Fixed this for you.
I don't really want a gigantic federal agency having insight into every financial transaction I make. Hard, fucking, pass.
This is what's bizarre to me about the FedNow hysteria. It's not a government system replacing a private market system. It's a government system replacing an older, worse government system. It's like having a panic attack because the Federal Reserve is updating their PCs to from Windows XP to Windows 10.
I'm torn on this. Visa, MasterCard, Venmo (aka PayPal), etc. all know about large subsets of my transactions, and they go and sell my personal data to other companies in sleazy ways to cover their costs.
Is that better or worse than the government knowing all this stuff? Sure, the government can also legally use force against me and deprive me of my freedom and possessions, and might pervert my transaction history into justifying doing bad things to me. But that's a risk, not a certainty. Private companies selling my data and using it in nefarious ways is a certainty.
The point of keeping the government out of the banking business would be to keep the door cracked for the chance to improve it later. That door slams shut once the federal government has the insights into every transaction, and more importantly the ability to deny ones they don't want us to do. We also Wil have much less control over the creation of a social credit score, theoretically the government would have everything it needs to make that happen with control over our transactions.
the government already knows.
the freezing of accounts related to the "Freedom Convoy" is quite different, as it was an exercise of emergency powers. the Trudeau admin could have ordered gas stations to not sell fuel to them, or Visa/MasterCard to not process certain cards, or anything similarly extraordinary.
Are you think they won’t need search warrants?
But the list goes on..
If that's the case, I have bad news for you about the banking system of literally every developed country.
I can buy an icecream anywhere in the world without anybody tracking me. Even with the "wrong" political opinion (even if I would be a trucker in Canada during certain protests).
I cannot do that with CBDC.
No. CBDC (aka: the ultimate totalitarian's dream) is not the same as the current banking system, despite the current banking system also being very horrible for privacy.
* All of the above assuming that cash will be banned and CBDC will be mandatory for everybody.
No you can't. Companies like OpenEye and Deep Sentinel offer facial recognition solutions that are targeted at loss-prevention, and these systems are commonplace in the USA. Facial recognition-based consumer analytics systems are also available.
In fact, I think you'd be hard pressed to find a pint of ice cream that you can buy without having a camera pointed at your face. Even the little stand at the beach in the state park near my old place had a camera, and I didn't even have real LTE coverage there.
Privacy comes only from the force of law; not the other way around.
Anyways, the whole conversation is a red herring. This is a replacement for ACH, which already exists, and there isn't substantively more information sharing between banks and governments than already exists.
Anyways, it's not (fully) about information sharing. It's about control. It's the difference between read access and read/write access.
Anyways, you missed the point.
The anti-new-technology and anti-gov-technology response to privacy and control is misguided. Corporations will fuck you, left unchecked, and governments will fuck you through corporations. There is no technical solution to political problems, and physical cash vs FedNow vs digital currency is a suite of technical solutions.
Trying to solve a political problem by eliminating technology is literally the same thing as trying to solve political problems with technology. The fallacy is in focusing on technology where the actual problem is political.
The problem is political and needs to be treated as such. The solution is building and maintaining political consensus in favor of strong privacy and personal property rights, not carrying around a billfold full of physical cash.
Can’t even recall to ever pulling some out other than some casino entertainment night. I understand all the “freedom” (or whatever one might call it) I’m losing, but the positive sides are much better (never have to care about losing my wallet, much faster transactions, convenience and etc.). Sure, sounds bad on paper, but I haven’t felt any negatives in 10+ years, especially when in practice makes my life easier.
Unfortunately, in my experience, I'd have to agree with you on that. But it also brings to mind a relevant Samuel Adams quote:
“If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen.”
Meanwhile, wealthier people get paid in ‘unrestricted’ currency.
I'd just as soon give everyone dollars via UBI
The government provides coupons that allow you to buy food which is remediated to the seller in dollars. The authority and funding to provide that service is something that voters can impact or change.
These are very different things, not "that already exists" at all.
This is an primarily American phenomenon though and it's only really true because of the dominance of the US and US petrodollars over global society. It's probably not easy to spend Turkish lira in Madagascar, for example. Yes there are banks which will exchange approved currencies, but that's one step removed from being paid in a global global currency as you imply.
If anyone ever mentions petrodollars, CBDC, or crypto to you, they are crazy and I recommend stealing their wallet. (Since they're into crypto they're used to it.)
