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Being inherently risk-free, the MOST the debt of a monetary sovereign should return is ZERO percent MINUS overhead costs = NEGATIVE. Otherwise, we have welfare proportional to account balance.
Moreover, the shorter duration debt should cost more with account balances at the Central Bank (aka "reserves" when the account holder is a private depository institution, aka "a bank"), having zero maturity wait, costing the most, i.e. most negative interest.
Then notice that Warren Mosler's proposal for a permanent ZIRP is, in reality, a giveaway to the banks since they should be charged not just negative interest but the HIGHEST negative interest of any holder/user of inherently risk-free sovereign debt.
But won't banks try to pass on negative interest to poor, captive depositors? Yes, which is why all citizens should have inherently risk-free accounts at the Central Bank (or Treasury) where they can be shielded from negative interest to reasonable limits on account balance and transaction rate.
Meanwhile you have tools like this who are absolutely determined to turn the US into Greece or Italy. They desperately want to inflict austerity. https://www.nytimes.com/2020/04/18/us/coronavirus-deficits-spending.html?action=click&module=Top Stories&pgtype=Homepage
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Being inherently risk-free, the MOST the debt of a monetary sovereign should return is ZERO percent MINUS overhead costs = NEGATIVE. Otherwise, we have welfare proportional to account balance.
Moreover, the shorter duration debt should cost more with account balances at the Central Bank (aka "reserves" when the account holder is a private depository institution, aka "a bank"), having zero maturity wait, costing the most, i.e. most negative interest.
Then notice that Warren Mosler's proposal for a permanent ZIRP is, in reality, a giveaway to the banks since they should be charged not just negative interest but the HIGHEST negative interest of any holder/user of inherently risk-free sovereign debt.
But won't banks try to pass on negative interest to poor, captive depositors? Yes, which is why all citizens should have inherently risk-free accounts at the Central Bank (or Treasury) where they can be shielded from negative interest to reasonable limits on account balance and transaction rate.
Meanwhile you have tools like this who are absolutely determined to turn the US into Greece or Italy. They desperately want to inflict austerity. https://www.nytimes.com/2020/04/18/us/coronavirus-deficits-spending.html?action=click&module=Top Stories&pgtype=Homepage
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