Simply introduce an exchange rate between the dollar and it's physical representation.
Barriers are largely people's lack of understanding of how this works and how huge the benefits would be for society.
No, I just think that neutral monetary policy which leads to full employment (defined as natural employment under given tax/regulatory regime) is good for society.
Also good for govt's ability to manage budget, but that's secondary.
Maybe if you think government and society are the same thing.
http://gawker.com/5729214/honey-buns-are-the-new-prison-curr...
Someone would need to propose a specific law. A law that says 'you may only contract with [insert privileged electronic currency here]" or something similar.
If the enforcement is through confiscation of other currencies it will likely violate 4th amendment protections on personal effects.
If certain contracts are banned (instead of, or in addition to, confiscation) it would violate speech protections. Exchanging money (in any form) is speech, as are your contractual dealings.
An argument as to how restricting the use of cash (or eliminating the use of cash entirely) inherently conflicts with the first or fourth amendments.
> A law that says 'you may only contract with [insert privileged electronic currency here]" or something similar.
The usual method would be more like "All damages, including -- but not limited to -- those for breach of contracts specifying payment in some other currency, shall be awarded and assessed in [privileged currency] as of the date the debt became due and payable."
> If the enforcement is through confiscation of other currencies it will likely violate 4th amendment protections on personal effects.
That's a creative argument, but, no, Fourth Amendment search and seizure protections do not prohibit confiscation of contraband.
> If certain contracts are banned (instead of, or in addition to, confiscation) it would violate speech protections.
Contracts that are contrary to public policy -- such as those whose fulfillment requires an act prohibited by law -- are generally void for that reason; this is a well-settled principal of law and is not contrary to the First Amendment. The idea that the First Amendment means any contract obligation, without restriction, is immune from prohibition is, well, silly in the extreme.
If you could get an interest-only mortgage at zero rates, why wouldn't you buy the largest house the lender would allow?
Isn't this a foolish proposition, considering the out of control speculation that occurred when interest rates dropped to near-zero? With negative rates, banks will only be rewarded further for acting recklessly.
I think the honest thing to do would be to let all of these irrational and highly-leveraged investment environments collapse so that we can have a chance of starting over with a clean slate.
The only way to benefit is to borrow and invest that money, which is exactly what the fed wants (with the expectation that productive investments will boost economic growth).
I think the real issue is that if you're paying -5% for a loan. It's rational to invest that into something that returns -1% (and profit by 4%). This means people are incentivized to invest in unproductive resources... Which might be a bad thing in the long run.