Sir, Forced borrowing would have the same effects as a wealth tax: the entrepreneur would have to shed investments, the taxpayer to reduce consumption, both to draw liquidity from their accounts, thus reducing the capability of the banks to lend. Instead of being an alternative to the “nightmare of austerity measures”, the proposal of Jean-Paul Fitoussi, Gabriele Galateri di Genola and Philippe Weil (“Forced borrowing: the WMD of fiscal policy”, September 15) would have adverse effects on growth and employment, and also reduce the incentive for governments to adopt reforms.
“The WMD of fiscal policy”: a perfect title indeed.

leggi il resto ›