Would it be better if there were two forms of currency?

Question

What if Bill Gates invested in many different companies. i.e. (food chains, clothing stores) and made it to where you had to use his money to buy things from him, but you could trade in your own money to have his. Then he could slowly build it up and it would become acceptable in America as another form of currency and soon it would become popular. Then he could compete against the National Treasury and make an incredible amount of money. Also he could loan money to the government and take the interest down to 0% so we could actually get out of dept as a nation. Then it could get rid of the income tax problem :]

It's like having two political parties, they keep each other in check :]

Answer 1

no thanks. I have a hard enough time juggling money between my Canadian account and my boyfriend and I's american account.

Answer 2

err no. Seriously take Ralfcoder's advice and take at least one decent economics course. You would just increase the transaction cost of doing business in America. Money and/or time would be used just converting one currency into another. The US economy would become inefficient and less competitive and consumption would fall. Ignoring the law about the dollar being legal tender which would otherwise hinder Bill Gates' attempts to stop people using them, the presence of two competing currencies in one country would just lead to a loss of confidence in one or both of the currencies leading to a currency collapse. Economic history shows that even the most rigidly pegged currencies have ended in a currency crisis and a massive depreciation.

You would have handed over considerable power over the economy to an unaccountable individual. having two currencies and so two associated monetary policies would not act as checks and balances. It would add to confusion and uncertainty, which in itself is bad for the economy, and eventually firms, consumers, etc would just act according to the more favourable monetary policy leaving the other one redundant and abandoned.

Taking interest rates down to 0% would not help your government get out of debt. Ignoring the fact that Bill Gates lacks the resources to do this, making debt cheaper will only encourage the Government to borrow more. You also run the risk of being caught in a liquidity trap. You couldn't stimulate a stagnating or recessing economy by cutting interest rates as you are already at 0%. If you want to get out of debt you have two choices, raise more taxes or spend less.

Answer 3

There are two problems with this. The first is that the government passed a tax on competing notes of ten percent in eighteen sixty five. So you could do it, but the cost would be enormous.

Second, the US does have a competing currency in the west, silver depository receipts. It is a private currency that is prominent in a very small area of the country. As they are completely private they are open to fraud. There is no evidence they could redeem if there were a large request.

Third, US law does not permit alternate currencies to be accepted for payment of public obligations.

Answer 4

Actually that'd be cool however annoying as well. Imagine having to pay for bread with the current currency and then going next door to buy clothes with Bill Gate's money? It'll get annoying and confusing. Also keep in mind, this gives Bill Gates SO MUCH POWER over the economy. He made the currency so it has to greatly affect everyone's lives. He has free will with it.

Answer 5

When you get to high school, sign up for an Economics class as soon as you can. Do the same in college. You have much to learn, grasshopper.

Answer 6

yes there's already two forms credit card and cash.

Answer 7

Here, here.