Fed “digital dollars” are part of debate over coronavirus stimulus
wsj.com
wsj.com
I call bullshit. Back when there was a small budget surplus, Bush sent us all a check in the mail. That was almost 20 years ago. This stinks of pushing an agenda.
I've moved twice since I last filed taxes. I put in a change of address but many folks might not have.
The aim of the Bush rebate was just to inject money into the economy. It didn't have to get to everyone but this does.
By bypassing banks with Fed Accounts, it just makes handing out cash even easier. They do it in other countries all the time. Saudi Arabia routinely gives citizens thousands of dollars direct to their bank accounts to keep them sated.
When people don't have money to meet their non-discretionary needs and unemployment reaches 20-30%, which is worse than the Great Depression, what follows is deflation and depression on an unprecedented macro scale. At the street scale, starvation and homelessness would be the impact; Venezuela, Cuba and the UN would be flying in doctors, refugee camp materials and food to the US.
Massive UBI directly to individuals and small businesses enough to meet basic needs is essential, and will be spent into the economy because MPC will be nearly 1.0. Otherwise, the US economy will contract more and for longer than at any point in recorded history.
There is a huge incentive to take risk on others' behalf and profit on one's own, then brag that one is a risk taker and an alpha male. You can see this behavior pretty much everywhere.
And we're already at pretty darned bad money.
Also, what's the plan for paying for government services, such as the military budget that's funding the Army Corps of Engineers that's building emergency ICUs?
If this goes through, then your options for receiving money from the government you might well need to not starve are just two: accept a payment to your 100% surveillance bank account, or accept a 100% surveillance "digital cash" payment if you're unbanked.
In all cases the state will receive detailed permanent records of when, where, and how you spent the money.
Once that happens, there is no option whatsoever for trading with everyday people that does not involve complete surveillance, recorded and saved for all time.
Your movement at all times will then be reported in realtime to the federal police, provided you eat or buy fuel or water at any point during your travels (just as it is today if you use a payment card or contactless payment).
From 2010: https://www.wired.com/2010/12/realtime/
This excuse is already being used against the £50 note:
https://www.telegraph.co.uk/money/consumer-affairs/bothering...
Your credit card data is already sold [1]. Your banking data is already sold [2]. Read the privacy notices you receive from your banks and credit cards to see when and to whom (these notices are required by law). Any transaction over $10k generates a CTR [3]. Any transactions that appear to be structuring are going to generate a SAR [4].
The solution, as always, is regulation, governance, and oversight, not outright turning down the idea. At the same time, the ability to turn your fiat into physical currency must always be preserved for privacy reasons; require the Fed issue debit cards and all ATMs accept them for dispensing hard currency.
[1] https://www.aclu.org/blog/privacy-technology/consumer-privac...
[2] https://www.courthousenews.com/banks-profit-from-selling-you...
[3] https://en.wikipedia.org/wiki/Currency_transaction_report
[4] https://en.wikipedia.org/wiki/Suspicious_activity_report
If you want a non-profit bank, that's what credit unions are for. They've been around for decades.
Yes but the system always finds a way of corrupting itself.
100% agree. Just consider the overhead of the massive government policy infrastructure required to adequately support all of the banks which exist purely to turn a profit off of people through oftentimes usurious methods. There's no reason the federal government can't simply provide a bank run not-for-profit.
However, the Fed is not the federal government, it is a private corporation; so this is not the correct entity. Instead, the national bank you're suggesting would necessarily have replace the Fed with a fully transparent public institution.
You'll find that most times in history when a Western country tries to do this, the moneyed elites do not enjoy it.
See https://news.ycombinator.com/item?id=22594458 for logistics.
I guess, can you exemplify what exactly the government would be able to do with this bill vs. what it can already do? If they send you a check, that's not helping you much. It goes through the bank and there is 100% traceability of the $$$ from the Fed to your bank account which is already very much "Digital".
Not quite. I can spend cash and nobody knows when or where I did so.
> If they send you a check, that's not helping you much. It goes through the bank and there is 100% traceability of the $$$ from the Fed to your bank account
Many, many Americans receive checks as payment which they then take to a service which will exchange the check for cash in hand, no bank account required. The check issuer has no idea where or how the money gets spent.
And they pay dearly for the privilege. I imagine the number of Americans who use check cashing for privacy is extremely small compared to the number who use it because they're in poverty and unbanked.
Currency is only as meaningful as its usefulness to people. If a large number of people can't or won't use a currrency, they'll just find another. It wouldn't be the first time in history a majority currency became too inconvenient for a large number of people and alternatives were found.
FED -> JOE's bank account -> ATM cash withdrawal -> Buys private stuff $$$ cash
FED -> JOE cashes the check -> Buys private stuff with $$$ cash
The FED still knows that it went to JOE. Whether they use the bank as the intermediary or a check-cashing service as an intermediary, its all traceable.
May be my logic is flawed here? To me, it doesn't make any difference. In both cases, what JOE bought with hard $$$ cash is indistinguishable. I think we're making a big deal out of this - I haven't read the bill but I am presuming that its just a modernization of physical mailing of checks to some wire transfer.
After all, they'll be debit-card accessible to buy food or supplies; why would you need cash unless you're going to buy drugs or something?
They're talking about using these digital dollars instead of checks, for the unbanked and those without addresses at which they could receive a check, et c.
Checks don’t do this.
Can I do the same with digital dollars, or must it be spent directly out of the account?
I guess that's actually a practical question in general, independent of the privacy concern. Can you go to any member bank and withdraw cash?
All of these are nightmarish.
I'll take at face value that this person does exist. They should take the digital payment and use it for a single or two lump sum payments they don't care about being tracked, like rent.
Is this really a Binary situation, where as soon as one or two not so private payments are trackable, now you can't use cash for the rest anymore? Maybe just don't use government stimulus for private things?
I'll buy this, if you're making a slippery slope argument about cash being completely obsoleted.
These two statements seem to nullify each other.
Edit: Not being sarcastic.