People who summarily dismissed Bitcoin for the last eight years are suddenly super worried about weak transaction volumes. You see, no one is spending their bitcoin!

Bitcoin is in a weird position where the dollar-denominated price just keeps going…up. And because the price keeps going up, HODLers are reluctant to spend. And if no one is spending bitcoin, how can it become a currency?

This is problematic. Nobel Prize-winning blogger Paul Krugman explains why:

What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that’s not at all what is happening in Bitcoin.

Paul Krugman wants everyone to spend their money, because consumption creates wealth.

Seems reasonable, but here’s a contrarian take from Greek philosopher Dio Chrysostom:

Because of stupidity and self-indulgence, a certain people take that which they prize most highly, silver, and of their own volition send it over a long road and across a vast expanse of sea…

He’s talking about the Roman citizens, and their desire for cheap crap from China. It was the first century AD, and Rome was sending all its silver down the Silk Road in exchange for fancy clothes and rare spices. These indulgences, Dio felt, represented a huge moral failing.

Under ordinary circumstances, weaker states send silver to stronger states in the form of tribute. Paying tribute is a form of submission, it’s what happens after conquerors have vanquished your army. There was absolutely no reason for the Romans to voluntarily send silver to an inferior state, aside from sheer stupidity.

Over the centuries, the Roman Empire faced constant coin shortages as precious metals flowed east. The emperors took to repeatedly debasing the coinage until the finances of the empire collapsed.

Today we export massive amounts of money to China in exchange for consumer goods, but it’s no longer considered reckless to do so. In fact, central bankers encourage such behavior. That’s because we’re not sending China anything of value, like gold or silver. We’re sending them our own worthless dollars, ha ha!

Foreign countries use US dollars to buy up Treasury bonds, and as the bonds depreciate due to inflation, the US government effectively imposes seigniorage. Thus we exact tribute on our overseas bondhonders, without even resorting to the threat of violence.

When Paul Krugman says that transactions make the economy rich, he means that consumer spending makes the US government rich. The more we consume, the more debt we can sell to our trade partners, the more tribute tax we extract. There’s no limit to household consumption – if we run out of money, lenders are happy to step in. Whereas borrowers used to compete for loans on the basis of good credit, now the lenders market every opportunity to load up on subprime debt. Take out a mortgage to own the American Dream! Invest in your future with a six-figure student loan! Buy a car with 0 down! How bout financing some designer pants?

Got this ad on Instagram for $393 cotton pants available via subprime loan.

Tell me again, what are Millennials killing? pic.twitter.com/Z3YLlmCsjk

— Susie Cagle (@susie_c) June 16, 2017

Krugman refers to Bitcoin as “golden cyberfetters” because HODLers are locked into a virtuous cycle of saving and frugality (he calls it money-hoarding). Bitcoin, for all its features, has one fatal flaw: We can’t spend our way to imperial prosperity.