Here are some excerpts from an interesting article in Bloomberg:
Could India Be the First to Get Rid of Cash?
JULY 20, 2016 By Mihir Sharma
“Black money” — the colloquial name for a vast network of off-the-book cash transactions and unbanked savings — is one of India’s biggest scourges.
Amounting to as much as $460 billion a year, bigger than the GDP of Argentina, all that money lies beyond the reach of the tax authorities, creditors, and anti-corruption investigators.
Half the country’s output comes from the small, informal sector, where cash transactions are the norm.
Meanwhile, taxes are cumbersome to pay and easy to avoid.
To collect revenue, India’s government has to rely on indirect levies such as sales and excise taxes, which are distortionary and regressive, rather than on income tax.
Direct taxes contribute only 35 percent of the take in India.
Tax evasion has been a hot-button political issue in India for at least a decade. The anti-corruption crusader Arvind Kejriwal — now chief minister of the Indian capital Delhi — made headlines when he accused top politicians and businessmen of having illegal offshore accounts.
Belgium, for example, which has the highest proportion of cashless transactions in the world — 93 percent, according to MasterCard — has banned cash payments of over 3,000 euros.
India’s many poor people and migrants still struggle to access its chronically inefficient banking system, despite the government’s efforts at reform.
If presented with an easy and frictionless way of transferring cash, there’s no reason to think consumers wouldn’t embrace it quickly.
As cash gets used for fewer and fewer transactions, it will become easier for authorities to crack down on tax evasion.
The “cashless society” is proposed as an innocent, money-saving convenience, especially for poor people, and as a way to reduce corrupt tax avoidance. Thus, the “cashless society” is described as a morally and economically good program.
But its real purpose, its insidious purpose, is control.
Consider that India is Monetarily Sovereign. Its currency is the rupee (worth about $.15).
Being Monetarily Sovereign, India has the unlimited ability to pay any bill denominated in rupees.
Even if India stopped taxing altogether, it could continue spending forever. It never would run short of rupees.
Monetarily Sovereign entities do not need income so long as their currency is widely accepted for payment and/or exchange. The rupee is such a currency.
The article gave the example of Belgium, as a nation where few bills are paid with cash. But because Belgium uses the euro, it monetarily non-sovereign. It does not have its own sovereign currency, so it does not have the unlimited ability to pay its bills. It needs income.
Similarly, our states, counties and cities are monetarily non-sovereign. They too, need taxes to fund spending.
By contrast, India (like the U.S., Canada, Australia, China, Japan, and other Monetarily Sovereign nations) does not need to collect taxes for bill payment.
Yet all these nations collect taxes, not because they need the currency (They don’t), but for economic control.
Tax collection, together with harsh laws about tax evasion, provide a means by which a government can track and control the finances of every citizen. Tracking and controlling finances allows governments to track and control the lives of their citizens.
When you use credit cards or checks to pay your bills, you create a “paper” trail, easily followed by the government. Similarly, if you are a business that accepts credit cards or checks in payment, your finances can be tracked.
More importantly, if you fall into either of the above categories, your finances not only can be tracked, but controlled.
Having the power to levy taxes on various forms of income or purchase, allows the government to control much of your life. For instance, a simple gasoline tax can affect such decisions as: Will you drive to work, take a train, or decide to work nearby? Where will you vacation? Where will you live? What kind of vehicle will you own? Import taxes affect what you buy. Luxury taxes affect what you own. Inheritance taxes affect what you leave behind.
The arbitrary tax rates on various forms of income dramatically affect your investing and your saving. Taxes affect your charity giving and your healthcare.
The requirements to declare your income and much of your spending allow the government to trace what you do and where you go.
The operations of any business are controlled in part, by what forms of income are taxed and what expenses are tax-deductible.
Today, computerized “big data” collection, gives the government a permanent record of your life and the lives of every business. Tax laws run the world.
The tracking and control afforded by tax collections is why the federal government does not want you to understand Monetary Sovereignty.
It is why the government wants you to believe the “Big Lie” (i.e. “Federal taxes fund federal spending”). It is why you repeatedly have been told wrongly that federal obligations are taxpayer obligations, and that when the government spends, its spends “taxpayer dollars” — all part of The Big Lie.
In summary, the real effect of the “cashless society” is to ease tax collection. The real purpose of federal tax collection is to track and to control your life.
Rodger Malcolm Mitchell
Ten Steps to Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich afford better health care than the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:
Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012
Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefiting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be an good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.
7 thoughts on “Why the cashless society? To track and control your life”
The whole world is marching toward being cashless so that our owners (the rich) can paralyze us at will. Consider military conscription (to take a random example). Either you go and die to make rich people richer, or else the rich will make you penniless forever. You will be worse than homeless. You will be paralyzed.
Sooner or later, all governments will outlaw cash for your “safety and convenience,” and to “enhance national security,” and to “fight terrorism,” and to “fight money laundering” and so on. And the masses will accept these lies.
The greed, hatred, and cruelty of the rich and their puppet politicians is limitless. If you are caught trying to use cash, the government will make an example of you, plus the person who accepted your cash, plus your entire family.
The sad thing is that average Americans would rather give up their cash than their guns. They imagine that guns give them power, when in fact guns are useless without money. If your owners paralyze you electronically, then the best you can do is resort to crime, which will quickly land you in prison.
The control is on an individual and collective basis. If you build a better mousetrap, and your product threatens existing monopolies, then the monopolies can have the government limit or eliminate your business transactions, using a million different excuses.
