Society runs on Benjamin and his brother bills. There is something so special about the smell, so distinct, gross and yet oddly satisfying, coupled with the sound that the thin, intricately designed pieces of paper make rubbing against each other and the muted emerald and taupe colors imprinted on the paper. The power they possess transcends boarders, religions, races and languages. Modifications to the monetary system have been occurring since it was instated, but all were intended to benefit the citizens using it. This was the case up until 1969 when the first shot in the war on cash was sent out by President Nixon. At this time, he pulled all bills in denominations higher than one hundred dollars from circulation, “in an effort to fight organized crime” (McRee 311). Nixon’s action planted a seed in the minds of governments and central banks which has only grown with the recent advances in technology. These advances have sparked a new age in what has been come to be known as the modern war on cash. With improvements in technology a shift in the ways payments have been made has occurred and governments, both domestic and abroad have taken notice. While this change does have benefits for them, there are too many risks involving the privacy, savings, rights and security of the citizens and their money that this move towards a cashless society would bring. 

Cash frustrates governments because of its anonymity. By doing away with cash, starting with the removal of high denomination bills from circulation, it makes illegal activities harder for terrorists, drug cartels, money launderers and tax evaders. For criminals’ cash is so valuable not only because it is untraceable, but because it is relatively easy to move and they seem to have figured that out considering they move about $2 trillion around the world per year. That may seem like an absurd number but when you consider that $1 million in $100 bills only weighs 2.2 pounds it becomes slightly less shocking (Desjardins). This combined with the fact that United States $100 bill is the most popular note in the world, with 10 billion of them in circulation (Forbes) and that 80% of these bills are in circulation outside of the United States (Paul), gives perspective into why the government believes going cashless could have benefits. The government’s argument is that, “paper currency promotes making transactions anonymously and helps obscure activities from them that might facilitate the avoidance of laws, regulations and taxes” (Rogoff). 

Another reason the government is a proponent of going cashless is it gives them more control over the economy. The more traceable money means the higher the tax revenues. When more tax revenue is made, more money goes back into the country for the benefit of all. In addition to more tax revenue, going cashless and digitalizing our current monetary system would create a third-party for all transaction (Desjardins). This third-party would be the banks who can dictate interest rates that encourage or discourage spending. Without cash and with the third-party comes the institution of negative interest rates. Mike Kimball, a professor of economics at the University of Michigan is a proponent for a cashless economy and negative interest rates. He states that if, “banks could charge depositors to keep their cash in the vault, the economy would get better. His argument goes like this: “If banks offer interest rates of two or three percent to depositors, the depositors stockpile their money in the bank to take advantage of the interest they can earn…it would be better if people would invest the money to start businesses (McRee 378). Finally, cashless transactions are faster and more efficient. 

The government plays a direct role in the ways citizens live their lives. Not only does this statement hold true here in the United States, but in all countries around the world. It would be nice to think that all they do is for the citizen’s benefit, after all that is part of their job description, but some decisions made seem to directly oppose what one would think to be in the best interest of the citizens. Unfortunately, the steps they are taking to abolish cash are not in the best interest of the citizens. While I do agree that the anonymity of cash is something criminal organizations are able to capitalize on, I do not agree that their criminal acts should take away the millions of law abiding citizens right to use cash. Also, as members of a governing body your job is not supposed to be easy. Doing away with cash because it is more convenient for you, gives you more control and may (from your point of view) curb illegal activities are not sufficient reasons for getting rid of cash, especially when it compromises the citizens in more ways than one. 

Cash is still king accounting for 85% of global transactions (Chakravorti). One of the reasons for this is the anonymity of it. It creates a privacy buffer between the government and the citizens. With all transactions occurring electronically, citizens would lose their privacy (Desjardins). Like previously stated, cashless transactions would always include some intermediary, and while this is a benefit for the government, it would be terrible for the citizens. How do we know that this third party is trustworthy with our credit cards, savings accounts, checking accounts and social security numbers? That’s just it, we already know they aren’t. In 2014, North America was the continent most affected by “data breaches”. Of the 1,164 North American data breaches the U.S. accounted for 1,107 of them. This is equivalent to 72% of the total breaches in North America (Holmes). 

