Tax Derivatives to Reduce the Debt & Improve the Economy

The gross domestic product (GDP), the sum of all economic transactions in the US, is roughly $15T, which is roughly comparable the national debt. Sounds big and bad (respectively) but they pale in comparison to the derivatives market, which is over 20-times larger!

Derivatives can be used to reduce risk by betting on a future price. This is valuable in particular situations, such as farmers planting crops, but the total market has grown to a size that causes dramatic volatility in currency and energy (oil) markets, increasing the risk to economic stability. These trades are largely unregulated and entirely untaxed. I propose we tax derivative trading at the trivial rate of 1%. I don't predict that we would raise all $6T annually, because some trades would not be done, some might go further undercover, and some will go 'offshore'. But NY State Pensions won't deal with entities in the Caymen Islands or Geneva as freely as they would Long Term Capital, or Lehman, or Solomon. We will raise significant amounts of 'revenue' (money) and reduce to some degree the silliness and scariness of the market.