The designers of Mix Policy, Kennedy and Dillon.
Bettmann file
Why did Bitcoin come? The revolution of computer science has given us the opportunity of a blockchain. All neat things can be done with blockchain, including the transactions of unique pieces of online real estate that maintain their nature after trade – responsibility, in a word. Technological development gave us bitcoin, in an important sense.
Equally important, the non -gold model gave us bitcoin. In 1971, the United States, almost set the dollar as a precious metal, gold or silver unit, ended this contract. President Richard Nixon said he was suspending, for good, as it turned out, the exchange of dollar at $ 35 per ounce of gold, the price the United States had secured since 1934 (before that was $ 19- $ 20). The economy and the public avoided this move. How do we know? Look before and after.
Post -war prosperity, the legendary successful era of the American economy during the generation after World War II, flourished as the United States was in the golden model. The station, the ugly-year combination of continuous recession and huge increases in consumer prices, occurred in 1971, America became the largest economy in the history of the world in the century and after its mandate, the economy had its moments,
The exceptions to American Economic History in Complete success, before 1971, were when taxes suddenly became huge, such as in the Great Depression.
Details of American Monetary History from Bitcoin’s point of view is the subject of our new book Free Money: Bitcoin and American Monetary Tradition. A set of details is in the 1960s. As the decade began, President John F. Kennedy made it clear that he would not deviate from a piece of redemption of the dollar upon demand for $ 35 per ounce of gold.
The economy responded with great development.
A recent book on Treasury Kennedy, C. Douglas Dillion, leads us back to these old days. It is especially pleasant to see how Richard Aldous’ Dillion season (2023) confirms Larry Kudlow theses and I proceeded JFK and Reagan’s revolution (2016). Aldous shows that Dillon was responsible for Golden and Tax Policy within the JFK – and this policy was to maintain the golden model and reduce tax rates. As tax rates decreased, the incentive for the construction and maintenance of dollars increased, reducing the demand for gold and leaving the price of $ 35 no less than markets. In the economies in which marginal commitments pay more after tax, the preference for gold for golden increases. Tax cuts solidify the gold standard.
Lower tax rates, audio classic money – this was the JFK policy mix. The crazy economic explosion happened. As he went, Kennedy died, with a murder and everyone began to do everything wrong.
First, Dillon’s competitors in the White House, academic economists led by Walter Heller at the Council of Finance, became chatterboxes, as Dillon went to other searches. These academics said the reduction of JFK tax was supposed to be temporary. Heller, Paul Samuelson, James Tobin and the company had opposed the overall reduction in Dillion’s tax rates, finding marginal reductions inadequate for Keynesian reasons. The marginal tax cuts make the next income dollar more valuable as opposed to ensuring that those with the largest “trend consume” (lower employees) get more money. This is probably the specialty of non -witnessing tax cuts, which were not the ones chosen by Dillon and JFK.
Secondly, President Johnson increased the marginal tax rates, all of them, up to ten percent. The golden market rushed like a rocket. High tax rates again in the United States? I’ll get gold for my dollars now.
And then, Nixon, who had lost Kennedy in the 1960s elections in the early 1970s, as president, was not going to imitate the man who had thrown him. It was not going to call the JFK policy mix, that is, to save the golden model by reducing the tax rates. In 1969, Nixon raised the alternative minimum tax, raised the interest rate of capital by ten points and maintained a surcharge of LBJ’s income tax. More knocks on the doors of gold markets. Until 1971, the requirement for the dollar drying and the golden -growing gold, Nixon acted. Finished the gold standard.
The problem is that the public hates Fiat money. Experts believe that Fiat money is mature and serious and the golden model crazy, weird and atavistic. Experts prevailed for a while. They could actually succumb that the public hates money and worship the golden model.
In the 1980s and 1990s, we had the chance of staying when huge tax cuts sent the private price of gold and fixed at a low level, about ten times $ 35 or $ 350 per ounce for the best part of these two decades. However, no reform happened. The dollar remained Fiat. And then became unacceptable by marginal tax cuts in the 2000s. Gold pulled out like a rocket. Up to ten times $ 35 but ten times $ 350. One hundred times $ 35.
Thus, Bitcoin had to gather in 2009 to launch the process of creating a reliable, competitive alternative to Fiat’s money. Everything could be avoided if we were stuck with gold, which would be quite easy if we had stuck with marginal tax cuts. This was JFK’s correct heritage, including, as she would have been expanding on mass prosperity, which never came to pass.
