NY Fed Chairman: Taxes for Revenue are Obsolete (1946)

This article is worth reprinting in full. No one can claim the Chairman of the Federal Reserve Bank was a “crank” or an advocate of “crackpot economics.” What a tragedy that this was known in 1946 and our politicians still refuse to “get it.”

Taxes for Revenue are Obsolete

by Beardsley Ruml,
Chairman of the Federal Reserve Bank of New York.

The superior position of public government over private business is nowhere more clearly evident than in government’s power to tax business. Business gets its many rule-making powers from public government. Public government sets the limits to the exercise of these rule-making powers of business, and protects the freedom of business operations within this area of authority. Taxation is one of the limitations placed by government on the power of business to do what it pleases.

There is nothing reprehensible about this procedure. The business that is taxed is not a creature of flesh and blood, it is not a citizen. It has no voice in how it shall be governed — nor should it. The issues in the taxation of business are not moral issues, but are questions of practical effect: What will get the best results? How should business be taxed so that business will make its greatest contribution to the common good?

It is sometimes instructive when faced with alternatives to ask the underlying question. If we are to understand the problems involved in the taxation of business, we must first ask: “Why does the government need to tax at all?” This seems to be a simple question, but, as is the case with simple questions, the obvious answer is likely to be a superficial one. The obvious answer is, of course, that taxes provide the revenue which the government needs in order to pay its bills.

It Happened

If we look at the financial history of recent years it is apparent that nations have been able to pay their bills even though their tax revenues fell short of expenses. These countries whose expenses were greater than their receipts from taxes paid their bills by borrowing the necessary money. The borrowing of money, therefore, is an alternative which governments use to supplement the revenues from taxation in order to obtain the necessary means for the payment of their bills.

A government which depends on loans and on the refunding of its loans to get the money it requires for its operations is necessarily dependent on the sources from which the money can be obtained. In the past, if a government persisted in borrowing heavily to cover its expenditures, interest rates would get higher and higher, and greater and greater inducements would have to be offered by the government to the lenders. These governments finally found that the only way they could maintain both their sovereign independence and their solvency was to tax heavily enough to meet a substantial part of their financial needs, and to be prepared —if placed under undue pressure — to tax to meet them all.

The necessity for a government to tax in order to maintain both its independence and its solvency is true for state and local governments, but it is not true for a national government. Two changes of the greatest consequence have occurred in the last twenty-five years which have substantially altered the position of the national state with respect to the financing of its current requirements.

The first of these changes is the gaining of vast new experience in the management of central banks.

The second change is the elimination, for domestic purposes, of the convertibility of the currency into gold.

Free of the Money Market

Final freedom from the domestic money market exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank, and whose currency is not convertible into gold or into some other commodity.

The United States is a national state which has a central banking system, the Federal Reserve System, and whose currency, for domestic purposes, is not convertible into any commodity. It follows that our Federal Government has final freedom from the money market in meeting its financial requirements. Accordingly, the inevitable social and economic consequences of any and all taxes have now become the prime consideration in the imposition of taxes. In general, it may be said that since all taxes have consequences of a social and economic character, the government should look to these consequences in formulating its tax policy. All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue.

What Taxes Are Really For

Federal taxes can be made to serve four principal purposes of a social and economic character. These purposes are:

1. As an instrument of fiscal policy to help stabilize the purchasing power of the dollar;2. To express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes;

3. To express public policy in subsidizing or in penalizing various industries and economic groups;

4. To isolate and assess directly the costs of certain national benefits, such as highways and social security.

In the recent past, we have used our federal tax program consciously for each of these purposes. In serving these purposes, the tax program is a means to an end. The purposes themselves are matters of basic national policy which should be established, in the first instance, independently of any national tax program.

Among the policy questions with which we have to deal are these:

Do we want a dollar with reasonably stable purchasing power over the years?Do we want greater equality of wealth and of income than would result from economic forces working alone?

Do we want to subsidize certain industries and certain economic groups?

Do we want the beneficiaries of certain federal activities to be aware of what they cost?

These questions are not tax questions; they are questions as to the kind of country we want and the kind of life we want to lead. The tax program should be a means to an agreed end. The tax program should be devised as an instrument, and it should be judged by how well it serves its purpose.

