I usually use this site to offer alternatives to mainstream economics, but today I'm addressing the direction of the American economy. I must sound the warning! I'm noticing a very disturbing trend that has been gaining momentum for some time now. That is the absence of cash in business transactions. I remember seeing someone pay with a debit card back in the mid 90's and it was obviously an oddity, that I remember it. Now, to see someone pay with cash is a rarity.
Let me say clearly that I do not believe the American paper currency is any more valuable or spiritually founded than plastic debit cards, but the difference lies in the power behind them. First, the federal reserve is in charge of it all, so that's not what I'm addressing. The power that I'd like to address is that of the person who is the "buying power."
The whole point of currency is to provide a common means of transacting commerce. The accumulation of currency is not the issue. I'm not suggesting that we spend everything we earn, but rather to be aware of the fact that currency is only a tool and once it's earned it's ours for the using, and once it's spent, it's gone, so the wise choice would be to spend it on something of value. The buying power that is now concerning me with debit cards and payroll bank cards is the fact that employees must now pay a fee to have access to their earnings. This should not be so.
I'm going to round off and round up and round out, just for the sake of mathematical ease to make my point. Say, I've earned, after taxes, $500.00. In cash, that's the sum. On a debit card, however; it may cost me at least $5.00 to access that money, taking my spendable cash to below $495.00. This takes place for the most part in low income, less than 40 hour employment, so already the employee is an a financial disadvantage. They are not likely to be the individuals with free checking. On the flip side to this new arrangement, if I don't draw my available cash out all at once, I can be charged for every transaction, which could literally be a significant percentage of my earnings.
Now, if I draw it all at once, there's the fact that I'm walking around with a significant amount of cash on me, and the "bank card" has served no purpose except to make the bank some money. Over a year's time, bank fees can be a major expense for low income employees. Our earthly economy is still failing and people are literally paying for money that is already their's.
I don't usually get so side tracked on a topic, but this is a serious phenomenon that will literally erode the standard of living without inflation or raising prices, although prices are going up. Bank fees are not figured into inflation or rising cost of living.
A bank transaction fee is a black hole in an already dismal economy.
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