>At 04:24 PM 3/22/2002 -0500, jerry wrote: >> >From the speech by Fidel Castro in [6804]: >> >>> The rich world should condone their foreign debt and grant them fresh soft >>credits to finance their development. The traditional offers of >>assistance, always scant and often ridiculous, are either inadequate or >>unfulfilled. >>For a true and sustainable economic and social development to take place >>much more is required than is usually admitted. Measures as those suggested >>by the late James Tobin to curtail the irrepressible flow of currency >>speculation --albeit it was not his idea to foster development-- would >>perhaps be the only ones capable of generating enough funds, which in the >>hands of the UN agencies and not of awful institutions like the IMF, could >>supply direct development assistance with a democratic participation of all >>countries and without the need to sacrifice the independence and >>sovereignty of the peoples. < >> >>Castro gives pretty sweeping support above for the Tobin Tax. Should >>we? > > the Tobin Tax seems impractical. Which governments would impose the tax on a two sided transaction? How could tax regulations be drawn up so that they could not be evaded easily through derivatives transactions? As Diane Coyle notes, one could simply substitute a swap for the straight exchange of currencies which was going to be taxed. Moreover, it is doubtful that a low Tobin tax would fundamentally alter the balance between the supposedly good transactions financing trade and direct investment, which form a very small proportion of the total, and the supposedly bad short term investment and speculation. Yours, Rakesh
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