Tuesday, September 15, 2020
Ken Rogoff, a Harvard University economist, argues we'd be a lot better off if there were less cash in the world. A lot less. He argues that getting rid of 100s — and, for that matter, 50s — would let normal people go about their cashy business. (He also thinks the government should subsidize bank accounts for people who don't have them.) And, he says, getting rid of big bills would make it much less convenient to move around very large sums of paper money. This would effectively raise the cost of using cash to commit crimes.
Rogoff also points to another less intuitive benefit of getting rid of big bills. It could help the U.S. recover faster from economic crises by making it easier for the Federal Reserve to goose the economy by setting negative interest rates.
And it could also spark hyperinflation. Of course, for that, the Fed would have to make a mistake, so don't worry.