Quote from: AnonyMint on April 05, 2014, 05:05:31 PM

In the following quoted post which comes from upthread, I had written about the need for perpetual debasement to fund mining (because transactions fees is broken design for several reasons):

Quote from: AnonyMint on April 05, 2014, 02:48:32 AM

To understand the symbioses more algorithmically, please read this summary I wrote yesterday:

https://bitcointalk.org/index.php?topic=400235.msg6060440#msg6060440

I think that was fairly well written. One of my better posts. Please click to read it.

The upside is a 0 transaction fees design is a very attractive feature for consumers and merchants. And with a cpu-only coin, the debasement is going right back to the users of the coin any way. And it enables such a coin to be obtained autonomously without any other party nor exchange necessary. Even Bitcoin is being debased by 11% annually now. Of course exchanges should still be available, but they should P2P decentralized. No more Mt.Gox!

In addition to the explanation at the above link inside the above quote, perpetual debasement is not a problem if there are no taxes as follows.

Quote from: AnonyMint on April 06, 2014, 07:22:55 AM

http://armstrongeconomics.com/2014/04/05/lagarde-part-ii/

Quote from: Armstrong

Increasing the money supply will NOT be inflationary when you are offsetting that by raising taxes. If the total money supply is $1,000 and I tax you 20% leaving you $800, increasing the money supply at $1,500 and raising taxes to 50% is still deflationary for you end up with less $750. Absolutely everything is balanced. This is why the cause and effect scenarios fail every time it is a bell curve in everything.

Armstrong forgets to make the point that increasing the money supply can increase the general price level causing income, capital gains, and VAT taxes to be higher, while there no net gain in purchasing power.

Thus increasing the money supply even while holding taxes constant, actually eats purchasing power. Whereas increasing money supply with no taxes at all, would not harm purchasing power.