Policy wonk proposes practically eliminating cash

[Hershmeister]

WSJ op Ed The Sinister Side of Cash

http://www.wsj.com/articles/the-sinister-side-of-cash-1472137692

Major implications on gun buying here......

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[gjohnsoniv]

Can't read the full article.

[No_0ne]

45 minutes ago, gjohnsoniv said:

Can't read the full article.

It's strictly on a need to know basis, and you sir, don't need to know ...

[btq96r]

Paper money fuels corruption, terrorism, tax evasion and illegal immigration—so the U.S. should get rid of the $100 bill and other large notes

He's not wrong per say, and since I can't read the full article while he might address it, it's also been brought up that counterfeiting money is less incentivized to large criminal elements if you get rid of the $100.  I can't remember the last cash transaction I made using anything larger than a $50 bill, or for more than a hundred total.  Everything else is done through bank draft or credit card.

As to the implications on gun buying...I think we'll have a requirement for any and all sales/transfers (for anyone other than immediate family) to go through an FFL before currency norms change.  So, something like this wouldn't necessarily be the game changer.

[crossfire]

Question here is , why post sites you have to subscribe to in order to read?

[No_0ne]

9 hours ago, crossfire said:

Question here is , why post sites you have to subscribe to in order to read?

Easy, commissions ...

[56FordGuy]

He's not wrong per say, and since I can't read the full article while he might address it, it's also been brought up that counterfeiting money is less incentivized to large criminal elements if you get rid of the $100.  I can't remember the last cash transaction I made using anything larger than a $50 bill, or for more than a hundred total.  Everything else is done through bank draft or credit card.

Everybody is different. I just recently sold a piece of machinery, the buyer paid for it in cash because "I don't trust the banks." His words, not mine. Shortly after that I bought a used pickup and paid for that with a few thousand dollars in cash. Pretty much everything I buy that's worth more than a few hundred bucks is bought in person, with cash. A lot of it is used, and most private sellers don't have a way to take plastic and don't trust a check. I certainly don't when I sell something.

I don't think we'll see cash, or the $100 bill going away anytime soon.

[crossfire]

In God We Trust, everyone else pays cash.

[DaveTN]

I don’t know why anyone would want to use cash, unless it’s something you don’t want a record of, when credit card companies give you cash back so you pay less than the guys paying cash.

[Hozzie]

52 minutes ago, DaveTN said:

I don’t know why anyone would want to use cash, unless it’s something you don’t want a record of, when credit card companies give you cash back so you pay less than the guys paying cash.

I think we are talking more personal transactions here.  Joe Bob (general term) doesn't take credit cards and I buy a lot from Joe Bob's.  I use and accept cash quite often.  It is the only thing I will take when I sell things.  Not because I am trying to hide anything, but because I know it is good.

Edited August 27, 2016 by Hozzie

[Garufa]

1 hour ago, DaveTN said:

I don’t know why anyone would want to use cash, unless it’s something you don’t want a record of, when credit card companies give you cash back so you pay less than the guys paying cash.

No one ever had their credit card number or identity stolen using cash.

Merchants pay around 3% per transaction for you to use that card.  That equals higher prices.

How are you going to use a credit card when buying a used lawnmower or whatever from some guy off Craigslist?

When people have to wait behind you in line at a convenience store for your card to clear on a $2 purchase when they have cash with possibly exact change in hand...well, I'll refrain from labelling.

So are you insinuating that those whose prefer cash are trying to hide something?

 

 

Edited August 27, 2016 by Garufa

[nightrunner]

I sold a used truck for $6000 and an old man came and bought it and paid cash right there.

I have also sold a Glock once for $500 and guy came and paid for it in $20s (and no the guy was not suspicious other than that) It might make things awkward at first but it won't cut out cash sales. There will always have to be some sort of hard currency.

[DaveTN]

9 minutes ago, Garufa said:

No one ever had their credit card number or identity stolen using cash.

True, but it’s also true you can’t stop payment on cash if you need to.

9 minutes ago, Garufa said:

Merchants pay around 3% per transaction for you to use that card.  That equals higher prices.

Do you get a 3% discount at the grocery store when you pay cash? I don’t. As a matter of fact the only place I personally have been offered a discount for cash is buying guns on-line.

9 minutes ago, Garufa said:

How are you going to use a credit card when buying a used lawnmower or whatever from some guy off Craigslist?

