All posts by Bryan Kavanagh

I'm a real estate valuer who worked in the Australian Taxation Office (ATO) and Commonwealth Bank of Australia (CBA) before co-founding Westlink Consulting, a real estate valuation practice. I discovered, by leaving publicly-generated land rents to be privately capitalised by banks and individuals into escalating land price bubbles, this generates repetitive recessions and financial depressions. We need a tax-switch: from wages, profits and commodities onto economic rents/unearned incomes, if we are to create prosperity and minimise excessive private debt.

“FIX THE MONEY, FIX THE WORLD” …..?

A good episode of the Keiser report with Max interviewing Lawrence Lepard in the second half.

And I like max’s line that considering where we are, and given US foreign policy, “Wouldn’t America bomb itself?”

Oh, and that bit about “Fix the money, fix the world”: close but no cigar, Lawrence. Rather, it should be tax land values, only, to fix money and fix the world.

HOW COME?

How is it that ‘property rights’ have somehow morphed over the years from the right to retain your earnings untrammeled by taxation–and the things you own–to not having to pay our dues on real estate to which we hold title?

That’s some change!

English law rejects absolute ownership of land, and it’s said that the word ‘owner’ derives from the Middle English ‘owerner’: he who owes the rent. Accepting that we are all owerners would reduce land prices enormously and actually address housing unaffordability instead of paying lip service to the principle.

So, how come the labourer is no longer worthy of his hire? It seems private rent-grabbing has well and truly taken hold of western society? We’ll end up paying dearly for tax regimes that favour real estate spec over real wealth generation.

Did this transformation begin with the sleight of hand ‘temporary’ measure of income tax, dished out to us by neoclassical economists at the onset of the Great Depression?

THE Thucydides Trap is on

‘on’

Thucydides had it all worked it out. Watch out for really nasty stuff when the ruling power is being challenged. It can’t be avoided and won’t be pretty.

The once supreme USA, caught busily financialising its stock and real estate market bubbles, is being overtaken by the industrialised Chinese powerhouse.

Not that China hasn’t pumped up its land prices to nosebleed heights, too. It’s just that China now makes the US look sick as a producer of industrial and IT wealth. The US had actively partaken in outsourcing much of this to China, to save on wage costs, and seems to be paying a penalty for being caught napping with its speculative financial interests. So, beware of the US-China shakeout.

The Doves are out, saying that it’s not inevitable: that diplomacy will forestall any military confrontation, because we can’t possibly afford to have have a full-on war these days. It would wipe out the world.

China is becoming more assertive: Hong Kong’s lease to the Brits having expired and it’s population having been recently shown who’s boss, China’s now eying off Taiwan.

So it’s looking bad.

If you look at China, however, its issues have been with Tibet, Japan and India, shared border or neighbouring countries; and its new ‘islands’ in the South China Sea. Although there’s not the same history of world military involvement as the US, there is the ‘Belt and Road’ initiative. Will that remain peaceful, or used to for support and military advantage?

As much as I’d like to believe the Doves, my money’s on Thucydides. It’s just a matter of when, because the USA won’t go down without a fight. It will likely be sold as the Western Good Guys v. those Chinese Commies.

IT’S A PACKAGE!

The acronym VIMMLBUTT is composed of:-

LVT land value taxation

UBI universal basic income

MMT modern monetary theory

Actually, LVT isn’t a ‘tax’ – it’s a rent. And MMT isn’t ‘modern’, Abraham Lincoln used it to fight the Civil War. Moreover, it’s arguable that a UBI shouldn’t be ‘basic’; it needs to be a living wage.

However, the fundamental principle behind each term remains valid:-

LVT is the public capture of Ground Rent, advocated by the classical economists. UBI provides a Universal Income to everybody from the nation’s net income (currently being largely expropriated by the rent-grabbing 0.1%). MMT says deficit spending by the federal government isn’t ‘debt’, it’s paid for the moment it’s spent and greatly assists the private sector.

So, more correctly, maybe VIMMLBUTT should be GRUIDEFICIT?

I’ll stick with VIMMLBUTT.

Isn’t this all kid’s stuff?

No. The point is that genuine economic reform is not simply LVT, UBI or MMT as their followers claim. All three are an essential package!