“While the US as a whole continues its painstakingly slow trudge towards economic recovery …” [Why does every financial commentary start off like this, these days?]
No, Matthew Murphy, there is no recovery. Got it? No recovery. We’re going deeper into the shit, not coming out of it. Oh, you’re trying to be a cheerleader, perhaps?
You don’t really understand what has happened do you, Matthew? You and many other financial commentators.
It’s like this. As my report “Unlocking the Riches of Oz: a case study of the social and economic costs of real estate bubbles (1972-2006)” demonstrated, it became fashionable in the west from the outset of the 1970s to wind back land-based revenues and to replace them with more and more taxes on work and productivity. So, people have taken their lead from what tax regimes are telling them to do and have become rent-seekers – because that’s now where the tax breaks are. They’re being quite logical. You’re not being logical, because you’re seeing faux recoveries and believing that economies are miraculously repairing themselves, Matthew. They’re not. There’s still too much household debt around to be able to stimulate demand.
Meanwhile, with nothing, or very little, by way of land-based revenues to keep the lid on land prices over the last forty years, real estate bubbles have grown bigger and bigger – until this God-almighty one we’ve had since 1996.
But people like you, Matthew, are saying the property markets are recovering. Well, that’s very bad, because the bubbles have an enormous amount of deflating to do before economies can be got back to work, but they aint deflated enough, and private debt remains too high.
Matthew, it doesn’t matter how many times Tony Abbott says “Australia is now open for business” there can be no recovery–here or in the US–because there are rotten tax systems to be addressed – along the lines of the Henry Tax Review.
No proper tax reform, no recovery. Got it, Matthew?
Good!
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ps. Otherwise, you’re article was OK, Matthew.
The cycle comes and goes. We can see a recovery without tax reform, it’s happened repeatedly before.
The boom that would be experienced with a move to a more Georgist framework is quite separate, and of a different order. Doesn’t stop recovery occurring to some lesser extent even under the current nonsensical, oppressive scheme.