Cashless = control.
Oh, and regarding federal taxation, its purpose is – again — control. The MMT claim that “taxes drive money” is flat wrong.
Apropos of what is happening in America today, I urgently suggest you read this:
When I have time, I’ll write about it, but meanwhile, you’ll find it interesting and educational.
Speaking of Trump, at his acceptance speech at the Republican National Convention, Trump said he would, “Fix TSA at the airports, which is a total disaster.”
Perhaps Trump means that if he was the U.S. President, he would privatize the TSA.
Rep. Mike Rogers (R-Alabama) has long advocated reduced funding for the TSA, in order to make the masses so unhappy that they beg Rogers to screw them via privatization. In May 2016 (thanks to Rogers) would-be travelers at Chicago’s O’hare Airport waited in TSA lines for over three hours, causing 450 passengers to miss their flights.
Canada and many European countries have already privatized their airport screening. Rogers says he will soon introduce a bill to privatize the TSA. He claims that private ownership is “more efficient” that public ownership.
This is a lie, since private owners only care about profits, which means slashed services and exorbitant fees. If people think that the situation at airports is bad now, they are in for a shock when airport screening is privatized.
Rep. Rogers claims that last year, undercover investigators from Homeland Security were able to smuggle mock explosives or banned weapons through checkpoints in 95 percent of trials. ABC News claims that TSA agents failed 67 out of 70 tests, with DHS “mock terrorists” repeatedly getting potential weapons through airport screening stations.
All lies, of course. And even if they were not lies, a privately-owned service would be much worse, since the owners only care about profits, which — again — means slashed services.
Note that when you own the security screening at an airport, you have a monopoly. This means you can charge whatever you like, and cut services as much as you like.
Chris Edwards of the neoliberal the Cato Institute claims that only privatization can keep Americans safe. Edwards says that private airport security companies can respond to changing conditions faster than TSA administrators (meaning that private owners can treat their employees like garbage, firing them at will, and calling them into work at any hour of the day or night). (Such slavery is called “workforce flexibility.”)
U.S. Rep. Darrell Issa (R-CA) is also pushing to privatize the TSA.
Meanwhile Rep. Bill Shuster (R-PA) plans to file a bill to privatize air traffic controllers across the USA. Shuster is chairman of the U.S. House of Representatives’ Transportation and Infrastructure Committee.
Privatization of air traffic controllers will make air travel far more expensive and dangerous, since the owner will only care about profits, which means that employees will be abused, and services will be cut.
All of the corporate media outlets and the neoliberal “think tanks” are demanding privatization.
India, with such a large cohort of poor people needing services should be among the the first to see how monetary sovereignty can answer so many issues, make so many people better off, and make so many more people contributors to India’s wealth. It’s a bargain!
Chicago’s infamous crook, Mayor Daley, privatized a toll road known as the “Skyway.” Tolls immediately rose to 400% of where they had been, with zero improvement is service.
He then privatized Chicago’s parking meters, the toll for which rose more than the aforementioned 400%, and service went down. Rather than a simple meter next to each parking place, there are two or three meters per city block.
So the drill is this:
Not only do Chicagoans pay more for worse service, but the city, which really could use the money, now will not share in the parking receipts for something like a hundred years or so.
Additionally, if there ever is a parade or other event that requires the city to prevent parking on those streets, the city must reimburse the private meter company for lost income.
And even more, if there is a snow event greater than 2″, parking is not allowed, so that snow plows can do their thing. Again, the city must reimburse the private meter company for lost income.
In short, privatization of government services is a sop to rich donors, who make a fortune at the expense of the users, and in the case of local government, also at the expense of taxpayers.
Privatization is a gift to the rich at the expense of the stupid.
By the way, Daley also wanted to privatize Midway Airport, but decided to retire when the sh*t hit the fan about his previous privatizations.
Now he has taken a high-paid, do-nothing, bullsh*t job at a huge local law firm, that had received millions in business from the city.
Anyone who believes privatization is done for “efficiency” or for “cost-saving” also is dumb enough to believe Trump would make a good President. (In short, half the country.)
Rather than privatize, people should send their dollars to a Nigerian prince. It will be a smarter investment. But who says voters are smart?
Good comment. As I said, whatever is privatized becomes entirely subject to the profit motive. No exceptions.
If the privatized item or service is a monopoly, then the result is drastically increased rates, plus drastically reduced quality of goods or services. Again, no exceptions.
“Efficiency” means efficient sucking by the private parasite from the social host.
This is why I say that neoliberalism is in fact neo-feudalism, in which a handful of people own everything, and the rest of us are their tenants (serfs) and their debt slaves.
The purpose of neo-feudalism is to concentrate ownership, which is the fastest way to widen the gap between the rich and the rest. Greece, for example, cannot pay its debts in money, and must therefore pay in the form of privatization (i.e. by surrendering ownership).
A cashless society will mean a worldwide financial Guantanamo from which no one will be able to escape.
Incidentally there is much confusion about banks issuing “digital currencies.” This is just another way of preparing people to surrender their physical coins and notes.
All money is digital. Therefore “digital currency” means no physical currency.
There are also “virtual currencies,” which are digital currencies that are not sanctioned, supported, or recognized by banking systems or national governments. Virtual currencies can be used to exchange goods and services within small communities such as on-line games, or social networks, or small cooperatives.