> on technology giants like Apple and Google
> taxes on sales of smart-phones and tablets
> The proposed tax would mirror fees already paid by television users, TV and radio broadcasters and Internet service providers
So it's nothing specific towards Apple or Google, or "anti-American", as far as I can tell from the article. It's just a device tax. So, seems a bit sensationalist.
(1) Stop creating money directly, but borrow from private parties instead. They will effectively create the money –fractional reserve banking and such.
(2) Keep a slight deficit on your budget every year.
If I recall correctly, the current French debt is 80% interests fees. If we had borrowed from our central bank instead of Rothschild&co, our current debt would have been only 20% of what it is now –well, assuming we didn't borrow even more.
So, now, mainstream politics is all about the raise taxes / cut expenses false dichotomy. Our governance doesn't seem to see the obvious third alternative: stop borrowing from the market, start borrowing from the central banks at nearly 0% instead. (It can be done indirectly, despite the current EU constitution/setting: let some public agency borrow from the central bank, then let the states borrow from this agency. Of course, it requires some impossible coordination from all states)
Depends what you mean by 'this mess' if this mess is a high level of debt without the productive economic activities to service it, I'd suggest that it was by spending too much on things that didn't provide a return on investment.
>They will effectively create the money –fractional reserve banking and such.
No, that is not fractional reserve banking, in fact what would happen if they did just print more money? Lets pretend they could do it without breaking away from the euro. Inflation would rise sharply? Would that lead to a better economic situation? Some people say it does, hence the UKs policy on QE.
>If we had borrowed from our central bank instead of Rothschild&co, our current debt would have been only 20% of what it is now –well, assuming we didn't borrow even more.
That is just a gross oversimplification, and really Rothschild&co? What are we, angry I learnt economics from youtube socialists?
>start borrowing from the central banks at nearly 0% instead.
Historically, this action hasn't worked well. Ultimately they have debt obligations as is, they need to settle that with something, where would that something come from? They could deflate the debt, which would be the effect of creating a synthetic entity which would loan at 0%. To deflate this much debt would seriously hurt people. They could potentially try and bond default, Russia kinda got away with it (some people say it was a good idea), but then Argentina really showed the problems that can happen doing this.
This is why people come down to taxation and spending, ultimately they are the only options, because any kind of inflationary policy is a cruel tax, as it is often felt more by the poorest, due to the commodities which tend to rise. Meanwhile the super rich can make money of the back of it and even increase their worth leveraged thanks to the inflation bonds and the like.
On Rothschild&co: I'm quite serious: President Pompidou used to work for them, prior to the 73 law that forbade the state from borrowing to the central bank (there were no Euro, back then). The only alternative was to borrow from private banks, of course. and Rothschild conveniently happened to be one of the big players, and happened to finance a significant part of the French debt.
Well, as far as I know. My sources are mainly Pierre Larouturrou, and Étiène Chouard, left-sided French economists.
On deflating the debt: I doubt the solution would be to do it at once. On the other hand, why not keep the budget as it is, and just stop borrowing from the market altogether? It would progressively Lower the payments on the interests, freeing some budget to actually lower the debt, or doing some other investments. I did not however measured the impact of not borrowing from rich people any more.
See for instance: http://www.reuters.com/article/2013/04/30/markets-bonds-idUS...
First, they are not cutting expenses "enormously" (enormously would be halving the yearly deficit, they haven't even started to stop its growth! So they are still digging further into debt every year), and then you need to spend less when your budget goes to debt repayment, if not you are going right in the wall while accelerating.
Having a huge debt means the population / the whole country is living on credit, and therefore ABOVE their means. It's natural a recession would take place, whether you like it or not. Take it as a reality check.
A country is not a household. The difference is not merely of scale. A country can create the freaking money. Well, except since they decided to stop that around the seventies, and borrow at a hefty interest rate instead. (By the way, thanks to things such as Fractional Reserve Banking, the money is created out of thin air anyway.)
Did you know that about 80% of our (French) debt is made up of interests we paid in the past? It's hardly about a whole country living above its means. More likely, it's about a government playing Robin Hood, only in reverse –taking from the people to give to a few rich entities.
Even the 20 remaining percent may not represent 20 percent too much. A part of it arguably represents actual wealth that has been created, such as transports or schools.
Now I agree that we are in deep. I disagree however with the suggestion that it could be the people's fault. It's the government's fault, which is not the same thing at all. Because, we don't live in a democracy. Instead, we elect representatives based on what mass media tell us, and once elected, they hardly listen to the people. (Take the European Constitution, for instance: the people once voted "no" by referendum at about 60%. No matter, they reordered the paragraphs, and made the parliament vote instead. Basically, the government acted against the will of the people —maybe for its own good, but that's not the point.)
A country can print money, but it can't create value to back them at will: the national workforce at their productivity rate create only so much added value at any time.
Yes if a government wants to live beyond its means, it can either print more money, with inflation following shortly; or borrow money, and hope the future generations sort out the downpayments somehow. If a country has enough assets and reputation on the market it can borrow for decades, but eventually the risk of piling up the debt becomes unacceptable to usual investors, and it's payback time.
If I recall correctly, inflation is hardly a bad thing. Okay, super-inflation is a bad thing, but I'm talking 5-15% a year. As if controlling inflation would ultimately cause unemployment. As long as we keep it smooth, and the salaries rise along with the prices, then it's only a tax on savings. Plus, inflation seems to be heavily and negatively correlated with unemployment (I'm not sold on that idea, but as far as I know, it seems plausible).
I also agree that there is such a thing as living above one means, even if it's a whole country. I disagree however that printing money (with the intention of destroying most of it later) instead of borrowing it at a significant interest rate would necessarily cause inflation. Or are you implying that your government is by nature unreasonable, and will systematically abuse its power to print?
Possibly. But then, if I can't trust my government with that, I can't trust it with anything (starting with taxes). If it's a problem with this particular government, we have elections. If it's a problem with any possibly elected government, then maybe it's time to change the governance itself.
The idea that inflation is always and forever a bad thing, PERIOD, is religious dogma for some people; they will not be budged, nor swayed, nor convinced to look at any evidence that inflation is part of a healthy, growing economy.
No, and indeed the governments use printing press as a last resort. However when it becomes necessary to inflate in a last ditch attempt of saving economy, we're not speaking of 5-15%.
Greece without external bailout, were it not in Eurozone, would've taken perhaps 500-1000% annual, with most loss concentrated within few initial months. People's savings would've been wiped and confidence in the currency lost for at least a decade. Likewise for Iceland, Cyprus and other borrowing bubble zones.