….. is likely to come from:

1. people who have closed minds to new ideas
2. rent-seekers who realise a universal income is a direct deduction from the unearned economic rent they’re now receiving
3. those people wrongly believing we need a pool of unemployment to curb inflation (NAIRU)
4. bureaucrats administering the current welfare system
5. those who don’t want the current income tax (and transfer) regime to be undermined by a universal income
6. those believing people will become ‘couch potatoes’ and not want to work given greater freedom to choose what they want to do
7. sundry others

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.

I’ve long argued that the real estate market leads and directs the economy through boom and bust and that we could eliminate the boom-bust cycle and have ongoing prosperity. My real estate colleagues tended to consider the cycles are something we simply have to endure.

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’.

Now that governments and their central banks are locked into supporting the current land price bubble (excellent work on this front today, BTW, Martin North! And as for regulators!) I’ve locked 2026 in as the world’s crunch year on the basis of the 18-year Georgist cycle.

Here

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.

Maybe I should ask him?

Real estate valuers know more about boom-bust than economists.

A slideshow presentation

…. BUT IT OVERLOOKS SOME OF BRYAN KAVANAGH’S EXCELLENT OBSERVATIONS!

[There’s nothing like talking about yourself in the 3rd person!]

~~~

Such as: that extra taxes are not needed to ‘fund’ a universal income. In fact, a UBI becomes a direct deduction from the economic rent currently purloined by rent-seekers.

Dr Gavin Putland’s 2019 “Trickle-Up Economics” paper for Prosper Australia, showed economic rent got to occupy 50% of GDP in the 2018 financial year.

16% of that amount was land rent and the other 34% was taxes on labour and capital, the deadweight losses from same, and realised capital gains.

In attempting to tax away the land rent of 16%, instead of wages and profits and goods and services, although land prices would fall towards zero, the land rent itself would actually continue to grow as the economy began to burgeon self-sustainably (for a change!) and remain to be ‘taxed away’ each year!

This would ‘afford’ the damaging 34% of the economy to be replaced by a universal income of at least $30,000 per annum for every Australian of 18 years of age and beyond. Not bad, eh?

‘Modern’ Monetary Theory shows the money is available, anyway. That it comes out of rent and thereby attacks rent-seeking and property spec is a bonus.

The only threat to the MMT and a UBI is inflation, and as the public capture of land rent does away with taxes on labour and capital and land prices, inbuilt inflation will disappear in one fell swoop. The only residual taxes are those we choose to apply to ‘bads’ such as pollution and smoking.

There would be a natural falling away of income tax in the UBI scenario anyway, because the coercive effects of taxation have disappeared. (Goodbye NAIRU!) For example, business wage bills actually decline with a UBI in place: businesses have only to offer a sufficient amount above the UBI to retain or attract employees. Of course, this has enormous implications for the income tax regime. It tends to become redundant because tax scales no longer ‘work’.

If regressive taxes on goods and services are abolished, prices fall substantially with the slashing of their deadweight. This is not only good for the people of Australia, but also for Australian exports!

Although it’s a win/win for individuals and businesses, it’s not so good for rent-seeking businesses and monopolies ….

… and that’s a good thing, too!

With the Australian federal election coming up in the new year, it would be great if one of the burgeoning political parties or even an independent candidate, just one, would acknowledge the problem.

For whom do you vote when our politcal ills stem from working in vain to deal with the many poor socio-economic outcomes–eg. by establishing ‘regulatory’ bodies–instead of eradicating their cause, the rentier.

So far, John Maynard Keynes has been proven wrong in believing we would euthanise the rentier.

You are here to serve the 0.1%: we drones, leeches and parasites.

Don’t seek to rise above your station and try to change things, OK?

Otherwise, we will scream blue murder to the media (which we control with our money) using a miniscule proportion of our wealth–that will be more than enough!–to destroy your attempts, if not destroy YOU!

Got it?

Have a happy Christmas, then get back there creating our wealth!