Covid19, Public Debt and Superbonus 110%

2020 will remain in our memory as the year of the Covid19 virus, of the lockdown, of social distancing and of masks. Probably also the year of the explosion of public debt and of the most serious economic crisis in history. But we are also experiencing another historical event, which risks remaining hidden, hidden under the blanket of media terrorism: the Superbonus 110%.

1 – Terrorism on Covid19

Today the media use all their weapons of mass distraction to convince us of the danger of the "Covid19 Virus", which in Italy in recent months has generated a high number of infected people and causes the death of several dozen people every day . Forgetting to say that in most cases this virus does not produce any disease, but above all that they continue to die in Italy, for many other far more dangerous causes, an average of about 1,772 people per day (2019 data).

Instead of using science and technologies to study this virus and identify the best therapies to help the most debilitated people, they convinced us that we must absolutely avoid coming into contact with the virus and that for this reason the restrictive measures of the virus are fully justified. our individual freedoms.

In this way, the problem of public debt is aggravated (go to point 2).

2 – Terrorism on Public Debt

For many years the media have been using all their weapons of mass distraction to convince us of the danger of the "Public Debt", which in Italy is reaching a record 160% of GDP. Forgetting to say that in most countries of the world this debt does not produce any problems, but above all that it grows more in the richest ones, such as Japan which has largely and without problems exceeded 240% of GDP.

Instead of using science and technology to analyze the components of public debt and identify the best solutions to manage it in the most indebted countries, they convinced us that it is absolutely necessary to avoid increasing it and that for this reason the recessionary measures of economic policies are fully justified. of austerity.

In this way the public health problem is aggravated (back to point 1).

Within this disastrous loop, and perhaps precisely because of it, there was another event that could instead change our vision of the economy and society, laying the foundations for a radical paradigm shift.

3 – Super bonus 110%

The Superbonus 110% is a historic event whose innovative and revolutionary significance no one has understood.

In this article https://scenarieconomici.it/rinascimento-economico-un-vaccino-contro-le-crisi/ of 25 March, I had illustrated our "vaccine" against the economic crisis, which we had sent as a precious seed, both to the Government and to all parliamentarians. Also complicit in the two conferences in the Senate, which we had attended in 2019, and also the two previous ones in the House in 2016 and 2018 (you can find the videos in our YouTube Channel Positive Money ), the seed delivered at the beginning of the lockdown has finally generated the his first seedling.

The solution we propose is called "SIRE", a "trivalent vaccine against the economic crisis", the main component of which is the possibility of using the tax deductions granted for building renovations, as an electronic exchange tool with fiscal value and voluntary acceptance. Considering that the tax deductions for years have been a tax credit granted by the state without increasing its public debt, our proposal was to make it transferable to everyone, so as to make it a means of payment very similar to electronic bank credit.

Finally, with the Relaunch Decree, the 110% Superbonus has become a reality, which is a tax credit that can be transferred to everyone, granted by the State for seismic and / or energy improvement interventions that private individuals will carry out on their homes.

Let's see what are the most important innovations of this Superbonus, but above all because it is an innovative and revolutionary solution from a macroeconomic point of view.

The 1st novelty is that you receive tax credits equal to 110% of the expenses incurred.

Citizens who make energy and / or seismic improvement interventions on their properties, can receive from the State 110% of the expenditure they have incurred in the form of electronic tax credits, which can be deducted from their taxes over the next 5 years, for an amount equal to 22% per year.

In practice, citizens receive a quantity of tax credits higher than the expenditure they have incurred.

The 2nd novelty is that the tax credits are transferable to everyone.

The tax or tax credits received, not only can be used to reduce their taxes in the following 5 years, but can also be sold to everyone, including banks and financial intermediaries, who accept them because they too can use them to reduce your taxes in the following 5 years. Or sell them in turn.

In practice, electronic tax credits become in effect an instrument of exchange and / or a means of payment that can circulate in the real economy and stimulate economic recovery. They can even be sold to a bank or to a financial intermediary, receiving in exchange a slightly smaller quantity of euro currency (about 100% of the cost of the work).

Considering that for years the state has had budgetary and public debt problems, significantly worsened with Covid19, most people ask the same question: “ where does the state get the money with which I renovate my house? ".

As I always say, questions are often more important than answers, but in this case the question we should have asked ourselves for years is another.

Who creates all the money we use today?

We will try to answer in detail in the next articles, starting from the ABC of economics and money. For now, it is enough to know that virtually all the money we use is generated by the banking system through loans.

