The Cash Tax Not Enough To Make It Go Extinct
from the money-down dept
A recent report from England quantified the amount of money the British government makes just from printing currency. As it turns out, it amounts to a fairly sizable tax. In addition to the money that the government makes, currency leads to a lot of other costs associated with storage and security. There's not much doubt that digital money is far more efficient and cost effective. But the transition to a cashless society is taking a long time. Part of the problem is that payment providers (banks, credit card companies, etc.) are able to levy high fees on each transaction. In many cases, they make it worthwhile for merchants to opt for cash, even with its carrying costs. Eventually, situations where you'll need cash will become quite rare, but as long as digital money carries significant "taxes" of its own, cash will be around for some time.
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Filed Under: digital money
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If the government were to print too much money purposes of "making money" (this has been done by other governments at various times) rampant inflation is the result.
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Re:
Subjects are always screwed over by their GUVMENT.
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oh yeah...
If you look at it like something cheap like free satellite is the motivation to crack the card scheme in under a few months, how quickly do you think they'll have a hack for something as nice as cash?
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Smart Cards / Digital Currency
Cash is king!! Universally accepted, and no service charges to use it.
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**disclaimer: ordinarily i am not a card-carrying member of the tinfoil hat club. but this issue just makes me twitch.
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No imagination
And for anyone worried if they lose the card or it gets stolen they will lose their $$, well that $20 bill in your pocket works the EXACT same way.
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Re: No imagination
Remember the tale about all your eggs in the same basket?
Perhaps I'm a bit precautious but I don't even trust any single bank, having money spread out amoung several and cash in the safe...just in case.
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Bad idea all around
Secondly, as lizard wrote, going completely cashless is an end to privacy. It's absolutely begging for tracking, investigation and data mining.
Thirdly, how will private transactions take place? Will everyone have to carry around card readers? Where are they going to come from? Children would have to have them but they're not legally responsible or liable; they can't be parties to any sort of contract.
Fourth and last: infrastructure. The massive demand on transaction confirmation would far exceed the capacity of any phone/radio system. Iceland is probably closer to cashless than any other country. People pay for each beer with their credit cards on weekends.
Having stood behind a Reykjavík bar pouring those beers, I can tell you that starting around midnight, the system falls apart. It can take 10 minutes for a single card to go through, in which time I've collected another two dozen, all waiting to be scanned and the slips to be signed. This in a city of 120,000 with massive telecomms infrastructure.
A cashless society is an idea right up there with conversion to methanol: it's idealistic, sounds good on the surface, turns out to be horrendous when studied, and in the end, is completely unworkable.
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Re: Bad idea all around
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Re: Re: Bad idea all around
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who said anything about smart cards or credit card
Bottom line most likely if they do eliminate cash and go to a digital currency it will be just like you bank card or a credit card that has a positive balance. they only thing you will notice is the fact that you will not be able to use an ATM and withdrawal any actual currency. then all the garage sales people will have to have a terminal to do transfers.
This is to far away to really imagine. I would think that Ill be dead as will most of you before this ever is implemented.
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without cash....
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Re: without cash....
However, getting the signature might be more fun.
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Just a few examples: If a video store takes in $2000 a day in cash and needs to hire security guards at $200 a day to protect that cash - the cash costs them 10%. Add on the cost of a locked office and cash drawers over time and it could be 11-12% cost to give customers the choice of cash as a payment. The same store gladly takes Visa at a transaction cost of 30cents plus 2.9% per transaction. What a bargain!
On the other hand Ma and Pa Kettle's general store uses a calculator and a cash box along with Pa's shotgun for security. Their cash processing costs are .1-.2% of their sales or less. They don't take Visa as they see a 35cents plus 3.9% transaction fee as a ripoff - wouldn't you?
Most of these items would be less necessary or less costly if all currency were digital - except for the card processing companies take 2-5% of each transaction right now.
Once transaction costs start getting down to 1-2% or less on average - cash will begin to be more expensive to process than cards.
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Banking
Your paycheck was always direct deposit. Your bank payed your bills from a spending account you set up with them...or you could opt to visit the post office if you'd rather do it yourself. When I say post office I don't mean mailing your bills. I mean you take your little bill slips and you wait in line. We did ours all online (in 1998 mind you)
Transactions happened a bit like an ACH here in the states.
I lived there four years and I saw just one checkbook, from a business, during that entire time.
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Cash should stick around...
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i hope it never goes extinct
if they wanted to ruin you or shut you up. or practically 'kill' you all they would have to do is wipe out your bank account
cash prevents too much tracking and control..
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Gold is king...
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Hmmmm...
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Two years after their introduction, tolls in the states that used them increased by 30%. The states that did not use them didn't raise their toll - or did by only the usual small increments.
I've been a retail business consultant. People spend more when they use credit cards than when they use cash - cause they don't feel the reality of the expenditure.
That should come as no surprise.
I agree with everyone who is against the "cashless" society - especially the part about the stri . . exotic dancers.
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The Federal Reserve Prints US Cash
No that's not true, they print more money to cover debts they can't sell abroad.
The printing of cash is done by a group of private banks known as the Federal reserve. These banks own the right to print money.
What happens is, when the US Gov wants to borrow money it issues a right to the Federal Reserve to print more money, which it swaps for government bonds. The bonds are used by the federal reserve as the equivalent of the old 'gold reserve'. These bonds are the thing that backs the US currency.
Effectively the government buys the money from the federal reserve in exchange for bonds and hefty fees.
The US gov has in recent years been buying a lot, as it's gotten more difficult to sell bonds abroad. It's what's behind the steady drop in the US$.
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I missed something, the FRACTION RESERVE RULE
Under this rule, the Federal Reserve can lend about 7 times the value of the Government bonds they hold.
So whenever the US government borrows $100 from the fed, the Federal Reserve gains the right to lend (i.e. print) $700 to the banks for a percentage and an addition fee of about 50 cents to print the paper used in the 'Federal Note'.
You can see how failing to sell the government debt abroad, and having to dump it into the federal reserve instead is a last ditch option. It dilutes the $ seriously, and since old debt is priced in US$, it makes countries unwilling to buy further US debt only to see the repayments heavily diluted.
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Impenetrable wall
See -
http://www.stepstowardthemark.com/
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Re: Re: Bad idea all around
In short, for people lik emyself, cash is easier for everyone: the college staff, students, and the hard working officails at the ATO and Centrelink.
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hesslei...
Debit Card Machines
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