> He (Kenneth Rogoff) argues that, apart from facilitating crime and tax evasion, cash hampers central banks from setting negative interest rates.
I think a lot of the "war on cash" boils down to this. Central Banks want to impose negative rates on us to try and get us out of the mess of having too much debt in the system. Cash makes this difficult.
Two points: First, the economic logic of negative rates is actually to try to incentivize the private sector to create more debt.
This isn't completely absurd. Slow economic growth quite often boils down to a lack of spending. One way to get more spending is by having the private sector take on more debt.
I think this is a bad idea, considering how the global financial crisis was caused by too much private debt in the first place. It would be better to increase public debt, at least in countries with monetarily sovereign governments, since there is no risk of default and the financial chaos that goes with it.
Second point: I've been hearing voices against cash since before negative rates became a thing. So while they're certainly a factor, they're far from the only one.
> Central Banks want to impose negative rates on us to try and get us out of the mess of having too much debt in the system
Of course, lower interest rates encourage more debt. So if they are honestly trying to do this, they're doomed to failure.
(I model their activity as self-interestedly creating as much debt as possible to further erode the ability of plebs to save, siphoning all economic surplus to them back as rent)
Reduced, including negative, rates are a stimulus measure, designed to (in the short term) increase borrowing (and therefore overall economic activity), not decrease it.
Generally, central bank monetary policy is driven by measures of economic activity, unemployment, and inflation.
I think a lot of the "war on cash" boils down to this. Central Banks want to impose negative rates on us to try and get us out of the mess of having too much debt in the system. Cash makes this difficult.