No, that would be the time to use cash.

9 minutes ago, Garufa said:

When people have to wait behind you in line at a convenience store for your card to clear on a $2 purchase when they have cash with possibly exact change in hand...well, I'll refrain from labelling.

I swipe my card and roll; they probably take longer giving you change.  

9 minutes ago, Garufa said:

So are you insinuating that those whose prefer cash are trying to hide something?

No I’m stating it; but that doesn’t mean there is anything wrong with it. Some people won’t buy a gun from an FFL because they don’t want the sale recorded; nothing wrong with that. I’ve bought guns and paid cash because I didn’t want to deal with questions from the wife; nothing wrong with that either.

I’m not saying there is anything wrong with using cash. I’m just saying I choose to get the kickbacks from the credit card companies. I pay my credit card bill when it comes due; so it’s free money.

[DaveTN]

51 minutes ago, Hozzie said:

I think we are talking more personal transactions here.  Joe Bob (general term) doesn't take credit cards and I buy a lot from Joe Bob's.  I use and accept cash quite often.  It is the only thing I will take when I sell things.  Not because I am trying to hide anything, but because I know it is good.

Correct, I was talking about everyday use. All my private gun sales are cash. If I’m buying they usually only take cash and if I’m selling cash is the only thing I accept unless I’m shipping; then I accept a USPS money order. But I don’t ship until I go to the post office and cash it.

But with my day to day stuff; everything goes on a Sears Mastercard. I get a $500 gift card at least once a year and sometimes twice a year. They just paid for a big chuck of a washing machine.

 

[Hershmeister]

All right ya cheap bastages ... I can't copy the full Article but here are some select morsels for your enjoyment



To be clear, I am propos­ing a “less-cash” so­ci­ety, not a cash­less one, at least for the fore­see­able fu­ture. The first stage of the tran­si­tion would in­volve very grad­u­ally phas­ing out large de­nom­i­na­tion bills that con­sti­tute the bulk of the cur­rency sup­ply. Of the more than $4,200 in cash that is cir­cu­lat­ing out­side fi­nan­cial in­sti-tu­tions for every man, woman and child in the U.S., al­most 80% of it is in $100 bills. In turn, $50 and $20 bills would also be phased out, though $10s, $5s and $1s would be kept in­def­i­nitely. To­day these smaller bills con­sti­tute just 3% of the value of the cur-rency sup­ply.



Per­haps the most chal­leng­ing and fun­da-men­tal ob­jec­tion to get­ting rid of cash has to do with pri­vacy—with our abil­ity to spend anony­mously. But where does one draw the line be­tween this in­di­vid­ual right and the gov­ern­ment’s need to tax and reg­u-late and to en­force the law? Most of us wouldn’t want to clamp down on some-one’s right to make the oc­ca­sional $200 pur-chase in com­plete pri­vacy. But what about a $50,000 car or a $1 mil­lion apart-ment? We should be able to re­duce the prob­lems I’ve de-scribed here while also en­sur­ing that or­di­nary peo­ple can still use small bills for con­ve-nience in every­day trans­ac­tions.



And my favorite. this refusal to see that negative interest rates is a signal of a bad economy thus savers hoard cash




In prin­ci­ple, cut­ting in­ter­est rates be­low zero ought to stim­u­late con­sump­tion and in­vest­ment in the same way as nor­mal mon­e­tary pol­icy, by en­cour­ag­ing bor­row-ing. Un­for­tu­nately, the ex­is­tence of cash gums up the works. If you are a saver, you will sim­ply with­draw your funds, turn­ing them into cash, rather than watch them shrink too rapidly. Enor­mous sums might be with-drawn to avoid these loses, which could make it dif­fi­cult for banks to make loans—thus de­feat­ing the whole pur­pose of the pol­icy.
Take cash away, how­ever, or make the cost of hoard­ing high enough, and cen­tral banks would be free to drive rates as deep into neg­a­tive ter­ri­tory as they needed in a se­vere re­ces­sion. Peo­ple could still hoard small bills, but the costs would likely be pro-hibitive for any re­al­is-tic neg­a­tive in­ter­est rate. If nec­es­sary, cen­tral banks could also slap tem­po­rary fees on any large with-drawals and de­posits of pa­per cur­rency.


