The Lost Weekends
The NYT reports that the natives of Cyprus are restless.
ATHENS — In a move that could set off new fears of contagion across the euro zone, anxious depositors lined up at cash machines on Saturday in Cyprus to withdraw money hours after European officials in Brussels required that part of a new 10 billion euro bailout must be paid for directly from the bank accounts of ordinary savers. ...
People crowding cash machines around Cyprus were stunned and angry at the decision. A crowd of around 150 demonstrators massed in front of the presidential palace late in the afternoon after calls went out on social media to protest the abrupt decision, which came with almost no warning at the beginning of a three-day religious holiday on the island.
Good timing, that a long holiday. Nobody in office to ask about "the surprise tax by the International Monetary Fund, the European Central Bank and the European Commission". The "first to take money directly from ordinary savers. In the bailout of Greece, holders of Greek bonds were forced to take losses — but depositors’ funds were not touched."
There used to be a TV drama called Touched by Angel. But the angels done left town. So now it's Touched By the IMF.
As the Business Insider reports, "Europe Announces Stunning Bailout For Cyprus — Bank Depositors To Get Instant 10% Tax Before Banks Reopen This Week". In these enlightened times you "get" a tax like you should be grateful for it. Fair share and all that.
The interesting thing about the current financial crisis is that there's apparently plenty of money. Pick up the papers and trillions and trillions of dollars are spoken of like they were nickels and dimes. Curiously no normal person seems to see any of it. But figures don't lie. Notice how big the Federal Budget has gotten. Notice how much money has been borrowed. What did Bloomberg say, the Government can borrow an infinite amount? Infinite, man, them's a big a big number. And how many times has the debt limit has been raised.
But where's the money? Why, there isn't enough to pay for aircraft carrier deployments to the Middle East, there's nothing for national defense. There's not even enough to pay for tours at the White House. So where's the money?
But wherever it is there's a need for more of it. So lawmakers have unveiled a proposal for a trillion dollar tax increase. Forbes reports: "Senate Democrats Unveil Their Own Budget Proposal; Push For Nearly $1 Trillion In Additional Tax Increases". Yes. That'll fix it.
The nearly $1 trillion in tax increase would be added to the $600 billion raised over the next decade through the year-end fiscal cliff deal, which increased the maximum rate on ordinary income and long-term capital gains/qualified dividends from 35% to 39.6% and 15% to 20%, respectively, on taxpayers with taxable income in excess of $450,000 (if married, $400,000 if single). Any additional hikes would also be in addition to the $1 trillion expected to be raised over the next ten years from the President’s signature Obamacare legislation, which along with other provisions, created an additional 3.8% surtax on the net investment income of taxpayers with adjusted gross income in excess of $250,000 (if married, $200,000 if single).
A trillion dollars. That ought to be good for at least a couple of weeks.
Here's a thought. There's really plenty of money out there, but you're never going to see it. Happy days may be here again, but not necessarily for you. Walter Russell Mead explains why. He described how it worked for Detroit. "Detroit Dems Enrich Wall Street As City Goes Bust".
Michigan made it official this week: Detroit can no longer survive without adult supervision. Michigan’s governor named Kevyn Orr, a DC bankruptcy lawyer, to handle the city’s affairs on an emergency basis as the deep blue city makes a last ditch effort to avoid the biggest municipal bankruptcy in American history.
During the long grim slide, much of Detroit’s population fled the implosion; those who remained suffered through declining city services. Schools, police, fire, infrastructure: all the vital services cities are supposed to provide have gone into steep decline.
But while the city’s mostly low-income and mostly African-American residents struggled to survive civic decline, the ill wind from Detroit blew somebody good: well connected Wall Street firms have feasted on the Motor City’s carcass.
Ever since the long death spiral began, Detroit has relied on periodic bond sales to keep its bills paid. The thinking was clear: borrow now, pay it back later when the city’s finances recover. Of course, Detroit’s finances never recovered, and now it’s on the hook for much of this borrowing, in addition to the fees that these banks charged.
So the money's out there, just not in your pocket. It's like one of those old cartoons where people are dividing up dividends at a table. One man holds the pile of money at a table of with nine others. He counts out the bills. "One for you, one for me. One for you, one for me." The others know that something is wrong with this counting system, but they can't explain quite why. "Whadda you mean it ain't fair! It's fair ain't it. Here, let me show you! One for you, one for me."
Some people are sure things ain't right. Like Dr. Ben Carson, speaking at CPAC.
One for you, one for me, Dr. Carson. Just watch out for them long holidays. Cyprus might be nice place to visit.