Also coming with electronic is increased government access to personal transactions and records. E-payment is data rich system (Bendell). There will be a record of everything, because as McRee says, “A cashless economy relies entirely on electronic transactions. These transactions are transmitted via the internet, cell phone networks and satellites. All such transactions have electronic documentation which identifies every aspect of the transaction, including who made the purchase, what was purchased, when it was purchased, where it was purchased, and from whom it was purchased” (632).  He goes on to say, “With all transactions taking place electronically, you will lose all privacy. Your health insurance company will know how much beer you drink, how many candy bars and donuts you buy, and which over-the-counter medications you take (which might indicate health risks that will increase your premiums). Certainly there are benefits to having a completely transparent life…Most people, I hope, would conclude that the price of the loss of privacy is too high” (641). Privacy is something everyone values and going cashless makes privacy disappear. 

Going cashless would take away the savers individual freedom to store wealth “outside” of the system (Desjardins). Even though the government would like people to think that if you use cash, you’re probably a criminal, cash is very much still legal to use in the United States today, and you do not have to keep your money in the bank to be a law abiding citizen. If you want to hold your money outside the system you have every right to do so as long as you still pay taxes on it. It was when I read this excerpt from James Lileks article that the importance of cash hit me, “The best argument for real money: self-protection. Paper money may be a mere symbol of our shared assumptions, but you can squirrel it away, and if the government wants to make it worthless, they have to work at it. If they decide there’s a fiscal crisis that requires your contribution, and everyone’s going to take a “haircut”—a charming financial euphemism for being barbered by a guillotine—they can’t come to your house and paw under the mattress. Electronic money? Ding! Gone” (Lileks). You cannot rely on anyone, you have to be self-sufficient and if we went cashless that would be impossible. It may be paranoid to think like this but it is the harsh reality of the society we live in. 

Citizens who saved would also have limited abilities to react to extreme monetary events like deflation and inflation. For example, one dollar in 1913 had the same purchasing power as   $23.90 in 2015. That means if you put your dollar in the bank in 1913, you'd have to earn 3.19% interest every year just to keep up with inflation and to have the same purchasing power in 2015 that you had in 1913 (McRee 850). The government’s argument is that interest, dividends or capital gains on savings offset the results of inflation but that just isn’t the case considering the current FED American interest rates are sitting at 1.00% which is a third of what they should be if we want the dollar to be worth the same amount it was in 1913. As the price of goods is rising, the length the dollar goes is shrinking and it will continue to do so if the government continues down the path it is currently riding. 

Eliminating cash also makes negative interest rates (NIRP) a feasible option for policymakers. While the government argues that this is a positive, citizens would argue the exact opposite (Desjardins). Governments desire this because, in their minds, it would give them the ability to stimulate the economy in the way that the previously mentioned, Mike Kimball suggests. The first problem with that system is seen when McRee picks apart Kimball’s example in which a business is considering building a factory in three years. Kinball thinks that it would be better, if they built it now. So, he says: "If someone would lend to them at an interest rate of -3.33% per year (that's negative 3.3%), the company could borrow $1 million to build the factory now, and pay back something like $900,000 on the loan three years later." McRee tares into this logic saying if you do this, you are going to lose your money in the long run and end up paying the factory to borrow your hard earned money (378). If they currently tried to impose negative interest rates people would start bailing out into cash, but if cash was eliminated and NIRP’s were imposed, spending would increase because it would cost more to keep your money sitting in an account than it would to spend it (Mitchell).  NIRP’s penalize people for trying to save their money which is just wrong. This poses an enormous issue for the responsible retired citizens of our country who worked hard and saved their entire life in order to life a comfortable life once they retired. NIRP’s would penalize them for their responsible behavior. 

As changes to the monetary system have transpired the lives of Americans, and citizens of other countries, have been impacted. Rapid demonetization has violated people’s rights to life and food (Desjardins). As inflation has occurred the value of the dollar has deceased. This has resulted in people working hard for less. It is often observed that the US Dollar has lost about 96% of its purchasing power since 1913 (McRee 846). McRee gives an example related to minimum wage when he graduated high school compared to now. He says, “When I graduated high school in 1978, the minimum wage was $ 2.30 per hour… in order to have the same level of purchasing power today that the $ 2.30 had in 1978, I would need to earn $ 8.24 per hour. The actual minimum wage in Florida as of January 2015 is $ 8.05. So minimum wage has not quite kept up with inflation” (829). People have to work more hours, spending less time with their family in order to adequately provide for them.

