This article pretty much sums it up:

Could we be constantly tracked through our clothes, shoes or even our cash in the future?

I’m not talking about having a microchip surgically implanted beneath your skin, which is what Applied Digital Systems of Palm Beach, Fla., would like to do. Nor am I talking about John Poindexter’s creepy Total Information Awareness spy-veillance system, which I wrote about last week.

Instead, in the future, we could be tracked because we’ll be wearing, eating and carrying objects that are carefully designed to do so.

The generic name for this technology is RFID, which stands for radio frequency identification. RFID tags are miniscule microchips, which already have shrunk to half the size of a grain of sand. They listen for a radio query and respond by transmitting their unique ID code. Most RFID tags have no batteries: They use the power from the initial radio signal to transmit their response.

After this was written, Congress passed the new National ID Card Bill. In a year, all US Driver’s licenses will have RFID chips… the police state will be complete.