For example, when we are told that public (and / or private) debt can and must be reduced, this statement is nonsense from a macroeconomic point of view, because even if we were able to eliminate this debt, then all the money we use would disappear. exchanges of goods and services, leaving barter as the only possibility.

We can even show that the public and private debt, generated by the type of money we currently use, is mathematically inextinguishable and forced to continuously grow exponentially, due to interest. But this is a discourse that would take us off topic.

To understand the innovative and revolutionary scope of transferable tax credit, it is enough for us to note that practically all the currency we use is “in debt”, because it is generated by the banking system through loans and interest.

So if the state wants to implement expansive economic policies, to inject more money into the real economy and exit the economic crisis, in this system based on a debt currency, it has only two possibilities to do so:

• taxing more than it spends, increasing the private debt of citizens and businesses;
• issuing government bonds and paying interest, while increasing the public debt.

Today all this makes no sense, especially if we consider that the currency no longer has any connection with gold. No longer having an intrinsic value, its value is based on the confidence that that currency is accepted by a certain group of people. The larger this group, the more trust we have in that currency.

But what is the requirement that a currency must have, to be sure that it will be accepted by the entire population of a state? The main requirement is its acceptance for payment or tax reduction, which is a requirement that all people living within those borders have.

Money is therefore a tax credit

In fact, the state still has fiscal sovereignty, that is, the power to impose or reduce taxes, and therefore also has the power to decide by what means of payment we can and must pay taxes. Therefore it is also the only subject, in a given territory, that can create new instruments of exchange, without having to borrow them from anyone. The important thing is that they have the power to extinguish or reduce our tax debt and this power today is still the exclusive competence of the State (Article 117 point "e" of our Constitution):

"The state has exclusive legislation in the following matters: …
e) money, savings protection and financial markets; competition protection; currency system; state tax and accounting system; harmonization of public budgets; equalization of financial resources; "

Metallic coins and euro banknotes are certainly a tax credit, but also and above all electronic bank credit, created from scratch by private banks. Indeed, today it has become the only instrument accepted by the state for the payment of taxes, as cash is no longer allowed.

The electronic tax credit generated by the Superbonus 110% is able to reduce our tax debt, but being also transferable to other subjects, including banks and financial intermediaries, it has also become an exchange tool and / or a means of payment for voluntary acceptance, similar to the bank credit we use today.

But compared to all the currency we use today, tax credit has two huge advantages:

• it is owned by the issuing state;
• it does not generate public debt for the state.

So it is a positive currency, i.e. citizen-owned and debt-free.

Possible evolutions of the assignment of the tax credit

With the Superbonus 110%, the tax credit can now be assigned to private individuals for the works carried out on their homes, but also assigned to the Autonomous Institutes of Popular Homes (IACP or similar), which are public bodies.

The next step, once it is understood that it can also be used for the expenditure of public entities, is to use it for part of the public expenditure of the state. So if the state wants to support and revive the real economy, it will no longer be forced to borrow money from someone else, be it the European Union or the financial markets, with the obligation sooner or later to have to repay it, paying also interests. In this way he would avoid the blackmail and retaliation of his creditors, who always want to impose on him the famous structural reforms, which up to now have only worsened the economic crisis.

In 1300 we invented paper banks and banknotes, ancestors of current banknotes, and this allowed us to experience one of the most beautiful and richest eras in our history, the Italian Renaissance. Today we are the 1st country in the world to invent and test a new electronic payment method created by the state without increasing public debt, which could generate a New Economic Renaissance capable of enhancing the enormous human, artistic and cultural wealth we have.

Obviously, there are still many tricks to be implemented for this tool to work at its best: an electronic exchange platform connected to a credit card, the simplification of the management of fiscal current accounts, the use to reduce taxes after 2 years, instead of in 5 years, the possibility of using the credit in subsequent years, the introduction of an annual incentive to avoid the "discount" when they are sold in exchange for euros.

But it is still an important first step in the right direction. We will continue to collaborate with institutions to improve this solution until it is perfect.

Because THEY won't give up easily, but WE WILL NEVER give up.

© Fabio Conditi

President of the Positive Money Association

www.monetapositiva.blogspot.it

15.10.2020

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The article Covid19, Public Debt and Superbonus 110% comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/covid19-debito-pubblico-e-superbonus-110/ on Thu, 15 Oct 2020 14:12:54 +0000.