By all odds, the most important single purpose to be served by the imposition of federal taxes is the maintenance of a dollar which has stable purchasing power over the years. Sometimes this purpose is stated as “the avoidance of inflation”; and without the use of federal taxation all other means of stabilization, such as monetary policy and price controls and subsidies, are unavailing. All other means, in any case, must be integrated with federal tax policy if we are to have tomorrow a dollar which has a value near to what it has today.

The war has taught the government, and the government has taught the people, that federal taxation has much to do with inflation and deflation, with the prices which have to be paid for the things that are bought and sold. If federal taxes are insufficient or of the wrong kind, the purchasing power in the hands of the public is likely to be greater than the output of goods and services with which this purchasing demand can be satisfied. If the demand becomes too great, the result will be a rise in prices, and there will be no proportionate increase in the quantity of things for sale. This will mean that the dollar is worth less than it was before — that is inflation. On the other hand, if federal taxes are too heavy or are of the wrong kind, effective purchasing power in the hands of the public will be insufficient to take from the producers of goods and services all the things these producers would like to make. This will mean widespread unemployment.

The dollars the government spends become purchasing power in the hands of the people who have received them. The dollars the government takes by taxes cannot be spent by the people, and, therefore, these dollars can no longer be used to acquire the things which are available for sale. Taxation is, therefore, an instrument of the first importance in the administration of any fiscal and monetary policy.

To Distribute the Wealth

The second principal purpose of federal taxes is to attain more equality of wealth and of income than would result from economic forces working alone. The taxes which are effective for this purpose are the progressive individual income tax, the progressive estate tax, and the gift tax. What these taxes should be depends on public policy with respect to the distribution of wealth and of income. It is important, here, to note that the estate and gift taxes have little or no significance, as tax measures, for stabilizing the value of the dollar. Their purpose is the social purpose of preventing what otherwise would be high concentration of wealth and income at a few points, as a result of investment and reinvestment of income not expended in meeting day-to-day consumption requirements. These taxes should be defended and attacked it terms of their effects on the character of American life, not as revenue measures.

The third reason for federal taxes is to provide a subsidy for some industrial or economic interest. The most conspicuous example of these taxes is the tariffs on imports. Originally, taxes of this type were imposed to serve a double purpose since, a century and a half ago, the national government required revenues in order to pay its bills. Today, tariffs on imports are no longer needed for revenue. These taxes are nothing more than devices to provide subsidies to selected industries; their social purpose is to provide a price floor above which a domestic industry can compete with goods which can be produced abroad and sold in this country more cheaply except for the tariff protection. The subsidy is paid, not at the port of entry where the imported goods are taxed, but in the higher price level for all goods of the same type produced and sold at home.

The fourth purpose served by federal taxes is to assess, directly and visibly, the costs of certain benefits. Such taxation is highly desirable in order to limit the benefits to amounts which the people who benefit are willing to pay. The most conspicuous examples of such measures are the social security benefits, old-age and unemployment insurance. The social purposes of giving such benefits and of assessing specific taxes to meet the costs are obvious. Unfortunately and unnecessarily, in both cases, the programs have involved staggering deflationary consequences as a result of the excess of current receipts over current disbursements.

The Bad Tax

The federal tax on corporate profits is the tax which is most important in its effect on business operations. There are other taxes which are of great concern to special classes of business. There are many problems of state and local taxation of business which become extremely urgent, particularly when a corporation has no profits at all. However, we shall confine our discussion to the federal corporation income tax, since it is in this way that business is principally taxed. We shall also confine our considerations to the problems of ordinary peacetime taxation since, during wartime, many tax measures, such as the excess-profits tax, have a special justification.

Taxes on corporation profits have three principal consequences — all of them bad. Briefly, the three bad effects of the corporation income tax are:

1. The money which is taken from the corporation in taxes must come in one of three ways. It must come from the people, in the higher prices they pay for the things they buy; from the corporation’s own employees in wages that are lower than they otherwise would be; or from the corporation’s stockholders, in lower rate of return on their investment. No matter from which sources it comes, or in what proportion, this tax is harmful to production, to purchasing power, and to investment.2. The tax on corporation profits is a distorting factor in managerial judgment, a factor which is prejudicial to clear engineering and economic analysis of what will be best for the production and distribution of things for use. And, the larger the tax, the greater the distortion.