Demonetization also hurts people and small businesses that make their livelihoods in what the Department of Justice (DOJ) and Federal Deposit Insurance Corporation (FDIC) classify as the “informal sectors” or “high-risk merchant categories” of the economy (McRee). Two of these merchant categories that are targeted at alarming rates include ammunition sales, and firearm sales. According to United States Representative Blaine Luetkemeyer, “This targeting of businesses is called Operation Choke Point, and it is an operation in which the FDIC and DOJ intimidate financial institutions from offering financial services to certain licensed, legally-operating industries the government doesn’t like in an attempt to choke off those industries from our country’s banking system” (McRee 680). McRee tells many stories of legally operating business that have suffered catastrophic losses at the hands of Operation Choke Point, but he says, “ultimately it does not matter whether it is gun dealers or pawn shops that are being targeted, or both. Both of these industries are legal businesses and are entitled to conduct business within the law. And banks, being private businesses, certainly have a lawful right to decline to do business with industries that they think are too high risk. However, it is not the place of the government to pick and choose which lawfully operated businesses are allowed to have bank accounts. And as has been observed, denying these businesses access to the financial services system forces them to do business only in cash--which is what the government is trying to discourage” (722). If cash is eliminated, the actions of the government will inevitably cut off these legitimately operating businesses means of conducting their business causing their owner and employees to lose everything. What is so shocking about this is that it is currently happening in our country, at the hands of the power that if supposed to protect us, and only 30 members of Congress have taken action by contacting the FDIC and DOJ and demanding an investigation into Operation Choke Point. So don’t worry, a very thorough investigation will be conducted into Operation Choke Point by the very people who invented it. What ever happened to due process of the law that this country was founded on? This is the problem with allowing the government access to your transactions, McRee says, “If the currently empowered administration decides you are involved, however tangentially, in an industry it does not favor, it can put you out of business without due process of law, even though your business activities are lawful. If all transactions are electronic, they can be monitored or stopped. If there is no cash, you have no money if the government cuts off your access to the electronic payment systems” (745). They will have complete control over you, and who wants to have their life in the hands of someone else? No one. 

Finally, with the death of cash and all wealth being stored digitally, the potential risk and impact of cybercrime increases. As previously stated, North America accounts for the vast majority of data breaches in the world (76%), and the United States accounts for the majority of that (72%). 54% of the United States data breaches in 2014 were related to identity theft, 17% with a goal of financial access and 11% for account access. The remaining bit were attempts at classified information. Hacking or identity theft could destroy people’s entire life savings (Desjardins). It also effects people of every age. According to Holmes and the Federal Trade Commission, in 2014 “18% of victims were age 20-29, 18% were 30-39, 19% were 40-49, 19% were 50-59, 13% were 60-69, 7% were 70 and over and 6% were 19 and under”. From a total of 12.7 United States citizens $16 billion was stolen in identity fraud. If all payments were to made online, which would be the case if we became a cashless economy the ability and frequency of data breach would increase dramatically. Between 2014 and 2018 it is estimated to multiply by 34%, imagine the percentage it would multiply by if all transactions, account information, personal information was stored digitally. Yes, getting rid of cash would make certain crimes more difficult, but it would also cause numerous other crimes to rise dramatically. The cost of these online data breaches is already expected to reach $2.1 trillion by 2019, when there is still cash in circulation. Imagine the heights it would reach without cash. 

What is comes down to is that cash is too valuable for citizens to give up, but what can one do to resist the effort by the government to control us through a cashless society? Once you become aware, make others aware. Yes, you may be referred to as a conspiracy nut but your knowledge gives you control as the powerful forces are threatening our financial freedom, and clearly from the evidence I have gathered it is a growing issue in our country. Do research, educate yourself and distance yourself from banks. The closer you get the harder it will be to distance yourself later and the more compromised your privacy, savings, rights and security will be. 
