There are not many saying we can hold out until 2026, Mase.
Following the peak of the Kondratieff Wave in 1972/73, there has been a gradual decline in the growth of gross domestic product . It is not coincidental that this has been accompanied by increasing levels of real estate speculation. It happens all the time. However, government authorities and political parties turn a deaf ear to warnings about the upcoming financial depression.
Neoclassical economics lends itself to ‘academese’ more than any other discipline. Amidst its sophisticated jargon and often mindless economic modelling, the study has grown to hide fundamental considerations; not the least the reciprocal relationship between general prosperity and rising land prices.
It has acted to bury human rights such as access to cheap accommodation and the abolition of servility and poverty. However, these are normative measures and, of course, “Economics must not be values-based”.
So much for taxing land values (carrying no deadweight losses) instead of wages, profits and goods and services (which inject extensive deadweight losses)!
Thusly, has neoclassical economics come to accommodate the 0.1% and its fellow-travelling financial speculators at great cost to all others.
Accordingly, we daily witness the study’s misbegotten results as world economies head relentlessly into the financial depression of 2026.
Believe it or not, I’m a fundamentally positive and happy person. It’s just that I’m able to see things the way they are.
Question 3: The invisible hand will meet demand-pull inflation, but why do we simply ignore that (a) land prices–land having no cost of production–and (b) the deadweight losses generated by the taxing of labour and capital–passed on into the price of goods and services–are responsible for cost-push inflation? Neither are included in the Consumer Price Index.
Question 4: Maybe we need fresh thinking on the main causes of cost-push inflation?
I disagree with Mosler only on the point that “inflation results from prices that governments pay above the margin” – although I suppose even that definition could be taken as a veiled description of governments having us unnecessarily paying for land prices that needn’t exist, and for taxes levied upon labour and capital?
And, hey Greens! If you really want to attack pollution and climate change, we need to be taxing ‘land’ rent away (i.e. the rent of all our natural resources) to curb monopoly and over-exploitation: for people and the planet’s sake.
rent-seekers who realise a universal income is a direct deduction from the unearned economic rent they’re now receiving
those people wrongly believing we need a pool of unemployment to curb inflation (NAIRU)
bureaucrats administering the current welfare system
those who don’t want the current income tax (and transfer) regime to be undermined by a universal income
those believing people will become ‘couch potatoes’ and not want to work given greater freedom to choose what they want to do
Are these reasons sufficient to reject a universal income that will abolish poverty and the charity industry – by permanently assisting those most in need?
Of course, there is the essential corollary that a universal income needs to be supported by the taxing of land values to curb inflation – instead of inflation-adding income taxes, sales taxes and escalating land prices.
There are valuers and real estate agents who understand much more about the future direction of the economy than economists do. Unfortunately, as high priests for the status quo, the gift of forecasting has been given to economists.
To achieve my annual 20 CPD points to remain professionaly updated I was required each year, amongst other things, to squirm through a “The State of the Market” presentation by one of the big four bank chief economists’ – i.e. their opinions and charts demonstrating why the prospects for the economy looked pretty good. These included rosy forecasts for the years 1991 and 2008. At one of those two professional sessions–I believe it was the latter–I was actually moved to pose the question to the speaker whether the rampant real estate market might bode poorly for the economy. The premise of my question was not accepted. This is not to suggest that bank economists never get it right.
Unlike the USA, the Rudd/Swan government in Australia proved able to pump the real estate market on the advice of Hank Paulson to avoid recession in 2008/09, and as we had no ‘correction’, so the upcoming Australian collapse promises to be a doozie. In this respect, I’m on board with ‘Avid Commentator’.
Warren Mosler’s modern monetary theory correctly argues that taxation isn’t necessary to provide a fund from which the national government may spend. It’s to curb inflation.
He mentioned in the following tweet that he has “long proposed replacing all taxes with a federal real estate tax”.
Maybe Warren also sees that the underlying generators of inflation aren’t simply excessive government spending, but land prices themselves–as land has no cost of production–together with the deadweight losses from taxing labour and capital. In favouring the taxing of land values, I suggest he provides more than an inkling to this effect.
What if the whole land rent were to be taxed away each year–if taxes were to be abolished it would tend to grow with prosperity and real wealth creation–wouldn’t that therefore cause land prices and inflation to fall towards zero – along with interest? (Have we shocked everyone to the core at this point?)
Would not that program make it possible for the national government to deliver a very good universal income to abolish poverty and free people from deadend jobs? Wouldn’t that render a job guarantee unnecessary?
Warren Mosler is an unusual man; successful and honest, yet clearly with the wellbeing of the community at heart.