The Root of Economic Crashes
Land is the root of economic crashes. Commonly created wealth is appropriated by private individuals and concerns.
Community economic community activity soaks into land, crystalizing as land values, the values become higher. If there is a shortage of washing machines at $300 each, makers can make more to maintain the price at $300. If land prices rise in a city centre, because of community activity you can't make more land in the city centre. Land prices are outside normal market forces. Here is the destructive cycle we have today:
[B]The land fuelled boom & bust cycle, which may turn into a slump/crash:[/B][LIST=1][*]When the economy is rising, economic progress occurs.[*]Quantity of goods increases because of labour and capital (capital is machines, etc, made by man).[*]The land supply remains the same. Demand for land increases, land supply remains static it cannot be made like consumer goods.[*]Result: increase of land prices.[*]Speculators are looking for a place to store the value of their money and increase the value.[*]Land, is increasing in value over time, is an attractive "investment"[*]Speculative demand shifts demand for land up.[*]Land prices rise more.[*]Artificially high land values mislead landholding consumers into thinking they have more wealth than they actually have. Home owners see their land/house value rise, spurring additional consumer spending - the wealth effect.[*]This results in a temporary increase in the standard of living[*]Speculative demand for land increases yet more in response to the price increases, raising the land price again.[*]However, land prices have now risen above a rate many potential wealth producers can afford - manufactures, services, people who need homes to live, etc.[*]The market flattens:[B][LIST=a][*]Some businesses fail[*]At this stage, businesses fail without being replaced.[*]High land prices prevent potential business replacements.[*]The most recent speculative land buyers begin to have a hard time selling at a price that justifies the original purchase, due to a fall in economy productivity.[*]Prices remain steady as landholders attempt to ride out the slump[*]Because the slump is caused by the high land prices, it cannot end until prices collapse back to a level that can be sustained by economic producer demand.[*]Land (house) owners find themselves in negative equity as the land (house is worth less than what they owe banks.[*]Many land (house) owners cannot pay their debts to banks.[*]Banks who lent money for land (houses) cannot retrieve their owed money.[*]Banks do not have enough money to lend to productive economic growth businesses.[*]Banks call in loans to productive economic growth businesses.[*]Many productive economic growth businesses go under.[*]Productive economic growth businesses slow down.[*]Demand for land is removed as speculators move out of the land market.[/LIST][/B][*]Land prices drop and being within reach of economic producers, the economy begins to grow again.[/LIST]Spiralling land prices are the early warning signs of a coming bust. Here are the points of stable Geonomics. Note there is no cycle:
[B]Geonomics using Land Value Tax as the core (reclaiming commonly created wealth) eliminating Income & Sales Taxs:[/B][LIST][*]Taxing the value of land, which is reclaiming commonly created wealth, stops land speculation and land prices running out of control, preventing financial crashes.[*]Money is directed to invest into productive economic growth industries, not land. Land does not make the economy grow.[*]Removing income and sales taxes spurs people to be productive as they not are penalised.[*]Taxing land values gets at the values of the economy that soak into the finite supply of land.[*]Taxes extracted from Land Values can be used to provide essential economic growth infrastructure.[*]The infrastructure makes a community more economically productive.[*]The infrastructure makes land more desirable and in demand.[*]Those in districts with high land values because of the community paid for infrastructure via their taxes pay more Land Value Tax[*]Those in districts where land is not in demand pay less Land Value Tax.[*]The system prevents:[LIST=1][*]Boom & busts[*]High housing prices - housing is affordable[*]Social housing paid for by taxpayers - the private sector copes with housing.[*]Concentrations of wealth by the few - Distributes wealth more evenly[*]Land hoarding - Re-distributes land automatically as "all" land is taxable[/LIST][*]Tax collection is easy and cheap as land is fixed - it cannot be taken off-shore or moved. The tax cannot be dodged.[*]The tax burden is less as the economy is stable and grows.[*]Tax burden is reduced - virtually no taxpayers money is put into social housing as the private sector copes with housing.[/LIST]Economic stability is guaranteed. No booms, no busts. Production is greatly promoted and economic parasite activities and speculation discouraged or eliminated.
