I’m sitting in a macroeconomics strategy review held by my employers economics team, and they are staring dumbfounded at the french sovereign bond yield and it is evident they don’t know exactly why this is happening, nor what to do with it. The French government and opposition seems to also have no better ideas, seemingly paralyzed.
Half of the debate thinks that the people can take it, they just need to work harder. The other half believes the economy can afford to pay out a bit more. Neither are correct (although perhaps some are closer).
Not to sound too grandiose, because it isn’t my idea at its core, but myself and my co-author have written a paper that can explain what is going on.
And then the policy you want is simple: Tax the bad capitalism, don’t tax the good capitalism. If this sounds familiar, it’s quite close to the 150 year old theory of Henry George and Georgism. How do you tax the bad capitalism? Well, some parts of it are hard, and some are less hard, but the theoretically most effective method is using both a tax and a benefit, specifically a Land Value Tax (LVT) that pays out a Universal Basic Income (UBI).