3. The corporation income tax is the cause of double taxation. The individual taxpayer is taxed once when his profit is earned by the corporation, and once again when he receives the profit as a dividend. This double taxation makes it more difficult to get people to invest their savings in business than if the profits of business were only taxed once. Furthermore, stockholders with small incomes bear as heavy a burden under the corporation income tax as do stockholders with large incomes.


Let us examine these three bad effects of the tax on corporation profits more closely. The first effect we observed was that the corporation income tax results in either higher prices, lower wages, reduced return on investment, or all three in combination. When the corporation income tax was first imposed it may have been believed by some that an impersonal levy could be placed on the profits of a soulless corporation, a levy which would be neither a sales tax, a tax on wages, or a double tax on the stockholder. Obviously, this is impossible in any real sense. A corporation is nothing but a method of doing business which is embodied in words inscribed on a piece of paper. The tax must be paid by one or more of the people who are parties at interest in the business, either as customer, as employee, or as stockholder.

It is impossible to know exactly who pays how much of the tax on corporation profits. The stockholder pays some of it, to the extent that the return on his investment is less than it would be if there were no tax. But, it is equally certain that the stockholder does not pay all of the tax on corporate income — indeed, he may pay very little of it. After a period of time, the corporation income tax is figured as one of the costs of production and it gets passed on in higher prices charged for the company’s goods and services, and in lower wages, including conditions of work which are inferior to what they otherwise might be.

The reasons why the corporation income tax is passed on, in some measure, must be clearly understood. In the operations of a company, the management of the business, directed by the profit motive, keeps its eyes on what is left over as profit for the stockholders. Since the corporation must pay its federal income taxes before it can pay dividends, the taxes are thought of — the same as any other uncontrollable expense — as an outlay to be covered by higher prices or lower costs, of which the principal cost is wages. Since all competition in the same line of business is thinking the same way, prices and costs will tend to stabilize at a point which will produce a profit, after taxes, sufficient to give the industry access to new capital at a reasonable price. When this finally happens, as it must if the industry is to hold its own, the federal income tax on corporations will have been largely absorbed in higher prices and in lower wages. The effect of the corporation income tax is, therefore, to raise prices blindly and to lower wages by an undeterminable amount. Both tendencies are in the wrong direction and are harmful to the public welfare.

Where Would the Money Go?

Suppose the corporation income tax were removed, where would the money go that is now paid in taxes? That depends. If the industry is highly competitive, as is the case with retailing, a large share would go in lower prices, and a smaller share would go in higher wages and in higher yield on savings invested in the industry. If labor in the industry is strongly organized, as in the railroad, steel, and automotive industries, the share going in higher wages would tend to increase. If the industry is neither competitive nor organized nor regulated — of which industries there are very few — a large share would go to the stockholders. In so far as the elimination of the present corporation income tax would result in lower prices, it would raise the standard of living for everyone.

The second bad effect of the corporation income tax is that it is a distorting factor in management judgment, entering into every decision, and causing actions to be taken which would not have been taken on business grounds alone. The tax consequences of every important commitment have to be appraised. Sometimes, some action which ought to be taken cannot be taken because the tax results make the transaction valueless, or worse. Sometimes, apparently senseless actions are fully warranted because of tax benefits. The results of this tax thinking is to destroy the integrity of business judgment, and to set up a business structure and tradition which does not hang together in terms of the compulsion of inner economic or engineering efficiency.

Premium on Debt

The most conspicuous illustration of the bad effect of tax consideration on business judgment is seen in the preferred position that debt financing has over equity financing. This preferred position is due to the fact that interest and rents, paid on capital used in business, are deductible as expense; whereas dividends paid are not. The result weighs the scales always in favor of debt financing, since no income tax is paid on the deductible costs of this form of capital. This tendency goes on, although it is universally agreed that business and the country generally would be in a stronger position if a much larger proportion of all investment were in common stocks and equities, and a smaller proportion in mortgages and bonds.

