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Ireland's "Peaceful Protestors" - Pest Control?
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It's not limited to 12 months, TAN's can be reissued as they are collected as taxes (same way as government spends money collected as taxes) - you could sustainably keep the same amount of TAN's in circulation forever this way, if you want - it's not analogous to debt in this way, and wouldn't count as public debt.You're expecting Ireland to effectively use a 12 month interest free credit card to run the country. This would be totally fine if we were expecting to have the full amount within 12 months - but we're not. So we'd have to transfer the balance year on year by issuing more TANs.
Would this even count towards public debt on the books? And if there's no interest the debt wouldn't even be worth trading which would negatively effect the holders (average people). They're basically bonds issued against people's work? Wouldn't the government be basically saying "Hey, public sector employee, instead of your wages here's a little note which says I'll pay you next year.".
That is my understanding of that article. If I'm wrong I'd genuinely like to hear an explanation.
You can't be thinking about it as if it is debt, because you're setting traps for yourself, where you treat it like debt/bonds when it is not. It's like a hybrid between bonds/money (though you can't think be thinking about it as if it is money either
as that can set more traps for you).
It wouldn't negatively affect the holders, because it's meant for trade and paying taxes, not investment/holding
(you would be able to use TAN's like money - because businesses need to pay taxes too)
The holders would in fact benefit, because their salary would increase, as would aggregate demand, due to all of the TAN's going through the economy like money and contributing to their wages and business profits.0 -
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KomradeBishop wrote: »It's not limited to 12 months, TAN's can be reissued as they are collected as taxes (same way as government spends money collected as taxes) - you could sustainably keep the same amount of TAN's in circulation forever this way, if you want - it's not analogous to debt in this way, and wouldn't count as public debt.
But effectively it IS debt - it just wouldn't be accounted for as such. More of a general liability. Still balances the same.
You can't be thinking about it as if it is debt, because you're setting traps for yourself, where you treat it like debt/bonds when it is not. It's like a hybrid between bonds/money (though you can't think be thinking about it as if it is money either as that can set more traps for you).
The reason I think about it as debt is because it essentially - expect it has no real benefit for the holders. You're issuing people with a cert that's good for an agreed value at a future date. The only reason it's not called a tax bond is that there's no interest to be paid. As such, there's no benefit to holding them (unless forced, at which point you have no option).It wouldn't negatively affect the holders, because it's meant for trade and paying taxes, not investment/holding (you would be able to use TAN's like money - because businesses need to pay taxes too)
The holders would in fact benefit, because their salary would increase, as would aggregate demand, due to all of the TAN's going through the economy like money and contributing to their wages and business profits.
If I want to pay taxes, why not just pay them in money? Sure, if I can secure an effective discount by charging the government interest then I might consider it, but otherwise no.
You mention that TANs would go through the economy. They wouldn't. There's nothing to be gained by buying a TAN from one person. They wouldn't follow the circular flow of money through the economy as a traditional fiat currency does. Nobody would accept TANs as payment either because they accrue no interest so, assuming the economy has inflation which Ireland does, they would be worth less by the time I could cash them in. So the only way I'd accept them is if I could collect more TANs than the current monetary value of the transaction to offset inflation, which would be bad for the person paying in TANs because they'd be paying €120 in 'tax bonds' for €100 worth of product/service.
Dress it up how you want. TANs are a short-term financing option for a government. Not something useful for financing the running of a country for 20 years over billions of euro (the deficit and current repayment schedule).
I did some searching around. Their only use seems to be in the US with local authorities issuing them to fund small, immediate projects which capital will be available for before the TANs come due. Totally different scenario in terms of scale and usage than any EU austerity solution.0 -
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