For months now, my bank has been plaguing me to get on-line with them to take care of my bank transactions. They have even offered me a $50 bonus if I try out their system and see if I like its "convenience".
I am sure I would like its convenience just fine, but I don't like the idea of cyber money where, once I am committed to a program, all kinds of fines and charges can then be automatically added to my account.
So now here comes a brand new wrinkle for those who believe that the New World Order is a mere figment of the imagination of some right wing conspiracy nuts and not, as I believe, a very frightening reality.
In "Cash and the 'Carry Tax'", (Oct. 27, 1999) Wired reporter Declan McCullagh alerts us to what is likely going to be slipped to us next:
"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."
So if you have money hidden under your mattress, it is no longer safe from Federal Reserve sharks. The way these things are projected to work can be deduced from some of the glimpses in this interesting article:
McCullagh:
"The magnetic strip could visibly record when a bill was last withdrawn from the banking system.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 argument in this 34 page paper is that a carry tax will discourage "hoarding" currency, put a crimp into black marketeering and criminal activities, and - get this! - "boost economic stability during deflationary periods when interest rates hover near zero."
Furthermore, the plan proposes that banks and automatic teller machines will read bills, assess a carry tax according to the time elapsed when you might have carried cash in your pocket, and stamp the bill "current" so that the next sucker can be robbed of his greens.
Goodfriend suggested 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.
Naturally there is at least some token opposition in Congress.
"The whole idea is preposterous. The notion that we're going to tax somebody because they decide to be frugal and hold a couple of dollars is economic planning at its worst," said Representative Ron Paul (R-Texas), a free-market proponent who serves on the House Banking committee.
"This idea that you can correct some of the evil they've already created with another tax is just ridiculous," Paul said.
Other economists have also spoken out against such a harebrained scheme.
"This is going beyond taxing banks for holding reserves. It's taxing the public for holding currency too long. That's even more wild an idea," says George Selgin, a University of Georgia economics professor who specializes in monetary policy.
"There are sweeping implications of these suggestions beyond whatever role they might play in thwarting a deflationary crisis... I think it's a very dangerous solution to what may be a purely hypothetical problem," Selgin said.
To that, our friend, appropriately called Goodfriend, has already in place an alternate plan. The Feds could at time prevent you from withdrawing cash from your bank accounts. In other words, they could withhold your own money from you:
"Suspending the payment of currency for deposits would avoid the cost of imposing a carry tax on currency."
The report says Congress would have to pass legislation allowing such a tax. Here is what I want to know: Has the Congress, within living memory, seriously opposed what the Federal Reserve has cooked up?
Welcome to the New World Order!
Ingrid
Thought for the Day:
"Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States , in the Field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they better not speak above their breath when they speak in condemnation of it."
(- Woodrow Wilson in The New Freedom. (1913) )
Back to Table of Contents of the Oct. 1999 ZGrams