22 Oct 2017

Global Financial Transactions 2006-16 by country

Here's another table that analyses where the financial tranasactions listed by the Bank for International Settlements have been taking place since 2016. You can again find the data on a google sheet file here.

The US remains the biggest player,  followed by the UK, although the international CLS settlement system comes close at number 3 in 2016..

By looking at how the transactions in different countries have changed, you can see some very dramatic changes over time. The most striking change has been China, where transactions have increased from just under $134 trillion in 2006 to over $1.14 quadrillion in 2016, putting it at the number 3 slot. Germany has now dropped back to a mere $638 trillion in 2016 from a peak of $1.46 quadrillion in 2013. It has thus dropped behind Japan.

From my point of view, the fact that transactions can move around like that doesn't really change my basic conclusion. If we decided to impose a Global Transaction Tax, it would be be possible to provide a Basic Income at 50% of median income for every person on the planet with a tax of just 0.1%. The money is clearly there, it just doesn't get used to do the most important things for the planet.

And, as I have said over and over again, even the $11 quadrillion a year reported by BIS is almost certainly massively underestimated becauses the mammoth Options Clearing Corporation doesn't even get listed. So you might not even need to tax at 0.1%.

You might say that there would always be some place where people would try to provide a tax haven to allow traders to get away without paying even 0.1%. There are solutions for that too. You simply have to decide that any financial transaction that is not declared is not legally valid. I suspect that even the most greedy traders would be happy to pay 0.1% of the transaction value to ensure that their billion dollar deal was legally valid.

8 Oct 2017

The ECB has now created over €2 trillion

If you have been reading my blog, you will know that I am a big fan of having an Unconditional Basic income. In my last post, I noted that with Global financial transactions running at a minimum of $11 quadrillion in 2016 (official BIS figures), you could finance a Basic Income at 50% of Median Income for the entire population of the planet with a flat rate financial transaction tax of 0.1%.

But in this post, I would like to point to another simple way of financing Basic Income.

I've just looked at the latest figures provided by the European Central Bank for its Expanded Asset Purchase Program (APP) which has been running since October 2014. This is actually composed of four separate programs:
The history of these purchases is in a CSV file that can be downloaded here. But to make things easy to see, I have imported the info into an excel sheet that can be found as a publicly available Google Sheet here.

Here is a table of the figures.

As you can see, the total has now exceeded €2 trillion. This corresponds to around €6160 for each of the 330 million people living in the Eurozone.  Since March 2015, the ECB has been pumping roughly €64 billion every month into the economy. That money could perfectly well have been given directly to Eurozone citizens. It would have been roughly €193.50 each - €774 for a family of four.

Of course, I imagine that Mario Draghi, the ECB president, will say that his way of using €64 billion a month is better. It certainly has been better for the banks, who have been able to buy up Public Sector debt by using their money creation power, and then hand on the bonds to the ECB. Effectively, some 82.4% of the "money" created by the ECB has been used to buy up Government bonds on the secondary markets.

But really, if the ECB wanted to get the Eurozone economy working, putting the money into peoples pockets would be a much more efficient way to use €2 trillion. It's the idea that has been proposed for some time now by the QE4people movement.

BIS Financial Transactions in 2016 - Over $11 quadrillion - again.

Sorry. I've been very quite for a couple of months. But when the Bank for International Settlements brings out its Statistics on payment, clearing and settlement systems in October, I really feel that I have to do my standard analysis - one that I've been doing every year since I started this blog in 2010.

If you want to do the number crunching yourself, you can get the original data files from the BIS website. There are two excel files - one provides comparative tables for the 23 countries that BIS reports, all converted into US dollars. The other provides information country by country, using each countries national Currency.

You can also download the whole thing as a handy 572 page pdf file.

However, the really interesting numbers are not available directly in the documents. You have to compile a monster file with all the entries from the different tables. There are 241 separate values, and you can see them all for the entire period from 2006 to 2016 in a Google Sheet that I have made public here.

The bottom line (literally) is that in 2016, the total value of the transactions listed by the BIS comes to $11,014,671,780,050,100. Let's just call it $11 quadrillion, shall we? 

The total for the period from 2006 now totals over $117 quadrillion. Which means that the average annual value is a healthy $10.6 quadrillion over the entire period. It has never slipped much below $10 quadrillion, except for 2006. 

To get an idea about the key players, I've compiled a short table with just the top 25 players, each of which has done over $1 quadrillion in trading since 2006.  Together they account for over 80% of the total. 
The three red values are based on the previous years numbers. I did this because the the values for 2016 are not yet available for NSCC (National Securities Clearing Corporation) and Payment Transactions by non-banks in the USA. And for some reason, the Payment Transactions by Non-Banks for 2011 was never made available in the BIS data set. Oh well. Too late now, I guess.

The value for 2016 is up about 4% on 2015. But this is mainly due to the fact that BIS has finally managed to get a figure for one of my favourite trading sites - LCH Clearnet Ltd. Those figures have been mysteriously "nav" - not available for the period 2010-2015. Given that LCH Clearnet managed to handle over nearly $1.6 quadrillion in transactions in 2008, this slight oversight meant that the figures for that period are clearly underestimates. Now that the BIS has rediscoved the existence of LCH Clearnet's figures in 2016, you can see that with over $786 trillion of transactions in 2016,  it's a major player. 

But the fact is that even BIS's figures are certainly massively underestimated. For a start, they only cover 23 of the worlds countries. But even more significant is the fact that the Bank for International Settlements doesn't report anything for the Options Clearing Corporation, based in Chicago, which is "the world's largest equity derivatives clearing organization". The OCC has handled over 4 billion transactions every year since 2011. I've been unable to find how much those transactions were worth, but given that they generate over $1.3 trillion in premiums, the total could dwarf even the $11 quadrillion a year in total value listed by BIS. 

Why are such numbers important? Well, suppose that we decided to impose a 0.1% flat rate Financial Transaction tax on all electronic transactions. It's an idea that I have been pushing since October 2010.  Back in January 2016, I calculated that such a tax would generate enough money to give a Universal Basic Income at 50% of the median income for every person on the planet

Imagine. No more starvation, no more mass migrations, no more need to inflict environmental destruction on the planet. The wealthiest 1% of the population would soon no longer have the same wealth as the rest of mankind - as Oxfam reported earlier this year.  Six people would no longer have the wealth of half of humanity - as recently pointed out by Bernie Sanders

Think about it. I think it makes sense.  

