3 ms·

Maybe the French government is out of money, and they might be even desperate, but first of all this money will be earmarked for the production of independent m

by carlob 13y ago

Maybe the French government is out of money, and they might be even desperate, but first of all this money will be earmarked for the production of independent movies and the like. Secondly and more importantly when the French elected a socialist president they where expecting more actions like this one and many commentators think the government is not doing enough and is still too enterprise-friendly.

jamesaguilar 13y ago
Indeed, and it's not like the tech giants will pay for the tax anyway. It will be the french citizenry who pay in the form of higher prices on goods (to some extent, depending on elasticity, YMMV, no purchase necessary, etc.).
ekianjo 13y ago
Well they can earmark it where they like, it does not change the fact the country's first budget (even before Education) is dedicated to debt repayment. And things will only get worse as the confidence in the Eurozone erodes, sending future debt rates to the roof. They won't be solving much by raising taxes, and at one point raising taxes will definitely have a negative effect (i.e. significantly hurt consumption and therefore reduce the government revenues - we may already be at that point).
- loup-vaillant 13y ago
  On the other hand, cutting expenses (as you seemed to be suggesting in another comment) is not the solution either. Remember how we got in this mess in the first place: (1) Stop creating money directly, but borrow from private parties instead. They will effectively create the money –fractional reserve banking and such. (2) Keep a slight deficit on your budget every year. If I recall correctly, the current French debt is 80% interests fees. If we had borrowed from our central bank instead of Rothschild&co, our current debt would have been only 20% of what it is now –well, assuming we didn't borrow even more. So, now, mainstream politics is all about the raise taxes / cut expenses false dichotomy. Our governance doesn't seem to see the obvious third alternative: stop borrowing from the market, start borrowing from the central banks at nearly 0% instead. (It can be done indirectly, despite the current EU constitution/setting: let some public agency borrow from the central bank, then let the states borrow from this agency. Of course, it requires some impossible coordination from all states)
  - TheAnimus 13y ago
    >On the other hand, cutting expenses (as you seemed to be suggesting in another comment) is not the solution either. Remember how we got in this mess in the first place: Depends what you mean by 'this mess' if this mess is a high level of debt without the productive economic activities to service it, I'd suggest that it was by spending too much on things that didn't provide a return on investment. >They will effectively create the money –fractional reserve banking and such. No, that is not fractional reserve banking, in fact what would happen if they did just print more money? Lets pretend they could do it without breaking away from the euro. Inflation would rise sharply? Would that lead to a better economic situation? Some people say it does, hence the UKs policy on QE. >If we had borrowed from our central bank instead of Rothschild&co, our current debt would have been only 20% of what it is now –well, assuming we didn't borrow even more. That is just a gross oversimplification, and really Rothschild&co? What are we, angry I learnt economics from youtube socialists? >start borrowing from the central banks at nearly 0% instead. Historically, this action hasn't worked well. Ultimately they have debt obligations as is, they need to settle that with something, where would that something come from? They could deflate the debt, which would be the effect of creating a synthetic entity which would loan at 0%. To deflate this much debt would seriously hurt people. They could potentially try and bond default, Russia kinda got away with it (some people say it was a good idea), but then Argentina really showed the problems that can happen doing this. This is why people come down to taxation and spending, ultimately they are the only options, because any kind of inflationary policy is a cruel tax, as it is often felt more by the poorest, due to the commodities which tend to rise. Meanwhile the super rich can make money of the back of it and even increase their worth leveraged thanks to the inflation bonds and the like.
    - loup-vaillant 13y ago
      On inflation (I don't want to duplicate comments): https://news.ycombinator.com/item?id=5706941 https://news.ycombinator.com/item?id=5706941 On Rothschild&co: I'm quite serious: President Pompidou used to work for them, prior to the 73 law that forbade the state from borrowing to the central bank (there were no Euro, back then). The only alternative was to borrow from private banks, of course. and Rothschild conveniently happened to be one of the big players, and happened to finance a significant part of the French debt. Well, as far as I know. My sources are mainly Pierre Larouturrou, and Étiène Chouard, left-sided French economists. On deflating the debt: I doubt the solution would be to do it at once. On the other hand, why not keep the budget as it is, and just stop borrowing from the market altogether? It would progressively Lower the payments on the interests, freeing some budget to actually lower the debt, or doing some other investments. I did not however measured the impact of not borrowing from rich people any more.
- lambast 13y ago
  This line of reasoning makes sense, but so far the evidence has been contradicting it completely... France is borrowing at the cheapest rates it ever has. See for instance: http://www.reuters.com/article/2013/04/30/markets-bonds-idUSL6N0DH3QD20130430 http://www.reuters.com/article/2013/04/30/markets-bonds-idUS...

