The Case for Deeply Negative Interest Rates
Ken Rogoff discovers negate numbers, insts this ius a new trick, we are different today.
Negative rates are a tax on the banking industry, the banking sector rolls up faster than a scampering mouse.
We avoid taxes, especially non legislated taxes. I think we actually founded the country on the principle. Remember the stamp tax act? A sudden large negative rate is a sudden stop, a step one of a Nixon shock. Once we realize the impossible position it puts government in, then we immediately go to phase two, default.
A federal sales tax collected by the banks
You banker is now the government tax collector?. The total sales taxes becomes 8-12%, depending uping where you live. Retails sales by banker card will stop flat, it will all be cash and carry. The effect on local sales taxes will be catastrophic, immediate shutdown of half the local governments. We will get immediate, overnight Nixon Shock.
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