22 Aug 2017

Saving the World - by fixing the economy - all 800 pages of my Blog!

I started my blog on the Economy in October 2010. Since then I have generated a total of 576 posts, corresponding to over 380 thousand words and over 2.1 million characters. The blog has been visited more than  441 thousand times.

That's a lot of stuff to read.

Just in case there is someone out there who would like to read all my output at their leisure, and maybe read it using a reader program rather than on the web, I have used BlogBooker to generate a Word file, that I then edited to produce a monster pdf file with over 800 pages. It's actually quite a good way to read the stuff, because all the links work, and you can use the index at the front to navigate. You can also easily search the text for keywords etc.

You can download the file, called "SavingTheWorld-2000-2017" by clicking on this link.

Enjoy!


5 Jun 2017

Martin Farley's proposals for a UK Basic Income based on Negative Income Tax

I've just been having a very interesting exchange concerning my recent proposals for implementing a UK Basic Income via a Negative Income Tax with Martin Farley, who has proposed a whole set of reforms that togeher he calls the "Transformation Deal". His proposals integrate several key ideas including Unconditional Basic Income (UBI),  a Land Value Tax, a Flat Tax on ALL income,  and Commons Licences that would require businesses to pay to use common resources.

I got  in contact with Martin because I had seen his post from September 2016 on "How a Negative Income Tax could more effectively deliver a Basic Income" and found it very interesting - as well as being very similar to my own suggestions! Martin proposed the following numbers for Basic Income, which would vary with age according to the following arrangement
  • £8,400 per year to every person over 65 years of age
  • £6,000 per year to every person between 21 and 64 years of age
  • £3,600 per year to every person between 18 and 20 years of age
  • £2,400 per year to every person between the ages of 0 and 17 (for 16 and 17 year olds, the payment will be made directly to the recipient. For those 0-15, payment will be made to the named guardian/primary carer)
These seem like pretty reasonable numbers that take into account the fact that people over 65 are less able to go out and work to earn additional income than those between 21 and 64. I presume that Martin's proposal would replace the UK's state pension (currently £122.30 a week, or £6359.60 per annum). Giving more to the elderly seems justified, in the same way as it would be normal to pay more to those of working age who have physical or mental handicaps that reduce their ability to obtain additional income. Martin and I agree that while the Basic Income would allow many of the current means tested benefits to be scrapped, it is necessary to keep at least some of the existing benefits in place.

Specifically, Martin suggests that those benefits would add £50 billion to the cost of the system, broken down as follows:
  • Disability benefits -£18bn
  • Housing benefit for OAPs - £5bn
  • Second Earnings-Relation Pensions Scheme - £10bn 
  • Attendance Allowance - £6bn
  • Various other random allowances - around £10bn
He also points out that my figures, which uses the percentiles among tax payers fails to take into account the existence of a substantial number of people who would also be eligible for the Basic Income, but didn't figure in my original calculations. Specifically:
  • 4m people who work, but earn less than £10k
  • 2m people in full time study/training
  • 1.2m pensioners who have no income other than the state pension
  • about 6m other people who have no income (stay-at-home parents, unemployed, the sick etc)
It's a fair point. Clearly, I will need to make adjustments to the precise values for the values for the Basic Income and the flat tax rate to make the system balance. But I feel that whatever the final numbers, the overall scheme which sees the Income Tax system as a way to provide a Basic Income and redistribute revenue from the highest earners to the rest of the population will work.

Indeed, on his website Martin gives a specfic implementation in which he proposes a Basic Income of £7200 a year, coupled with a flat tax of 35% that allows the Goverment to raise £63.5 billion a year. In that simulation, he takes into account the numbers of people who are currently non-earners. The result is actually very close to what I am proposing, with the difference that the point at which people stop being net receivers from the tax system is shifted left to the 44th Percentile point. It is this that allows the proposal to generate revenue for the government, whereas my proposal which has the neutrality split at around 66% is deliberately designed to be a self-contained redistribution system. My own view is that Income tax should not be used for raising revenue for the government - raising revenue would be easier to do with a Financial Transaction Tax, that would also be a flat rate tax, paid by all - citizens, businesses and banks alike.

One reason I think this may be a good ploy, especially in the USA where there are a lot of people who object to giving any of their hard-earned money to the government. With a scheme where their tax money only goes to other citizens, it is a lot less easy to object.

I note that Martin has also done some calculations that show how the same scheme could be used to provide a Basic Income of $9000 a year in the USA with a flat income tax rate of 27%.  It's very close to my proposal, posted yesterday, where I suggested a Basic Income of $10 000 a year, entirely financed by a flat rate income tax of 18.5% - the only real difference being that my proposal does not try to raise revenue for the government.

As you can hopefully see , it looks like Martin Farley's proposals and my own are really remarkably closely aligned. Great minds think alike?

4 Jun 2017

A Basic Income using Negative Income Tax for the USA

Now that I have shown how to implement a Basic Income using  a perfectly balanced redistributive Income Tax system in France and the UK, I thought I would see how the same idea could work in the USA.

I took figures for the Income distribution that I found here (a bit tedious, because I had to extract the numbers by hand), and that allowed me to generate a Google Sheet file that you can consult here.

The following graph shows one of the many options for a balanced system.

In this one, we give all US citizens a Unconditional Basic Income of $15000 a year, but tax any additional income at a flat rate of  27.8%. This means that the 66% of Americans who earn less that $53,600 a year, will pay no tax at all - it's the point where the tax at 27.8% cancels out the $15000 payment.

Anyone earning more than the magic $53,600 will effectively pay tax at 27.8% on any additional income, but of course this only ramps up very slowly - as shown in the following plot - and even people in the top 1% of earners woud still be paying less than 25% (red line)

The graph also shows two other combinations or Basic Income and Tax that work well. You could give everyone a Basic Income of $10,000 a year if you had a flat rate Income Tax at 18.5% on all other income (blue line), or you could choose to give everyone $20,000 if you applied the universal income tax at 37.1%.

As with the other examples for France and the UK, I think it is only fair to point out that income tax done this way does not raise any revenue for the Government - it's purely redistributive. But in the USA, where tax payers (particularly those at the top end) are endlessly moaning about their money going to the government. In this case, NONE of the money goes to the Government - it all goes to other US citizens. You'd have to be extremely selfish to say that you would prefer to see people starving to death, or living in the street, that pay less than 30% of your income in tax.

In such a system, 2/3 of the population actually get money from the tax system. And the other third can look themselves in the mirror and say - I'm doing something good for my fellow citizens.

