Treasuries in deficit borrow first and print last
A national, regional or city treasury that runs out of money now posts a bond in monthly instalments, banks lend against it while keeping half their capital in cash, and a treasury still negative after thirty game days is issued its deficit plus ten percent by its central bank.
Several national treasuries had sat deep in deficit for weeks with no way out: their bond ceiling was measured against a fraction of the tax they actually collected, and a bond nobody could fund is not money.
- Bonds measure real revenue. A treasury's borrowing ceiling is now based on every tax credited to it, income tax withheld from citizens included, so a treasury with real income can borrow against it. - Monthly instalments. A shortfall bond repays thirty days of principal and coupon at once, every thirty game days. Bonds funded before this keep their daily schedule; the bonds market shows which. - Banks keep half their capital. A bank backing a state bond lends at most what leaves half of its cash and sovereign holdings in cash, so a deficit can no longer empty a bank into paper it cannot service. - Thirty days negative means an emission. A treasury still below zero in its own currency after thirty game days of failed bond attempts is issued the deficit plus ten percent by the currency's central bank. That is new money, and it will move prices in that currency — a state that cannot borrow abroad prints.