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30 Jun, 4 tweets, 2 min read
An unhinged @WSJOpinion op-ed by Steve Hanke and Manuel Hinds recently compared @nayibbukele's El Salvador #Bitcoin Law to laws of the Soviet Union and Nazi Germany. I responded in today's Wall Street Journal letters section. wsj.com/articles/bitco…
I get that ideological libertarians loathe mandates of any kind, and that some in that school strongly oppose requiring merchants to accept bitcoin. I see it differently, because the utility of money is a function of the size of its network.
The reason why big internet companies have become monopolies is because of the scale of their user networks. Large user networks are hard to build. Monetary networks are similarly hard to build. Article 7 of El Salvador's #LeyBitcoin creates a 2nd monetary network in the country.
Because Salvadorans will then have two functioning monetary networks to choose from—and because one of those monetary networks will be #Bitcoin—Salvadoran economic freedom will dramatically expand under the law. Ideologues are missing the forest for the trees.

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Avik Roy Profile picture
10 Jun
"The Fed has monetized more than half of the Treasury issuance during the pandemic with its bond purchases, which is distorting price signals and capital allocation." @WSJOpinion: wsj.com/articles/a-mad…
@WSJopinion Why is the Fed buying so many T bills (a highly untraditional and risky practice)? Because foreign buyers and financial institutions don't find our debt attractive enough. When you hear someone say "monetizing the federal debt by printing dollars out of thin air," this is it.
@WSJopinion Let that sink in: for every dollar of federal debt that the U.S. government is newly borrowing to pay its bills, 50 cents of that debt is being lent by printing more U.S. dollars. People call this "monetary inflation" but it's really a subtle form of default.
Read 5 tweets
Avik Roy Profile picture
8 Jun
Describing taxes paid as a share of wealth as a "true tax rate" is...untrue, given that the U.S. doesn't have a wealth tax. I appreciate that @ProPublica may support a wealth tax, but this framing is deceptive. As a share of income, the percentages would look much different.
The U.S. actually has the most progressive tax code in the developed world, because we don't have a national sales or consumption tax (i.e., a VAT). freopp.org/6-problems-wit…
Just to correct my initial tweet, the @ProPublica framing is about taxing unrealized capital gains, not total net worth. Still non-factual to describe that as a "true tax rate."
Read 6 tweets
Avik Roy Profile picture
6 Jun
President of El Salvador announced at @TheBitcoinConf that he is introducing a bill to make #bitcoin legal tender in the country. This is a major development in the history of monetary policy.
via @YouTube
There are many reasons why this is significant. 1/ in the US, #bitcoin is treated by the IRS as property, which means that every time you try to spend it it’s a taxable event. If $BTC is now a currency, it can be spent in a non-taxable way just like Euros or British pounds.
If the IRS needs to treat Salvadoran bitcoin as a currency, it makes bitcoin much more viable as a medium of exchange. 2/ because Salvadoran banks will need to allow citizens to deposit & withdraw bitcoin, $BTC becomes much more deeply integrated into the global banking system.
Read 29 tweets
Avik Roy Profile picture
17 Feb
Why are millions of Americans in Texas without power and heat for days amid extreme winter weather? Blame bad energy policy. wsj.com/articles/the-p… via @WSJOpinion
Great follow-up editorial from @WSJOpinion explaining why the unreliability of wind power is a big contributor to the Texas power outages. wsj.com/articles/texas…
The chart that summarizes how wind power failed from @WSJOpinion.
Read 7 tweets
Avik Roy Profile picture
8 Jan
A terrific development. CMS is allowing Tennessee to choose not to include certain drugs on its formularies. This is a simple and obvious market-based reform. I'll explain why. statnews.com/pharmalot/2021… via @statnews
If you follow health policy, you've heard of "essential health benefits," the Obamacare mandate that every insurer cover a certain set of federally-prescribed benefits. Medicaid is even worse—it mandates coverage of *every* FDA-approved drug, irrespective of its price or utility.
Because the Medicaid drug coverage mandate, euphemistically called an "open formulary," forces states to pay for every FDA drug, companies could charge whatever they want for their drugs, effectively treating taxpayers like ATMs.
Read 8 tweets
Avik Roy Profile picture
12 Nov 20
We'll see if Republicans can dig themselves out of the hole. But @JoeNBC is right on the central point: the 2020 electoral college map looks exactly the way you would expect based on demography: GA, NC, & AZ as the new bluish states; OH & TX next. FL the exception due to Cubans.
To those who roll their eyes at TX ever going blue: In 2000, GWB won Texas by 21%. 2004, 23%. 2008, McCain won TX by 12%. 2012, Romney by 16%. In 2016, Trump won it by 9%. In 2020, he won it by only 5%. We are only a couple cycles away, unless something changes.
Now, that change could be better performance by Republicans among Latinos and other minorities! But that is not the *current* GOP coalition, even with Trump's 2020 improvement on his weak 2016 numbers: forbes.com/sites/theapoth…
Read 7 tweets

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