Donald Trump - are you listening?

A Basic Income via Negative Income Tax for the UK

With the UK's general election in a few days time (9th June 2017), I thought it might be interesting to see how my proposal for introducing a Basic Income based on Negative Income Tax might work in the UK. I had already taken the percentiles of income in France to show that you could provide a monthly Basic Income of (say) €600 for all adults and pay for the whole thing with a flat rate tax on all additional income of under 30%.

What would happen in the UK?

Well, I obtained the official figures from the UK government on the income and tax paid for all percentiles in the UK, and calculated what would happen if you gave a basic income of £10000 to everyone, and then required people to pay a flat rate tax on all additional income.

I've uploaded the file to Google Sheets, so you can see the details here, but the bottom line is as follows. If you want to provide £10,000 to all tax payers in the form of a Basic Unconditional Income, it would be possible to finance the whole thing by taxing all additional income at 34.4%. Anyone earning less than £29,500 would get a net payment from the state via the tax system, scaling from £10,000 for people in the first percentile down to nothing if you are at the 66th percentile. But that means that 2/3 of the population would be net receivers from the system.

The system would be in equilibrium because the money needed to make those payments would be entirely paid for by the 34% of the population earning more than £29,500 a year. The following graph shows how it works.


The blue line shows how annual income changes with percentile of the population. The red line plots the income following the introduction of a £10000 annual Basic Income. And the yellow line shows the net transfer - positive for the bottom 66% of the population (those earning less than £29,500) and negative for those earning more.

As in the French version, the £29,500 figure is a magic cut off point. It's simply the point at which the £10000 of It is easy to vary the level of Basic Income while keeping the system neutral - you simply have to increas the flat rate tax to ensure that the top 34% of earners pay enough into the system to make the payments to the other 2/3 of the population.

Here's how the tax rate would change for different Basic Income rates:

  • For a Basic Income of £8000 a year requires a flat rate income tax on additional income  of 27.5%
  • For a Basic Income of £10000 a year, set the tax at 34.4%
  • For a Basic Income of £12000 a year, set the tax at 41.2%
  • For a Basic Income of £14000 a year, set the tax at 47.2%
In fact the rule is simple - each additional £2000 a year of Basic Income requires a hike in the flat rate tax of roughly 7%.

However,  it is important to realize that these numbers do not reflect the real rates of tax that people would pay. The following graph shows the effective tax rates paid under each of these four schemes as a function of income.
As you can see, tax rates are always 0% at around £29,500 of annual income and increase progressively as income goes up. But at £50,000 a year, even a £14,000 Basic Income would not require paying more than 22% in net tax.

It looks quite an attractive proposal. However, to be fair, I should note that with this scheme the UK government would not be raising any revenue from Income Tax. On the other hand, since people on low incomes would be getting quite substantial sums of money every month from the tax system, it would no longer be necessary to make a large number of the existing means tested welfare payments.

Those of you who are familiar with my ideas will know that I think that there are far better ways of earning revenue for the government- especially in the UK. The solution is to replace Income Tax as the main way for the government to raise revenue by a financial transaction tax. Given the incredible levels of financial transactions in the UK, a tiny tax of a fraction of 1% would easily allow Income Tax (and indeed other taxesà to be scrapped as a way to raise revenue. Instead, the system of negative income tax proposed here has only a redistributive function.

Isn't that what we need? In a world where the top 1% of the earners are taking an excessive share of the revenue, and where jobs are dissapearing so fast that those at the bottom are no longer able to hope to earn enough to live decently, we need to provide a was of redistributing the money to everyone.

Importantly, with the proposed system, even though people do get "paid for doing nothing", the system is such that it will be always interesting for people to go out an work to earn additional income. There a no poverty traps that block people in a world of hopeless means-tested welfare payments. 

14 May 2017

Can we replace the French benefits system by a Universal Basic Income financed by a Negative Income Tax?

Those who are following my blog will have seen my suggestion that we could have a redistributive tax system whereby 61% of the population would actually get a net payment from the tax system, paid entirely by the other 39% of the population. This means that everyone earning less than about €2000 a month actually gets extra money from the system - effectively a negative income tax.

It's remarkably simple, because you just have to fix two numbers - the Basic Income level that every citizen should get, and the flat rate tax needed to cover the cost.

Thus, to provide a Basic Income of €600 a month would need a tax rate at just under 30%.
To provide a Basic Income of €800 a month, needs a tax rate at just under 40%.  A
Basic Income of €1000 a month, needs a tax rate at just under 50%and so forth. Around 10% tax provides an additional €200 a month of basic income for all citizens.

So, what rate should we choose?

Well, how about using the system to replace the "Minium Vieillesse" which currently provides a minimum revenue for old-age pensioners. As of the 1st April 2017, these payments are fixed at
- €803 for a single person
- €1247 for a couple

These payments are currently heavilly means tested -  you can only get it if you are over 65, and every euro of pension you receive from alternative sources is removed from the amount of the allocation. If you have a pension of €803 per month, the state will add nothing to your pension.  If your pension is €403 a month, the system will make up the difference.

Let's compare that with  what would happen if we scrapped the Minimum Vieillesse and just introduced an Basic Income at €800 a month, coupled with a 40% tax on additional income. In that case, someone with an additional pension of €800 would effectively get the €800 basic income, plus 60% of the additional pension, taxed at 40% - i.e. €480, a total of €1280. That's way better than under the current system.

Now consider what would happen to someone with pension of €1200. They would get €800 + 60% of €1200 = €1520 a month.

You have a pension of €2000? You would get €800 + €1200 (60% of €2000) = €2000, meaning that you would effectively keep it all. Only those with pensions of over €2000 a  month would pay anything, and their effective tax rates would increase only slowly as shown in this graph which shows the rates for a Basic Income at €800 and tax rate at 39.5% in Blue. Even someone getting a very generous pension of €10000 would still only be paying tax on that at 31.5%.



The graph also shows the effective tax for those getting more than €2000 with the Basic Income set at €600 and the tax rate at 29.65% (in yellow) or at €1000 and the tax rate at 49.4%. It's interesting to note that even at €10,000 a month, people are paying way below the standard rate. In fact, at €10,000 a month you would be paying tax at 80% of the headline rate. To get anywhere near the headline rate you would have have to be earning far more - at €40,000 you still only have an effective tax rate of 95% of the headline rate. 

