Self liquidating scrip money updating mcs 150


Fisher estimated that stamped money with characteristics like those described above would circulate at least six times faster than ordinary currency circulates during times of depression.

Of course, this does not mean that business sales would increase six fold, for stamped money would comprise a small percentage of the total money stock, and some ordinary currency might be held for a longer period of time than usual following the introduction of stamped money.

But, one might ask, could some variation of the stamped-money idea play a temporary role in getting a slumping economy going again?

Whether this explanation is true or not, it is misplaced as a criticism of the stamped-money program.As long as everyone waits for others to increase their spending, there will be no increase in spending.But if the Treasury can make it costly to hoard, at least for awhile, then the circumstances that gave rise to the hoarding will themselves disappear, and we can get back to work again.The “Wednesday stamp requirement” sets in motion a flurry of buying wherein the holders of the scrip scramble to spend it before Wednesday arrives and they incur what is, in effect, a tax on their scrip holdings.Stamped script, or stamped money, is like ordinary currency in that it may be spent, deposited at the bank, or invested in securities.Economists from the Rational Expectations School will insist that households receiving stamped money will simply save an equivalent amount of ordinary currency, leaving total expenditure unchanged.

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