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Comment by USAnum1 | Hacker News Reader

Although true, there really is no substitute for money (cash or a deposit account) in terms of liquidity and fungibility.

You need at least some liquid capital, and those with the least money will always be 100% liquid (or very close to it), and are hence the worst off under negative interest.

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This is true, but then a .25% haircut on their deposit accounts doesn't penalise the poor nearly as much as widely accepted existing regimes like inflation, never mind a 20% sales tax or VAT (and in practice, is only likely to occur when inflation is low and more conventional taxes are being cut)

Your inflation point is something I had not considered.

The cost of negative interest is likely less regressive than than the existing system of inflation.

It will be interesting to see how this untested financial environment will settle to equilibrium, and what our world will look like as a consequence (like you mention, more VAT? Or fewer taxes as borrowing grows cheaper?).

It does when the poor are also in debt.

Lower interest rates are good for debtors.

They loaned under higher interest rates, and then deflation hits, that's bad.

If nobody will refinance (often more true for poor people), this puts them in a double bind.

On the contrary, this won't hurt the poor and unbanked at all. Those folks live hand to mouth, at least according to standard progressive lore.

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