The economist that publicly stated the internet would never amount to much comparing it to the fax machine – Paul Krugman is slamming Governor Ron DeSantis’ opposition to a digital dollar or a central bank digital currency (CBDC).
DeSantis officially announced his candidacy for President of the United States in a Twitter Spaces interview where he was asked about crypto. The governor said he supported Bitcoin while noting that he signed a law banning a CBDC in Florida. The pronouncements should please crypto Twitter and the 30 million or so US individuals holding crypto.
As for Krugman, he pointed to an Op-Ed he published in NYTimes.com last month where he claims that law-abiding individuals would “flock” to a CBDC as it would be convenient while predicting that a ban on CBDCs would “protect the ability of wiseguys to evade taxes, launder money, buy and sell illegal drugs and engage in extortion.”
Krugman said DeSantis’ policy reminded him of former Senator Rick Santorum’s opposition to a public weather service.
What Krugman did not mention is the main concern is the federal government would gain another vantage point to monitor, and perhaps manage, the masses and their financial activities – similar to what the Chinese are planning with their digital yuan. While the Feds can already monitor transactions, a CBDC could take this ability to the next level of automation and invasion of privacy. This is part of the argument private stablecoin issuers are betting on, as many people already consider the government too intrusive.
To be honest, I thought Ron DeSantis's attacks on central bank digital currencies, while revealing, wouldn't remain a major message — not exactly a guys-in-diners issue 1/ https://t.co/sDA3KCrd1L
— Paul Krugman (@paulkrugman) May 26, 2023
While it is accurate that the Feds are researching the potential benefits and risks of a government-issued digital dollar – there has been no decision yet, and, in all likelihood – it will not happen due to privacy concerns.
As for Krugman, who won a Nobel prize in Economics, he has a long history of being on the wrong side of reality. Krugman predicted that a Trump presidency would usher in a market collapse. The opposite happened. One publication took the time to list the top five claims Krugman has gotten wrong. This does not make the Nobel organization look very good, not to mention Krugman.