Instead of reducing taxes on interest payments, the Government could tax all bank deposits and other risk-free savings. This would create a negative risk-free interest rate, encouraging savers either to invest in property, shares and other productive assets - or simply to save less and consume more. In either case, the result would be more consumption and physical investment, less unemployment and faster recovery from the slump.It is somewhat hard to fathom that this idea made its way into the printed world. Penalizing people for saving when it was excessive lending that created this huge problem in the first place?
This is akin to forcing the credit drunk to not just drink more liquor but, if they don't, then punishing them for even an iota of sobriety.
Strange. Bizarre. And an early candidate for this year's "Most Ridiculous"...
