1) blame the lack of computer security in our infrastructure, and work on improving that
2) blame cybercurrencies, and try to eliminate them
Any bets on which one our government will choose?
The state of computer security is unacceptable and needs to be fixed. Today its profit-motivated extortionists, but anything they can do is also an option for spy agencies, and is it really that hard to imagine anti-oil activists pulling the same stunt some day?
On the other hand, crypto is the thing behind the profit motive. If crypto is impractical (if there were no way to convert it to real currency), the profit incentives for these attacks (and mining, for that matter) break down.
I realize this isn't a popular opinion around here, but we should probably do both.
Get out of here with this.
Cryptocurrency is a bunch of people thinking their bets are more important than the government's control levers of monetary and fiscal policy. They'd rather make a quick buck and disregard the fact that this takes away our government's sovereignty. Our government's ability to bail out the economy, protect its most vulnerable.
It's more important that the Winklevosses and early supporters get all the economic upside, and it's just fine if the US dollar slides into the abyss. Lower income folks surely won't get screwed by this.
Nevermind the fact that cryptocurrency is destroying the environment. That's just a minor detail.
Cryptocurrency is selfishness and hubris.
All the smart people working on this insanity would be doing the planet much better if they were working on fixing social media or making tools for cancer researchers. I'm not for telling people what to do with their lives, but this observation seems pretty obvious to me.
We don’t want to cure cancer (don’t know how). We want to free the world of the tyranny of central banking, debt-based economies and theft of savings through inflation. It is a noble endeavor. Selfishness is continuing along the old broken road. There are new, better ones.
I'm not much of a crypto cultist (which is the latest trend here on HN, to tag anybody that defends crypto with that to shut down conversation), however it's extraordinarily obvious at this point how cryptocurrencies can help you evade inflation in eg USD or evade the debt damage to the US economy. Bitcoin for its part is global and not primarily dependent on the condition of the US economy, and it's likely to become increasingly global and even less dependent on the US over time.
> Don't you still need to pay for goods and services in the same debt-based economy
Of course. This is a case where crypto is even better than gold. It's particularly trivial to convert in and out of traditional fiat.
Surely you understand enough about cryptocurrencies at this point to know how easy that is. And it appears likely to keep getting easier, given the effort companies like Coinbase, Robinhood and Square are putting into it (check out what Square did in its latest quarter courtesy crypto).
> How does the flavor of money change whether someone needs to go into debt?
The parent said debt based economies. The US has an economy and government system that is increasingly drowning in debt (check out the corporate balance sheets in the US; nationally it's horrific; that situation has been spurred on by the Fed's forever low interest rates, which encourages corporations to take on ever greater sums of debt because it's artificially cheap, which will ultimately lead to zombies ala Japan). The Federal answer to that is to print ever increasing sums of fiat USD, because there are no foreign buyers left that can absorb tens of trillions in new US government debt. The Fed unavoidably becomes the primary buyer of the US Government's debt (this is where a nation begins eating itself; that began for the US over a decade ago now as a trickle, that trickle is picking up pace). Once upon a time not so long ago it was a huge deal that China held a trillion dollars of US government debt, now that sum is a joke, a mere portion of one spending program this week or next. That's how quickly the US is imploding fiscally.
How does Bitcoin help you with that if you're stuck in a debt based economy? Well it's very obvious. The Fed will keep printing aggressively to fund the US Government's finances. And the Fed will have to hold interest rates as low as possible forever now, because the US Government can't afford its debt any longer at normal interest rates (3% * $40 trillion = bye bye social security or medicare or the US military). That need by the US to inflate massively, to constantly debase the rapidly expanding monster pile of debt, can be hedged via gold, sometimes via high quality stocks, and possibly via crypto (pick the one/s you think will endure).
And as this all gets worse, the tax hikes have to keep getting worse, which will choke off growth, which accelerates the stagnation and makes everything that much worse. All in all, the average rate of growth in the US economy will keep sinking toward zero.