At best this kind of stuff is a harmless ideological pressure release valve for a discontented middle class / small business / entrepreneurial layer squeezed from above (esp after COVID). At worst it veers into outright authoritarian & xenophobic politics and often blends in some anti-Semitism. Starts with rants about Bretton-Woods and the next thing you know you're hearing about the Rothschilds.
There was a whole wing of this stuff ascendant in the 1930s (in western Canada we had "Social Credit", for example) whose ideological purpose was to displace left wing populism and anti-capitalist politics with an explicitly pro-capitalist highly social conservative narrative which pinned blame for problems on "international banking" and, ultimately, Jewish people.
The latest flavour is obsessed with talk about "petrodollars" and cryptocurrency, and then you scratch a little and there's the face of Sergei Lavrov or Marie Le Pen hiding under the paint.
The world is f*cked and unjust but not for the reasons that these people go on about.
I do agree that the bulk of the foundation of the world's economy is constructed over the petroleum economy. Though I also don't think the nature of power in the world would change significantly if that were to be replaced with something else or if the nationality of the currency it is traded in were to change.
Christian Gelleri made this proposal to solve the Greek crisis: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3144910
I actually prefer we give out UBI, in a tracked manner, as well.
"cash" they can spend on anything, but with data collection so we can do society improving retrospectives on how it was spent.
If there were political motive and will to implement such a system, it could be done without a CBDC and certainly without modernization of ACH (heh).
Conversely, if there's not political motive and will, then the presence of a CBDC doesn't change that fact.
Then you can enforce meat and fossil fuel rations with no way to buy yourself around it.
Many are concerned that cdbc will allow the gov to create carbon rations that are enforced by disallowing purchases. Cash is fungible while regulated digital currency isn't.
Plus, if the goal is to limit carbon emissioms, it's more of a liberal market-shaping attitude that mainstream economists have to simply tax carbon heavy activities rather than invent new and unpopular technological measures to force it to happen. Same applies to the fears about limiting meat consumption, etc.
(I’m not in any way a climate denier, just a huge pessimist when it comes to attempted solutions)
In fact, the private sector solution is perhaps even worse from a civil rights perspective.
Consider a prosecutor in Jurisdiction A hell-bent on violating the civil rights of a citizen in Jurisdiction B, and suppose Jurisdiction B is sympathetic to this citizen. This isn't even hypothetical in the USA. Abortion, immigration, civil disobedience, etc. In the corporate duopoly setup, Jurisdiction A can compel the ISP to comply -- either by physically entering the property of the ISP and taking data by force, or by threatening market access. In the muni ISP case, Jurisdiction B says "shove it".
And that's before noting that corporations such as modern ISPs are -- like governments -- also large bureaucracies endowed with incredible power that are de facto impossible to opt out of. Except at least in representative government you have some sort of voice, however small, which isn't dependent on amassing vast sums of cash.
I dream of the day my municipality does this. The idea of buying service from whoever I want rather than be forced to use Comcast... -swoon-
Why is it horrible?
CBDC really isn't a big issue either, because it almost certainly won't happen. Americans are very unlikely to want a system like that.
https://www.cambridge.org/core/journals/perspectives-on-poli...
Arguably the US government effectively has these powers today, but beingtthat they don't directly own our banks there is a level of red tape they have to go through. As long as they are technically separate there is also the opportunity for us to change the laws and strip them of that access, once combined we give up that possibility.
The US was originally design with a very strong distrust of our own federal government. For the last 80 years we've completely flipped the script and given more and more power to a massive federal government, but the undertone of distrust is still around for quite a few Americans.
* the Biden administration is planning to monitor smaller denomination transactions (in an inflationary environment!)
* IRS resources historically and presently target low-income, low-wealth households/individuals for audits
https://www.cnbc.com/select/irs-600-reporting-rule-delayed/
https://www.cbsnews.com/news/irs-audit-eitc-five-times-as-li...
For high net wealth audits, you could have potentially dozens of people working on it for years so there is a possibility that a judge / jury rules in your favor.
They are going after low effort people, but making it up by volume.
This also depends if by "audits" you include every kind of correction letter the IRS sends you.
Wrong question. The correct question is:
What benefit would the IRS targetting low wealth individuals have to high wealth individuals?
I'll shorten the explanation even further: many more easy/no contest wins.
I'll let you figure out why.
If we could actually increase their funding substantially, this would be less true, but it's difficult and expensive to go after wealthy individuals.
https://medium.com/beyondmoney/the-good-bad-and-ugly-of-cbdc...
https://medium.com/illumination/how-the-central-banks-digita...