A senior vice president at the Federal Reserve Bank of Richmond has delivered a paper to a Federal Reserve conference in Vermont that calls for U.S. currency to include tracking devices that would allow the government to track and tax private possession of cash. According to Marvin Goodfriend, “The magnetic strip could visibly record when a bill was last withdrawn from the banking system. A carry tax could be deducted from each bill upon deposit according to how long the bill was in circulation,…” The idea would be to discourage hoarding, make criminal activities more difficult, and stimulate banks to make loans when interest rates are low.
You can read about it at http://www.wired.com/news/politics/0,1283,32121,00.html
I don’t like it at all. Besides the further erosion of privacy, it’s yet more taxation, and I really doubt it’ll do much to slow down the criminal world - those folks have a way of adapting. I guess it’s the hoarders I should be fretting about.