Found here. Reproduced here for fair use and discussion purposes. My comments in bold.
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(This approving article, containing not a single detraction or critical statement, fully embraces the idea of more government economic involvement.
Lest you think that this is Denmark and therefore irrelevant, may I remind you of how the Left values the European ways of doing things? They are always comparing us to Germany's health plan or the Belgium's infant mortality rates or how many days off of work they get in France. So these ideas are soon to be floated in the US, I guarantee it.
Crucial understanding: Money is a proxy for your labor. That is, your work has value, which you exchange for your pay. So your money is a meter of sorts that represents how much of your labor you are able to exchange for cash. Then, when you buy something, you are in fact trading a valuation of your labor for those goods or services.
So what happens when government assumes the power to dictate where you spend your cash, in the form of mandates, or how much of your cash you are allowed to keep, in the form of net income after taxes? Well, what happens is the government has in essence allocated your labor to serve the interests of some other party, and not you.
So what has happened is you are working for someone else's benefit. Your labor, and/or its cash proxy, ends up in someone else's pocket. And that, my friends, is slavery.
So now to the root of the article. The author believes that government can and should lay additional claim to your labor proxy, and render its value as zero. Because if the government can tax your cash accounts to manipulate your behavior in order to serve the aims of society, the money is no longer yours, and the value of your labor is zero.
Read on:
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Forcing everyone to spend only by electronic means from an account held at a government-run bank would give the authorities far better tools to deal with recessions and economic booms, writes Jim Leaviss (Here we have the central idea. This proposal is for the benefit of government, and force is perfectly ok.)
A proposed new law in Denmark could be the first step towards an economic revolution that sees physical currencies and normal bank accounts abolished and gives governments futuristic new tools to fight the cycle of “boom and bust”. (Can you feel the writer's enthusiasm? Do you think you're going to read a balanced account based on this gushing sentence?)
The Danish proposal sounds innocuous enough on the surface (It doesn't seem innocuous at all! It sounds extreme, dangerous, and repressive.)
– it would simply allow shops to refuse payments in cash and insist that customers use contactless debit cards or some other means of electronic payment. (Note how over the course of the article "allow" morphs into "require."
Also, we should note that in the US each bill says, "this note is legal tender for all debts, public and private." In other words, dollars can be used in any situation to exchange value.)
Officially, the aim is to ease “administrative and financial burdens”, such as the cost of hiring a security service to send cash to the bank, (Such a burden! I'm sure that not having to have money hauled around will be a wonderful thing for the average Dane.
You will find as you read further that easing some burdens will increase other burdens, and do so disproportionately.)
and is part of a programme of reforms aimed at boosting growth – there is evidence that high cash usage in an economy acts as a drag. (This is an odd statement, not documented or explained. How would cash usage drag the economy?)
But the move could be a key moment in the advent of “cashless societies”. And once all money exists only in bank accounts ("Exists?" Does something exist simply because it is in an electronic ledger on a server somewhere? Indeed, this is the crux of the issue. If I put a $100 bill in my wallet, no one knows I have it. But if my $100 is simply some digits in a computer, then it is nothing more than a credit in my favor, with access governed by other parties, like government.)
– monitored, or even directly controlled by the government – the authorities will be able to encourage us to spend more when the economy slows, or spend less when it is overheating. (See? The virtuous and all-knowing government must know about your money because it will need to force you to engage in various behaviors for the sake of the certain preferred economic outcomes.
In fact, it isn't your money at all, it is a tool to be used by government to impose control. If you can't put a wad of bills in a coffee can anymore, then government can do what it wants with your money.)
This may all sound far-fetched, but the idea has been developed in some detail by a Norwegian academic, Trond Andresen*. (Didn't the author just tell us how it "sounds innocuous enough on the surface?" But now it is "far-fetched?" Hmm.)
In this futuristic world, all payments are made by contactless card, mobile phone apps or other electronic means, while notes and coins are abolished. Your current account will no longer be held with a bank, but with the government or the central bank. (Ahh, yes, a government "bank." What could go wrong?)
Banks still exist, and still lend money, but they get their funds from the central bank, not from depositors. (So in actual fact, your money does not exist at all. There is no account holding it, and you have limited right to your own wealth depending on what government says is best for that money.)
