Hey man, you know more about economics than me, are you familiar with the Prosperity Certificates introduced by Alberta's Social Credit party? they seem like your kind of deranged.
I've heard of people propose the idea of money that gets taxed if you don't spend it before, but I've never heard of this particular variation.
People have also tried local currencies based on hours worked.
I'm half-asleep, so hopefully I'll get this right (and I may not), but this is difficult to explain...
So, you're not actually supposed to hoard cash.
Cash is basically a distributed accounting system so that we don't have to do labor bartering. With cash, you don't have to negotiate to mow your dentist's lawn 10 times to cover a dental visit. You might work, say, replacing brake pads for other people instead. Those people give you cash, representing the unredeemed value of that labor, you give the cash to the dentist, the dentist hires a lawn guy.
The cash is kind of this bump that moves through the system.
If you absolutely refuse to spend it for some reason, what will happen is that eventually everyone will figure out that there are fewer dollars in circulation relative to the amount of stuff, and then change their prices. It will take them a while to notice this, and also a while to actually update their prices, and not everyone will notice at once, so this will disrupt sales, planning, and potentially production.
There is a theory that this can cause a spiral - a company notices a fall in sales, doesn't realize it's just because a miser is hoarding cash (and thus changing the ratio of dollars to stuff), and cuts production. The guy that gets fired from the production line cuts his spending (because he's unemployed), causing other firms to cut their production, until the information about the shrinking money supply makes its way throughout the whole economy. In the long-run it'll eventually self-correct, but in the short run, beneficial deals are not being made.
If you then decide to spend the cash 20 years later, you haven't actually moved the productive capacity that the cash would normally represent 20 years into the future. Instead, suddenly there will be more dollars relative to the amount of stuff, and this will throw people off again.
What you're supposed to do for long-term storage of value is hold some asset like real estate (that will still be there 20 years in the future), or buy shares of productive enterprises (that will continue operating over time).
You save up money from replacing brakepads for people. You give that money to Albertsons Loblaws. They use it to buy a forklift. They use the forklift to sell groceries for 20 years, paying for the upkeep and eventual replacement of the forklift. When you go to sell the shares 20 years after buying them, representing the Albertsons Loblaws forklift, you effectively have shifted the productive capacity 20 years into the future, so the ratio of dollars to stuff doesn't change as much.
As I understand it, the point of governments targeting a small, but stable rate of inflation is to prevent people from hoarding dollars. They're supposed to put their money into a bank (which will pay interest), and then the bank will find real estate to invest in.
