Trump's weird and dangerous Fed nominee

Senator Jon Tester has issued the following statement after Federal Reserve Board of Governors nominee Dr. Marvin Goodfriend testified that he does not believe the 30-year fixed rate mortgage needs a guarantee from the U.S. government: 
"The 30-year fixed rate mortgage has been the ticket to the American Dream of home ownership for generations. Dr. Goodfriend's extreme stance on the 30-year fixed rate mortgage is dangerous for our economy, could slow down the housing market, and keep millions of families from purchasing their first home. His testimony today tells me he is unqualified for a leadership role at the Fed."

Wired -US currency should include tracking devices that let the government tax private possession of dollar bills, a Federal Reserve official says.

The longer you hold currency without depositing it in a bank account, the less that cash will be worth, according to a proposal from Marvin Goodfriend, a senior vice president at the Federal Reserve Bank of Richmond.

In other words, greenbacks will get automatic expiration dates.

"The magnetic strip could visibly record when a bill was last withdrawn from the banking system. A carry tax could be deducted from each bill upon deposit according to how long the bill was in circulation," Goodfriend wrote in a recent presentation to a Federal Reserve System conference in Woodstock, Vermont.

The 34-page paper argues a carry tax will discourage "hoarding" currency, deter black market and criminal activities, and boost economic stability during deflationary periods when interest rates hover near zero.

Goodfriend said in an interview that banks might place a kind of visible "date issued" stamp on each note they distributed. "The thing could actually stamp the date when the bill comes out of the ATM," he said.

Congressional critics say they would oppose any such move.

"This is going beyond taxing banks for holding reserves. It's taxing the public for holding currency too long. That's even more wild an idea," says George Selgin, a University of Georgia economics professor who specializes in monetary policy.

Goodfriend discusses an alternative: The Fed should at times prevent Americans from withdrawing cash from their bank accounts. "Suspending the payment of currency for deposits would avoid the cost of imposing a carry tax on currency."