It must be conceded that, in many cases, a high corporation income tax induces management to make expenditures which prudent judgment would avoid. This is particularly true if a long-term benefit may result, a benefit which cannot or need not be capitalized. The long-term expense is shared involuntarily by government with business, and, under these circumstances, a long chance is often well worth taking. Scientific research and institutional advertising are favorite vehicles for the use of these cheap dollars. Since these expenses reduce profits, they reduce taxes at the same time; and the cost to the business is only the margin of the expenditure that would have remained after the taxes had been paid — the government pays the rest. Admitting that a certain amount of venturesome expenditure does result from this tax inducement, it is an unhealthy form of unregulated subsidy which, in the end, will soften the fibre of management and will result in excess timidity when the risk must be carried by the business alone.

The third unfortunate consequence of the corporation income tax is that the same earnings are taxed twice, once when they are earned and once when they are distributed. This double taxation causes the original profit margin to carry a tremendous burden of tax, making it difficult to justify equity investment in a new and growing business. It also works contrary to the principles of the progressive income tax, since the small stockholder, with a small income, pays the same rate of corporation tax on his share of the earnings as does the stockholder whose total income falls in the highest brackets. This defect of double taxation is serious, both as it affects equity in the total tax structure, and as a handicap to the investment of savings in business.

Shortly, an Evil

Any one of these three bad effects of the corporation income tax would be enough to put it severely on the defensive. The three effects, taken together, make an overwhelming case against this tax. The corporation income tax is an evil tax and it should be abolished.

The corporation income tax cannot be abolished until some method is found to keep the corporate form from being used as a refuge from the individual income tax and as a means of accumulating unneeded, uninvested surpluses. Some way must be devised whereby the corporation earnings, which inure to the individual stockholders, are adequately taxed as income of these individuals.

The weaknesses and dangers of the corporation income tax have been known for years, and an ill-fated attempt to abolish it was made in 1936 in a proposed undistributed profits tax. This tax, as it was imposed by Congress, had four weaknesses which soon drove it from the books. First, the income tax on corporations was not eliminated in the final legislation, but the undistributed profits tax was added on top of it. Second, it was never made absolutely clear, by regulation or by statute, just what form of distributed capitalization of withheld and reinvested earnings would be taxable to the stockholders and not to the corporation. Third, the Securities and Exchange Commission did not set forth special and simple regulations covering securities issued to capitalize withheld earnings. Fourth, the earnings of a corporation were frozen to a particular fiscal year, with none of the flexibility of the carry-forward, carry-back provisions of the present law.

Granted that the corporation income tax must go, it will not be easy to devise protective measures which will be entirely satisfactory. The difficulties are not merely difficulties of technique and of avoiding the pitfalls of a perfect solution impossible to administer, but are questions of principle that raise issues as to the proper locus of power over new capital investment.

Can the government afford to give up the corporation income tax? This really is not the question. The question is this: Is it a favorable way of assessing taxes on the people — on the consumer, the workers and investors — who after all are the only real taxpayers? It is clear from any point of view that the effects of the corporation income tax are bad effects. The public purposes to be served by taxation are not thereby well served. The tax is uncertain in its effect with respect to the stabilization of the dollar, and it is inequitable as part of a progressive levy on individual income. It tends to raise the prices of goods and services. It tends to keep wages lower than they otherwise might be. It reduces the yield on investment and obstructs the flow of savings into business enterprise.

Particular desires are universal, but universal desires are always particular

Particular desires are universal, but universal desires are always particular

Everyone has “selfish” wants, which are often very similar between individuals, creating demand for markets. For example, everyone wants food and shelter. Markets tend to satisfy those wants, at least to some degree, so people tend to appreciate markets.

However, everyone’s version of a “good society” is different. Most people are dissatisfied with how society is run now, but their visions of what a better future would look like, and how to get there, are often radically different. There is usually no “accretion of desire” like that which leads to the creation and political popularity of markets.

This situation is overturned, however, when markets fail or seem to fail. When markets are no longer meeting people’s desires, either because they stimulate desires far beyond what they can provide to the average person (i.e. when everyone starts wanting the “Hollywood” lifestyle), or in cases that markets actually fail on their own terms (falling price of labor relative to productive capacity, extreme inflation in ultra-inelastic markets where no substitute goods are available such as healthcare, etc.), then the political gravity that naturally favors markets has the potential to be upset.

The 20th century saw Communist movements take over the two largest countries in the world not because markets had failed on their own terms, but simply because they had been disrupted by war. In other words, an exogenous failure. Markets were not strong enough to avoid being destroyed in wartime. The 21st century might see something similar due to an endogenous failure of markets, due to advances in automation, monopoly capture of formerly free-market economies, etc.

