Demonetization Woes (10)

More centralization. More control.
A requiem to all the small and nameless footpath vendors

It was never about Black Money.

(via Sunny Narang)

Are we moving toward a cashless society?
Harvard economist Kenneth Rogoff has a new book out called The Curse of Cash. He thinks we should eliminate most paper bills. His plan is to phase out $100, $50, and $20 bills, which together account for about 97% of the face value of all US dollars in circulation.
He generously lets us keep the small change.
Rogoff isn’t aiming only at tax evaders and drug dealers. He thinks paper money is problematic no matter who holds it because cash restricts monetary policy.
It would get in the way if the Federal Reserve ever wanted to push interest rates into the negative range, the way central banks in Japan and the Eurozone already have.
Under a negative interest rate policy (NIRP), putting cash in the bank costs the depositor money instead of earning it. You can avoid this simply by holding paper currency… but not if the paper currency doesn’t exist because your government followed Professor Rogoff’s advice.
In a blog post after the India move, Rogoff said his plan isn’t meant for developing nations where fewer citizens use the banking system. But he still thinks it may benefit India in due course.
Professor Rogoff isn’t some fringe wacko. Influential people listen to him and read his books.
Forcing more transactions into the banking system would make tax collection easier and help authorities keep tabs on everyone’s activities. It’s the sort of thing central planners and authoritarian regimes have always loved, but modern technology lets them do it more effectively.