The UK conquest of Ireland began in 1169.
It’s time to finish the job.
All they have to do is offer the following:
Ireland converts all its public debt to sterling.
The UK Treasury takes over the responsibility for all of Ireland’s existing public debt.
(Ireland gets a clean start with no Irish govt. debt and not interest payments)
Ireland taxes and spends in sterling only and has a balanced budget requirement.
Ireland can borrow only for capital expenditures.
The UK Treasury guarantees all existing insured euro bank deposits in Irish banks.
Only sterling deposits are insured for new deposits.
Ireland runs a mirror tax code to the UK and keeps all of its tax revenues.
The UK agrees to fund Ireland’s with a pro rata/per capita share of any UK deficit spending.
St. Patrick’s Day is declared a UK national holiday and everyone over 21 gets a beer voucher.
You’re a brave man suggesting another Act of Union with the UK. They’ve only just stopped shooting and blowing people up over the last one.
Also the beer drinking age here is 18, not 21. We’re not as repressed as the Yanks 🙂
And from there the UK can do the same with the rest of the euro members, picking them off one by one, until the new empire extends far beyond anyone ever dreamed of…
Michael, please change to 18 in the post, thanks!
Yeah, but it’ll never be complete until we get the American colonies back where they belong 😉
In short, Ireland moves from the “euro standard” to the “sterling standard.” Something like Illinois being on the “dollar standard.” It could work.
You said, “Ireland taxes and spends in sterling only and has a balanced budget requirement.” So, where does Ireland get money? You answer that question with, “The UK agrees to fund Ireland with a pro rata/per capita share of any UK deficit spending.”
The better solution is to substitute “the EU,” for “the UK,” and have the EU function as a government. That would solve all of Europe’s problems.
But who pays for the beer?
Rodger Malcolm Mitchell
The problem is, the EU doesn’t have any facility set up to deficit spend, but the UK does (it just doesn’t want to). And of course, Ireland being on the Sterling standard does make a lot more sense in the first place, since most of it’s trade is with the UK, anyway.
Warren’s proposal neatly gets around the problem of the crippling lead time it would take to get a new currency up and running. Just redenominate debt in sterling, have everyone convert their euros to sterling if they want to pay their taxes, etc.
It makes eminent sense. Only two problems: 1.) The U.K. would never go for it, and 2.) The Irish would rather THE ISLAND WAS SET ON FIRE AND SUNK INTO THE SEA than go for it. Other than that, it’s a lock.
England doesn’t have enough money now. 🙂
Exactly! And just when you need it the most!!!
right, if the uk ‘got it’ they wouldn’t be on their moronic austerity program/Aztec economics, etc.
But the Irish just might take the money and run, so to speak, figuring they are getting something for nothing from the Brits they could walk away from later.
Just like with the EU…
of course it could work. 🙁
I already suggested the EU do it, but they’ve obviously declined, leaving an opening for the UK, or anyone else with their own currency.
I suspect govt. officials from China read this blog, so don’t be surprised if they make overtures…
I’m surprised Rodger, you seem like such a well-traveled man, I thought you knew this:
In Ireland, The government creates this beer by crediting bank accounts. It creates beer with the stroke of a computer keyboard. New beer is an entry on a spreadsheet, nothing more. :o)
The problem with Warren’s idea is its too damn logical. Its the fate of mankind that people would rather be governed poorly by their “own kind” (which is a fluid concept) than be governed wisely by outsiders. Indeed, that universal provincialism may be what crushes the European Union. I really don’t think European elites ever realized that abdicating national economic sovereignty to the German government was bad economics and horrible politics. Frankly it makes Margaret Thatcher look like a genius for refusing (even bucking her own cabinet) to put the UK in the Eurozone. Its a pity that neither Brown nor Cameron recognized the value of her obstinacy.
If we didn’t have such a small-minded bunch running the US Government (imagine if someone with the balls of Teddy Roosevelt were in the White House), the United States would be signing up Iceland, Ireland and probably several Eastern European countries as self-governing US Territories.
They might find union with Massachusetts, or at least Boston, more acceptable.
Become the 52nd US state? Or a territory, similar to the Virgin Islands?
Haha, this post is awesome, I’d love to see the UK pick-off the pigs one-by-one.
