While the Justice Department and Apple face off over access to an iPhone – a telephone that can carry payments for coffee and a growing number of retailers – for the possible context of what lead up to the San Bernardino terrorist shootings, proposals to reshape the country’s hard currency continue.
Last week, a Harvard Business School study argued that eliminating $100 and $50 bills would help make life more difficult for some criminals and drug dealers. A bribe to a government official or a corporate decision maker, or a medium-sized illegal drug purchase, would require an additional couple of suitcases of cash if the payoff was in $20s rather than in $100s. Handling that many suitcases, or trying to wash that number of bills through a bank or business, might just cause some suspicion and trigger an arrest.
So, to reduce crime, make the $100 bill disappear.
At the same time, the $100 bill is reportedly popular. According to the Federal Reserve, in the past 20 years the number of $100 bills in circulation has climbed 350 percent. Given the amount of money the Federal Reserve has put into the economy since 2008, that is understandable.
What does it mean, however, that 80 percent of the $100 bills are being held outside the country, again according to the Federal Reserve? It means that this country’s currency is a predictable medium of exchange worldwide, and that in contrast to other currencies there is a high expectation that dollars will retain their value in the coming years.
If the $100 bill is eliminated (perhaps the $50 bill should stay), and that is fine with us, let’s continue the makeover.
The country is moving toward putting a woman on one of the bills. Fine, let’s do that.
And the penny, frequently marked for elimination, should be. Use that cash compartment for ...
Trying again at keeping a $1 coin in circulation? Also a good idea. Urban parking meter rates are at the $1 level, and the mechanism to accept the $1 coin is simpler and less expensive than one for the dollar bill. So, too, newspaper and soda dispensers.
But, back to that iPhone. Those under 25 are carrying little or no cash today; they rely on a credit card for even the smallest purchases. It will only be a matter of time before electronic devices – the iPhone and its competitors – will handle most people’s financial transactions. Cash will be a rarity.
“Daddy, why do you carry something called a ‘billfold?’” will be a 15 year old’s question.
We doubt that eliminating the $100 bill is at the top of many politicians’ list of priorities – not this year – and we know the political party that did not propose the change would fault the party that did, no matter how persuasive the arguments. So, for those breaking the law, it will likely remain a one-suitcase bribe and drug deal.