Demonetization, Modi's Biggest Move, Is Total Bust

Some said that counterfeit currency would be exposed; in fact, it's less than 0.0007 percent of the cash taken in. The prime minister himself argued that demonetization would "break the back of terrorism" by cutting off sources of funding. Instead, this has been among the bloodiest summers for Indian security forces in Kashmir. This week, Jaitley argued that the move would change Indians' behavior, encouraging them to use digital payments instead of cash; but as I've pointed out in the past, demonetization is the exact opposite of what Cass Sunstein would call a "nudge."

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apparently nobody in India is dishonest -- because, according to the Reserve Bank of India's long-delayed accounting, more than 99 percent of the cash in circulation has been returned. This isn't surprising. Indians are not the idiots their government seemed to imagine. Within days of the "demonetization," a dozen methods to launder piles of cash had been pioneered. Instead of the world's best-planned attack on black money, India's government had launched the world's biggest legal money laundering scheme.