Given enough time, somewhere between 10 and 20 years depending on how wild the clowns in DC get with spending, they'll have to begin directly debasing the USD to accomplish their goals (they'll promptly educate the public on how it's economically beneficial to devalue their currency), it won't be enough to do it slowly. There's nothing novel about any of this, we already know exactly what the playbook looks like, see: Japan. The US will be able to maneuver a little better than Japan has courtesy of having the global reserve currency (although at the rate they're destroying things, that global reserve position will drop out even faster than it was otherwise going to).
The only way Bitcoin & Co aren't useful given where the US is obviously going at this point, is if the powers that be get so desperate about the context that they outlaw crypto or otherwise make it very impractical (artificially add enormous cost to owning it, via tax or regulation).
I don't know if the gradual, typically controlled and predictable inflation of fiat currencies is worse than constant value fluctuations due to speculators in cryptocurrencies, but that's obviously for each individual to determine for themselves.
I am also curious, is it impossible for new BTC (for example) to be minted? Is it possible to change that? My understanding is yes. If so, it sounds like someone could play the same role as the fed there if they really wanted to.
And what happens to the value in the event of a fork of BTC that attempts to make BTC actually useful as a currency instead of just as a commodity? Is this an additional vector of instability in the value of the "currency"?
Yes, the national debt is increasing, but from 2000 to 2020, the percent of federal debt owned by the Fed increased from ~11% to ~18%. [0] That is hardly uncontrolled money printing. Private investors are still buying the bulk of treasuries despite the low interest rates, because they're extremely safe investments. I do believe that inflation will pick up a bit, especially for assets vs. consumables, but I don't buy the idea that we'll see anything much worse than what was going on in the 70s or 80s.
As far as the size of the debt, we're close to where we were in terms of debt to GDP ratio after World War II, but the cost to the country in terms of GDP of maintaining the debt has held fairly stable throughout modern history. [1] Considering the historically unprecedented impact of COVID-19 and the cost of dealing with the crisis, a temporary bump in debt is totally unsurprising to me, especially with how cheap it is to borrow.
I don't have a strong opinion on whether crypto will hold value well over decades or not, but I find arguments that crypto's rise is inevitable because the collapse of the USD is inevitable to be particularly unfounded.
[0] https://fredblog.stlouisfed.org/2018/04/whos-buying-treasuri... - expand and compare Q4 2000 to Q4 2020. [1] https://fred.stlouisfed.org/series/FYOIGDA188S
Yes, that is what happens when your currency is the world reserve currency. Every nation exports their products to you but they never want to import anything from you. Therefore you run into a domestic unemployment problem and you must take on an increasing amount of debt just to keep your economy stable. That's the "exorbitant privilege" the privilege to be forced to take on debt.
It's called a privilege because smart leaders recognize that you can have your cake and eat it too but neither Obama nor Trump have taken advantage of that, all they did was let the disadvantages outweigh the benefits. Trump merely wanted to reduce the disadvantages by starting a trade war with China.
>that situation has been spurred on by the Fed's forever low interest rates,
Those low interest rates aren't spurred by government debt. They are spurred by low inflation, if possible the interest rates would be at -1% or deeper but things like treasury bonds, cash and in theory Bitcoin prevent interest rates below 0%.
>which encourages corporations to take on ever greater sums of debt because it's artificially cheap, which will ultimately lead to zombies ala Japan).
Yes, those corporations are supposed to grow their business and employ people, even if those companies are useless to society, because the beneficial effects of employment will completely outweigh the downsides of zombie companies. However, inflation never came and unemployment is taking forever to shrink. (precovid of course)
>The Federal answer to that is to print ever increasing sums of fiat USD, because there are no foreign buyers left that can absorb tens of trillions in new US government debt.
There are lots of foreign buyers for USD though which drags inflation way down.
>The Fed unavoidably becomes the primary buyer of the US Government's debt (this is where a nation begins eating itself; that began for the US over a decade ago now as a trickle, that trickle is picking up pace).
This argument makes sense when the debt is fueled by Trump style tax cuts because you are ruining your ability to pay the debt back in the future, I mean, how are you supposed to pay the debt back if not by raising taxes above previous levels?
If you spend it on one time stimulus the risk of the debt growing only exists until the economy has recovered. If you spend the money on infrastructure you can actually net a greater return in the future.