[youtube]1pYSsME_h7E[/youtube]
[URL="http://www.youtube.com/watch?v=1pYSsME_h7E"][COLOR=#0066cc]The Taxing Question of Land - YouTube[/COLOR][/URL]
Community economic community activity soaks into land, crystalizing as land values, the values become higher. If there is a shortage of washing machines at $300 each, makers can make more to maintain the price at $300. If land prices rise in a city centre, because of community activity you can't make more land in the city centre. Land prices are outside normal market forces. Here is the destructive cycle we have today:
[B]The land fuelled boom & bust cycle, which may turn into a slump/crash:[/B][LIST=1][*]When the economy is rising, economic progress occurs.[*]Quantity of goods increases because of labour and capital (capital is machines, etc, made by man).[*]The land supply remains the same. Demand for land increases, land supply remains static it cannot be made like consumer goods.[*]Result: increase of land prices.[*]Speculators are looking for a place to store the value of their money and increase the value.[*]Land, is increasing in value over time, is an attractive "investment"[*]Speculative demand shifts demand for land up.[*]Land prices rise more.[*]Artificially high land values mislead landholding consumers into thinking they have more wealth than they actually have. Home owners see their land/house value rise, spurring additional consumer spending - the wealth effect.[*]This results in a temporary increase in the standard of living[*]Speculative demand for land increases yet more in response to the price increases, raising the land price again.[*]However, land prices have now risen above a rate many potential wealth producers can afford - manufactures, services, people who need homes to live, etc.[*]The market flattens:[B][LIST=a][*]Some businesses fail[*]At this stage, businesses fail without being replaced.[*]High land prices prevent potential business replacements.[*]The most recent speculative land buyers begin to have a hard time selling at a price that justifies the original purchase, due to a fall in economy productivity.[*]Prices remain steady as landholders attempt to ride out the slump[*]Because the slump is caused by the high land prices, it cannot end until prices collapse back to a level that can be sustained by economic producer demand.[*]Land (house) owners find themselves in negative equity as the land (house is worth less than what they owe banks.[*]Many land (house) owners cannot pay their debts to banks.[*]Banks who lent money for land (houses) cannot retrieve their owed money.[*]Banks do not have enough money to lend to productive economic growth businesses.[*]Banks call in loans to productive economic growth businesses.[*]Many productive economic growth businesses go under.[*]Productive economic growth businesses slow down.[*]Demand for land is removed as speculators move out of the land market.[/LIST][/B][*]Land prices drop and being within reach of economic producers, the economy begins to grow again.[/LIST]Spiralling land prices are the early warning signs of a coming bust. Here are the points of stable Geonomics. Note there is no cycle:
[B]Geonomics using Land Value Tax as the core (reclaiming commonly created wealth) eliminating Income & Sales Taxs:[/B][LIST][*]Taxing the value of land, which is reclaiming commonly created wealth, stops land speculation and land prices running out of control, preventing financial crashes.[*]Money is directed to invest into productive economic growth industries, not land. Land does not make the economy grow.[*]Removing income and sales taxes spurs people to be productive as they not are penalised.[*]Taxing land values gets at the values of the economy that soak into the finite supply of land.[*]Taxes extracted from Land Values can be used to provide essential economic growth infrastructure.[*]The infrastructure makes a community more economically productive.[*]The infrastructure makes land more desirable and in demand.[*]Those in districts with high land values because of the community paid for infrastructure via their taxes pay more Land Value Tax[*]Those in districts where land is not in demand pay less Land Value Tax.[*]The system prevents:[LIST=1][*]Boom & busts[*]High housing prices - housing is affordable[*]Social housing paid for by taxpayers - the private sector copes with housing.[*]Concentrations of wealth by the few - Distributes wealth more evenly[*]Land hoarding - Re-distributes land automatically as "all" land is taxable[/LIST][*]Tax collection is easy and cheap as land is fixed - it cannot be taken off-shore or moved. The tax cannot be dodged.[*]The tax burden is less as the economy is stable and grows.[*]Tax burden is reduced - virtually no taxpayers money is put into social housing as the private sector copes with housing.[/LIST]Economic stability is guaranteed. No booms, no busts. Production is greatly promoted and economic parasite activities and speculation discouraged or eliminated.
[youtube]1pYSsME_h7E[/youtube]
[URL="http://www.youtube.com/watch?v=1pYSsME_h7E"][COLOR=#0066cc]The Taxing Question of Land - YouTube[/COLOR][/URL]
Total Comments 0
