Hey! This was a sawbuck this morning!

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 According to Marvin Goodfriend, “The magnetic strip could visibly record when a bill was last withdrawn from the banking system.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.

I automatically see dozens of problems of this plan. Mainly lots of people do strange things with money besides hording it.

Mainly, some people like to barter these paper rectangles for goods and services, like food dress, entertainment. I handed over several of them myself to go view a motion picture. American Beauty, I believe.

Would there be a way for these store keepers to figure out how long I held on to my money, and add a markup accordingly.

I didn’t see the idea to time stamp part of it, but still, it has to be the dumbest idea from someone who ought to know better.

All the reasons I could possible think of for it being a bad idea are already in the article.

And what about the money that exists before this plan is placed into effect. Will they become worthless.
That is probably the easiest way to make EVERYBODY in the country HATE you.

Marvin, what is wrong with you?

Hmm. . . I wonder if something like that would lead to the abolition of hard currency altogether? If you start taxing cash, people won’t want to keep as much of it on hand. . . leaving more in the banks. . . finally cash is nixed in favor of checks and banking cards.

Okay, so I’m wandering. Still, taxing cash?
– Sylence

And now, for my next trick, I will talk in spooky half-references.

Isn’t this exactly what militia groups have been afraid of ever since they put thos identification threads into paper currency? ( C’mon, you know what I’m talking about. . . )

“Oh we were brought up on the Space-Race, now they expect us to clean toilets. When you have seen how big the world is how can you make do with this?”
Pulp, “Glory Days”

There’ve been proposals over the years calling for conversion to a cashless society, mainly aimed at curbing criminal activity. These proposals acknowledge the trend toward e-money (I know I can sometimes have the same $10 bill in my wallet for a week because you can take care of everything down to groceries and parking with plastic), but ignore a large part of the economy that still works (legitimately) on cash. It’s impractical to think about getting every lawn guy, valet and bellhop on an e-bucks system.

The ill-advised proposal cited in the OP walks in tandem with the cashless society ideas in terms of these “small” questions AND adds both the absurdity of taxing cash (guess which end of the economic spectrum’s going to feel that tax the most?) and the rather chilling spectre of your every transaction being trackable.

The expense of conversion would be phenomenal, to boot. We’re talking about getting every last truck stop condom machine on the network.

Sounds like a joke. A bad joke, but a joke. I didn’t find it in snopes, though, using the word “tax” as my key. So, I suppose it could be a serious proposal, as far as it goes.

I don’t think it’ll fly, so I’m not gonna worry about it.

Sounds like a good way to abolish Federal paper currency in favor of unminted or privately-minted gold and silver.
I wonder if this Marvin Goodfriend is secretly a gold bug in disguise.
Shucks, I believe that Greenspan was an Objectivist and a gold bug in his youth. Maybe this is all part of a Cunning Plan™ to at last impose Objectivism on American society.

“Kings die, and leave their crowns to their sons. Shmuel HaKatan took all the treasures in the world, and went away.”