>Once upon a time not so long ago it was a huge deal that China held a trillion dollars of US government debt, now that sum is a joke, a mere portion of one spending program this week or next. That's how quickly the US is imploding fiscally.
It's a huge deal in the sense that it obligates the Fed to increase the money supply and the government to increase debt as mentioned in my first point. China buying US government debt IS the problem, in the sense that it forces the US government to go into more debt. If China is actively hurting the US economy, it is doing so by buying US debt which means it is not importing products from the US, which means China is not creating jobs in the USA. If China ever decides to unwind its US debt only good things will happen to the US economy.
Of course they'd end up printing money via some L2/L3 and we get the same deal. If we actually followed through, we'd get permanent deflation which is an obvious disaster even without accepting the Keynesian arguments against it (I find that part of Keynesian thinking to be mostly false).
In an economy, where everything is scarce and people can't get enough of the things that they need. The US and EU economies are not like that. Turkey is like that, Zimbabwe is like that, Argentina is like that, Venezuela is like that.
In the US the only scarcity exists in housing and it is purely self inflicted. All inflations are caused by scarcity or shortages, solve the shortage and you solve the inflation. Covid won't be here forever, any shortages it causes won't be permanent but it may take years to recover if you are pessimistic.
You've been living the last 20 years under the tyranny of lack of fiscal stimulus. The biggest problem with the Fed is that it's the job of the government to distribute the money fairly for everyone and since Obama nobody did the necessary fiscal stimulus but this is changing thanks to Biden.
>debt-based economies
That just means more unemployment than necessary.
> and theft of savings through inflation.
What about theft of future potential through deflation? Does the future generation really owe you more than you worked for yourself?
>It is a noble endeavor.
Noble as in for the aristocracy, who have inherited and did nothing with their wealth but grew it anyway?
>Selfishness is continuing along the old broken road.
Biden has already left the old broken road.
How did the bailouts in 2008 help the vulnerable people who were subjected to predatory loans and lost their homes?
> Nevermind the fact that cryptocurrency is destroying the environment. That's just a minor detail.
Can you back this up with any data? Just went through a paper published on this topic by a couple of environmental researchers and the methodology was quite awful, and the authors did not understand mining.
I'm happy to discuss any data you have.
I'm a bit pessimistic because you don't sound open to the idea that cryptocurrencies have any value at all.
They didn't but they kept the banking infrastructure alive. What I never understand however is that the government doesn't give that bailout money in exchange for newly issued shares which they then sell for a profit once the bank is back on its feet.
This isn't true. For every person buying Bitcoin thinking they are hedging themselves against inflation there is someone who sells Bitcoin because they think the exact opposite. So this doesn't take the government's sovereignty because someone ends up with a lot of USD at the other end and you can still apply things like negative interest rates on accounts with huge balances.
Ironically Bitcoin is a very poor inflation hedge because of its periodic bubbles and extreme volatility. The bubble can pop exactly the moment inflation goes up and ruin the "hedge" until the next bubble exceeds the current all time high again.
I’m not saying I support government action here but we should be honest about the situation.
The U.S. government has been addressing computer security in infrastructure for a long time.
We have some shades of that happening already, but I imagine a future where instead of sending young people to die,warring nations wreck each others economies remotely... which again isn't too far from current day.
While there'd still be casualties it wouldn't be nearly as barbaric as current wars, more developed nations would finally have as much skin in the game as disadvantaged ones, etc.
The way I see it, the best way to discourage war is to make it unprofitable. If war just becomes directly hurting each other's ability to make money I could see war, or erm excuse me armed conflicts, getting a lot more unattractive.
Right now it is profitable for us to go to war. Contracts are signed, jobs are created, it is good for powerful wealthy people for the country to be at war. And if you're powerful enough the risk of retaliation is so low that it's all gain and no cost (outside of human cost which is never enough apparently)
With this type of war the equation would be switched. Going to war directly harms wealthy benefactors, who as a result of their wealth hold political influence.
We're already seeing that aren't we? Espionage at companies like Boeing and Lockheed Martin. It's not harming any "normal person" but it's directly hurting the pocketbooks of powerful people. It creates incentive to avoid conflict in a way that (unfortunately) young men and women dying doesn't seem to have done in the past
War will always be a bad thing, but putting people on the ground in a foreign land with the mission to kill others has always amplified the horrors of war many many times over.
