Hacker News Reader

Exactly, working as intended.

You want people to hold real assets, not imaginary ones like a currency, because you want people to be invested in your economy. The only intrinsic value a currency have is taxation.

We don't want people just stuffing dollars in a mattress. That doesn't help either themselves or anyone else. So we encourage putting dollars/currency into interest bearing vehicles or real assets.

We don't want dollars to sit in hoards. We want them to circulate. If I can be without access to dollars for a while I can loan them to you for some enterprise. Then you pay me back more than I loaned you (and more than inflation we hope) because your enterprise created additional value.

If my excess money circulates I benefit from access to the things that money is used to build in addition to the interest I receive. Since I'm not a medieval landed noble my economic value isn't measured by the productivity of the serfs on my land holdings.

Currencies aren't supposed to be a good store of value, just a predictable store of value. Investments are supposed to be good stores of value. The government very much does not want people hoarding currency.