Enact a financial transactions tax in order to curb excessive speculation and reduce the deficit.

A financial speculation tax on stocks, options, futures, credit default swaps, and other derivatives would raise more than 1.0% of GDP (approximately $150 billion in 2011) while reducing economic rents earned by the financial sector. It would discourage short term trades that can be enormously profitable, yet destabilizing to the markets. It would consequentially shrink the high-end salaries in the financial sector, reducing inequality. Even bank friendly institutions like the IMF have advocated for such a tax. A financial speculation tax has existed with much success in the U.K. for many years, and it is high time the United States follow suit to reduce market volatility and simultaneously reduce our ballooning deficit, all without endangering the currently anemic economic recovery.