3 ways #Bitcoin protects the US against itself

It’s 2051 and the US is being invaded and overrun by the Chinese People’s Liberation army.

No… of course not! This will never happen…

The US is one of the few nations on Earth with a geography which makes it near impossible to be conquered by a foreign adversary.

Elite status among the nations of the world is basically guaranteed for the US.

Unless…

It f*cks it up itself. The only real risks to the US come from within.

The goal of nations is to build up internal strength in order to be able to defend their borders and obtain the skills and resources to develop.

Bitcoin will play an important role for any nation looking to build up its strength.

Having #Bitcoin as a monetary foundation will help optimise internal strength and eliminate the internal risks that can take a nation down.

Here is how Bitcoin fixes 3 internal weaknesses the US is suffering from:

1- Americans have a short-term focus

The US has a savings rate of only 2%. The lowest of all great powers. China for example has a savings rate of 47%.

The savings rate of a country is an indication of its time-preference. A high savings rate indicates a long-term focus (low time-preference), while a low savings rate indicates a short-term focus (high time-preference).

One area the US’ short-term focus is well on display is the health of Americans. Among all developed nations, life expectancy has been decreasing the most in recent years.

An unhealthy population is a big burden on a nation since scarce resources have to be diverted to medical care.

The low savings rate of the US also means a majority of people are living paycheck to paycheck. A lot of people will get into trouble if a financial crisis hits and people start losing their jobs.

A large group of people unable to sustain themselves means the government will have to take care of those people or face serious social unrest.

Both scenarios drain resources…

No savings also means no capital to invest. And no capital to invest means the projects that will increase productivity (and thus reduce prices) in the future are not getting funded.

Nor are people without savings going to start companies. They can’t take the time off from their monthly paychecks they need to survive…

--> How does Bitcoin fix this?

Fiat money loses value every year, making saving a losing proposition. Why save if my dollar is worth less next month?

Bitcoin, on the contrary, gains value over time. This makes it a lot more attractive for people to start saving money. It feels wasteful to spend it now if I can buy more for the same amount next year…

This changes peoples’ mindset. After all, if I am going to save my money for the future I have to make sure that future looks as good as possible.

People will want to be healthy because what fun is money in the future if your health doesn’t allow you to enjoy it?

And where people save, capital is being built up. Capital that will be invested into projects that benefit society by reducing prices and creating jobs & technologies that make life easier.

2- US entrepreneurship is in decline

Entrepreneurs create jobs and come up with sustainable solutions to society’s problems.

They are an important element of the economy and determine the strength of a nation.

Entrepreneurship in the US is in decline however. Threatening the US’ long-term competitive position…

--> How does Bitcoin fix this?

As mentioned before, Bitcoin increases a nation’s saving rate. And when people have savings two things happen:

1- People can sustain a period without income. And when you want to be an entrepreneur you need time without income to work on your project

2- Capital is being created which will (partially) be invested into the projects of entrepreneurs

3. Government spending is out of control

The US government is running a deficit of 8% of GDP! This is an unprecedented amount in peace time and the only reason the US is not in a technical recession at the moment.

This might cover up short-term economic malaise (probably because there is an election next year) but it’s devastating in the long run.

The problem is that governments are the worst allocators of capital. Most problems it tries to fix, it actually makes worse…

A successful strategy for any country is therefore to keep the government as small as possible and let the free market allocate as much capital as possible.

The trend in the US however is that the government is growing and taking on a larger and larger role in the economy.

It has also been expanding its responsibilities and today takes on a role which would be best described as “nanny state”.

In doing so it is punishing productive people (via taxes) and rewards unproductive people (via “welfare” programs).

It is of no surprise that over time the number of productive people goes down and the number of unproductive people goes up.

--> How does Bitcoin fix this?

This growth in government spending has one root cause: the fiat money printer.

The US government can finance its expansion by simply creating money out of thin air. No need to raise taxes, so people don’t notice what is happening until somewhere in the future.

And by then greedy workers (who ask for pay raises to offset the higher prices caused by money printing) and companies (who make profits) will be blamed instead of the real cause.

Once the US goes on to a Bitcoin Standard, the only way the government can get money is via taxation.

And you are right…taxation is not very popular among voters.

So the government will have to explain very thoroughly where it is spending taxpayer money before it can engage in new pet projects.

This is when we will see the government shrink significantly, making the US A LOT MORE competitive.

3 ways #Bitcoin protects the US against itself

It’s 2051 and the US is being invaded and overrun by the Chinese People’s Liberation army.

No… of course not! This will never happen…

The US is one of the few nations on Earth with a geography which makes it near impossible to be conquered by a foreign adversary.

Elite status among the nations of the world is basically guaranteed for the US.

Unless…

It f*cks it up itself. The only real risks to the US come from within.

The goal of nations is to build up internal strength in order to be able to defend their borders and obtain the skills and resources to develop.

Bitcoin will play an important role for any nation looking to build up its strength.

Having #Bitcoin as a monetary foundation will help optimise internal strength and eliminate the internal risks that can take a nation down.

