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Comment by kemotep

3 years ago

Why would the government program money to expire? Would the money not become effectively worthless the closer to the expiration date? Why would a business accept transactions from people with money that’s about to expire would that then mean they would be giving away goods and services for free potentially?

19 comments

kemotep

Reply
lockhouse  3 years ago

In theory you spending it would reset the expiration date.

If you know your money will expire you will spend it, thus stimulating the economy. We also can’t have the dirty proles save their way to a higher social class.

  • kemotep  3 years ago

    Where are these theories of how a hypothetical future CBDC come from? Is there an official announcement from the Federal Reserve about how they would like it to work? A committee hearing in Congress where this is discussed?

  • imtringued  3 years ago

    There are easy ways to get around this. This isn't actually practical to implement. You could just buy and sell stocks within a second.

    > We also can’t have the dirty proles save their way to a higher social class.

    I don't know what you mean by this. Rich people spend their money at a slower rate than poor people so the rich would be disproportionately impacted by this. Someone living paycheck to paycheck isn't going to have much money that can expire to begin with.

wtmt  3 years ago

The government could issue money that can be tied to a specific purpose (allowed to be spent with specific merchants or establishments) and have a time limit. Think of the COVID-19 assistance that was given to people. If — instead of just transferring normal money into people’s accounts that allowed people to do whatever they wanted with it whenever they wanted and wherever they wanted - the government could force recipients to spend it across certain things and not others, and gave a deadline to move the money around, would that be something that’s in the best interests of the receiver? By expiring money or by applying negative interest rates, the government can offload its burden on to the people who hold and have to use this money.

Tyr42  3 years ago

I think Japan did try this, as they really wanted people to spe d, vs save.

oaththrowaway  3 years ago

I assume that the TTL of the money would reset once it has changed hands

  • kemotep  3 years ago

    If you are assuming how a hypothetical future currency will work then we could easily assume exactly the opposite and the money would be destroyed by a set date to maintain some stable rate of deflation. Do you have evidence that a time to live for a currency is being considered by the Federal Reserve and US government?

  • imtringued  3 years ago

    The TTL would have to reset at awkward points. Like paying out salaries otherwise you could just wash trade the TTL away.

    I just don't see how this is realistic. It is basically impossible to enforce.