DOUGLAS COUPLAND´S OBSERVATIONS / THE FINANCIAL TIMES MAGAZINE

Last updated: September 28, 2013 1:19 pm

 

Douglas Coupland’s Observations

 

Imagine the Treasury could earn billions doing absolutely nothing

 

©Jason Ford

Last week I was making a collage that included the sacrifice of a one-dollar bill for the sake of art. A friend watching me do this made a horrified face and said, “But the government could punish you if they caught you destroying money!” I quickly corrected her assumption. From the government’s point of view, a dollar bill destroyed is a dollar bill the government no longer needs to back. Nothing would make the Treasury happier than people around the world setting fire to boxcars full of money – basically, bonfires like that would be a massive cash gift to the nation.

Then I got to thinking about boxcars full of money – more specifically, I got to thinking of places around the world where one might find truckloads of cash to burn. I couldn’t think of any boxcars per se, and nor could I think of, say, any Scrooge McDuck money bins. But what I do know as a certainty is that around the planet are perhaps millions of suitcases and sacks and boxes filled with US cash, much of it denominated in US hundreds. What if one were to magically destroy all of this cash? Out of the blue, the Treasury would earn perhaps billions of dollars for doing absolutely nothing.

At first this idea struck me as fanciful but then I fleshed it out. What if the government were to have, say, a “currency flush”? Basically, word could be broadcast that as of January 1 2016, the government will no longer honour any hundred-dollar bill printed before December 31 2013. People around the world with socks, suitcases and safety deposit boxes full of hundreds would have two years to redeem or spend their cash, and quick. What would happen?

Well, such a currency flush wouldn’t necessarily affect everyday people too much. People who work in bakeries, teach high school or drive taxis tend not to have suitcases full of hundreds in their universe – nor have much sympathy for those who do. But for those who do have stashes, there would be a two-year window to convert this cash into services and goods. The problem is that it looks very suspicious to walk into a Mercedes-Benz dealership and buy an S-Class with $87,000 in cash.

Or to buy a Montauk summer house for millions. Or a boat. Or jewels. Or anything, really. Divesting oneself of soon-to-be valueless hundreds would require great skill in not drawing attention to oneself. At the very least, suitcase owners would be eating at expensive restaurants, buying expensive plane tickets and living it up for two brief years. What a boon to the economy for zero effort! And near the end of the flush, there might be a huge bump in the number of thousand-dollar lap dances and bar tips – but then that revenue would have to be recorded and taxed. More money in the coffers!

©Ken Mayer Studios

The Great Currency Flush would give the US economy a defibrillation of unparalleled voltage but, of course, there would have to be a few rules. For example, you couldn’t just take a hundred-dollar bill to the bank and say, “Give me five twenties.” Once set in motion, the Flush would demand that hundreds could only be used in one go. You could buy a pack of gum with a hundred but you wouldn’t get back any change – so why not instead buy a hundred bucks of gum? The people selling the gum, in the meantime, would have to document where the hundreds all came from – not that hard to do. It’s also not hard to imagine many, many books in many, many places being very, very cooked.

Yet overall, even given the biggest one-time-only shopping spree in history, enormous chunks of money would go unredeemed. Imagine the number of suitcases out there parked by people now long dead – or people who are in jail and who wouldn’t be able to get out their shovels and dig and retrieve their trove.

Sure, there would be attempted workarounds . . . go to Las Vegas, buy a million dollars’ worth of chips and then cash them in. Buy five hundred grand’s worth of gift certificates at Saks and then shop up a storm. But tricks like those would be easy to predict and cut off at the pass just as easily.

Is such a flush ethical? Why wouldn’t it be? The government’s not saying the money is valueless. It’s just saying you have two years to spend it or go to the bank to redeem old hundreds for new hundreds. Except who’s going to go to a bank to redeem a duffel bag full of hundreds? Perhaps someone stupid. The government is trying to flush out all of the zombie money – not unreasonable – while giving itself a bit of a financial enema at the same time.

It’s hard to imagine much collective political anger being used by the masses in support of that one per cent or so with box-loads of money. In the end, people got those suitcases full of money by doing, um – whatever it was it took to get it. I’m sure they have receipts for all of it. Why wouldn’t they?


Douglas Coupland is the author of ‘Generation X’. His new novel ‘Worst. Person. Ever.’ is published by Heinemann this autumn

 

Copyright The Financial Times Limited 2013.