7 ms·

>You can do crazy shit in times of recession like money that expires unless you spend it on goods in order to increase the velocity of money This in particular

>You can do crazy shit in times of recession like money that expires unless you spend it on goods in order to increase the velocity of money This in particular sounds like a fantastic idea. One of the more out-there leftist ideas I've heard proposed is a monetary system where everyone gets a basic income but all personal bank accounts have a negative interest rate, to disincentivize accumulating wealth for wealth's sake. This seems like a simpler and more reasonable version of that.

stickfigure 5y ago
Expiring money sounds hard to enforce. It clearly wouldn't expire after it was spent or transferred. So how do you guarantee that it is spent/transferred to something that isn't a savings vehicle?
- npunt 5y ago
  Wouldn’t a ledger be a path to solving this?
- naniwaduni 5y ago
  Hyperinflation basically achieves this.
  - tablespoon 5y ago
    > Hyperinflation basically achieves this. I don't think so. I think the idea they want the money to lose its value only if someone hoards it. If it's spent quickly enough, it retains its full value now and in the future. That's not how hyperinflation works.
    - razius 5y ago
      What do you think hyperinflation is? "Gary North tells a story of a German citizen who realized too late that her money was on the way to becoming worthless: "…the truly marketable goods were gone. They were being hoarded. All she found was a large inventory of bedpans. She bought them in late 1923." https://mises.org/library/weimar-and-wall-street https://mises.org/library/weimar-and-wall-street
  - imtringued 5y ago
    Hyperinflation is an economy wide collapse in production though. If every human in the nation lost trust in the currency but there was enough production capacity to feed everyone then exports would rise until the currency appreciates to normal levels again. However, most nations suffering from hyperinflation don't have enough products to export in the first place.
- simonh 5y ago
  I suppose you pay it as taxes, or banks pay it as interest to the central bank. It does seem odd though.
- trompetenaccoun 5y ago
  Of course the money would flow to safe havens an accumulate there. Besides all the known issues with UBI, a populists' favorite. This thread demonstrates vividly how little the average person understands about economics and finance, even in a place like HN.
- imtringued 5y ago
  >So how do you guarantee that it is spent/transferred to something that isn't a savings vehicle? Would you sell your gold for expiring money? The exchange rate would be much worse than the regular one.
roenxi 5y ago
We've already got half of that, it is called inflation. Anyone who tries to accumulate wealth by holding money in a bank account will either die young or poor. Anyone who tried to hold cash through COVID probably isn't going to do too crash hot either, there is a lot more money around now than there used to be.
- baby 5y ago
  The problem is that people try to invest their money, it’s worth than saving and end up making markets like real estate an investment asset as opposed to a human right. People always need to get richer.
  - danuker 5y ago
    "problem"? I argue that a healthy economy should allow people to invest and defer consumption until they want to consume.
    - simonh 5y ago
      It's not that investment is bad, but that asset bubbles are bad even for the health of the long term investment landscape.
      - danuker 5y ago
        If only someone could profit off bubbles while at the same time deflating them...
    - baby 5y ago
      All I’m seeing in your healthy economy is disparity.
      - imtringued 5y ago
        The irony is that inflation is too low.
    - 5y ago
diegoholiveira 5y ago
People will find a way to build a parallel monetary system, for sure.
dash2 5y ago
Why would anyone use a currency that disappears? They will just store their money in some other form, then transfer it to govcoin when they have to pay taxes.
- Applejinx 5y ago
  Using and storing are not the same thing. I think the whole point is that the storing of money is considered harmful. Which is odd to consider, since the whole concept of money is 'storing' something in a fungible way, but still worth thinking about. To what extent does 'money' actually provide an improvement over 'commonly understood capacity to kick your head in', which is another sort of power a person or organization might have? Clearly if there's no money then there's the more immediate physical threat of force, or a more charming interaction like giving someone food or shiny rocks. Money permits an abstraction of this, so what is it incentivizing over the more primitive modes of interaction?
Applejinx 5y ago
Huh. That IS interesting. It'd suit me right down to the ground, I'm always building stuff. It also makes it the best possible time for 'pitch a wild idea that's going to be the next great business'. I still think that post-50s wealth created Silicon Valley: relative to how things are now, people were absolutely coddled and had tons of disposable income and spare time, which they used to pursue things like the Altair (a seemingly unproductive activity). This became the democratization of something important, and it's taken this long for the power to swing back to capital holders. Why just PERSONAL bank accounts? To disincentivize being a person?
natmaka 5y ago
A negative interest rate also leads people to ask the bank for a loan instead of patiently sparing money, and as far as I understand banks love this (more power upon people and free money!).
- imtringued 5y ago
  Negative interest loans for consumers would be very interesting. Assuming we allow every citizen to borrow $1000 at -1% then the effect is very similar to helicopter money because the value of the debt is being eroded by inflation and you have to pay less back than you borrowed.
  - beefield 5y ago
    I think there are/has been negative interest mortgages in Denmark[1]. And actually, after the first shock, when you have thought it through, there is not that much interesting in negative rates. Unless you have so spotless opsec that you dare store a mortgage's worth of cash somewhere for decades (and you get that much cash in first place in negative rate environments - I doubt banks are giving you that without really good excuses), you need to invest the money somewhere. Bank accounts? Of course, you get even more negative rates there. Stocks? Well, it is not that different to positive rates, you take quite some risk there. Houses? Well, that's what mortgages are for. But assuming a 100k mortgage, is that really so fundamentally different if you need to gather 99k instead of 101k from somewhere in 10 year's time? [1] https://www.theguardian.com/money/2019/aug/13/danish-bank-launches-worlds-first-negative-interest-rate-mortgage https://www.theguardian.com/money/2019/aug/13/danish-bank-la...

