cheers, t
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Date: Wed, 27 Oct 1999 10:28:29 -0400 To: politech at vorlon.mit.edu From: Declan McCullagh <declan at well.com> Subject: FC: Fed official wants expiration dates, tracking devices for bills
http://www.wired.com/news/politics/0,1283,32121,00.html
No Deposit, Less Return
by Declan McCullagh (declan at well.com)
3:00 a.m. 27.Oct.99.PDT
WASHINGTON -- US currency should
include tracking devices that let the
government tax private possession of
dollar bills, a Federal Reserve official says.
The longer you hold currency without
depositing it in a bank account, the less
that cash will be worth, according to a
proposal from Marvin Goodfriend, a senior
vice president at the Federal Reserve
Bank of Richmond.
In other words, greenbacks will get
automatic expiration dates.
"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when a bill was last withdrawn from the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," Goodfriend wrote in a recent
presentation to a Federal Reserve System
conference in Woodstock, Vermont.
The 34-page paper argues a carry tax will
discourage "hoarding" currency, deter
black market and criminal activities, and
boost economic stability during
deflationary periods when interest rates
hover near zero.
It says new technology finally makes
such a scheme feasible. "Systems would
have to be put in place at banks and
automatic teller machines to read bills,
assess the carry tax, and stamp the bills
'current,'" the report recommends.
Goodfriend said in an interview that banks
might place a kind of visible "date issued"
stamp on each note they distributed.
"The thing could actually stamp the date
when the bill comes out of the ATM," he
said.
[...]
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