Would it help an economy if money expired and did not “earn interest” after a time?

No.

Everybody could go on the “Dole” and nobody would work . . . then what @RedDeerGuy1 ?

@Tropical_Willie I guess it is just as bad as inflation hurting seniors and those on fixed income? I never considered that everyone would go on employment insurance.

It’s just incentive to save, free money, so we can take care of ourselves. So no.

@KNOWITALL I don’t understand?

@KNOWITALL He doesn’t understands saving for future, only getting money now and spending it, I think.

@Tropical _Willie I don’t understand either?

I have savings that I can live off. I don’t live off of the “Dole” only, I have Social Security monthly payments.
But I also have retirement accounts, savings plans and stock portfolios. I don’t have only fixed income. Inflation causes the retirement accounts, savings plans and stock portfolios to increase in value.

@Tropical_Willie No, it’s dis incentive to save, because the money expires after a while, so you need to use it for something.

The money also therefore needs to be added to the economy regularly. IIRC when this was actually done, it was the local government (a duke?) issuing it, I think actually for services that they needed done. It also created paid work, which also got more people doing things.

As for inflation increasing something’s value, how does that work?

What are you talking about? How is the economy helped when money becomes worthless?

@stanleybmanly I am trying to find out if storing wealth slows down the economy? Also if spending helps lubricate the wealth production in any jurisdiction?

@RedDeerGuy1 Expiring money would be contradictory to one of the definitions of money” money is a store of value.

Fluctuations in the money supply would be dangerous and uncontrollable. And, it would result in a deflation/inflation cycle that would be confounding.

Plus, it would mean no capital reinvestment.

No. If so, no one would have the initiative to invest.

@kritiper I disagree. You could keep assets just not cash. It would encourage peope to spend before deadline day. Some of that could be used for investment.

@RedDeerGuy1 But without investing, there would be very little, in any, to spend your money on. Money doesn’t do much when it’s just sitting around. Might as well make it work for you and others, then everybody wins. Assets are great, but you can’t eat them. That’s what makes cash so handy.

@kritiper How about “encouraging” citizens to sell assets every year for cash? With some exemptions like family home and cars. The opposite of spending cash every year.

@RedDeerGuy1 What happens when the assets run out? People become homeless, jobless.
There is a program on PBS called “Economics USA.” Perhaps you could watch it and see how economies work.

@kritiper I’m not sure? Maybe we can balance it with a guaranteed basic income?

Strange as it may seem at first, interest is the cost of money. A company is willing to borrow money for starting a business or expanding their current business at a certain rate of interest because they expect their profits will grow at a greater rate. Borrowing is an essential part of capitalism.

Here is another aspect. When a company uses the borrowed money to increase plant size, the workers are not being paid to actually produce anything. That means there is more money being paid than the value of output. In order to prevent runaway inflation, the population at large need to save part of their money rather than try to use it all for buying goods. Thus savings tends to equal investment.

Another way of thinking about what @LostInParadise is saying:

Interest represents the Time Value of money.

That is a real value; to eliminate it would be a real cost. You can’t just ignore that cost without realizing it makes people worse off and reduces efficiency.

You can’t just say “sell your real assets” because those assets depreciate, and converting it to cash erodes wealth (collective wealth). It is also very inefficient.

@zenvelo O.k. just a random thought.