I actually hope this does not happen because markets are incredible forces for good. But we who are on the pro-market side need to think about how we can give markets the appropriate political “armature” to survive both internal and external threats to their existence.

Should a Basic Income be conditional or unconditional?

Should a Basic Income be conditional or unconditional?

I think that at least initially a Basic Income should be conditional. There are several reasons that I take this stance:

1.) Political feasibility. The main problem BI advocates face is that on first glance the idea seems like “money to be lazy,” rather than what it really is, an efficient means to distribute productivity dividends within an economy. A BI program with a work requirement would be a lot more feasible politically than an unconditional basic income.

2.) Economic efficiency. An unconditional basic income would face the problem of people who wish to “drop out” of the economy for whatever reason, but who still have marketable skills, skills often acquired at public expense through public schools and/or subsidized student loans. The loss of the contribution that these skills make to the economy is an inefficiency that UBI cannot avoid.

3.) Social efficiency. We must consider what a work requirement in a Basic Income scheme would look like. Theoretically, Basic Income becomes feasible as increasing automation eliminates jobs and drives down wages. A work requirement would have two positive effects:

  • It would keep recipients in the labor force who do have marketable skills, but for whom the market price of those skills has dropped below that of a living wage
  • It would create a pool of available labor for social goods that the market cannot provide. A National Labor Pool (NLP) program, into which all BI recipients who are not full-time workers are enrolled, could be deployed for tasks such as disaster relief, city beautification, and, with proper screening, childcare services. All non-full-time BI recipients who claim that they are not able to find private employment would be subject to “call-up” by the NLP.


What constitutes a “full-time” worker could be subject to political debate and change over time. For example, mothers caring for young children could automatically be considered full-time workers. The number of hours per week needed to qualify as full-time would also be adjustable, and, ideally, decreased over time as technological progress obsoletes more and more human skill sets.


Universal programs are more robust than means-tested ones

Universal programs are more robust than means-tested ones

Means-tested programs always engender a set of perverse incentives. When government benefits are only available to the poor or the disabled, there is an incentive to stay poor (or pretend that you’re poor, by working off the books), or to pretend that you’re disabled (witness the massive abuse of the SSI system, which has become Welfare for White People in many areas.)

Universal programs, by being available to all, avoid these pitfalls. And they are more robust politically, too. Means-tested welfare programs will always carry with them a class-based and racial stigma that make them vulnerable to political attack. Universal programs largely avoid this. Witness the relative popularity of Social Security retirement benefits, as compared to, say, Food Stamps.

This is why recent proposals to turn Social Security into a means-tested program are dangerous. As a commenter to this article put it:

Republicans want means testing because this will make Social Security appear the same as welfare and make it easier to do away with. They can initially set the cut off high and then let inflation bring them down until only the poor receive payments. It is then easy to attack.”

Won’t a Basic Income just make people lazy?

Won’t a Basic Income just make people lazy?

A basic income will be just that, basic. It will be enough to pay for basic food, basic housing, basic clothes. It should not provide any of the luxuries or gadgets that people have become accustomed to, such as smartphones or sushi dinners. One of the first maxims of economics is that desire is limitless. People will always want the shiny new thing, and be willing to work for it.

A basic income should actually decrease “laziness,” since it will stop the widespread practice of people faking or exaggerating illness or injury to get on Disability.

The government is already printing money

The government is already printing money

People tend to be uncomfortable with the idea of “the government printing money,” and given some ugly incidents with hyperinflation in recent history, this is understandable. But opponents  should consider that when the Federal Reserve buys government bonds, it is essentially providing a way for the government to print money and lend it back to itself, with the banks taking a cut, a process that has been dubbed “stealth monetization.”

So in fact this dreaded money-printing is already going on, and has been for some time. Even when the country was technically on the Gold Standard, there wasn’t nearly enough gold to exchange for all the dollars in the economy at the set rate of exchange.

So the question then becomes, not should we print money, because we already are, but why are we giving the banks a cut of it for doing essentially nothing?

And why are we letting the banks, through the Fed, control how much money is printed and what it is bought with it?

The Fed is the legally deputized agent of Congress in charge of the currency. Its authority comes from Congress and can be returned to Congress.

