Funny Money
Ah! Money! To have the clean, crisp feel of a banknote in your hand! Even if it's a small bill, it's still physically in your hand. You can turn it over, scrunch it up, smooth it out, fold it over, fold it into a boat, whatever. It can even go through a wash and rinse cycle and come out clean and new and ready to be hung to dry with the rest of the laundry. There is no doubt that you have it and can exchange it for whatever its denomination can buy. (If it's a five euro bill, that's not going to be much.)
Ah! A card! A cold stiff plastic card to be kept safe. You can't fold it; if you do, you destroy it. You can only hold it out in your hand to stick into a machine. Or you can put it into a slot in your wallet, but far from any magnet or it's useless. You can't put it in your pocket because you might bend it, and it's quite uncomfortable to feel its unyielding shape in that small space, anyway. You can buy anything with it, depending on what the bank says it's worth. You can even buy things you can't afford. But that's not such a good idea.
Some countries in Europe have easily accepted the widespread use of credit and debit cards for everything, mostly the Scandinavian countries. Further south, people are still suspicious, and prefer to have the real thing in their hands. One can argue it's a case of honor culture. In the countries where cards are preferred, a stated payment does not change. A number does not suddenly become an amorphous unreality. In the countries where people don't trust plastic, numbers have a shape-shifting existence. I say ten, you say five. It is settled for five, but that then becomes seven. Prices are not always fixed, and neither are salaries. A credit card is a maybe promise in the future. A fifty euro bill is a settled and closed contract in the present.
Many people in Spain are paid in cash, especially those that work for small companies. Their salaries are pacted by word. What they are paid is not always what appears on company papers. The paper number can be greater or smaller, or not even appear. Quite a few jobs are not actually official jobs; the perceiver of the salary does not exist on the company payroll. The company therefore avoids paying all kinds of taxes, including the contribution to the worker's future retirement. In these years of crisis, some unemployed people will do hourly or daily work that is completely sub rosa. Given the lack of official jobs, it's one way to make ends meet. And avoid paying taxes. This does not lend itself to paying with a credit card. Many purchases are made in cash, including, up to a few years ago, large purchases such as a new car, or sometimes even property.
That habit lent itself beautifully to money laundering. So the government put a stop to it, and decreed that all purchases above €2,500 must be paid for through mechanical means, either bank transfers or credit and debit cards. Has it worked? Yes and no. Someone I know bought a used car last year from the owner. The car's price was pacted at €3,000. The owner and the buyer filled out all the forms, and presented them at all the official offices they needed to be presented. On all of those forms, the price was listed as €1,500. Less taxes were paid, and the pacted price was illegally paid in cash. The same as was done in this example, is done daily between private citizens and small businesses. But it's not done only to pay less taxes, it's also done to keep third parties out of private business arrangements. After the banking fiasco in Spain, where banks offered outrageous interest rates, and then imprisoned people's investments in perpetuity in illegal investment schemes, the common folk have stopped trusting their local banker. Their hard-earned money is theirs, and they will use it as they see fit, with no one telling them how to do it.
That law has put a hamper on large-scale money laundering, though. So the government thought to take it further, and force people to use credit and debit cards more often (and give the banks further earnings through the outlandish commissions they already charge) by lowering the cash limit to €1,000, to be put into effect this month. With that in place, many workers wouldn't be able to continue being paid in cash, and people who have no idea how to use a credit card would be forced to have one, such as technologically allergic older people. Small business groups rebelled, claiming that would stop the hopeful Christmas season from growing all it could. The new law has now been put on hold, to be discussed once more sometime after the Christmas season. But, of course, Christmas is followed by the winter sales with their raucous spending. I doubt that new law will come into effect any time soon.
What would be the best way to foster increased use of plastic? Perhaps the government should begin by flushing out all the corruption that is gangrening the profession of politics and showing the public exactly where all our tax money is really being spent and why. Another way would be to curb the greedy banks, break up the mega banks instead of encouraging them to grow, and force them to lower commissions and accept lower profits. When might all that happen? This being Spain, when pigs fly.
Ah! A card! A cold stiff plastic card to be kept safe. You can't fold it; if you do, you destroy it. You can only hold it out in your hand to stick into a machine. Or you can put it into a slot in your wallet, but far from any magnet or it's useless. You can't put it in your pocket because you might bend it, and it's quite uncomfortable to feel its unyielding shape in that small space, anyway. You can buy anything with it, depending on what the bank says it's worth. You can even buy things you can't afford. But that's not such a good idea.
Some countries in Europe have easily accepted the widespread use of credit and debit cards for everything, mostly the Scandinavian countries. Further south, people are still suspicious, and prefer to have the real thing in their hands. One can argue it's a case of honor culture. In the countries where cards are preferred, a stated payment does not change. A number does not suddenly become an amorphous unreality. In the countries where people don't trust plastic, numbers have a shape-shifting existence. I say ten, you say five. It is settled for five, but that then becomes seven. Prices are not always fixed, and neither are salaries. A credit card is a maybe promise in the future. A fifty euro bill is a settled and closed contract in the present.
Many people in Spain are paid in cash, especially those that work for small companies. Their salaries are pacted by word. What they are paid is not always what appears on company papers. The paper number can be greater or smaller, or not even appear. Quite a few jobs are not actually official jobs; the perceiver of the salary does not exist on the company payroll. The company therefore avoids paying all kinds of taxes, including the contribution to the worker's future retirement. In these years of crisis, some unemployed people will do hourly or daily work that is completely sub rosa. Given the lack of official jobs, it's one way to make ends meet. And avoid paying taxes. This does not lend itself to paying with a credit card. Many purchases are made in cash, including, up to a few years ago, large purchases such as a new car, or sometimes even property.
That habit lent itself beautifully to money laundering. So the government put a stop to it, and decreed that all purchases above €2,500 must be paid for through mechanical means, either bank transfers or credit and debit cards. Has it worked? Yes and no. Someone I know bought a used car last year from the owner. The car's price was pacted at €3,000. The owner and the buyer filled out all the forms, and presented them at all the official offices they needed to be presented. On all of those forms, the price was listed as €1,500. Less taxes were paid, and the pacted price was illegally paid in cash. The same as was done in this example, is done daily between private citizens and small businesses. But it's not done only to pay less taxes, it's also done to keep third parties out of private business arrangements. After the banking fiasco in Spain, where banks offered outrageous interest rates, and then imprisoned people's investments in perpetuity in illegal investment schemes, the common folk have stopped trusting their local banker. Their hard-earned money is theirs, and they will use it as they see fit, with no one telling them how to do it.
That law has put a hamper on large-scale money laundering, though. So the government thought to take it further, and force people to use credit and debit cards more often (and give the banks further earnings through the outlandish commissions they already charge) by lowering the cash limit to €1,000, to be put into effect this month. With that in place, many workers wouldn't be able to continue being paid in cash, and people who have no idea how to use a credit card would be forced to have one, such as technologically allergic older people. Small business groups rebelled, claiming that would stop the hopeful Christmas season from growing all it could. The new law has now been put on hold, to be discussed once more sometime after the Christmas season. But, of course, Christmas is followed by the winter sales with their raucous spending. I doubt that new law will come into effect any time soon.
What would be the best way to foster increased use of plastic? Perhaps the government should begin by flushing out all the corruption that is gangrening the profession of politics and showing the public exactly where all our tax money is really being spent and why. Another way would be to curb the greedy banks, break up the mega banks instead of encouraging them to grow, and force them to lower commissions and accept lower profits. When might all that happen? This being Spain, when pigs fly.
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