And the way the US budget discussions are going they could probably get us back as well
Geez Warren, that really is a frightening thought. The Chinese and Russian leaders are damn smart. They’ve watched a President with solid majorities in both Houses of Congress get hammered in midterms due essentially to his own insanely bad negotiating skills. Every very time Obama gets outwitted by halfwits like Chuck Grassley, you can bet Putin adds items to his diplomatic wish list.
IIRC, until Woodrow Wilson went to the Paris Peace Talks in 1919, no incumbent president had ever left the Western Hemisphere, diplomacy was the State Department’s job. Now of course, presidents are gone half the time to various bilateral and group summits (G-7, G-20, NATO, APEC, etc.). Obama should do himself a favor and let Hillary handle those.
Obama can’t even negotiate with himself.
I think the problem is the opposite – he is always negotiating with himself.
He just never closes the deal.
First of all I don’t think the UK would offer the Irish such a sweet deal. Secondly, I think the Irish would rather accept being taken over by the rest of EU than by the British. In particular because 18 is the legal drinking age there too, which also speaks against a merger with Massachusetts 😉
What the EU is currently doing is exactly what you proposed the UK should be doing except that it hasn’t yet fully made it to the general public’s mind that in future the breeze will be blowing from Brussels and from nowhere else. What they’re currently doing is to play the crisis/austerity card against the European nations one by one in order to move economic policy powers away from national institutions to the center. And the battle behind closed doors is just who’s getting to do the talking in Brussels. That’s why Merkel is playing hard to get I’m assuming.
To me, all of this seems to be following directly from your Seven Deadly Innocent Frauds, which I just finished reading.
It’s not clear, of course, how many of the players get it. Merkel, for instance, may not be one of the it getters.
Interestingly, though, the way your description of basic monetary structures inverses one’s view of monetary logic, these players might still be playing their power games right, as they are battling the wrong causes with the wrong ideas. If only they wouldn’t be causing so much collateral damage …
Oh, sorry British, got the drinking age thing totally wrong.
Come to think of it, your last proposal (the revenue sharing one, not the beer one – intriguing as that is) might be a good one for the U.S. and the states. Pass a requirement that the Federal government run an operational balanced budget, but have an annual, per capita distribution of dollars (new money, not debt) to the states, based on some sort of formula like unemployment or GDP growth. Sort of like your Euro proposal. It would go a long way toward separating, both operationally and conceptually, the operational responsibilities of the government from the monetary ones.
recall my three proposals- FICA suspension, fed distribution to state govs on a per capita basis, and a fed funded job for anyone willing and able to work.
all still apply
Maybe revenue sharing via beer credits would be more easily accepted than Euro credits.
Who needs gold? Let’s go on the beer standard!
actually not all that bad of an idea!
our economy could really be hopping
As a Brit I concur with Jim Baird.
Only two problems:
1.) The U.K. would never go for it, and
2.) The Irish would rather THE ISLAND WAS SET ON FIRE AND SUNK INTO THE SEA than go for it.
My Grandad told me never to hang around where I was not wanted.
There’s little appetite for colonialism in 21st century UK. We leave that sort of stuff to the US now 😉
First off why 18, when I lived in germany I remember kids at 12 years old and even younger drinking lotsa beer.
This is a short hilarious video talking about the irish bailout, half way through it, they even have warren mosler holding a gun to the guys head in the room, I busted out laughing. Can anyone here tell me who the guy with the gun to his head is?
PS warren, you are talking traitorous/treasonous talk putting us back under mother england, benedict arnold switched sides and history doesn’t remember him well. I don’t think we have to worry though, one of Obama’s first acts as president was to send the bust of Churchill back to england that had been in the whitehouse for decades.
I like Erickson’s idea; If the U.K. won’t do it, maybe we (the USA) should do it.
It’s no further away than Hawaii is.
They all speak english and are well educated.
They like us! (hard to find in Yurrup)
They make good beer.
It’s a great place to go on vacation.
And I think the women are pretty good lookin’, to boot.
Only the ones you see on TV.
At this point. I run and dive for cover.
Ha!Ha!Ha! Hilarious thread!!
Re. Warren’s 3 proposals — FICA suspension, fed distribution to state govs on a per capita basis, and a fed funded job for anyone willing and able to work.
For may years, I have recommended the first two. But that third one has be puzzled. I don’t know how it would work logistically, and why it’s added to #2 (giving money to each state). Why not leave the unemployment problem up to the states? Think of the federal government trying to monitor the work habits of 20 million people. Yikes!
