61–70 of 99 posts
Earlier quoted context omitted.
Actually, money is specifically designed for saving.
To paraphrase Silvio Gesell, an economist in favor of symbolic currency almost a century ago, "All the physical assets of the world are at the disposal of those who wish to save, so why should they make their savings in the form of money? Money was not made to be saved!"
In some ways, this isn't a great plan. It punishes those who saved their money while rewarding those who consumed their income. It also means that people will have to start assuming that wealth taxes on bank account balances may happen in more jurisdictions and that they should move their money into what they deem to be safe jurisdictions. This could do harm to other countries whose banking systems have been having t…
Extracting money from people's bank accounts without even an acknowledgment is akin to foraging through their purses and wallets without consent. Can't you see the larger issue here? This shortsighted measure will backfire. Imagine you saved just enough money to cover rent, or see a dentist. You counted on that money being there. Wouldn't this be upsetting and a betrayal of your trust? Would you be so quick to leave…
If you want to be libertarian, go be a hermit in the mountains. You'll be the master of your domain there, and won't have to pay taxes or pay a penalty when other people screw up.
This is highway robbery. It reneges on the contractual agreement between the depositors and the banks to get the full deposit back. If they impose a 10% levy on the new deposits, then fine. They are levying on existing deposits retroactively. That's simply robbery. Just because the money is from foreigners doesn't make it right. EU banking will have not credibility after this. This will discourage people to put money…
Well, the locals got screwed, too. Here's some good analysis: http://bit.ly/110JLpm He speculates that they could have taxed the foreigners (Russians) @ 30%, but that would have finished off Cyprus as a destination for foreign money. Instead, they taxed everyone at 10%. The Russians might see 10% as the cost of doing business.
In some ways, this isn't a great plan. It punishes those who saved their money while rewarding those who consumed their income. It also means that people will have to start assuming that wealth taxes on bank account balances may happen in more jurisdictions and that they should move their money into what they deem to be safe jurisdictions. This could do harm to other countries whose banking systems have been having t…
The problem is that the state is broke. It's that or they're out of the eurozone.
In some ways, this isn't a great plan. It punishes those who saved their money while rewarding those who consumed their income. It also means that people will have to start assuming that wealth taxes on bank account balances may happen in more jurisdictions and that they should move their money into what they deem to be safe jurisdictions. This could do harm to other countries whose banking systems have been having t…
That said, I can understand why they went this route. It's basically a free down payment on an emergency loan mostly provided by wealthy Russians. Again, not illegal, but it isn't exactly just to have foreigners pay for your countries debts. I don't feel terribly sorry, since most of that Russian money likely came from less than reputable means. But as the saying goes, two wrongs don't make a right.
But the repercussions will be far reaching. First off, Cyrpus can expect a run on their banks from foreigners. Don't know if they have plans on stopping that, but I don't see why any foreigner would keep money there. Secondly, Smaller countries (and possibly large ones as well) in financially precarious situations will probably start seeing a run on their banks. This can set off contagion in a region without a strong central economic force to stave it off.
Though I expect some off-shore type country to pass a law soon stating they will never perform such a tax, and a lot of money will start flowing into their banks.
Earlier quoted context omitted.
Extracting money from people's bank accounts without even an acknowledgment is akin to foraging through their purses and wallets without consent. Can't you see the larger issue here? This shortsighted measure will backfire. Imagine you saved just enough money to cover rent, or see a dentist. You counted on that money being there. Wouldn't this be upsetting and a betrayal of your trust? Would you be so quick to leave…
It's the cost of living in a group. Your receive all the benefits of living in the group, and when the group as a whole is in trouble, you need to do your part. If you want to be libertarian, go be a hermit in the mountains. You'll be the master of your domain there, and won't have to pay taxes or pay a penalty when other people screw up.
The problem with "doing your part" is that once you reach a certain level of taxation you have diminishing returns: that's the Laffer curve and, sadly, socialists don't seem to be able to understand that.
And I can tell you that in many countries of the eurozone the private sector is "doing its part" since decades, only to pay for the lifestyle and entitlements of the ever growing number of public servants.
