The Reason For An Income Tax Default (Form)

In Denmark, the government automatically prepares people’s taxes. Because they already have the data they need, the tax authority calculates everyone’s income taxes and sends them notice of how much they owe or will receive as a refund. With 80%…

Fiscal Policy: What We Need to Know About the Debt Ceiling

Like me, you might have thought that the US has not yet reached its debt limit. But actually it has. The story is unimaginably complicated. From what I can discern in a Congressional Research Service report, for the last 9…

Sovereign Debt: Is Argentina’s Default Legal?

Does Argentina still owe bondholders the money? The US Supreme Court might decide. It all began with what scholars Rogoff and Reinhart called the lending boom of the 1990s. Enjoying an influx of dollars, Argentina borrowed and grew and prospered…for awhile.  But…

Luxembourg Yogurt?

For this Greece update, some past and current information… Soon after the euro was launched on January 1, 2002, a €76,000 bank heist near Athens became the first major euro robbery. Near Athens also, with the new currency launch, it…

Some Greek Math

With a euro zone update on Greece unfolding (they might lease some islands but we’ll get to that in a moment), here is some Greek math that Michael Lewis presents in Boomerang. Referring to the deficit, during October 2009, the…

Exit Plans

A British charitable trust has offered a hefty reward for the best eurozone break-up plan. Their goal? Improve and influence policy though a 250,000 pound ($393,430) incentive prize. As I read through the finalists’ plans, the unfathomable complexity of unraveling…

Greek (Debt) Myths

Maybe sell some islands and an ancient ruin or two? In Boomerang, Blind Side author Michael Lewis repeats what German politicians were suggesting in 2009 when they heard that the Greek debt was much larger than previous estimates. How much…

Alexander Hamilton, George Washington and the Euro Zone

How to decide euro zone policy today? Just look at the U.S. between 1780 and 1840. Saturday, in his Nobel Prize lecture, economist Thomas J. Sargent compared the past U.S. to the current euro zone. He based his talk on…

The First Credit Default Swap

Some of the euro zone’s problems actually started with the Exxon Valdez oil spill. After the 1989 Exxon Valdez calamity, when an Alaska jury said that Exxon owed $5 billion in damages, they asked J.P. Morgan for a $4.8 billion…

Default Deja Vu

Between its independence in 1829 and 2006, Greece has had 5 defaults or debt reschedulings that occupied a total of 50.6 years.  Described by Rogoff and Reinhart in their 2008 paper and book, This Time It’s Different, few nations break…