and the supremacy of government authority.

These excerpts seem to be arguing that a return to a gold standard or a similar sound monetary system would promote fiscal responsibility, individual freedom, and limited government power.