FOR RELEASE: 05/12/2013
Contact: Philip Pilkington
Tax-Backed Bonds Will Still Solve the Eurozone Crisis and Stop Austerity
The Levy Institute of Bard College recently released a follow-up policy note by Philip Pilkington on the continued relevance of tax-backed bonds as a means of solving the Eurozone crisis. The policy note reevaluates the revolutionary tax-backed bond solution to the Eurozone crisis in the face of ongoing changes in the monetary union.
Tax-backed bonds work by providing investors with a solid guarantee that in the case of a default by a Eurozone member country their sovereign debt can be used to make tax payments within the state. This would provide investors with a solid, 100% guarantee on their investment. Such a guarantee would ensure low and stable yields without the intervention of the monetary authorities and would allow the issuer of tax-backed bonds to halt any damaging austerity programs which they may be undertaking.
The original policy note which was co-authored with the originator of the plan economist and hedge fund manager Warren Mosler and was published in March of 2012. Since then there has been a lot of discussion about the proposal.
The Irish Finance Minister Michael Noonan raised the proposal in the Irish Parliament in May of 2012 but rejected it based on advice that he received from the National Treasury Management Agency (NTMA). The new policy note published by the Levy Institute addresses the Finance Minister’s concerns and concludes that the policy is still viable in light of the objections raised by the NTMA.
Press coverage of the proposal has been extremely positive so far, with a seminal op-ed being published by the famous anthropologist and author of ‘Debt: The First 5000 Years’ David Graeber in The Guardian. We are also awaiting an upcoming appearance of Philip Pilkington in a film about the debt crisis for French television that deals with the crisis as a whole.
We look forward to a lively debate surrounding the proposal in the coming months.