The Real News Network has a great Cliff Deal a “Moderate” Betrayal? with William Black.

Besides a great discussion of the road ahead, there was the following amazing statement by William Black:

And the third thing you can do is you don’t actually have to issue debt, because the real deal about money is that it’s actually created by keystrokes on computers. And we use bonds for other purposes in, you know, pretty abstract macro economics, not because we actually have to get cash. And if you’ve ever wondered if this is true, ask IRS sometimes what happens if you send in cash to pay your tax bill. And here’s—I’ll tell you what happens: they burn it or shred it.

I presume that Bill Black is in a position to know this, but I’d still like to do a little research to see if this can be confirmed.

The Payment Options – Ways To Make a Payment page on the IRS web site tells you how to make a cash payment of your taxes, but it does not tell you what they do with the cash.

Cash payments can only be made in person at a local IRS Office. Do not send cash through the mail. Due to staffing limitations, not all local IRS offices accept cash. Please check the Services Provided page for the local IRS office at Contact My Local Office.

After a Google search, I found the following comment on The Mosler Economics web site:

Scott Tam Says:
March 30th, 2010 at 6:04 pm

I’ve read and heard Warren Mosler claim the IRS shreds cash it receives in payment of taxes. I cannot find any reference to this anywhere other than those quoting Mr. Mosler. (While it is a well known and documented fact the Treasury shreds old, torn, or defective bills to take them out of circulation, this is not what Mr. Mosler is talking about.) Can you give me any proof, documentation or third party reporting on this shredding of cash tax payments?

I have also found the interesting article Where US Currency Goes to Die. This does not answer the question about the IRS and cash, but it does have the following interesting quote:

Paciello makes sure to make one final point about money shredding by the Fed perfectly clear.

“The Federal Reserve doesn’t destroy money,” he says. “They destroy banknotes. Don’t ever call it money.”

The New Yorker has the article Senatus Decadens. It is a nicely written description of how the Senate has declined over the last 40 or so years.

The Senate is in a prolonged, self-induced coma. It does not produce creative legislation. It does not inspire important debate. It is not responsive to key national problems. Its pretense of institutional dignity is so battered that junior senators openly mock it. I’m amazed that so many talented people—Elizabeth Warren among the most recent—still fight like hell to get into it.

This article trots out the usual explanation for why the Democratic leadership is hesitant to embrace reform.

…among Democrats, most of the leadership oppose anything that will upset the status quo, perhaps out of a fear that the same tactic could be used on them.

And I respond again.

What a silly concern.  If it takes only 51 votes to change the rule, then the Republicans can change it the next time they get a majority irrespective of what the Democrats do now.  You can bet that the Republicans won’t be so squeamish.

In fact the mere threat of doing away with the filibuster the last time the Republicans were in control was enough to cower the Democrats.  I don’t see any signs of this level of tactical thinking by the Democrats.