What concerns me about his idea is that businesses would be less incentivized to take payments if your money was closer to expiration. This could lead to situations where my dollar is worth significantly less near expiration than someone else's dollar that just got stamped. In this respect, businesses get screwed because the money that they just accepted is slowly deflating in value.<p>Expiring money basically incentivizes short term thinking over long term goals. Businesses won't save for improvements, retirement won't exist, etc.
That system is essentially what we have now, but less subtle. A 2% inflation target means that the purchasing-power of held currency is halved in 36 years.
If people know when the money will expire, they'll accept it at a lower and lower value as it approaches its expiration. Money that will expire tomorrow will be worthless. I think a better way would be to continually reduce all (digital) accounts by some rate. Say you want 1% depreciation per year. At the end of the year, every bank account balance is multiplied by x0.99. The "money" evaporates equally for everyone at the same time. In any case though, while technocrats might like the sound of all of this, the plebs (aka those of us without political power) are likely to be less enthusiastic.
The fed has recently said they aren’t going to try and prevent inflation any longer - they think that acting aggressively to prevent inflation before it hits has actually hurt the economy. So, perhaps there is something to this logic.<p>But I will say, in many ways we have the opposite problem right now. Too much money chasing too few good opportunities for a return has led to things like SoftBank, WeWork and many others.