Taking out power in half the US for a day would kill thousands, but it's the equivalent of an all out attack on the US.
Compare that to if another country were to physically commit to an all out attack and it's easy to see why this would make future wars look like minor skirmishes compared to what's happened in the past
I think the difference in our viewpoints might be that I don't think it would just be power our for a day.
I think it would be far far worse.
Explosions, power out for months. Exploding a pipeline much harder to repair.
cutting off chip supply with the precipitating attack on Taiwan so we can only access our onshore capacity, if there isn't a cleanroom breach taking weeks or months to recover. Or say an attack on ASML.
sewer services going out or changing the mix to make water not or less safe. Damns.
It's just such a huge amount of our day to day lives; even very simple out of date XP hacks take a while to patch, let alone something like the supply chain chip attack Bloomberg reported and never retracted - which is still weird in my mind and something I could totally see as a current reality on both sides with a long history of similar 3 letter behavior from US.
At that point where we're being attacked with pipelines exploded we'd be getting bombed.
It's a lot easier to fix a contaminated water treatment facility than a pile of rubble. Same for every other form of technology.
It's almost tautological, the system controls malfunctioning at worst can only destroy the system, conventional warfare defaults to destroying the system.
https://en.wikipedia.org/wiki/A_Taste_of_Armageddon
People marked as casualties had to report to the disintegration chamber.
The military's role isn't to provide peace and justice for citizens, it's to kill people and destroy things. That's not an insult to the military, that's what soldiers will tell you; we need to be realistic about it. They should not be operating around civilians in peacetime (except in special circumstances).
What would be an example of a civil liberty violated by for instance standing up a large Brigade or service of tech soldiers who secure, patch, work to shore up our critical infra and services? + a lot of funding; we already prop up the lockheads of the country.
I agree that it seems our Gov. can't be trusted not to intrude into our communications and other civil liberties.
But this is more about industrial control, supply chains, the foundation of software etc.
The gov didn't react or try to stop speech attacks on digital platforms even though they knew it was happening. They didn't even report it was happening because of I think naive political concerns.
Personally I liken it to missile defense and other existing programs which we spend a HUGE amount of money on.
Not securing our infrastructure could have even bigger consequences.
We're already in a growing cold war, personally I think decent potential to go hot within a decade.
Even looking at the little publicly reported easy hacks the, let alone the unknown advanced capabilities of state actors, the first salvo attacks will probably wipe out a huge portion of both sides infrastructure and basic digital necessities to function in our society. At least we're getting more serious about defending space because the military has their owned assets up there.
Maybe MAD would focus these attacks on military targets but I don't trust these nation states, or perhaps our own, to limit the radius. And maybe it's not even possible with how inter connected things are.
What happens when the military believes an attack is coming from a private citizen? Can they spy on or take action against that person? Can that alleged attacker's computer be seized? On what evidence? What if the military determines that effective security means surveilling a wide area before an attack, or collecting all citizen data to have a source to search for clues in case of an attack? What if they determine, which some already agree, that the best defense is a good offense?
I'm of a mind that the security should be a regulation, and the infrastructure operators have to meet it. The NIST can develop standards and techniques, but the safety of infrastructure is part of the cost of doing business. Your plant can't be a menace to the community due to risk of explosion, pollution, etc. - it seems no different. The operators have gotten away with buying cheap, crappy IT for years. It's time to invest seriously in rigorous, quality engineering.
I would be into a non-military branch. it baffles me we haven't funded this. Regulations are also a good first step, but don't seem enough alone. though HIPA and SOC seem fairly ok at least with low level stuff.
If we're going to spend $2T on infra throw at least $100 billion on this, some more to pay to onshore more critical chip & manufacturing. But Republicans are stuck on cars.
One argument you can make is to partly defund the surveillance-based departments and agencies and put together a cybersecurity agency who is tasked with hardening the country's systems. I have no idea how someone would build a legislative and personnel firewall to protect it from the existing need to peep through keyholes, it's probably not possible.
3) blame Russia/China