Why cash is losing its currency
March 25, 2012
For generations now, storekeepers have been making change by taking bills and coins out of the cash register drawer. Now many experts say changing technology is nickel-and-diming old-fashioned cash out of existence. So is cash a relic of a bygone era? Our Cover Story is reported by Lee Cowan:
It’s what the wallet was invented for, to carry cash. After all, there was a time when we needed cash everywhere we went, from filling stations to pay phones. Even the tooth fairy dealt only in cash.
But money isn’t just physical anymore. It’s not only the pennies in your piggy bank, or that raggedy dollar bill.
Money is also digital – it’s zeros and ones stored in a computer, prompting some economists to predict the old-fashioned greenback may soon be a goner.
“There will be a time – I don’t know when, I can’t give you a date – when physical money is just going to cease to exist,” said economist Robert Reich.
Economists like Reich say the demise of cash has been happening ever since our financial fortunes could first be told by a piece of plastic with a magnetic strip.
That was half a century ago – and now? “95 percent of the transactions in America, or more, have nothing to do with physical pieces of paper or coins,” Reich said.
Think about it. Parking meters, taxis, tolls, even Girl Scout cookies don’t require cash anymore, all proof (argue some) that cash’s days are numbered.
“Everyone thinks cash is so simple and so easy and so fast and so secure. It’s NONE of those things,” said author David Wolman. In his new book, “The End of Money,” he argues the biggest knock against cash is that it’s costly.