In The Future, You May Have To Pay The Bank To Hold Your Money

The Fed has control of short-term interest rates. During recessions, it cuts those rates to bring about greater investment and growth.  However the Fed cannot make rates negative, because people will withdraw and store their money instead of letting it slowly decrease over time. This is called the zero lower bound and it limits the Fed's power.

In recent weeks, economist have discussed the idea of how to implement a negative interest rate while preventing people from hoarding paper currency. Economist Miles Kimball has discussed creating an electronic currency and having an exchange rate between it and dollar bills. Others have discussed going cashless and eliminating paper currency altogether.

The European Central Bank (ECB) has also recently considered adopting a negative interest rate on bank deposits as well. Whether it will follow through with the policy is unclear, but it has sparked fears in banks around the Eurozone.

The goal of these ideas is to allow desired savings to equal desired investment. Right now, that would require a negative interest rate, but since it cannot happen, savings are too high and investment too low, leading to the middling growth we've seen over the past few years.