“Central bankers and mainstream monetary economists have become intrigued with the idea of reducing, or even entirely eliminating, hand-to-hand currency. Advocates of these proposals rely on two primary arguments. First, because cash is widely used in underground economic activities, they believe the elimination of large-denomination notes would help to significantly diminish criminal activities such as tax evasion, the illicit drug trade, illegal immigration, money laundering, human trafficking, bribery of government officials, and even possibly terrorism. They also often contend that suppressing such activities would have the additional advantage of increasing government tax revenue. [A second argument relates to monetary policy.]…
“Yet the arguments for phasing out cash or confining it to small denomination bills are, when not entirely mistaken, extremely weak.” [Jeffrey Rogers Hummel, Cato Policy Analysis No. 855]
12 Comments
If I want to sell my car, I only take cash. All other avenues are open to fraud. If I want to buy a stick of gum, the overhead for the merchant for a check-card is absurd for such a small purchase. Some places only take cash for transactions less than $10 for this reason.
The real reason they want this is for taxes, yet the US has among the highest tax compliance rates in the world. Gov doesn’t trust us and wants to monitor everything.
“If I want to buy a stick of gum, the overhead for the merchant for a check-card is absurd for such a small purchase.”
The fee to the merchant for a debit or credit transaction is a percentage of the transaction, usually 5% for credit (not sure the debit fee). So the relative overhead is exactly the same no matter how large or small the transaction.
There’s often a small (10 to 35 cents) per transaction fee added to the percentage – which is why many retailers have a $5 minimum transaction to use your card.
In fairness, the government does not trust us because there are many people who are paid under the table in whole or in part in this country. I think their lack of trust is rooted in experience.
Wrap up the “reasons” for a cashless society all you want, but I do NOT want the Government controlling the money supply!!.
I deal in cash only (within reason) whenever I can.
Am I paranoid? Damn betcha.
The government has just as much control over the money supply in a cash only economy.
There are only three ways to avoid a government controlled money supply.
1. Cryptocurrencies.
2. Deal only in precious metals by weight (not coinage).
3. Deal only in barter, trading goods/services directly for other goods/services.
I flat don’t trust the government. Handing total control of banking and money is suicide for freedom – I can put up with the money laundering, etc. if it means the government doesn’t control the way we pay for things.
Paranoid? Oh, yeah…
“I love my Country, I Fear my Government”
It’s all about control, the gov wants more and more control of what we do.
Some is about taxes but every year the fed gov gets more tax revenue than the year before, We’ll never be able to satisfy that beast.
I know it sounds tin-foil hat crazy but they don’t need to know what I buy. It’s all about control.
I can feel how strongly you feel about it Many people smarter than I have strongly held views about these things. Personally, I couldn’t care less if the government knows about every single purchase I make. I’d be glad to let them hear my phone conversations too. (I don’t think that should be a law but I would sign up for a “we want to listen in on your calls to make the country safer” list.
Of course the goal is for us to render unto Caesar and just shut up about it. But Caesar never had it so good. Visa, Mastercard, Citibank, B of A, J.P. Morgan Chase, Wells Fargo, et al, all private actors, are against us as well.
And every one of them engages in criminal activity regularly. Visa/Mastercard just settled for $6.2 billion in a merchant swipe fee case. Wells Fargo paid $142 million for opening unauthorized accounts. Check the rest and you’ll see the same story.
It may take an exceptionally pliable mind to succed in the personal injury trade, and Ronald V. Miller, Jr. admits smarter people than him have thought about this issue.
Here’s one. Former broker, now journalist, Brett Scott has a good article in the Guardian about the cashless
movement.
https://www.google.com/amp/s/amp.theguardian.com/commentisfree/2018/jul/19/cashless-society-con-big-finance-banks-closing-atms
I for one look forward to a cashless society.
Why, what could be better?
Just think how easy civil asset forfeiture would be if some out of state yahoo is driving through my town – I could just debit their account as they couldn’t show a “legitimate source” of those funds to me.
Just think how our betters could “nudge” us more effectively in a cashless society. Just up thread in the “healthy food” ordinance….why, that wouldn’t be necessary as the Government could monitor every penny of your expenditure and tax…er, I mean charge a healthy food “fee” to be used only on Government approved healthy foods. Spend it on the oranges or pay the tax, er, I mean fee to the Government.
And just think how docile and controllable everyone could be made. Anyone remember Demolition Man and the swearing machine? Yeah….that would go for ANYTHING….instant fine, baby!
Want to find out who has what nasty disease? Well no need to hack their medical records….just find out from those perfect electronic payment records what they’re spending money on. Why, what EVER could go wrong with that?
/snark off/
Yeah, anyone who thinks the government has as much control over us with cash as it would without currency hasn’t spent much time thinking about how you’ll be “nudged” by the government (e.g., negative interest rates). And that’s assuming a relatively beneficent government (which is a naive assumption).