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Does destroying currency worsen or improves the economy?

Gizmo j

Gizmo j

Platinum Member
Say I had a billion dollars in cash and burned it all down.

What does this do to the economy?
 
Gizmo j said:
Say I had a billion dollars in cash and burned it all down.

What does this do to the economy?
Click to expand...
When the Fed was unwinding its "quantitative easing" it destroyed 50 billion in cash monthly. Destroying currency reduces inflation pressure a bit but It takes a heap o' vittles to gag a boggie.
 
In a multi-trillion dollar economy, the disappearance of 1 billion won't do much. Giving it away could greatly improve the local economy however.
 
Does destroying current women with political views worsen or improve the "getting laid" probabilities of ATOTDC nerds?
 
I guess, that it depends whether the economy is in a recession or is over-heating. Reduce the money-supply, reduce inflation, reduce liquidity - might be good, might be bad. I dunno, go ask Paul Krugman...though he seems preoccupied with other things at the moment.
 
Funny I was casually thinking the same thing the other day, but came to the realization that there is no point in destroying it. Just stash it somewhere very secure. It may as well be destroyed but at least you have a stash you can go to if you need it. Just make sure it's VERY secure and can't get stolen then it ends up back in the economy.

You would need to have an insane amount to even make a tiny dent though. The government burns a trillion like every couple seconds. Though I guess one could argue that money is still ending up in the economy to some degree. It's going into another economy which ends up coming back in some other way.
 
Unused/un-circulated cash is the same thing as destroyed cash. So, where you are theoretically destroying 1 billion... there is easily trillions of liquid cash that is not being used/available. Used/available indicating it hasn't been deposited in banks and not making it's way into a system where it's tracked.

Look at Colombia in the cocaine days. The only reason the US got involved was because 10s of billions of dollars showed up, out of nowhere, in Colombian coffers.

The money was so huge, that Pablo Escobar would spend $2,500 - per month - on rubber bands, to hold/stack all that cash...
www.businessinsider.com

Legendary drug lord Pablo Escobar lost $2.1 billion in cash each year — and it didn't matter

"Pablo was earning so much that each year we would write off 10% of the money because the rats would eat it ..."
www.businessinsider.com www.businessinsider.com

Also... he would also lose $2 billion each year... and that was OK/acceptable. And these are figures from the 80s - so that $2bn is $6bn today.

So, to answer your question - your burning of $1 billion won't do jack shit to the economy. It would just ruin your life... if that $1bn was all you had.
 
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At the micro scale, If you were to spend the money in your local economy, it would mean the local businesses would do well, and in theory, they would need to hire more workers to meet the demand and the economy would grow.
 
highland145 said:
Does destroying current women with political views worsen or improve the "getting laid" probabilities of ATOTDC nerds?
Click to expand...

Don't be ridiculous. Politics is way too complicated for wimmenz to comprehend. Best they stay barefoot and pregnant...and in the kitchen where they belong.
 
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