Rodger Malcolm Mitchell
Yeah, I blow hot and cold over that proposal too. If the govt is doing its job filling the output gap, it wouldn’t really be necessary but on the other hand, if govt isn’t doing its job, then yeah, suddenly the Dept of Labor is employing a force the size of the Red Army.
I guess I’d be content with a negative income tax system (adjusting the tax credits up or down to put more or less money into the economy) with funding available to states that want to set up their own JG program or, to recycle Truman’s old idea, universal military training of new high school grads via the state’s National Guard.
the fica tax suspension should be sufficient for quite a while, and it’s paid by all from dollar one
I’ll give you one good example of a program that could be administered locally and which is actually needed here. We have a nice wooded park that is quite extensive close to where I live. My wife and I used to enjoy walking in the park regularly. Then the city found it too expensive to maintain the hiking trails. Neglected over time, the trails became overgrown, washed out, and difficult to navigate in parts for older folks, if not dangerous. We stopped using the park for our walks after awhile and expect a lot of others like us did too.
This would be a worthwhile project for a “make-work” program. which could restore the quality of life in this city to what is was previously in “better days.” Moreover, maintenance of this sort is an ongoing requirement and does not require much skill or expensive equipment. It is really dumb having a beautiful public facility lie this that is going to waste, just waiting for some developers to “convert to gainful use.”
I’d call that something close to high priority/essential public purpose when you line up all the other things people do with their time.
Way more important than most anything the financial sector does, for example.
Publicly owned real estate represents perhaps the clearest example of unaccounted government waste.
I would recommend that all government owned property (federal, state, or local) be put on the property tax roles and both the imputed property tax revenue and property tax expense (obviously netting to zero) be included in the budget statements.
Seeing such large line items in the budget may encourage politicians either to better use such property or sell it off to the private sector where it is far more likely to be used efficiently.
On a separate but related point, no entity should be exempt from property taxes. It may require decades to transition to a system where churches, universities, etc. have to pay full property taxes, but we should start as soon as possible (a pipe dream, I know).
lots of reasons.
see ‘full employment and price stability’
all currencies are ‘anchored’ by some kind of buffer stock policy
might be gold, dollars, etc.
we use unemployment as our buffer stock to anchor prices
i propose an employed buffer stock vs the current unemployed buffer stock many reasons stated in the text
said another way,
In a ‘market economy’ the currency issuer, in theory, need only set one price, and the rest gravitate towards relative value.
Historically that has often been gold.
Today it’s the price of unemployed labor set at 0.
I propose using an employed buffer stock where that wage becomes ‘one price’ the govt sets, thereby defining the value of the currency
It is an interesting idea (see what I mean I blow hot and cold on it). A couple of guys on the same page as you in terms of JG policy are Rutgers Professor Philip Levy and a UC grad student Steve Attewell (they’re political scientists and look at it in terms of “returning to New Deal policies”).
Attewell suggests that a JG could first be implemented at the state level. Uncle Sam could push that along by funding state JG programs just as it currently funds state unemployment benefit programs.
The critical element in terms of creating a buffer stock JG is not whether DOL or States run it but that Congress provides funding by “price” and not “quantity”. Offhand, the only law that I know does that is the student loan program– 28 USC 1071(b)(6)– I’ve never seen a blank check clause like this before, must be legal or colleges would be empty.
“there is authorized to be appropriated, and there are appropriated, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary for the purpose of carrying out section 1072 (c)(7) of this title.”
Oops, Rutgers Professor Philip Harvey (not Levy).
I’m technically a policy historian.
It’s like being a political scientist without having to care about p-squared values.
Hey Steven, thanks for dropping by(or decloaking). I apologize for the misidentifying your trade. :o)
Your Realignment Project articles are first-rate. Since there’s just one Congress (and a sad one it is) and 50 states, your ideas for state-level JG and Keynesian programs have a much greater chance of quick implementation than anything at the federal level.
Now, if Warren can figure out how the Fed can monetize state debt to fund it, you’re off to the races. :o)
my second proposal is for per capita distributions to the state govs. pick any number you want!
I know Phil Harvey and he’s read most all the mmt literature. his agenda is full employment
Someone else is taking credit for this post over at Naked Capitalism.
I know. I call out Yves Smith on this, but she blocks my comments. Yves tolerate no dissent and is dishonest broker in her comments policy, like that blubber boy brad delong
Well, now that I’ve thought about it a bit, St. Croix could be considered a commonwealth, and Warren is certainly irreverent. So maybe that’s Yves’ out on this one….