Three Links on the Eurozone Crisis

Michael Stephens | December 9, 2013

1) In an interview with Roger Strassburg, James Galbraith discusses the “Modest Proposal,” a plan for resolving the eurozone’s multiple crises without creating any new institutions or amending any treaties. Galbraith is a co-author of the latest version of the proposal, joining Yanis Varoufakis and Stuart Holland (an earlier version was published as a Levy Institute policy note). The interview then turned to a discussion of next year’s potential US debt standoff in the context of Modern Money Theory.

Read Galbraith’s full interview here at Yanis Varoufakis’s site.

2)  Starting off from Wynne Godley’s 1997 observation that the fundamental problem with the EMU setup was the institutionalized divorce between fiscal policy and currency sovereignty, Rob Parenteau develops an alternative public financing instrument that attempts to get around this flaw:

… governments will henceforth issue revenue anticipation notes to government employees, government suppliers, and beneficiaries of government transfers. These tax anticipation notes, which are a well known instrument of public finance by many state governments across the US, will have the following characteristics: zero coupon (no interest payment), perpetual (meaning no repayment of principal, no redemption, and hence no increase in public debt outstanding), transferable (can be sold onto third parties in open markets), and denominated in euros. In addition, and most importantly, these revenue anticipation notes would be accepted at par value by the federal government in settlement of private sector tax liabilities.

Read the rest here at Naked Capitalism. Parenteau recently discussed the idea at the Levy Institute’s Athens conference. You can listen to his presentation here (Saturday, November 9, Session 4; slides available here).

Also, see Philip Pilkington and Warren Mosler’s related proposal for “tax-backed bonds,” recently updated.

3) Usually, when we think about the rising threat of authoritarianism accompanying Greece’s policy-induced economic disaster, we think about Golden Dawn, but C. J. Polychroniou argues that there’s more to the deterioration of Greece’s political culture than the growing popularity of the far-right party:

In today’s economically beleaguered Greece, where the repayment of foreign debt, the sale of public assets to private interests and the blocking of alternative routes to recovery define the official public policy agenda, the government has resurrected the many authoritarian practices of the past in an apparent effort to keep the game going for as long as possible.

Read the rest at Truthout.

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