Thoughts after listening to Paul Krugman on NPR
Who needs a PhD or a Nobel Prize? Indeed, those seem to have been a hindrance to the economy for some years now. We can balance the US budget by freezing spending at current levels, but we need to invest to get the economy moving. The solution is to do both. Maintain spending at current levels, and fund investment with Federal Reserve Gift Cards.
It may sound crazy until you realize these are not Applebee’s gift cards, merely good for a meal and worthless if Applebee’s goes bankrupt or takes your favorite off the menu. Federal Reserve Gift Cards will be backed by the full faith and credit of the United States government. Holders will be able to exchange them anytime, not for a mere dinner, or a giant margarita, but for something durable and of inestimable value – Federal Reserve Gift Cards! The holder exchanges them any time before their expiration1 for new Federal Reserve Gift Cards, simply by presenting them at the US Treasury Building in Washington.
To publicize the cards and promote acceptance, we will start by paying all unarmed government employees in Federal Reserve Gift Cards. Then, on a date to be determined, all we’ll pay active duty military with them, and then the Secret Service. That will give markets time to adapt. Finally, all federal elected officials will be paid in gift cards.
Frequently Asked Questions
Q: Aren’t these the same as Federal Reserve Notes?
A: No. Federal Reserve Notes are paper. Dollar bills are expensive to make, and though they don’t last very long in circulation, they will last for years stuffed in a duffel bag under the stairs, encouraging those to whom society has given more than necessary to hoard their surplus. Gift cards, while exchangeable and re-loadable subject to terms and conditions, expire at a set time after issue.2
Q: What are Federal Reserve Gift Cards worth?
A: They will be issued in denominations of ten, fifty, and one hundred.
Q: Ten what?
A: Technically, the cards are denominated in Federal Gift Card Units.
Q: What’s a unit?
A: One tenth the value of a ten-unit card.
Q: What are they good for?
A: They reduce the deficit, and make it easier for voters to re-elect their representatives.
Q: Right, but can I buy anything with them?
A: The cards have a magnetic strip compatible with card readers throughout the world. For example, a card holder could use the card to pay for gas.1
Q: Is there a rewards program, with points and stuff?
A: Present any Federal Reserve Gift Card at Starbucks for a free small coffee, subject to state sales tax and a two-dollar user fee. Also, you can make free calls with Skype.
Q: Can I pay my taxes with the card?
1Subject to merchant agreement
2Twelve months from issue. Five years in South Dakota.
UPDATE: On the other hand…