Trump Keeps Tax Cut Promise. From Barter to the Cashless Economy

President Trump and the Republicans appear to have achieved a major milestone, with the Senate passing their tax reform bill. It reduces tax on business from 35% to 20%  and apparently simplifying personal tax. According to the BBC, private citizens would generally benefit till 2026, after which those families earning less than $75,000 a year could be worse off.

This is a major victory for President Trump in terms of his election pledges.

Cutting tax could potentially mean the need for the US borrowing an additional trillion US dollars. The gamble is that the tax cut will promote business and more than recover the losses.

It looks as if we are drifting increasingly towards a cashless society. I notice it myself in that I make more and more payments by card, from a cup of tea, to bus ticket, to shopping in the supermarket or online. Locally, more bank branches are disappearing from villages and small towns. Apparently, ATMs are also likely to follow them. Retailers might pick up the provision of physical cash - until digital person to person money transfers via NFC or similar become as easy as paying with coin and paper.

Before cash, there was bartering - exchanging goods. This progressed into using either animals such as cattle or physical items such as stones or shells as money. The most dramatic example that I saw of this was a giant stone disk used as money in a Polynesian culture, displayed in the Uebersee Museum in Bremen. Fixed weights of metal, gold or silver began to be used about 4000 BC. The first manufactured coins did not appear till between about 700 BC and 500 BC, seemingly simultaneously in China and the Aegean. The advantage, you could carry the value of an item in the metal itself, although debasing coins with inferior metals was already a phenomenon during later Roman times.

The ribbed or textured rims of coins were introduced later to counter the fraud of  'clipping' as fraudsters looked to stretch out the value of their metal. 'Sweating' was another coin debasing fraud - shaking of a bag of coins and collecting the metal dust!

The conceptual leap to using paper, which is based on the promise that a paper item will be guaranteed as an alternative payment, occurred in during the Song dynasty in China in the 11th century. The idea was taken up in Europe in the 13th century, after travelers like Marco Polo reported its use in China.

It has only been in the last century or so that paper money became disconnected from linkage to actual physical gold reserves and more a feature of confidence in a particular economy. Digital money in our bank accounts and accessed through our cards has been a logical progression.

Going completely cashless has one advantage/disadvantage - all transactions become traceable. The digital solution to this has been the rise of cryptocurrencies like Bitcoin, which can be used for normal transactions (where accepted) but also on black markets.

Whilst the trend to a cashless society might seem simpler and beneficial in some quarters, it also disadvantages the elderly and others either without access to technology or the capability of dealing with it.