How much would be saved by scrapping the Minimum Vieillesse and replacing it in this way by a negative tax?  Actually, I don't know. The latest figures I have seen were €1.6 billion in 2006, and €2.83 billion in 2008. It's probably substantially higher today.

So, why not scrap it, save billions a year, and also prevent people being stuck in a poverty trap that prevents them moving off the €803 baseline unless their additional pension rights are much higher.

The French system also provides another set of Benefits for people of working age. It's called the Revenue de Solidarité Active (RSA). The current value for a single person is €513.17 a month. Clearly, such a person would be immediately better off with the proposed switch to a Basic Income financed by a negative income tax, even at the lower value of €600 a month.

But, importantly, they would immediately see an improvement in their situation if they were earning additional income from a part time job. With the current RSA mechanism, any additional income is  directly substracted from the €513.17. Thus, if you earned €313.17 in a given month, your RSA is docked by the same amount. You also lose some of your RSA if you are also receiving housing support - €64.22 to be precise. You simply cannot get more than the standard amount unless you are earning over the basic amount. What incentive is there to go and work a few hours a week under such conditions? It would be better to stay at home at claim the RSA unless you can find a  full time job that pays enough to get you off the minimum level.

Emmanuel Macron wants to encourage people to take on work. The RSA system is the antithesis of what is required.

Compare that will my proposal where you could decide to give everyone an Unconditional  Basic Income of €600 coupled with a flat rate tax of under 30%. Someone who worked part time and earned say €500 would keep slightly more than 70% of the income, moving them to €950 a month. In otherwords, it always pays to take on work, even if it is only a few hours a week.

Under the current system, which takes into account all the other sources of revenue, succesfully getting the RSA requires citizens to negotiate a whole string of complex rules and fill in large amounts of paperwork. Many disadvantaged people will miss out simply because the system is too complicated for them. 

In addition to being good for incentivising people to earn additional money, switching to the proposed system would save a huge amount of money for the state.  How much would it save? According to one site, the cost is currently around €10 billion a year. As I have been arguing, a much more generous program of benefits could be provided for essentially no net cost by getting the 39% who earn the most to pay those who constitute the 61% at the bottom.

So, dumping RSA and Minimum Vieillesse and replacing both by my proposed simple system would save billions. And the administration costs would be a fraction of the cumbersome means tested system that we currently have.

Is Emmanuel Macron listening? Maybe it's time to think about some really radical reforms?



8 May 2017

Message to Emmanuel Macron : Prove that you are not just a puppet of the Banking system

Yesterdary, in the second round of the French Presidential elections, Emmanuel Macron succeeded in getting 20,753,798 people to vote for him. That's 43.63% of those eligable to vote, 58.47% of those who voted, and 66.06% of those who chose to vote for one of the two candidates in the second round.

There's no denying that this is a truly remarkable performance for someone who is only 39,  has never held an elected office, has no official support from any of the traditional French Political Parties, and had to launch his own "En Marche" movement (with the same initials as his name) little more than one year ago, on the 6th of April 2017.

It's truly spectacular, and I'm not surprised that many people are feeling more optimistic about the future with Emmanuel Macron as president. It could be the new blood that we desperately need.

But many people have criticised him for having spent a period of over over 3 and half years from September 2008 to May 2012 as a Banker with Rothschild and Co. And it's true that this is an invitation to those who like conspiracy theories.  Could it be that he could be secretly working for the banking system? After all, the ability of Banks like Goldman Sachs to infiltrate the highest echelons of the Political system is impressive, as pointed out in a recent article in Yahoo Finance. Just as a quick reminder (thanks to Wikipedia) here is a partial list of how just one bank has managed to get its alumni into a huge number of key positions:

But I'm prepared to give Emmanuel Macron a chance to prove that he is truly independent.

Here's how he could do it.

First, he should join the chorus of distinguished economists who are calling on Mario Draghi to put an end to the scheme where he uses his power as President of the European Central Bank to create money to flood the financial markets with liquidity. The €80 billion that Draghi has been pumping into the financial system every month for the last year has been of virtually no utility to Eurozone Citizens. Instead, he should be using that money creation intelligently - for example to finance renewable energy projects, or providing direct payments to Eurozone citizens. The arguments can be found on the QE4citizens website.

Second, he should accept that the current system in which commercial banks have a virtual monopoly on money creation in the real economy, and where essentially all the money we use is created as interest bearing debt, is insane. It would be far more intelligent to allow governments to create at least some of the money we use debt free. This is what I have been proposing with the idea of the N-Euro - a parallel electronic currency that can be used to pay public sector salaries, pensions and benefits, and which has parity with the conventional Euro because it can be used to pay taxes - one N-Euro being exactly the same value for paying taxes as one standard Euro. The huge difference is that the N-Euros are not created as debt and therefore do not require interest payments. Progressively replacing Euros with N-Euros would allow us to avoid paying the absurb interest payments on public sector debt that French taxpayers have been paying to the commercial banks and pension funds. As I reported recently, those payments that have totalled over €1 trillion since 1995. French taxpayers can reasonably say - we want our €1 trillion back.

Third, he should push for the introduction of a tax on financial transactions. This is something that has been blocked by the banking lobby for years, but is totally unjustifiable. Everytime I make a financial transaction using my credit card outside the Euro area, I get charged a financial transaction tax of around 2.75% - for multiplying the value in sterling or dollars by the current exchange rate. At the same time, the banking sector and its allies makes over 5 trillion dollars worth of foreign exchange every day, and for free. Let's have a level playing field. I'm happy to pay exactly the same transaction fees as the bankers.

If Emmanuel Macron was prepared to take the lead on either of this issues, he would convince me that he is not simply a smooth and manicured front man for the Banking System. If he fails to do anything, then I'll always have doubts about his true motivations.

I'll be following developments with much interest in the months and years to come.


French Presidential Elections : A massive increase in the "we don't want your policies" vote

Like many people, I'm very relieved that Marine LePen's National Front was pushed into second place in yesterday's second round of the Presidential Elections. Congratulations to Emmanuel Macron.

But one of the most fascinating things about yesterday's results was the massive increase in the number of people who went out to vote, but refused to vote for either Macron or LePen. The official  results from the French Ministery of the Interior now distinguish between "Vote Blanc" - an empty envelope, or a blank piece of paper, and a "Vote Nul" which is what happens if you write something else on the voting slip. This is actually new - and follows a change in practise that occured in 2014.