The Goals of the Money Revolution

The Goals of the Money Revolution

1.) End Central Bank control of the money supply

Whether this is done through Chartalism, private currencies, or some combination of the two, it must be done. Currency is the lifeblood of any modern economy, and it should not be controlled by a private monopoly. Either a public monopoly or a private free market of competing currencies is preferable to the current arrangement.

A Chartalist system will reduce or perhaps eventually even eliminate the need for governments to collect taxes, allowing business and individual tax rates to be lowered, stimulating the economy. The Money Revolution will be about creating new wealth, not redistributing existing wealth.

At the same time, the existence of competing private currencies will put a check on any excess money-printing by the government that is done for purely short-term political gain, as opposed to sound economic reasons.


2.) Create a robust social safety net, including Universal Health Care and a Basic Income, both as a moral imperative and to improve economic efficiency

Many of the regulations that impose serious dead-weight losses on the economy, for example minimum wage laws and the requirement that companies offer health insurance coverage, are only in place because the State is not fulfilling its duties with respect to the welfare of its citizens.

The American system of having companies act as government-subsidized welfare providers (for example through the tax deduction for offering health insurance) is dishonest and distorts the political dialogue in this country. It has established a “shadow welfare state,” where employed persons believe that they are receiving market goods in exchange for the value of their labor when they are really receiving state benefits in disguise.

Creating a robust social safety net, including a Basic Income, will remove the political pressure that sustains these costly regulations and the shadow welfare state that lurks behind them. Wages should be set by the free market, not government dictat, and requiring employers to offer health coverage places an undue burden on free enterprise.

A Basic Income in place of a minimum wage would dismantle the huge and coercive welfare bureaucracy. It would apply equally to all citizens, removing the disincentive to work which is inherent in the current welfare system.

Once the new system is in place, governments will no longer fear the consequences of allowing large corporations or banks to fold. Unemployment will simply mean the period in which one searches for a new job, rather than being a term of dread. The era of Too Big to Fail in which governments keep “zombie” firms operating for political reasons will be at an end.


3.) Establish a clear delineation between the duties of the private sector and those of the public sector

Markets work best in most sectors of the economy, but not all. Defense, infrastructure, health care and to some extent education are all public-sector duties. Markets have been shown to work poorly or to be extremely corrupting in these sectors.

On the other hand, agriculture, auto manufacturing and mortgages are clearly private-sector duties. The government should exit these sectors of the economy and let private markets function as they should. The massive corporate welfare that exists in these sectors is a drag on the economy and a theft from the taxpayer.

The prices currently seen in the equity and mortgage markets are political prices, not market prices. The destruction of the price discovery mechanism in these markets is incredibly harmful to the efficient functioning of the economy.


4.) Formulate a strong, consistent ideology that can implement and maintain these goals

Thomas Jefferson held that there was a “Wall of Separation” between Church and State in the Constitution, not just to protect the State from the Church, but to protect the Church from the State.

The modern economy needs a new Wall of Separation, this time between Market and State, to protect both entities from each other. Public financing for elections should be a critical part of this New Wall, as well as the development of laws forbidding the “revolving door” between government and the businesses it regulates.

Such radical changes can only gain acceptance if all parts of the political spectrum come to see them as necessary and inevitable. Advocates must present the Money Revolution to Conservatives and Libertarians as a way to preserve and extend the domain of free enterprise (which it is), to Moderates as a way to safeguard social stability (which it is), and to Liberals as a way to strengthen and protect social welfare (which it is.)


Could chartalism and Bitcoin could work together?

Could chartalism and Bitcoin could work together?

Chartalism, the idea that governments can create money ex nihilo unconstrained by anything other than inflation, and Bitcoin, an alternative currency with a strictly limited supply, are universally seen as being at opposite ends of the ideological spectrum when it comes to monetary economics.

I have a sneaking suspicion that this is not the case, and that the new economic and monetary system that will emerge will involve both a chartalist element and something resembling Bitcoin, if not Bitcoin itself.

This is merely a protoplasm of an idea in my head right now, not a fully thought-out position. But I know it involves separating what have been considered two of the essential features of a currency: Currency as a means of exchange, and currency as a store of value.

Right now all currencies try to fulfill both roles. But what if they were separated? What if a chartalist token served as the means of exchange, and a capped currency like Bitcoin served as the (inherently appreciating) store of value?