Mr Richards on technology, information, and people
RuminatingSep 18, 2009
Cash has outlived its usefulness
Sure its easy to use, nice to have - might even score some points when you flash it to the lady across from you at the bar. But could it do more than simply transfer your wealth into someone else's pocket ?
What if cash carried an expiration date? Not a completely new idea apparently. John Keynes had some notion about it, and as recently as 1999, it was flouted about by Marvin Goodfriend, then VP at the Federal Reserve, to 'discourage "hoarding" currency, deter black market and criminal activities, and boost economic stability during deflationary periods when interest rates hover near zero.' The penalty of spending "old cash" would be a carry tax.
Ok, so it had its critics, like Ron Paul and others.
But what if the idea of expiring cash has some merit ? Namely, to keep money flowing through local economies for goods, services, and start-ups. Yeah, start-ups. By stamping an expiration date on this New Cash, you prompt people to spend it before it goes.. worthless ? Or perhaps devalued by some percentage. In either case, you'd be likelier to spend it while its worth more, right?
You decide to put this cash to work, paying for fresh groceries instead of throwing stuff into the freezer for six months. Pay for landscapers to mow the lawn - might as well - the cash will be no good next week.
Or you want to get a washing machine, since you have kids and you have no other alternative - those rugrats are getting stains on their Osh-Kosh overalls every damn day. Go get that machine - now!
Maybe you decide instead to do some investing, because you can do that with expiring cash too. You actually get some tax breaks for using it in an investment. Its a no-brainer, really. So you do your research, and think to yourself that Solar Panel Corp, a new start-up, is trying to create cool solar panels that would be way more efficient than existing ones.
So let's say you invest your expiring dollars, with the idea that any future revenues would come back to you as plain, old dollars you keep forever. The inventor gets the money to try out the invention, and you get rich. Win-win ?
Sure there are details to work out. There is testing to be done as well. Maybe sell this model to some isolated community somewhere, throw them financial incentives for following through, and see if it works. (Selling an economic model might even be a whole other blog post as it is.. so if you're a large research firm interested in any of this - contact me - and we'll see if we can't get some New Cash in circulation )
What if cash carried an expiration date? Not a completely new idea apparently. John Keynes had some notion about it, and as recently as 1999, it was flouted about by Marvin Goodfriend, then VP at the Federal Reserve, to 'discourage "hoarding" currency, deter black market and criminal activities, and boost economic stability during deflationary periods when interest rates hover near zero.' The penalty of spending "old cash" would be a carry tax.
Ok, so it had its critics, like Ron Paul and others.
But what if the idea of expiring cash has some merit ? Namely, to keep money flowing through local economies for goods, services, and start-ups. Yeah, start-ups. By stamping an expiration date on this New Cash, you prompt people to spend it before it goes.. worthless ? Or perhaps devalued by some percentage. In either case, you'd be likelier to spend it while its worth more, right?
You decide to put this cash to work, paying for fresh groceries instead of throwing stuff into the freezer for six months. Pay for landscapers to mow the lawn - might as well - the cash will be no good next week.
Or you want to get a washing machine, since you have kids and you have no other alternative - those rugrats are getting stains on their Osh-Kosh overalls every damn day. Go get that machine - now!
Maybe you decide instead to do some investing, because you can do that with expiring cash too. You actually get some tax breaks for using it in an investment. Its a no-brainer, really. So you do your research, and think to yourself that Solar Panel Corp, a new start-up, is trying to create cool solar panels that would be way more efficient than existing ones.
So let's say you invest your expiring dollars, with the idea that any future revenues would come back to you as plain, old dollars you keep forever. The inventor gets the money to try out the invention, and you get rich. Win-win ?
Sure there are details to work out. There is testing to be done as well. Maybe sell this model to some isolated community somewhere, throw them financial incentives for following through, and see if it works. (Selling an economic model might even be a whole other blog post as it is.. so if you're a large research firm interested in any of this - contact me - and we'll see if we can't get some New Cash in circulation )
posted by Phil # 9:06 PM 
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