Why Government Hates Cash
August 10, 2015
The Greek government announced in April 2015 plans for a 10 percent tax on any euro withdrawn from a bank account. Instead of being able to convert one euro into cash, customers in Greece now can only retrieve the equivalent of 90 cents of every dollar. These policies are not isolated to Greece, Joseph Salerno argues, but represent governments' global war on cash -- a war fought under the guise of security. Over the past 50 years, governments across the world have gone to great lengths to limit the amount of cash in public hands:
- The U.S. government limited circulation of bills over $500 beginning in 1945 and pulled them from circulation in 1969.
- A majority of banks in Sweden no longer accept or pay out in cash.
- France recently restricted the use of cash per exchange from 3,000 euros to 1,000 euros.
- The Swiss government recently banned cash payments of more than 100,000 francs or $106,000.
- Chase Bank, the largest bank in the U.S., now restricts cash payments on credit cards, mortgages, equity and auto loans, and prohibits customers from storing cash in safety deposit boxes.
Why are governments so keen on restricting access and use of cash? Salerno says the war on cash provides more power to the central banks and forces the public to conduct transactions through financial systems. This gives the government greater abilities to monitor and surveil citizens' private financial dealings and creates easier means for levying new taxes.
Source: Joseph Salerno, "Why Government Hates Cash," The Austrian, Mises Institute, Vol. 1, No. 4 (July-August 2015).
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