Not sure they’ve quite got this

The second factor is the increase in interest rates, especially in the 1990s. This increase favoured creditors and speculators, to the detriment of debtors. Instead of borrowing on financial markets at prohibitive interest rates, had the state financed itself by appealing to household savings and banks, and borrowed at historically normal rates, the public debt would be inferior to current levels by 29 GDP points.

And how do you appeal to banks and household savings? By increasing the interest rates on offer of course.

These Frogs don’t seem to quite get economics, do they?

The state should cease to borrow on financial markets, instead financing itself through households and banks at reasonable and controllable interest rates.

What the hell is borrowing from banks and households other than borrowing through a financial market?

17 comments on “Not sure they’ve quite got this

  1. What the hell is borrowing from banks and households other than borrowing through a financial market?

    I have a sneaking suspicion that they have been reading Ritchie and what they mean is forcing people to buy government bonds and the state taking over their pension funds a la Argentina. It is not a market if the plebs are forced to buy a government IOU at a rate set by the government of its own choosing.

  2. I suspect when they talk about “socialisation of the banking system” they mean they will steal the money rather than borrow it.

  3. It’s a marvellous piece. What intrigues particularly is how the character of money changes as a function of who owns or owes it.

  4. Very much off topic, but something odd.
    Did anyone see the Telegraph article on digital anarchy, this morning? It was linked from the front page at 7:00 this morning. Explored the implications of the blockchain protocol not only in relation to Bitcoin but also its use in various peer-to-peer transactions. It was truly libertarian, anarchic stuff. Except it seems to have gone missing. It doesn’t come up on search & the nearest thing, the link to an article in News/Technology about Bitcoin doesn’t go anywhere.
    Very strange.

  5. Razmig Keucheyan is a hardline revolutionary Marxist sociology lecturer at the Sorbonne writing (badly) about economics. A Guardianista’s wet dream.

  6. “As history has shown, France is capable of the best and the worst, and often in short periods of time.

    “On the day following Marine Le Pen’s Front National victory in the European elections, however, France made a decisive contribution to the reinvention of a radical politics for the 21st century.”

    Strange. Would have thought Marine was doing radical politics for the 21st century.
    Must be some other meaning of radical…

  7. BiS – Radical means doing the same things Marxists did in 1917.

    Everything else is reactionary.

  8. “The state should cease to borrow on financial markets, instead financing itself through households and banks at reasonable and controllable interest rates.”

    I think what he means is as said above – compulsory ‘enrollment’ in a State ‘savings scheme’ offering derisory rates of interest and which you aren’t allowed to withdraw your money from.

    I liked his theory that oublic spending has not increased (eh?) but as debt has increased because of tax ‘cuts’ it is therefore not real debt and can be repudiated.

    As we all know, as all this debt is owned to a few evil Jewish gnomes and not millions of ordinary people it can be unilaterally written off by the State with a sniff and nothing bad would happen AT ALL.

  9. @ BiS

    Following up, I’ve just done some googling – this (ie the blcokchain concept as a disruptive technology) looks to be getting increasing exposure, partilcualarly in the last couple of months..

  10. I’d be curious to know why the Torygraph carried it. It’s like the Graun serialising Ayn Rand. It’s subversive of everything the paper stands for.

  11. Upon reading this article I conducted a citizen’s audit of my mortgage; it’s illegitimate!

  12. Not the nuttiest or even the most laughable but definitely the stupidest thing I’ve read on CIF recently.

  13. MC

    You need to get out more; to the Tax Research blog to be exact, Mr Andrew “I’m not saying Stalin was a good man, but his tractors were great” Dickie to be more exact. Anything a government does, actually any law Parliament makes, that isn;t exactly in line with the election manifesto is illegitimate. And BIG laws (ill-defined, but he appears to mean anyth law made in the Margaret Thatcher era) needa a referendum. Funnily neough the Lisbon Treaty, hunting ban, HRA or anything he likes wasn’t included on the list; yeah, funny that.

    Ritchie likes the idea.

  14. Surely anything that’s done exatly in line with the election manifesto is also illegitimate, as the manifesto was written by some unelected party policy wonks and not by a democratically-elected Parliament?

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