Of the 35,407,616 people who voted yesterday, over 3 million voted blanc (3,006,106 to be precise), and a further million voted nul (1,070,696). Add them together, and that tells you that over four million people (4,066,802) said "we don't want either set of policies!". That's 11.49% of the people who voted. In my part of France (Occitanie), the percent of people who voted Blanc and Nul reached 13.08%.

That's about twice the previous record.

If you are interested in the details, I extracted the relevant information in a Google Sheet that you can access here.

I'm happy to tell you that I voted blanc myself - but only after the RTBF news site in Belgium had revealed that Macron was heading for a safe victory! I didn't want to wake up this morning with LePen as president.

If you add to the 4 million plus that voted Blanc or Nul the more than 12 million people (12,041,313) who abstained, and you get a total of over 16 million people (16,108,115) who effectively reject the current policies. This massive rejection is particular clear in these graphs that you can find on the Guardian's website, that shows that for many parts of France,  "spoiled ballots" (Blanc and Nul) and abstention were remarkably common.



I hope Emmanuel Macron is paying attention to this. It looks like the French people want something different from the usual tired old Neoliberal recipes. I believe that deregulation and Uberization of the economy is simply not what people want.

I believe we need radical new ideas that can make the economy work for people. Monsieur Macron, you seem to be an intelligent person, who appears to be capable of listening. I'm happy to talk with you if ever you want some new ideas.

7 May 2017

More ideas for Emmanuel Macron - A Basic Income via Negative Income Tax

Today we will learn who will be the next French President. Hopefully, the "MacronLeaks" scandal will not have destablilised the campaign and we will avoid the trauma of having a neo-fascist like Marine LePen as president.

Nevertheless, I am far from being a fan of the very conventional neo-liberal program being offered by Emmanuel Macron. That's why I would like him to consider some of the more radical ideas that I have been pushing for the last 7 years on my blog.

In my "Open letter to Emmanuel Macron" last week, I was suggesting that he should consider replacing the bulk of the existing tax system with a flat rate universal tax on all electronic financial transactions. And I argued that the positive redistribution effect of the current inefficient income tax system could be done much more efficiently by simply providing a universal basic income to all citizens.

In earlier posts, I had already argued that such a basic income can be implemented very neatly by having what is effectively a negative income tax for anyone earning less than a certain amount. Using the distibution of incomes in France provided by Lansais, Piketty and Saez, I was able to show that if you had a basic income payment of €600 a month, coupled with a fixed income tax on all additional revenue of under 30%, the entire system would pay for itself. You can hopefully understand how this would work by looking at the following graph which shows how montly income varies with the percentile of the population. The blue line plots monthly revenue for French citizens by percentile. The yellow line gives the monthly income include the Basic Income and after income tax. And finally, the red line gives the net transfer - negative for those on relative low income levels, positive for those with higher revenues. If you want to see exactly how I get these numbers, feel free to check out the Google Sheet that has all the numbers here.

The idea illustrated in this particular example is that everyone gets an Unconditional Basic Income of €600 and then pays 29.65% tax on any additional revenue. Since the bottom 7% of the population have no income at all, they all get the basic €600. But the 61% of the population who earn less than about €2000 a month would all receive a net payment from the state. Someone earning €2000 would be neutral (no net monthly payment) because the €600 of Basic Income would be cancelled out by paying 30% tax on their €2000 of revenue. People earning more than €2000 would effectively pay roughly  30% tax on earnings above €2000. Thus, someone earning €3000 would pay €300 (i.e. an effective tax rate of 10%), someone earning €6000 would pay  roughly €1200 (an effective tax rate of 20%), and so forth.

If you look at the details, this means that there would be a net transfer of nearly €10 billion per year to the 61% of the population earning less than €2000 a month, entirely paid for by the 39% earning more than €2000 a month.  In other words it would be a pure redistribution system. But importantly, more than a quarter of the money (€2.75 billion) would be paid for by those in the top 1% of the population. Indeed, nearly €1 billion would be contributed by the top 0.1% of the population, and no less than €390 million by the 0.01% of the population who earn the most.

It is interesting to point out that the €600 and 29.65% tax rate numbers are just one of a whole range of options. For example, if you only want to guarantee €400 of basic income per month, you could fix the tax rate at below 20% and again have a perfectly balanced redistributive tax system. In that case, €6.2 billion would be redistributed from the top 39% of earners to the bottom 61%, as shown in the following figure.

Likewise, suppose you wish to increase the basic income to €800. In that case, you would need to increase the flat rate tax rate to 39.95%, which would  transfer about €13.27 billion from the top 39% to the bottom 61% as shown in the figure.

You want an even larger Basic Income? Easy. To get an Unconditional Basic Income of €1000 a month, you simply have to increase the flat rate tax to 49.5% and you will transfer nearly €16.6 billion from the most affluent 39% of the population to the other 61%.

It's interesting to note that note that it doesn't matter which particular combination of Basic Income and Tax rates you choose, the percentage of the population that get a positive net payment stays fixed at 61%. Indeed the rule is pretty simple. Relative to a reference figure for the Basic Income of €600 and a tax rate at just under 30%, adding an extra €200 to the basic income requires a hike in the flat rate income tax of about 10%.

These numbers are built into the basic principle that the income tax system is designed as a redistribution system that shifts income from those who are earning a lot to those who are earning less than €2000 a month. If you actually wanted income tax to provide money to pay for other things (like the staggering €46 billion a year that French tax payers have been paying in interest on public sector debt since 1995!), then you could I suppose increase the tax rate above the levels proposed here. Personally, I object very strongly to the government using my income tax to pay illegitimate interest payments to commercial banks who didn't even have the "money" that they lent the French Government. In contrast, I would have much less problems if those interest payments were paid for using a tax on financial transactions - but that's another story.

If you do want to use this mechanism to actually raise money, rather than simply redistribute it, it's actual quite simple. If you go above the neutral tax rate for a given basic income level, each 10% increase in the tax rate generates roughly €120 billion in revenue. Thus, if we set the Basic Income at €600 and move the Tax rate from just under 30%, to 40%. First, it would generate €120 billion of extra income for the government. But second, it would move the point at which people start having to pay tax from €2000 a month, to about €1500 a month with the result that the percentage of people who receive money from the system will drop from 61% to 45%.

But for me, I really like the idea that Income Tax should serve one purpose, and one purpose only- namely redistributing wealth from the affluent to the less affluent. This may appear to go against my previous proposition that we could potentially scrap all taxes (including income tax) using a flat rate financial transaction tax. But the fact is that currently, French income tax only generates about about €146 billion a year, and most of that is in the form of the CSG (Contribution Sociale Generalisé) which is currently fixed at 15.5% and is not in the least bit progressive.

