"While assessing the proposed additional levy on bank accounts in Cyprus, Putin said that such a decision, should it be made, would be unfair, unprofessional and dangerous," Kremlin spokesman Dmitry Peskov told journalists.
It’s rare that I find myself admiring Vladimir Putin as a human rights visionary. It was a glaring omission from the syllabus back when the KGB used to train agents for USSR. Be that as it may, even Communists and Fascists sometimes make valid points. It makes their evil all the more pernicious, but it doesn’t make Vladimir incorrect in his assessment of the Eurozone’s behavior towards Cyprus this past weekend.
The Eurozone has ordered Cyprus to confiscate a percentage of the savings accounts belonging to every citizen of Cyprus in order to recover money that other European countries have leant the government of Cyprus. It’s an “upfront one-off stability levy.” It’s not as if they are stealing or something evil. In order for them to steal, they would have to acknowledge your moral right to property. The Welfare State doesn’t truly believe you have one. The mask has come off the demon – just like it did in Japan when a politician suggested that social programs became more affordable when old people hurried up and died.
It reminds me of a criticism that Margaret Thatcher once lobbed at the socialists. Their problem, you see, is that they always run out of other people’s money. Well, relax Lady Thatcher. They now have at app for that. Saul Goode, Baby! I wonder if anyone in the United States is studiously taking notes.
Matt Yglesias was and he’s totally stoked! Since it’s now Progressive doctrine in the Age of Dodd Frank that any bank big enough to cause voter diaper-rash gets a bailout, we need to find lots and lots of payers.
The most straightforward way to reduce the cost of a bank bailout is to simply not give people 100% of what they're owed. In other words, make creditors take a "haircut." But formal haircutting of bank creditors is still considered too hot and too likely to provoke panics and runs. So what they've come up with is a de facto haircut. The bailout will be paid for, in part, through new higher taxes in Cyprus—austerity, in other words. But the specific tax in question will be a one-off wealth tax. And not just any wealth tax, but a wealth tax specifically levvied on bank deposits. A tax of 9.9% on deposits over €100,000 and 6.75% on deposits below that level. This will raise €5.8b to help defray the costs.
Karl Denninger wonders too. He’s nowhere near as happy. He cites some reasons for being concerned that this express train intends to flatten the US in the coming years. He lays out why we may need recourse to something like this.
In two years federal medical spending along with Social Security and interest will, on current paths, reach the total of all tax receipts. At the outside the market will realize that Congress will never address the underlying issue with medical care because they have steadfastly refused to do so…. There is about $20 trillion in US Retirement "assets." A "small" 10% "one time" tax levy on those assets would fund the US Deficit a couple of years from now, and I will go out on a limb now and predict that exactly that will be done. Of course the "one time" aspect will be a lie too…
He goes on to explain how the test case for this has already been successful. And how the American People have already allowed the legal precedents to allow this to happen to be codified in case histories all the way up to the USSC.
the precedent has already been set, and you, the common American, sat for it.
You allowed the GM bailout to take place where the seniority of bondholders was ignored and they were screwed while the UAW was made whole. You allowed Obamacare to be passed with the Congress denoting it was a "fine" rather than a Tax, because Congress knew that a direct, unapportioned tax was unconstitutional -- and then you sat again when Judge Roberts of the USSC rewrote Obamacare to be that very same unconstitutional direct Tax.
Mark my words, Obamacare has very little to do with Health Insurance. This is why nobody in government feels any particular concern over the fact that it screws health insurance up so badly. If you are in government and you want the power to run things by fiat, this law just gave you the keys to a Barchetta with a full tank of petrol.
Now some of you have quaint hang-ups stemming from a silly political dope-deal known as The American Bill of Rights. For those who knit-pick abstruse details, Amendments IV and V get really anal about this property rights jib-jab.
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
Not to worry Komerade Amerikan. There are apps for this as well. Kelo v. New London is a landmark case that helps put the subjects in their proper place. As long as your bank account can be construed as conferring a public benefit through public use, this lovely piece of jurisprudence would justify its seizure down to the last penny.
Bottom line: The state can steal your property, your wealth and your sustinence at any time they get pissed off enough or desperate enough to do so. You have no recourse to the law against this. The law is pathetically bastardized. Remember how that Arch-Conservative Supreme Court was poised to heroically strike down The AACA? Forget it Jake, we are all Cypriots now.