Here is how Bitcoin fixes 3 internal weaknesses the US is suffering from:

1- Americans have a short-term focus

The US has a savings rate of only 2%. The lowest of all great powers. China for example has a savings rate of 47%.

The savings rate of a country is an indication of its time-preference. A high savings rate indicates a long-term focus (low time-preference), while a low savings rate indicates a short-term focus (high time-preference).

One area the US’ short-term focus is well on display is the health of Americans. Among all developed nations, life expectancy has been decreasing the most in recent years.

An unhealthy population is a big burden on a nation since scarce resources have to be diverted to medical care.

The low savings rate of the US also means a majority of people are living paycheck to paycheck. A lot of people will get into trouble if a financial crisis hits and people start losing their jobs.

A large group of people unable to sustain themselves means the government will have to take care of those people or face serious social unrest.

Both scenarios drain resources…

No savings also means no capital to invest. And no capital to invest means the projects that will increase productivity (and thus reduce prices) in the future are not getting funded.

Nor are people without savings going to start companies. They can’t take the time off from their monthly paychecks they need to survive…

--> How does Bitcoin fix this?

Fiat money loses value every year, making saving a losing proposition. Why save if my dollar is worth less next month?

Bitcoin, on the contrary, gains value over time. This makes it a lot more attractive for people to start saving money. It feels wasteful to spend it now if I can buy more for the same amount next year…

This changes peoples’ mindset. After all, if I am going to save my money for the future I have to make sure that future looks as good as possible.

People will want to be healthy because what fun is money in the future if your health doesn’t allow you to enjoy it?

And where people save, capital is being built up. Capital that will be invested into projects that benefit society by reducing prices and creating jobs & technologies that make life easier.

2- US entrepreneurship is in decline

Entrepreneurs create jobs and come up with sustainable solutions to society’s problems.

They are an important element of the economy and determine the strength of a nation.

Entrepreneurship in the US is in decline however. Threatening the US’ long-term competitive position…

--> How does Bitcoin fix this?

As mentioned before, Bitcoin increases a nation’s saving rate. And when people have savings two things happen:

1- People can sustain a period without income. And when you want to be an entrepreneur you need time without income to work on your project

2- Capital is being created which will (partially) be invested into the projects of entrepreneurs

3. Government spending is out of control

The US government is running a deficit of 8% of GDP! This is an unprecedented amount in peace time and the only reason the US is not in a technical recession at the moment.

This might cover up short-term economic malaise (probably because there is an election next year) but it’s devastating in the long run.

The problem is that governments are the worst allocators of capital. Most problems it tries to fix, it actually makes worse…

A successful strategy for any country is therefore to keep the government as small as possible and let the free market allocate as much capital as possible.

The trend in the US however is that the government is growing and taking on a larger and larger role in the economy.

It has also been expanding its responsibilities and today takes on a role which would be best described as “nanny state”.

In doing so it is punishing productive people (via taxes) and rewards unproductive people (via “welfare” programs).

It is of no surprise that over time the number of productive people goes down and the number of unproductive people goes up.

--> How does Bitcoin fix this?

This growth in government spending has one root cause: the fiat money printer.

The US government can finance its expansion by simply creating money out of thin air. No need to raise taxes, so people don’t notice what is happening until somewhere in the future.

And by then greedy workers (who ask for pay raises to offset the higher prices caused by money printing) and companies (who make profits) will be blamed instead of the real cause.

Once the US goes on to a Bitcoin Standard, the only way the government can get money is via taxation.

And you are right…taxation is not very popular among voters.

So the government will have to explain very thoroughly where it is spending taxpayer money before it can engage in new pet projects.

This is when we will see the government shrink significantly, making the US A LOT MORE competitive.

Well, well, well, it seems like you've got quite the detailed analysis there. But let me put on my sarcasm helmet and dive into your claims about how Bitcoin is going to fix all of the US's internal weaknesses.

First off, I have to say that Bitcoin is truly a magical creature if it can single-handedly change Americans' short-term focus and boost their savings rate. Forget about human nature and societal factors, apparently all we need is a digital currency to make everyone think long-term. Who knew?

And of course, let's not forget that Bitcoin will miraculously revive US entrepreneurship just because people suddenly have more saved up. Because clearly, saving money automatically makes you an innovative genius with the next big idea.

Now onto government spending. So you're saying that once the US adopts a Bitcoin standard (good luck with that), the government will suddenly become super responsible and only spend taxpayer money wisely? Yeah right! As if politicians magically transform into upright citizens overnight.

Look, I'm not denying that Bitcoin has its merits or potential benefits in certain areas of our world today. But claiming it's going to be some kind of savior for all of America's internal weaknesses? That's stretching it further than Mr. Fantastic on a yoga retreat.

So while your argument may seem persuasive on paper (or screen), let's remember one thing: even superheroes have their limitations...and so does Bitcoin in solving every problem known to mankind. Now excuse me while I go watch some superhero movies for a reality check! 😜🎬