F^ck socialism. We're witnessing the failure of socialism and I can tell you that I love it. What I don't love is all the states running at deficit since decades trying to wag the dog and pretend the problem is not that states are indebted at crazy high levels.
The public sector is way too important in Europe. That's the Laffer curve and you can't do anything about it besides lowering taxation on the private sector and citizen if you want an efficient economy.
Socialists always end up with state default. There's no other way. Because socialist economies do not work. Even Sweden lowered it's public sector from 67% of the GDP to 49% in 20 years, realizing they were otherwise going into a wall.
Some countries, like Switzerland, have a constitution forbidding the state to run with a deficit too important.
This is what the eurozone should do. We should beat the socialists who are ruining our economy and destroy the entrepreneurship spirit...
Earlier quoted context omitted.
Extracting money from people's bank accounts without even an acknowledgment is akin to foraging through their purses and wallets without consent. Can't you see the larger issue here? This shortsighted measure will backfire. Imagine you saved just enough money to cover rent, or see a dentist. You counted on that money being there. Wouldn't this be upsetting and a betrayal of your trust? Would you be so quick to leave…
It's the cost of living in a group. Your receive all the benefits of living in the group, and when the group as a whole is in trouble, you need to do your part. If you want to be libertarian, go be a hermit in the mountains. You'll be the master of your domain there, and won't have to pay taxes or pay a penalty when other people screw up.
This won't work. When the government undermines the trust of the people so that they will no longer use the financial system they are trying to protect, that's called "shooting yourself in the foot".
A bank is only in business if people trust it. Money only works if people trust it. Governments only work if the people trust it.
In some ways, this isn't a great plan. It punishes those who saved their money while rewarding those who consumed their income. It also means that people will have to start assuming that wealth taxes on bank account balances may happen in more jurisdictions and that they should move their money into what they deem to be safe jurisdictions. This could do harm to other countries whose banking systems have been having t…
Your conclusion that this action would be lawful in the US is an overstatement. Without contorting the Euro Zone economic rules into the US monetary system, if something like this happend in the US, it would not be a tax, but a seizure of private property without Due Process. Kinda a no-no, legally speaking.
The U.S. has its own way to confiscate citizen's money and that is called quantitative easing, which creates inflation. That's why they abandoned the gold standard: to be able to confiscate as much as they want using inflation.
Earlier quoted context omitted.
This sure seems like it would be a violation of a person's right to be secure from seizure of property in the USA. Does anyone with a legal background have any insight they want to share? I am having trouble wrapping my brain around the idea that money I have in the bank could be seized to pay for someone else's fuckup. I know inflation can sort of do that on a society-wide scale, but seizure of post-tax income from…
In the U.S., a new tax like this would require an act of Congress. If it passed it would most likely be found Constitutional--there are basically no limits on the power of the Congress to levy a tax. But, it would take truly dire straits for Congress to even consider such an obviously unpopular idea. And those dire straits would have a much harder time arriving in the U.S. than the EU. Cypress (and Greece, and Italy,…
Part of the reason I think they're crazy to do this is that the above is obviously not true.
There may be nothing the population can legally do about it, but we're living in a time when governments are in genuine danger of going bankrupt, funny money isn't worth the paper it's printed on, and people are literally worrying about essentials like putting food on the table and keeping a roof over their kids' heads. Sooner or later, if we continue down this path, something is going to give, spectacularly.
Unfortunately, when that happens, it will probably come with a horrific body count and potentially even civil or all-out international war. That's the really terrifying thing about this whole mess: it is disrupting the basic fabric of society, the implicit trust we all place in our political and legal and financial systems so we can enjoy our modern, civilised lifestyles. We take a lot of things about that civil society for granted that we would miss dearly if they were gone.
We can only hope that whoever thought this blatant cash grab was a good idea will come to their senses in time to contain the fallout if they go through with it.
Earlier quoted context omitted.
an old lesson that has been forgotten needs to be relearned. Money is not meant to be saved. Money is for earning and spending. Saving should be done in real tangible assets.
Actually, money is specifically designed for saving.
Because currency is made to be inflated. It's universally producible for less than its face value.
Saving cash is ridiculous.