What would happen if $-1 bills were minted?

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xkcdfan
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What would happen if $-1 bills were minted?

Postby xkcdfan » Sat May 27, 2017 6:48 pm UTC

Would this have an effect on the economy, or would they somehow become collector's items with, ironically, positive value?

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Re: What would happen if $-1 bills were minted?

Postby poxic » Sat May 27, 2017 7:05 pm UTC

So, would they work like little IOUs or promissory notes? They'd have to be personalised to accomplish anything.

- I sell you a product for $1.
- You don't have $1, so I give you a $-1 which means I no longer have a -1 in my possession, theoretically increasing by $1 in assets overall.
- You take your product and the $-1. Once you're out the door, you throw away the $-1. Yay, free product.

I don't see a lot of practical use other than the novelty of it.
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Re: What would happen if $-1 bills were minted?

Postby Eebster the Great » Sun May 28, 2017 5:53 am UTC

Maybe the $-1 bills could be really big and inconvenient and cost about as much to dispose of as they do to pay off. Basically, they have negative melt value.

This sounds like a very good use of government resources.

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Re: What would happen if $-1 bills were minted?

Postby mfb » Mon May 29, 2017 1:33 pm UTC

Some types of waste have an effective negative value, but only if throwing it away randomly is forbidden. Printing dollar values on it would be odd, however.

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Re: What would happen if $-1 bills were minted?

Postby Eebster the Great » Tue May 30, 2017 5:59 am UTC

mfb wrote:Some types of waste have an effective negative value, but only if throwing it away randomly is forbidden. Printing dollar values on it would be odd, however.

It wouldn't even be the actual waste itself, it would be a minted [sic] bill that was a substitute for actual liability in the same way positive currency is a substitute for wealth. It would have to represent debt to the government in some way, so . . . taxes? Instead of sending you a bill with the threat of incarceration, the IRS could send you a stack of bills that are really hard to get rid of.

It sort of makes sense from a digital perspective, but I have no idea how it could work with physical currency. For it to have any use whatsoever, the cost of making and processing and shipping them must be substantially less than the cost of disposing of them.

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Re: What would happen if $-1 bills were minted?

Postby madaco » Tue May 30, 2017 5:00 pm UTC

Here is a variation on the idea:

Imagine a world where anyone can create a dollar from nothing, but doing so causes a number associated with oneself to become $1 more negative, and this number can be observed by looking at the person, and any dollar created this way indicates what this number was when the person created the dollar, and a person can reduce the number associated with themself by taking a dollar and making it disappear.

I think this could end up being like debt in some ways. People might not accept dollars produced while a person had a highly negative number, which could be sorta like not making a loan to a person who would be expected to be unable to pay it back.

An interesting result could be that it would be possible to fine or rob someone who had no money.

Maybe the dollars wouldn't be used for currency due to their being abundant, but I would think that having a less negative number (or 0) would probably end up being a high status thing.

One thing though, is that a person with a more negative number could produce bills with a less negative number, with the assistance of someone with a less negative number. The person with the less negative bill could produce a bill, and then the person with the more negative number would, and they would give that bill to the person with the less negative number, who would consume it, leading to them having the same number they started with, the person with the more negative number having their number being one more negative, and the production of a bill with a less negative number on the "number the person who created this bill had when they produced this bill" part.

This seems a little similar to money laundering? Not really though. Maybe like another person with a better reputation vouching for a person for a loan?

Transferring $-1 would be pretty much, the recipient of the $-1 producing $1, and then the $1 being consumed by the person giving the $-1 . So then the person giving the $-1 would have one $-1 less, and the other person would have one $-1 more.
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Re: What would happen if $-1 bills were minted?

Postby Xanthir » Tue May 30, 2017 6:15 pm UTC

Yeah, that's just being able to generate a loan against your future earnings, approved by yourself. We already have this mechanism in the real world, we just require a third party with positive funds as the go-between, and they charge interest for the favor/risk.
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Re: What would happen if $-1 bills were minted?

Postby mfb » Mon Jun 12, 2017 6:02 pm UTC

madaco wrote:Imagine a world where anyone can create a dollar from nothing, but doing so causes a number associated with oneself to become $1 more negative, and this number can be observed by looking at the person, and any dollar created this way indicates what this number was when the person created the dollar, and a person can reduce the number associated with themself by taking a dollar and making it disappear.
It wouldn't work. Some people would just keep producing dollars and others (with a nice zero) spend the produced dollars to buy things. You get a massive inflation until dollars are not used as currency any more.

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Re: What would happen if $-1 bills were minted?

Postby Benjamin Bratt » Mon Jun 12, 2017 7:01 pm UTC

poxic wrote:So, would they work like little IOUs or promissory notes? They'd have to be personalised to accomplish anything.

- I sell you a product for $1.
- You don't have $1, so I give you a $-1 which means I no longer have a -1 in my possession, theoretically increasing by $1 in assets overall.
- You take your product and the $-1. Once you're out the door, you throw away the $-1. Yay, free product.

I don't see a lot of practical use other than the novelty of it.

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Re: What would happen if $-1 bills were minted?

Postby radams » Tue Jun 13, 2017 9:53 pm UTC

Something like that exists here in Norway and in a few other European countries. They are called giros, and they work like reverse cheques.

A cheque: I buy something from you, write out a cheque and give it to you. You take the cheque to your bank, and the money moves from my bank to yours.

A giro: I buy something from you, you write a giro and give it to me. I hand in the giro to my bank, and the money moves from my bank to yours.

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Re: What would happen if $-1 bills were minted?