I think that people would be much happier with Income Tax if they knew exactly what it was being used for. Essentially, with my proposals, if you are among the 61% of all French citizens who earn less than about €2000 a month, your income tax will be NEGATIVE - it will be a good thing!  In other words the majority of French voters would actually be in favor of Income Tax!

And for those earning more than €2000, they will be able to feel proud that their taxes are going to help those with low incomes. If you are in the 1% of French citizens earning more than  about €11,000 a month, you will be able to look yourself in the mirror and not feel ashamed, because you are helping to contribute about 25% of the money needed to provide a basic income for all.

If you are in the 0.1% who earn more than about €32,500 a month, you will be even more proud to know that you among the group that finance no less than 10% of the basic income. And finally, if you count yourself among the 0.01% earning more than €110,000 a month, you will proudly be able to boast that your contributions pay for 4% of the basic income.

But for me, there are other huge advantages of scrapping the current ridiculous Income Tax system. My proposals are simple and easy to understand. No more tax bands. No more tax loopholes. Income tax will be simple to understand. Noone will need to spend their weekends trying to make sense of the ludicrously complex tables which you need to use to work out how much you should be paying in income tax. It will be simple. You will get a fixed allowance in the form of a basic income and then pay a flat rate on all additional income. Simple. Clean. And efficient.

At the same time, the existence of an Unconditional Basic Income at €400, €600, €800 or even €1000 a month would mean that most of the existing means tested benefits could be scrapped. You could potentially only keep benefits for people who are physically or mentally unable to earn additional income by working. Imagine the impact of such a vast reform?

Emmanuel Macron - are you listening? Isn't this the sort of liberalisation of the economy that you have been arguing for?

30 Apr 2017

An Open Letter to Emmanuel Macron - Future French President?

Dear Monsieur Macron

In a weeks time, the French will vote to choose whether you or  Marine Lepen should be their next president. Many people will probably vote for you simply to prevent an extreme right Front National candidate getting into power. But many others, including myself, remain unconvinced that your brand of neoliberalism is really what we need. I would be reluctant to see you elected with more than the minimum support to beat Lepen, because I fear that your program is just going to be more of the same neoliberal policies that we have had with Hollande. I see little in your program that has any chance of fixing the real problems that face us.

That is why I am writing to you to argue that in fact there are a large number of alternative ideas that I believe you should be considering. You seem like an intelligent person, capable of listening. So please, listen for a bit. You might find something you like.

To start with, I think that most people can understand that almost all taxes are intrinsically bad. Income tax reduces the incentive to work. VAT reduces the incentive to buy products and services. The cost of social contributions discourages companies from employing humans - and pushes them to replace workers with robots whenever possible. And taxes on Company profits encourages businesses to relocate to places where the tax rates are lowest, with the result that there are entire industries devoted to minimising taxes for international corporations, biasing the playing field against the small entrepreneur.

For some years, I have been convinced that we could easily scrap Income Tax, VAT, social contributions, and taxes on profits. The solution would be to introduce a simple flat rate transaction tax on all financial transactions. Figures from the Bank for International Settlements show that transactions in 2015 totalled $9.76 quadrillion, and if you count the last 10 years, the total reaches $105 quadrillion. That's a one with 14 zeros after it ($105,000,000,000,000).  Here's a summary table, but you can find the original data on a Google Sheet here.

OK, I would agree that France only contributes a relatively modest amount to this eye-watering total (3.4%) - the bulk taking place in the US and UK, with a massive 10.9% being handled by multinational groupings like CLS which handles roughly half the world's $5.1 trillion in Foreign exchange transactions that occur EVERY DAY.

Nevertheless, even if we count just the numbers that are purely French, you will see that France's total over 10 years has been €2.745 quadrillion - or about €275 trillion a year on average.

So, just imagine what would happen if you were to impose a flat rate transaction tax on all electronic transactions in France of 0.2%. That would potentially generate up to €550 billion of revenue - enough to abolish every other tax!

I'm sure that your banker friends would say that a 0.2% tax on transactions would make the sky fall in. But it's 100 times less than the 20% VAT that the rest of us currently pay when we buy many things. It's also 100 times less that what many individuals and companies pay to the government in the form of income tax and profits.

Sure, the ridiculous and pointless frenetic activity on the financial exchanges would slow done, or move elsewhere. But imagine if France was the first country to scrap taxes on profits entirely. Multinationals would be swarming to Paris to be able to use their profits legally, rather than stashing them away in some taxhaven in the Caymans or Panama.

A second reform that goes hand in hand with abolishing income tax would be to set up an alternative way of restributing wealth. People say that they like Income tax because it provides a way a redistribing wealth from the rich to the poor. But what would happen with no income tax? Well, one way that produces a roughly equivalent redistributive effect would be to replace the redistributive tax system with direct payments to all citizens in the form of an unconditional basic income. I suspect that you think that this is a dangerous lunatic leftist proposal. But I would argue that it is quite the contrary.

Suppose that we have a system where you have scrapped taxes on company profits and abolished social security payments. This would already give a fantastic boost to French industry, because their costs would be slashed, making it substantially cheaper to produce goods in France than elsewhere.

But what few people seem to realize is that when an unconditional basic income is combined with a citizen's salary, this will also produce a massive boost for French industry. Someone with a family and kids would have basic income that would cover some percentage of their basic living costs. Additional money paid by the employer would add directly to the family's revenue, especially if we have also managed to scrap income tax. With the extra direct revenue from the basic income, the employer could manage to provide a decent living for less cost - thus again driving down the costs of producing in France.

In many respects, the same thing happens with any services that are provided as a basic citizens right. If people get free health care, free child care and free public transport, these are all things that they don't have to pay out of their salary, meaning that employment costs for the employer can be reduced.

It's odd that in the US, people still fail to understand that having an extortionately expensive health system that effectively has to be paid for by the employer means that US industry could never really compete on equal terms with industries in places like China.

Moving to a system where there is a basic unconditional income would not be a leftist fantasy. On the contrary, it should be seen as move that would greatly simplify the employment rules. If combined with the elimination of the vast majority of existing benefits schemes, it would result in a much simpler and understandable system in which everyone would know that whenever they work, they would be be guaranteed to increase their revenue. Under the current system with its labyrith of support measures, many people find that working ends up being unattractive because if they earn more than a given amount, they run the risk of losing the benefits they currently have. Such poverty traps are something that you could eliminate by simplifying the entire benefits system.

