Sunday, August 25, 2013

Drugs and Money

Watching Breaking Bad got me to thinking about the connections of drugs, money, and crime once again. Real high level criminals go to a lot more trouble to protect the links in the chain (than in BB), going to elaborate lengths to prevent lower level people from having knowledge of higher ups, but there is one infallible and reliable link up the chain - the money.

The US has printed up a trillion dollars or so in hundred dollar bills. A nearly equal quantity of 500 and 100 Euro notes exists. No legitimate business or individual needs these. They are almost exclusively needed and used by criminal activities. Large bills, and shady banks, make organized crime possible.

Governments tend to like them because they provide seigniorage, but this could be dealt with, I think, by monetary operations.

Can anybody think of any good reason why large cash bills - or all cash - should not be done away with? In a country where almost everyone has a smart phone, cash is not needed. Those without could be issued at least special dumb phones that were essentially just debit and credit card readers.

UPDATE: At least a couple of readers thought of reasons why they didn't want to give up hundred dollar bills, or cash more generally. No doubt the Tea Party and others would scream bloody murder if any attempt were taken to downsize our bills, so I don't expect it to happen in my lifetime. That said, I'm far from sure that the right to buy expensive stuff for cash is really a vital or Constitutional right.