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[56FordGuy]

2 hours ago, nightrunner said:

I have also sold a Glock once for $500 and guy came and paid for it in $20s (and no the guy was not suspicious other than that) It might make things awkward at first but it won't cut out cash sales. There will always have to be some sort of hard currency.

 

When I sold my lathe, the buyer counted out over $1,000 in $20s. Said he was a bartender, got paid in cash and didn't trust banks. Didn't matter to me, they were all real bills. 

 

How do you buy something with plastic if the system is down, or power/ phone line/ internet is out? Various studies have shown on average people spend 18-50% more (the 50% was a McDonalds study) when using plastic vs cash. The credit card companies are making money, the vendors are making money, but somehow I've never met anyone that claimed to be the one giving it to them. Everyone I've ever spoke to about this has always claimed to the the guy with the system, the guy that never paid a dime in interest, fees, etc and was 'making money' with plastic. 

 

If every consumer is ahead of the game and costing the credit card companies money, how do the credit card companies stay in business and turn such large profits? Maybe the credit card companies really do know what they're doing, and feeling 'ahead of the game' is all part of their plan. That seems to make more sense than everyone being smarter than the system, but what do I know? I'm just a guy that likes using cash. 

[56FordGuy]

1 hour ago, Hershmeister said:

Per­haps the most chal­leng­ing and fun­da-men­tal ob­jec­tion to get­ting rid of cash has to do with pri­vacy—with our abil­ity to spend anony­mously. But where does one draw the line be­tween this in­di­vid­ual right and the gov­ern­ment’s need to tax and reg­u-late and to en­force the law? Most of us wouldn’t want to clamp down on some-one’s right to make the oc­ca­sional $200 pur-chase in com­plete pri­vacy. But what about a $50,000 car or a $1 mil­lion apart-ment? We should be able to re­duce the prob­lems I’ve de-scribed here while also en­sur­ing that or­di­nary peo­ple can still use small bills for con­ve-nience in every­day trans­ac­tions.
 

 

We should all be required to make large purchases electronically so the government can track those purchases and ensure proper taxation?

 

Am I misunderstanding what you're trying to say?

[Spiffy]

Drugs and hookers used to be the big evils for outlawing cash.......but with the iphone/cube thingy you can slide the card down the slot!

[Chucktshoes]

Cash=anonymity=freedom.  

 

Even if the government eliminated cash people would develop some sort of alternative hard-currency or just use straight barter.  The ability to use cash or hard-currency to hide purchases from the prying eyes of the government is a feature, not a bug. 

[Ted S.]

17 minutes ago, Chucktshoes said:

Cash=anonymity=freedom.  

 

Even if the government eliminated cash people would develop some sort of alternative hard-currency or just use straight barter.  The ability to use cash or hard-currency to hide purchases from the prying eyes of the government is a feature, not a bug. 

"Why do you need to circumvent the system if you have nothing to hide?" -a statist, probably

[Chucktshoes]

 My response to that will be something along the lines of "if you don't gtf away for me the only thing I'm going to be hiding is my ____ in your ____!"

[Ted S.]

Diogenes might masterbate in public. Nothing to hide.

[Ski]

1 hour ago, 56FordGuy said:

 

We should all be required to make large purchases electronically so the government can track those purchases and ensure proper taxation?

 

Am I misunderstanding what you're trying to say?

 

I suspect that was part of the article to which he linked, but I'm not sure because I'm one of those cheapskates that don't subscribe.

Not only would the government like to track guns, they'd like to track cash, too.

[Wingshooter]

4 hours ago, nightrunner said:

I sold a used truck for $6000 and an old man came and bought it and paid cash right there.

I have also sold a Glock once for $500 and guy came and paid for it in $20s (and no the guy was not suspicious other than that) It might make things awkward at first but it won't cut out cash sales. There will always have to be some sort of hard currency.

I bought a $7000 vehicle in cash once. The deal was right, I wanted it, and I wanted to pay cash. I do most all FTF in cash. Nothing wrong with a few Benjamins ready to be handed over to seal the deal 

[56FordGuy]

1 minute ago, Wingshooter said:

I bought a $7000 vehicle in cash once. The deal was right, I wanted it, and I wanted to pay cash. I do most all FTF in cash. Nothing wrong with a few Benjamins ready to be handed over to seal the deal 

That's how we've bought all of our vehicles. Dealer wasn't quite sure exactly what to do when I bought my '01 F-350 a few years ago with an envelope full of $100s.