by carlob 13y ago

jamesaguilar 13y ago

Indeed, and it's not like the tech giants will pay for the tax anyway. It will be the french citizenry who pay in the form of higher prices on goods (to some extent, depending on elasticity, YMMV, no purchase necessary, etc.).

ekianjo 13y ago

Well they can earmark it where they like, it does not change the fact the country's first budget (even before Education) is dedicated to debt repayment. And things will only get worse as the confidence in the Eurozone erodes, sending future debt rates to the roof. They won't be solving much by raising taxes, and at one point raising taxes will definitely have a negative effect (i.e. significantly hurt consumption and therefore reduce the government revenues - we may already be at that point).

loup-vaillant 13y ago
On the other hand, cutting expenses (as you seemed to be suggesting in another comment) is not the solution either. Remember how we got in this mess in the first place: (1) Stop creating money directly, but borrow from private parties instead. They will effectively create the money –fractional reserve banking and such. (2) Keep a slight deficit on your budget every year. If I recall correctly, the current French debt is 80% interests fees. If we had borrowed from our central bank instead of Rothschild&co, our current debt would have been only 20% of what it is now –well, assuming we didn't borrow even more. So, now, mainstream politics is all about the raise taxes / cut expenses false dichotomy. Our governance doesn't seem to see the obvious third alternative: stop borrowing from the market, start borrowing from the central banks at nearly 0% instead. (It can be done indirectly, despite the current EU constitution/setting: let some public agency borrow from the central bank, then let the states borrow from this agency. Of course, it requires some impossible coordination from all states)
- TheAnimus 13y ago
  >On the other hand, cutting expenses (as you seemed to be suggesting in another comment) is not the solution either. Remember how we got in this mess in the first place: Depends what you mean by 'this mess' if this mess is a high level of debt without the productive economic activities to service it, I'd suggest that it was by spending too much on things that didn't provide a return on investment. >They will effectively create the money –fractional reserve banking and such. No, that is not fractional reserve banking, in fact what would happen if they did just print more money? Lets pretend they could do it without breaking away from the euro. Inflation would rise sharply? Would that lead to a better economic situation? Some people say it does, hence the UKs policy on QE. >If we had borrowed from our central bank instead of Rothschild&co, our current debt would have been only 20% of what it is now –well, assuming we didn't borrow even more. That is just a gross oversimplification, and really Rothschild&co? What are we, angry I learnt economics from youtube socialists? >start borrowing from the central banks at nearly 0% instead. Historically, this action hasn't worked well. Ultimately they have debt obligations as is, they need to settle that with something, where would that something come from? They could deflate the debt, which would be the effect of creating a synthetic entity which would loan at 0%. To deflate this much debt would seriously hurt people. They could potentially try and bond default, Russia kinda got away with it (some people say it was a good idea), but then Argentina really showed the problems that can happen doing this. This is why people come down to taxation and spending, ultimately they are the only options, because any kind of inflationary policy is a cruel tax, as it is often felt more by the poorest, due to the commodities which tend to rise. Meanwhile the super rich can make money of the back of it and even increase their worth leveraged thanks to the inflation bonds and the like.
  - loup-vaillant 13y ago
    On inflation (I don't want to duplicate comments): https://news.ycombinator.com/item?id=5706941 https://news.ycombinator.com/item?id=5706941 On Rothschild&co: I'm quite serious: President Pompidou used to work for them, prior to the 73 law that forbade the state from borrowing to the central bank (there were no Euro, back then). The only alternative was to borrow from private banks, of course. and Rothschild conveniently happened to be one of the big players, and happened to finance a significant part of the French debt. Well, as far as I know. My sources are mainly Pierre Larouturrou, and Étiène Chouard, left-sided French economists. On deflating the debt: I doubt the solution would be to do it at once. On the other hand, why not keep the budget as it is, and just stop borrowing from the market altogether? It would progressively Lower the payments on the interests, freeing some budget to actually lower the debt, or doing some other investments. I did not however measured the impact of not borrowing from rich people any more.
lambast 13y ago
This line of reasoning makes sense, but so far the evidence has been contradicting it completely... France is borrowing at the cheapest rates it ever has. See for instance: http://www.reuters.com/article/2013/04/30/markets-bonds-idUSL6N0DH3QD20130430 http://www.reuters.com/article/2013/04/30/markets-bonds-idUS...