tl;dr: three problems that could undermine US stability. One of these is not like the others.

In his essay, Threats, Scott Galloway, a professor at NYU, writes that there are three big, and unspoken, threats to the safety, stability, and security of the United States.

They are:

• virgin homicides
• obesity
• crypto vs. usd

Virgin Homicides

Virgin homicides refers to men who, for any number of reasons, are alone and have no prospects. The bottom line is there has been a “radical decline in sexual activity among yong men. In 2018, 28 percent of men under 30 reported having no sex in the past year-double historical rates.”

As he writes, “when young women feel shame and rage, they don’t turn to AR-15s. The most dangerous person on the planet is a bored, broke, lonely young male. The US is producing too many of them.”

Obesity

As far as obesity goes, he provides all of the standard metrics and the downsides of the food-industrial complex. However, he has a scathing assessment of where we are today.

“While obesity is not a new concern, it has gained new urgency, even as we are increasingly reluctant to address it. Just as masking has been politicized by the right, open conversation about the dangers of obesity has been politicized by the left.

Media has moved from fat-shaming (reprehensible) to willful blindness towards the dangers of excess weight (inexcusable). Even as obesity rates increase, fewer people are trying to lose their dangerous excess weight.”

Crypto vs. USD

When it comes to the threat that crypto poses to the USD, Galloway is blunt and, I should add, on point.

“Should bitcoin and other cryptocurrencies usurp the scarcity credibility of major currencies and emerge as the dominant form of money, the dollar — and the role it plays in world stability — would be drastically undermined.“

Galloway isn’t wrong. He’s totally right.

He continues:

“Widespread use of currencies that evade the existing financial system could blind U.S. authorities to tax fraud, sanctions evasion, and other criminal conduct. Indeed, it would degrade the ability of governments across all democracies to collect taxes and enforce financial laws (underline mine).

Less investor interest in the dollar would increase U.S. government borrowing rates, and reduce discretionary spending as interest on debt increases.”

Yes, there will be tax evasion in crypto– as there already is in significant volumes in the existing fiat system.

But there’s a big difference between this threat and the other two.

It’s a Free Market, Isn’t It?

Where I think Galloway falls short, however, is in the idea that the ability for governments to enforce financial laws will be degraded.  It’s not that he’s wrong, he’s just missing the plot.  The point is that because of smart contracts and blockchains, fewer people will need them to.

Given a choice between establishing or joining an organization using the existing system, backed up by existing court system or choosing one where rights and wealth are protected by secure, decentralized, open-source protocols, not who can afford the most expensive lawyers, the market is simply going to move to the cheaper, fairer, more transparent, more global, more liquid option.

And we’re not just talking a little bit cheaper, we’re talking “orders of magnitude” cheaper.

So, yes, enforcement will be degraded but it will happen because of competition, not because people naturally say “oh, screw the dollar.”

Government doesn’t have a natural RIGHT to enforce financial laws, societies have have given governments the right to enforce financial laws because, historically at least, there has been no better way.

Now there is.

And that comes back to the larger point about Crypto vs. the USD overall.

Whereas “virgin homicides” and “obesity” are more societal problems which may have market solutiona, the USD vs. crypto threat is a purely market-driven one.

It’s somewhat ironic that, in a country where we espouse the value of the free market, there is no free market for currency. You MUST pay your taxes in USD after all.

Of course, the thing is that crypto is extra-jurisdictiona, outside the scope of US law enforcement.

Sure, it’s possible to slow things down, increase friction in on/off-ramps, and harass/imprison individuals, but there’s no way for the US to prevent Bitcoin-or any crypto- from actually existing and operating (save for shutting down the Internet.)

Can the USD be Saved?

The answer is probably, but that doesn’t mean it is likely.

The USD comes with a huge number of competitive advantages over crypto, including trust, familiarity, and adoption.

The problem is the US government, which has become addicted to spending and comfortable in the belief that the USD is the global reserve currency–and will always remain that way.

https://www.profgalloway.com/threats/

So, as long as the government continues to debase the currency, at an increasingly rapid race, to fund social programs combined with a hubris of assuming reserve currency status forever, the money printing, and hence the increased vulnerability to competition, will continue.

In short, the USD can be saved in the face of a money software that will eat the world (both BTC and others), but it would require a major shift in mindset and momentum on the part of the government.

I’m just not 100% confident that is going to happen.