Having everyone’s account at a single, central institution allows the authorities to either encourage or discourage people to spend. To boost spending, the bank imposes a negative interest rate on the money in everyone’s account – in effect, a tax on saving. (Because you are too stupid to know what's best for society. You cede that decision to government, and you and your money become a defacto arm of government, subservient to its agenda.)
Faced with seeing their money slowly confiscated, people are more likely to spend it on goods and services. (In other words, spend your money or government will tax it. As is typical for the tyrannical Left, they think the equations are static. However, economics is dynamic. There is more than two choices, like avoidance. People will not act according to Leftist prescriptions. They may simply trade objects of value instead of buying in retail settings. They may leave the country.)
When this change in behaviour takes place across the country, the economy gets a significant fillip ("Something that acts as a stimulus or boost to an activity." Because it's all about behavior modification. They want you to act in the interests of someone else's interests and not your own. Your life is not your own anymore.).
The recipient of cash responds in the same way, and also spends. Money circulates more quickly – or, as economists say, the “velocity of money” increases. (From here it is a short step for the government to simply eliminate your assets and allocate a certain amount of food credits, leisure credits, travel allowances, and regulate every part of your budget according to what it thinks you need.)
What about the opposite situation – when the economy is overheating? ("Overheating?" How is this bad? But more to the point, if government is so completely in control of your economic life that you are a slave to government, then there is no such thing as an economy overheating or having a downturn. Those would be archaic concepts. The economy itself would be a different animal, because economies are expressions of private people engaging in private activities for their own purposes. It would become a "system" taxes and credits administered by government, immeasurable according to traditional economic principles.)
The central bank or government will certainly drop any negative interest on credit balances, but it could go further and impose a tax on transactions. ("Could go further." Is there any limit on how far it could go?)
So whenever you use the money in your account (Notice how the author avoids calling it "your money?") to buy something, you pay a small penalty. (Actually, no. The government reduces the amount of assets in the account that bears your name. They simply change the value of the account.)
That makes people less inclined to spend and more inclined to save, (I can't conceive of anyone being inclined to save in such a system.) so reducing economic activity. (Putting money in savings does not reduce economic activity in a free market system, because the money held in accounts by banks does not just sit there doing nothing. It is loaned out, spread out, and spent all over the place, which is economic activity in itself.
In the author's system, "savings" is actually a fiction, because the assets of the account are not real, they are simply entries in a spreadsheet, and subject to the whims of government. They only "feel" like savings to the account holder, but that person will rue the day he acts in contrary to the edicts of government. I doubt he would be able to keep his accounts for acting against the interests of society.)
Such an approach would be a far more effective way to damp an overheated economy than today’s blunt tool of a rise in the central bank’s official interest rate.
If this sounds rather fanciful, (Again, formerly "innocuous.") negative interest rates already exist in Denmark, where the central bank charges depositors 0.75pc a year, and in Switzerland. (I wonder how that has impact the rate of savings. The author does not tell us.)
At the moment it’s easy for individuals to avoid seeing their money eroded this way – they can simply hold banknotes, stored either in a safe or under the proverbial mattress. (But we can't have that.)
But if notes and coins were abolished and the only way to hold money was through a government-controlled bank, there would be no escape. ("No escape." Sounds ominous. But despite the coercive tactics of the central planners, there are always ways to avoid the oppressive hand of government.)
Apart from the control over the economy, there would be many other advantages of a cashless society. Such a system is much cheaper to run than one based on banknotes and coins. Forgery is impossible, as are robberies. (Um, yeah. Since there's no money to steal since government has already stolen it, thieves will simply steal your stuff.)
Electronic money is an inclusive and convenient system, giving poor and rural sectors of an economy – where cash machines and bank branches may be few and far between and not all people have accounts – a tool for easy participation in the economy. ("Inclusive" as in "no escape?")
Finally, the “black economy” will be hugely diminished, (Actually, the black economy will become an increasingly viable and attractive way to transact business.) and tax evasion made all but impossible. (Because we know that what's good for government is the highest virtue.)
Jim Leaviss is head of retail fixed interest at M&G Investments.
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