Monsieur Macron, don't you think that there are better ways out there that are worth considering. In the short message, I have talked about just two of them - fundamental tax reform and specifically the idea of replacing the majority of conventional  taxes with a universal transaction tax, and the basic unconditional income. If such ideas could be included in your program, I am certainly that many people would end up voting for you because they actually like what you have to offer - and not just as a way to prevent LePen gaining power.

29 Apr 2017

Eurozone Public Sector Debt and Interest payments 1995-2016

Here I provide more details of the way Eurozone Public Sector debt has soared since 1995, and the extent to which increases in debt relate to the interest payments that we have been forced to pay. The full set of data can be found in a Google Sheet File that you can download and consult freely. All the numbers come from the latest set of figures from the EuroStat office.

First hes is a graph of how debt has increased by over 135% since 1995, from €4.07 trillion to €9.59 trillion at the end of 2016.


Now let's look at the figures in detail.




































Debt has increased by €5,518,180 million, corresponding to an average increase of around €263 billion a year.

In the same period, Eurozone taxpayers have paid almost €6 trillion in interest on that debt - an average of over €280 billion a year. The figure is amazingly constant, with a peak value of €318 billion in 1996, and a minimum of €246 billion in 2004 and 2005. This contancy is despite an almost continuous drop in the effective interest rate, from 7.37% in 1995 to a "mere" 2.46% in 2016.

But that "mere" 2.46% level, helped no doubt by the massive purchasing of government bonds by the ECB, has not appreciably reduced the drain on Eurozone taxpayers. Despite Mario Draghi's efforts, we still forkd out over €236 billion in interest last year - corresponding to 2.2% of the Eurozone's GDP.

Over the whole period, an average of 3.4% of the Eurozone's GDP has been used to pay interest charges on Public Sector Debt. Given that roughly 19% of Eurozone GDP is taken in tax, this means that roughly 18% of all taxes in the Eurozone gets used to pay interest charges.

Where does all that money go? Well, to start with, you have to realize that only selected players are allowed to buy Eurozone government bonds - and those players are essentially all commercial banks. They are thus the ones that are first in line to benefit from all that taxpayers money.

And where do the banks get the money they use to buy government bonds? Well, they would no doubt like us all to believe that they are just acting as intermediaries for armies of grannies who want to use their savings to buy safe government bonds.

But this image is, in my humble opinion, a complete myth. When Commercial banks want to buy government bonds, they can just invent the "money" they use out of thin air. They can then sit back and cash in the taxpayers money that is being siphoned out of the economy. Alternatively, they can flog the bonds to third parties that include US and Canadian Pension Funds.

Whoever benefits from the money, it seems very likely that  roughly €6 trillion of Eurozone Taxpayers money could have been used for much more useful purposes.

There is thus a very strong case for completely scrapping the current insane system in which our governments are forced to borrow from commecial banks with the result that we are effectively all slaves to the financial system. That system was made binding by the treaties of Maastrict and Lisbon, but desperately needs to be overturned.

What is needed is a system where the European Central Bank can provide funds to Governments directly, preferably with no interest charges to pay. Or even better, Governments could simply create their own debt free money as with the N-Euro scheme that I have been proposing.


Spain : Over €500 billion in interest payments on Public Sector Debt since 1995

I'm continuing my analysis of the latest Eurostat Figures on European Union Public Sector Debt and Interest payments since 1995. Following France,  the UK and Italy, let's have a look at Spain - another of the countries under heavy pressure from the troika. All the figures I used to do the analysis can be found in a Google Sheet document that you can find here.

First, take a look at the graph of how Public sector debt has increased. It was incredibly stable from 1995 to 2007, increasing from just under €300 billion to less than €400 billion. But then, starting in in 2008, debt levels have tripled to over €1.1 trillion at the end of 2016.



The next table allows us to look at the details.



First, over the period 1995-2016, debt levels increased by €811,348 million, an average of €38,636 million per year. But note that Spain actually decreased its debt levels in 2003, 2006 and 2007

The amount paid by Spain's taxpayers as interest on that debt totals €509,730 million. It was less than €20 billion a yaer from 2002 to 2009 but has now been substantially over €30 billion a year for the past 5 years.

The amount paid in interest charges averages 2.9%, which, when you compare that figure with the value of 14.5% of GDP corresponding to taxes in Italy provided by the World Bank,  means that roughly 20%  all Spain's taxes gets used to pay the interest on Public sector debt.

This is frankly criminal. As with all European Union governments, the Maasstrict and Lisbon treaties oblige governments to borrow from the financial markets - essentially commercial banks. But, because of the way that banks work, they don't have to have pre-existing money to buy Spanish Government bonds - they can just invent the money out of thin air, and then sit back and enjoy the benefits of getting billions of interest payments every year, or flog the bonds to third party investors, including US and Canadian Pension Funds.
What would a typical Spanish Citizen say if he or she found out that a substantial proportion of their   taxes gets used to pay for pensions in the US? Would there be a revolution? I think there should be.

Italy : €1.72 trillion in interest paid on Public Sector Debt since1995

I'm continuing my analysis of the latest Eurostat Figures on European Union Public Sector Debt and Interest payments since 1995. Following France and the UK, I now turn the spotlight on Italy. All the figures I used to do the analysis can be found in a Google Sheet document that you can find here.

First, take a look at the graph of how Public sector debt has increased from just over €1 trillion in 1995 to over €2.2 trillion in 2016.



Next, lets look at the details.



































First, over the period 1995-2016, debt levels increased by €1,147,338 million, an average of €54,635 million per year.

The amount paid by Italian taxpayers as interest on that debt was particularly impressive, totally no less that €1,720,306 million. The amount has varied substantially from year to year, peaking at an eye-watering €114,239 million in 1996. It's been dropping slightly over the last five years, but was still no less than €66,272 million last year. Over the whole period, taxpayers have been paying an average of over €78 billion every year - that's 5.8% of Italian GDP.

When you compare that figure with the value of 23.7% of GDP corresponding to taxes in Italy provided by the World Bank, this means that roughly one quarter of all Italian taxes gets used to pay the interest on Public sector debt.

OK, the interest rates have been dropping somewhat, and are now quite a bit lower that the 9.32% effective interest that Italians were paying in 1995. Indeed, the effective interest rate dropped below 3% for the first time in 2016. But that doesn't make this situation any less ridiculous.

