Let's Play Hot Potato
March 24, 2008
Tom Snyder in Waukesha, Wis., gets the credit for being the first person to report to me his receipt of one of the new $5 Federal Reserve Notes.
As he reports by e-mail, "It was spent by the customer ahead of me at McDonalds and the clerk was having a problem accepting it when the guy told her it was a new one. I, the next customer, agreed and so she accepted the note, but quickly paid it back out to me in my change."
This raises the usual questions about the lack of awareness of many of Americans of their money. Fortunately for the clerk's peace of mind, she could treat the new bill like a hot potato and quickly pass it to Tom, who could report it to me and the rest of the collecting community.
That got me thinking along historical channels about the economy. During the Depression of the 1930s there were many unorthodox thoughts about how to get the economy moving again.
One method was to spend into circulation pieces of paper that weren't money but passed as money. The technical term is scrip. The kicker, though, was this scrip expired, so the point was to spend it as quickly as possible. It was thought that these quick expenditures would help jump start demand much like the recently enacted stimulus package that will be paid out in May.
This was before John Maynard Keynes formalized the Keynesian economic theory of demand management through public expenditure to keep economies going.
Perhaps we can get the rest of the public to treat the new notes like hot potatoes and spend them more quickly.
No? Well, that's the best I can do on a Monday morning this week.
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