What do you think about an idea along these lines: each euro member state should issue two classes of debt: junior and senior. The senior debt is intended as fiscal backing to the currency, and cannot exceed X% of GDP. If a country wishes to issue more debt, it can do so, but this is junior debt that will always default first in case there is a fiscal crisis.
To finance the senior debt, each member country could impose a small tax, for instance a 1% VAT. Proceeds of this tax would service this debt. Or, alternatively, the debt could be equity instead, with all tax proceeds going to holders on a quarterly basis. The ECB is only allowed to hold this instrument on its balance sheet, and nothing else. A full fiscal union will never happen I think, and is not needed anyway.
Congratulations on the glider work! Very cool aircraft. My Dad taught glider pilots for the Army Air Corp 1938-1942, before joining the Corp in ‘42. Agree fully with your comments about the Fed in responding to the Furman article. Let’s get back to the Fed managing the money supply as Milton proposed.
this looks very interesting. The eurozone is a great test of all sorts of theories, predictions and comparisons. Did you read Bagus' 2010 tragedy of the euro? i loved the comparative and historical angle in that one. Anyway, looking forward to this one!
Ah yes, the landing! After several hours of high intensity thought and observation comes the landing. Obviously it went well. How does one learn to land a B-52 of gliders? Obviously it is a skill like economic that takes time to learn. Welcome back!
Welcome back!
What do you think about an idea along these lines: each euro member state should issue two classes of debt: junior and senior. The senior debt is intended as fiscal backing to the currency, and cannot exceed X% of GDP. If a country wishes to issue more debt, it can do so, but this is junior debt that will always default first in case there is a fiscal crisis.
To finance the senior debt, each member country could impose a small tax, for instance a 1% VAT. Proceeds of this tax would service this debt. Or, alternatively, the debt could be equity instead, with all tax proceeds going to holders on a quarterly basis. The ECB is only allowed to hold this instrument on its balance sheet, and nothing else. A full fiscal union will never happen I think, and is not needed anyway.
I decided to work out this idea a bit further: https://gideonmagnus.medium.com/the-case-for-consumption-linked-perpetuities-in-the-eurozone-557779ece710
Brilliant pic of the glider!!!!
Sovereign default doesn't mean nonpayment, but restructuring. I think it's healthy as it might preclude further TBTF policies.
Congratulations on the glider work! Very cool aircraft. My Dad taught glider pilots for the Army Air Corp 1938-1942, before joining the Corp in ‘42. Agree fully with your comments about the Fed in responding to the Furman article. Let’s get back to the Fed managing the money supply as Milton proposed.
this looks very interesting. The eurozone is a great test of all sorts of theories, predictions and comparisons. Did you read Bagus' 2010 tragedy of the euro? i loved the comparative and historical angle in that one. Anyway, looking forward to this one!
Ah yes, the landing! After several hours of high intensity thought and observation comes the landing. Obviously it went well. How does one learn to land a B-52 of gliders? Obviously it is a skill like economic that takes time to learn. Welcome back!
Joint fiscal institution? C'mon man!
EUtopia already has more than enough institutions :) But the place to start is EU bonds to fund mutual defense :)
How’d you do at the Nationals?
Great, downloaded and will read