Why on earth are Italians forced to pay 25% of all their taxes to a Financial System that creates money out of thin air to purchase Italian Government bonds and then sits back and rakes in the interest charge. The €1.72 trillion that Italians have paid is, in my humble opinion, a total racket. I would suggest that someone in Italy should press to (a) end this insane system, and (b) ask for the €1.72 trillion back- please.

UK : Nearly £750 billion in fraudulent interest payments on Public Sector Debt since 1995


Given that the UK also has elections coming up in the next couple of months, I thought it would be useful to use the recently updated EuroStat Figures on Public Sector Debt and Interest Payments to have a look at just how catastrophic the current system has been for UK taxpayers.

First, here's a graph of how UK Public Sector debt has gone trhought the roof in the last decade.

From 1995 to 2000, debt was fairly stable at around £400 billion. But then its started climbing gradually, and then shot up with the arrival of Cameron's Conservative Party in 2009 and George Osborne as Chancellor. It has now reached a very impressive £1,731,402 million - call it roughly £1.7 trillion.


The following table provides the gory details.



































First, debt has increased by £1,253,157 million since 1996. But that debt has increased most in the period 2008-2011. In 1998, 2000 and 2001, debt levels actually decreased!

At the same time, the UK government has been generously paying out tens of billions every year in interest payments on that debt. The total over the period was £747,343 million - and average of very nearly £34 billion a year.  Last year, depite the claims of the Conservative Govenment that it was trying to get levels of debt down, debt actually increased by over £65 billion, and UK taxpayers handed out nearly £48 billion in interest charges.

The right hand column show the effective interest rate on Public sector debt has tended to drop and currently stands at 2.76%. But the average interest over the entire period has been 4.91%.

As a percentage of GDP, those interest payments account for 2.5% (both in 2016, and as an average over the period 1995-2016), which corresponds to about 10% of the total UK tax take (25.4% of GDP according to the WorldBank).

The bottom line is thus that 10% of UK Taxpayers money has gone to feed the parasitic tapeworm that came up with the wonderful scheme that allows Commercial banks to lend non-existent money to gullible (or complicit) governments, and then sit back and either get the interest, or flog the bonds that they have bought to third parties such as the US and Canadian Pension funds. Effectively, UK taxpayers are paying for pensions in the US. How generous.

How about Labour or the Lib Dems challenging this insane system that, thanks to the policies of Cameron and Osborne have put UK citizens massively in debt, through no fault of their own?



France : Over €1 trillion in interest payments on Public Sector debt since 1995

The latest Public Sector debt and interest payment figures from EuroStat make for sobering reading. Yesterday, I gave the headline figures for the the whole European Union - €12.4 trillion in public sector debt, with in interest payments €317 billion in 2016 alone.

Today, I want to look at the specific case of France, particularly in the light of the next week's Presidential run off between the Extreme Right wing candidate Marine Lepen and Neoliberal Emmauuel Macron.

First, lets just plot a graph of the increase in Public sector debt from €696,291 million at the end of 1995  to €2,147,418 millon at the end of 2016. 


Now lets look a some more details. This table can also be found as a sheet in a publicly avaible Google Sheet file that you can examine and download here (go to the folder called "France").     





































The table reveals that, over the period 1995 to 2016,  French public sector debt levels inceased by €1,451,126 million (€1.45 trillion). Of that, €1,017,375 million was due to the interest payments, i.e over €1 trillion. 

The right hand column shows that the effective interest rate paid on French public sector debt has dropped from 5.79% in 1995 to a "mere" 1.96% in 2016. 

Does this mean that the French taxpayer has been gettting a better deal? I don't think so. If you look at the actual amount of interest paid, it has remained remarkably stable, averaging €46.2 billion over the whole period. The minimum was around €40 billion in 1995, peaked at €56.2 billion in 2008, andhas dropped back to roughly €42 billion last year. How interesting. Effectively, as the levels of debt have more than tripled, the markets have magically adjusted the interest rates to ensure that the amount of money extracted from France's taxpayers has remained roughly stable.

For info, the Agence France Tresor (AFT), which manages French Public Sector debt, is currently prediciting that for 2017, the interest payments will stay pretty constant relative to 2016, with a total of €41.55 billion

The system reminds me of a parasitic tapeworm that skillfully avoids killing off the host.

The column that gives the interest paymnets as a percentage of GDP shows that the percentage has indeed tended to drop - from a peak of 3.4% at the start of the period, to a "mereé 1.9% in 2016.But the average over the entire period was 2.7% of French GDP.

That parasitic tapeworm has siphoned off a very sizable proportion of the tax revenue of the French governments revenue. According to World Bank figures, France's tax system took about 23.4% of French GDP in 2015. Shall we say that roughly 10% of that was used to keep the parasitic tapeworm happy? 

Who profited from this? In other words, where should we looking to find that tapeworm? 

Well, unfortantely it is difficult to have clear information about who gets the interest payments. We know that around 60% of the debt is held by non-residents - the historical details are available on the Banque de France's website which demonstrates that the percentage held by non-residents has dropped a bit from a peak of  over 70% in 2010.  But who are these "non-residents"? It seems quite plausible that a major holder could be  US and Canadian Pension Funds. That would mean that a substantial proportion of the 2.7% of GDP that gets used to pay the interest on French Public Sector debt has been used to pay pensions in the US and Canada. One might reasonably ask whether it might not be better to use French taxpayers money to pay pensions in France!

No doubt the defenders of the status quo will argue that the French government has no choice but to borrow from the financial markets. But I would argue that this is simply false. Until the infamous "Loi Pompidou-Giscard" in 1973, the French government could simply ask the Banque de France for funds, and actually had no debt at all. 

For some reason, the idea that only commercial banks should be allowed to lend "money" to governments subseqently became the norm, and was finally sealed into the Maastrict and Lisbon treaties. The result has been total disastrous for French Taxpayers who, in the period 1995-2016, as  have effectively handed over more that €1 trillion of hard earned cash to Banks who, in case you didn't know, don't even have to have the money they lend. They can just create it out of thin air by buying up French government bonds with non-existent money, and then either sit back and collect the interest payments, or flog the bonds on to Pension Funds in countries like the US and Canada.

Is this insane? You bet.

If Emmanual Macron would really like to be elected in one weeks time as France's President, why doesn't he say that he will fight to (a) end this racket, and (b) ask for out €1 trillion back please. Now that would be a really popular move!