Has the time come for Americans to ditch cash and simply use credit cards, debit cards, PayPal and ApplePay?
Yes, argues Harvard economist Kenneth Rogoff in his new book, The Curse of Cash.
“There is little question that cash plays a starring role in a broad range of criminal activities, including drug trafficking, racketeering, extortion, corruption of public officials, human trafficking, and, of course, money laundering,” Rogoff writes.
Rogoff also says ending cash could end illegal immigration.
“It is incredible that some politicians talk seriously about building huge border fences, yet no one seems to realize that a far more humane and effective approach would be to make it difficult for U.S. employers to use cash to pay ineligible workers off the books and often below the minimum wage,” he writes.
Not everyone is keen on the idea, however. James Rickards, author of The New Case for Gold, writes that Rogoff and others engage in a “war on cash” that sets the stage for confiscatory government policies:
“An all-digital system sets up the economy for negative interest rates. The government could try to force people to spend money by confiscating part of whatever is left in a bank account under the guise of a ‘negative’ interest rate. Instead of the bank paying you interest, they take it out of your account. Cash is an easy way to defeat negative interest rates.”