Postby ucim » Wed Jun 14, 2017 1:57 am UTC

radams wrote:Something like that exists here in Norway [...]A giro: I buy something from you, you write a giro and give it to me. I hand in the giro to my bank, and the money moves from my bank to yours.
What if you don't hand the giro to the bank?

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Re: What would happen if $-1 bills were minted?

Postby Demki » Wed Jun 14, 2017 5:01 am UTC

ucim wrote:
radams wrote:Something like that exists here in Norway [...]A giro: I buy something from you, you write a giro and give it to me. I hand in the giro to my bank, and the money moves from my bank to yours.
What if you don't hand the giro to the bank?

Jose

I'd assume it'd result in either a lawsuit, or in the loss of the service/product.

Here we have a similar system for the deposit one gets for finishing their mandatory military service, to make sure it is spent on academics/living expenses(such as rent) and not on something else like a trip out of the country.

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Re: What would happen if $-1 bills were minted?

Postby KnightExemplar » Wed Jun 14, 2017 6:10 am UTC

poxic wrote:So, would they work like little IOUs or promissory notes? They'd have to be personalised to accomplish anything.

- I sell you a product for $1.
- You don't have $1, so I give you a $-1 which means I no longer have a -1 in my possession, theoretically increasing by $1 in assets overall.
- You take your product and the $-1. Once you're out the door, you throw away the $-1. Yay, free product.

I don't see a lot of practical use other than the novelty of it.


I mean, that's basically what a credit card is, isn't it? A Credit card allows you to go into negative money... all the way down to your credit cap. Since the $-1 is tied to your account and name, you can't throw it away. And thus, the system of credits and debt works out.

If there was a simple way to throw away the $-1 bills or notes, then it'd be worthless.
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Re: What would happen if $-1 bills were minted?

Postby radams » Wed Jun 14, 2017 6:39 am UTC

Demki wrote:
ucim wrote:
radams wrote:Something like that exists here in Norway [...]A giro: I buy something from you, you write a giro and give it to me. I hand in the giro to my bank, and the money moves from my bank to yours.
What if you don't hand the giro to the bank?

Jose

I'd assume it'd result in either a lawsuit, or in the loss of the service/product.


That's right, it's treated like an unpaid invoice (which is exactly what it is).

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Re: What would happen if $-1 bills were minted?

Postby cphite » Wed Jun 14, 2017 2:14 pm UTC

xkcdfan wrote:Would this have an effect on the economy, or would they somehow become collector's items with, ironically, positive value?


Nah, it'd just be sort of a standard value debt... basically, there'd need to be some means of recording the transaction and identifying you (so that you don't just toss the thing) and some practical means of you eventually paying off the amount. As someone else mentioned, this sort of thing is done found in Norway and in other places. The set value would make it a bit less convenient than something like the giro, but it would probably work the same way.

As for effect on the economy, I imagine the effect is similar to that of credit cards.

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Re: What would happen if $-1 bills were minted?

Postby speising » Wed Jun 14, 2017 3:29 pm UTC

A key property of paper/metal currency is it's anonymity. This only works as long as the receiver actually values the tokens and wants to keep them, though.
So any kind of debt transfer always has to be recorded and be claimable.

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Re: What would happen if $-1 bills were minted?

Postby Eebster the Great » Wed Jun 14, 2017 3:49 pm UTC

speising wrote:A key property of paper/metal currency is it's anonymity. This only works as long as the receiver actually values the tokens and wants to keep them, though.
So any kind of debt transfer always has to be recorded and be claimable.

It also works, as I already said, if the bills are more expensive to dispose of than to pay off.

But I agree, currency is very different from credit cards or giros. Credit cards are a means of securing a personal loan. Giros are just a convenient way to transfer money. They are not liabilities in and of themselves, and they are non-transferable.

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Re: What would happen if $-1 bills were minted?

Postby ucim » Wed Jun 14, 2017 8:31 pm UTC

So, a giro is just a bill which is evidence of a promise to pay. Nothing new here. Bills are even transferable; but in all cases anonymity is not a part of the deal. You (recorded) are making a promise (legally enforceable), and this is evidenced by some contract or other.

Minting $-1 bills is not this.

Eebster the Great wrote:It also works, as I already said, if the bills are more expensive to dispose of than to pay off.
More expensive to legally dispose of, or more expensive to practically dispose of? "I'll give you this fine diamond ring, but you also have to take this toxic waste from me. But nobody knows about the toxic waste. Nudge nudge wink wink.

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Re: What would happen if $-1 bills were minted?

Postby Eebster the Great » Wed Jun 14, 2017 10:56 pm UTC

ucim wrote:
Eebster the Great wrote:It also works, as I already said, if the bills are more expensive to dispose of than to pay off.
More expensive to legally dispose of, or more expensive to practically dispose of? "I'll give you this fine diamond ring, but you also have to take this toxic waste from me. But nobody knows about the toxic waste. Nudge nudge wink wink.

Jose

Yeah, so the problem is that I can't think of a way the bills could be easy to transfer but difficult to throw away. Both of those criteria need to be met for a practical bill. If I can easily exchange my negative bills while providing a service, I can probably also easily dump my negative bills in the trash.

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Re: What would happen if $-1 bills were minted?

Postby HES » Wed Jun 14, 2017 11:00 pm UTC

It needs to be something that someone can take, but you cannot give.
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Re: What would happen if $-1 bills were minted?

Postby ucim » Thu Jun 15, 2017 4:44 am UTC

HES wrote:It needs to be something that someone can take, but you cannot give.

Sanity?

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