Sending money cheap:
I had forgotten this. (Costly Cash, Economist vol. 427 n0. 8965 November 11, 2014 page 20)  The Economist published this article extolling the individually small remittances of cash people from poor countries send home.  They propose making it easier.  I heartily applaud.  In fact I’d go them better.

As I have suggested before, a trillion dollars is not an impossible amount of money.  Think of one bank bailout.  We could do that every year.  It would hurt, but we could manage.  So we set up a system whereby anybody with access to an instrument no more elaborate than a tablet gets say $3 a week from the US government.  That’s not quite enough to live on, but it gets close.  For somebody just able to make $200 a year, it means disposable income.  For somebody who makes $50 a year it means life.  For people in the rich world it means almost nothing. 

The rules should be that each withdrawal is made such the GPS location, a picture of the face, a picture of the background, a recording of the person saying his or her name or else the responsible caretaker saying the name are all recorded and a retinal scan.  When that money is transferred, it is transferred for free by the governmental agency.  Of course there would be a temptation to say that rich countries are excluded, or criminals, or children or terrorist suspect or any of a shopping list of unworthies should be excluded.  That would make it far too expensive.  Better just to pay everybody.  The whole thing gets handled by a supercomputer.  The money could be turned into cash at any American embassy, consulate or bank. 

Then what?  The freedom of transfer should make it popular enough so that a lot of money would never be cashed out, just used in exchange.  To that extent, the project would be free, except for the computer and skilled people to oversee it, which would be a tiny cost relative to the project itself.  There would be a flood of money coming in to buy American goods.  Our currency would inflate, and we could raise interest rates accordingly.  It turns out that countries rather like a moderate rate of inflation.  I don’t.  I think it’s stealing from our children, but so is government borrowing now.  I much suspect that other rich countries would watch us and improve their own rates of exchange – read lower the price of their goods abroad and get more exports going – and start their own programs.  In time the project might rise to $10 a week, and the direst poverty would end.  In fact it would be easy to add an elective that let somebody, who did not feel the need for the money, indicate, “Not this week, thanks.  Take mine and put it in the outgoing bundle for next week.  The marginal cost to the system would be zero, and it would be one charity to which one might contribute with confidence that none of the contribution would be diverted to “administrative costs.” 

If somebody died with cash in the account, well I’m sorry.  Don’t hoard. 

The rich world is going to be demographically against the wall in not that many more decades.  Give the others something nice to remember us for.  Does that sound like a better world? 

Then there’s the question of whether you could put money into the account.  I have an open mind.  It’s not intrusive, of course.  Nobody has to play.  But it does make those transactions between accounts easily traceable as to who with whom, when and where.   It would be quite the inducement for people to be honest.

Let’s just hope it doesn’t get hacked.

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