stickfigure 5y ago

Expiring money sounds hard to enforce. It clearly wouldn't expire after it was spent or transferred. So how do you guarantee that it is spent/transferred to something that isn't a savings vehicle?

npunt 5y ago
Wouldn’t a ledger be a path to solving this?
naniwaduni 5y ago
Hyperinflation basically achieves this.
- tablespoon 5y ago
  > Hyperinflation basically achieves this. I don't think so. I think the idea they want the money to lose its value only if someone hoards it. If it's spent quickly enough, it retains its full value now and in the future. That's not how hyperinflation works.
  - razius 5y ago
    What do you think hyperinflation is? "Gary North tells a story of a German citizen who realized too late that her money was on the way to becoming worthless: "…the truly marketable goods were gone. They were being hoarded. All she found was a large inventory of bedpans. She bought them in late 1923." https://mises.org/library/weimar-and-wall-street https://mises.org/library/weimar-and-wall-street
- imtringued 5y ago
  Hyperinflation is an economy wide collapse in production though. If every human in the nation lost trust in the currency but there was enough production capacity to feed everyone then exports would rise until the currency appreciates to normal levels again. However, most nations suffering from hyperinflation don't have enough products to export in the first place.
simonh 5y ago
I suppose you pay it as taxes, or banks pay it as interest to the central bank. It does seem odd though.
trompetenaccoun 5y ago
Of course the money would flow to safe havens an accumulate there. Besides all the known issues with UBI, a populists' favorite. This thread demonstrates vividly how little the average person understands about economics and finance, even in a place like HN.
imtringued 5y ago
>So how do you guarantee that it is spent/transferred to something that isn't a savings vehicle? Would you sell your gold for expiring money? The exchange rate would be much worse than the regular one.

roenxi 5y ago

We've already got half of that, it is called inflation. Anyone who tries to accumulate wealth by holding money in a bank account will either die young or poor. Anyone who tried to hold cash through COVID probably isn't going to do too crash hot either, there is a lot more money around now than there used to be.

baby 5y ago
The problem is that people try to invest their money, it’s worth than saving and end up making markets like real estate an investment asset as opposed to a human right. People always need to get richer.
- danuker 5y ago
  "problem"? I argue that a healthy economy should allow people to invest and defer consumption until they want to consume.
  - simonh 5y ago
    It's not that investment is bad, but that asset bubbles are bad even for the health of the long term investment landscape.
    - danuker 5y ago
      If only someone could profit off bubbles while at the same time deflating them...
  - baby 5y ago
    All I’m seeing in your healthy economy is disparity.
    - imtringued 5y ago
      The irony is that inflation is too low.
  - 5y ago

diegoholiveira 5y ago

People will find a way to build a parallel monetary system, for sure.

dash2 5y ago

Why would anyone use a currency that disappears? They will just store their money in some other form, then transfer it to govcoin when they have to pay taxes.

Applejinx 5y ago
Using and storing are not the same thing. I think the whole point is that the storing of money is considered harmful. Which is odd to consider, since the whole concept of money is 'storing' something in a fungible way, but still worth thinking about. To what extent does 'money' actually provide an improvement over 'commonly understood capacity to kick your head in', which is another sort of power a person or organization might have? Clearly if there's no money then there's the more immediate physical threat of force, or a more charming interaction like giving someone food or shiny rocks. Money permits an abstraction of this, so what is it incentivizing over the more primitive modes of interaction?

Applejinx 5y ago

Huh. That IS interesting. It'd suit me right down to the ground, I'm always building stuff. It also makes it the best possible time for 'pitch a wild idea that's going to be the next great business'. I still think that post-50s wealth created Silicon Valley: relative to how things are now, people were absolutely coddled and had tons of disposable income and spare time, which they used to pursue things like the Altair (a seemingly unproductive activity). This became the democratization of something important, and it's taken this long for the power to swing back to capital holders. Why just PERSONAL bank accounts? To disincentivize being a person?

natmaka 5y ago

A negative interest rate also leads people to ask the bank for a loan instead of patiently sparing money, and as far as I understand banks love this (more power upon people and free money!).

imtringued 5y ago
Negative interest loans for consumers would be very interesting. Assuming we allow every citizen to borrow $1000 at -1% then the effect is very similar to helicopter money because the value of the debt is being eroded by inflation and you have to pay less back than you borrowed.
- beefield 5y ago
  I think there are/has been negative interest mortgages in Denmark[1]. And actually, after the first shock, when you have thought it through, there is not that much interesting in negative rates. Unless you have so spotless opsec that you dare store a mortgage's worth of cash somewhere for decades (and you get that much cash in first place in negative rate environments - I doubt banks are giving you that without really good excuses), you need to invest the money somewhere. Bank accounts? Of course, you get even more negative rates there. Stocks? Well, it is not that different to positive rates, you take quite some risk there. Houses? Well, that's what mortgages are for. But assuming a 100k mortgage, is that really so fundamentally different if you need to gather 99k instead of 101k from somewhere in 10 year's time? [1] https://www.theguardian.com/money/2019/aug/13/danish-bank-launches-worlds-first-negative-interest-rate-mortgage https://www.theguardian.com/money/2019/aug/13/danish-bank-la...