Name: Mujtaba Ahmed Siddiqui

ERP: 08530
Class: Tues/Thurs 2nd Slot

Summary of the article

The Article, Why Do We Still Use Paper Money? written by Richard Rahn
appeared in The Washington Times on April 7, 2014. Richard initially talks about the
disadvantages of using paper currency in this modern age and regards it as dirty
and perishable. He then evaluates the importance of electronic payments by
stating that through computers money can easily be stored and transferred.
Therefore people value different forms of plastic money more convenient than cash.
The tagline Easily stolen, filthy currency ought to be forsaken reflects a complete
rejection of paper money.
However the author then tells that he never expected the increase in demand for
paper currency 15 years back. But in reality it is happening due to various reasons.
Firstly, the supply of the paper currency has reduced since merchants have started
to use electronic money in their dealings. This means a larger chunk of paper
currency is kept at homes. Secondly, the paper money is considered as
anonymous as there is no third party involved. So less risk is involved as
government agencies cannot confiscate the entire money by seizing the bank
account. Thirdly, in order to curtail money laundering more documents and larger
balances are required to create a bank account. This refrains the poor people from
using the electronic money.
In conclusion, people who make the regulations are blamed for the diseases
spreading from paper currency. The author states that the ever increasing rise in
paper currency is due to selfish policies of the government. (250 Words)

Personal Opinion
In my opinion, the article does identify valid reasons as to why we still use the paper
money. However, as per my knowledge paper money also offers the facility of
divisibility rather than the plastic money. Paying 2 rupees/dollars through credit
cards to a small scale shopkeeper wont be appropriate as there are high chances
that he may not have the credit machines. Moreover paper money is better than
coins as well, as its intrinsic value is less than the market value hence the chance of
converting it to something else and then selling it is minimized.
I disagree with the writer as he stated that those who make regulations are
responsible for deterioration of paper currency. In reality, they themselves want

Name: Mujtaba Ahmed Siddiqui

ERP: 08530
Class: Tues/Thurs 2nd Slot
paper money as it is relatively easy to hide it rather than conceiving the bank
accounts. So practically it is not possible to eliminate either of the types. (150
Words)