24 May 2012

The ultimate solution to the French National Debt Crisis

Following on from my post about fixing the Greek debt crisis, here are the numbers for France.

French national debt currently stands at around €1,745 billion, that's €26,970 per citizen.

To generate that sum using fractional reserve banking, a bank would need to have 8.6967% of that sum, namely €151.7 billion.

So, suppose we set up a bank with a special "French National Debt Cancellation" account. People could pay money into the account, and when the sum of €151.7 billion is reached, the account is frozen, the bank creates €1,745 billion out of thin air, lends the money to the French government, and the entire national debt is paid off. The loan would have very favorable terms under which the government would have to pay the money back after 1000 years with 0.000% interest.

On average, each citizen would have to pay €2,345 into the account to activate the mechanism.

In 2011, French taxpayers paid €52 billion in interest charges to the banking sector. It follows that the €151 billion needed to finance the scheme would be paid off in just three years.

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