4 ms·

That can, and will, be pushed out for generations. It's a declining birth RATE—there are still more people. Plenty more people. And we will continue to limit th

That can, and will, be pushed out for generations. It's a declining birth RATE—there are still more people. Plenty more people. And we will continue to limit the number of homes. If we need to, we will shrink the number of homes available. Home values must go up. They will go up. You should bet on them going up. Because if, for some reason that were to reverse global finance implodes and nothing else really matters. A permanent, long term downward trend in home values may as well be the end of "money" as we know it all together. And it sort of would be, literally, since much of money creation these days is via mortgage loans.

rcarr 4y ago
This, unfortunately, is correct. The birth rate means jack shit. People with the capital to do so will just buy multiple homes. Holiday homes, homes closer to work, rental properties etc. If the crash ever came it would be so bad it would make the Great Depression look like a picnic. This is why governments will go to ludicrous measures such as bailing out the banks during the financial crisis and then pumping the markets with money for an entire decade (!!!) afterwards. The problem is that the system might well collapse anyway. Here in the UK we seem to be right in the center of it and it’s not looking good. The health system is on the verge of collapse and almost every public profession is striking or in the process of voting to strike and there’s now talk of coordinated action between the unions for maximum pain because the government is flat out refusing to talk. I’ve said it before but I will say it again: the government came out and said during Covid that we were essentially running a war time economy. And the war in Ukraine and the disruption it is causing means we’re essentially still in one. During WW2, tax on the wealthiest in society was around 90%. To be quite frank, that kind of tax rate for a few years on the super rich and the globo corps is the only thing that is going to turn the ship around. No-one expects that as a long term solution, no-one is saying that is how it should always be, but in times of real, actual crisis like this, the super wealthy have to step up and take responsibility to save the system they have profited from. Temporary, very high tax rates to get some normality back and then the cycle can start over again. The poor cannot shoulder the burden anymore because they’ve been shouldering it for the last decade. They have nothing left to give and there is nothing left to cut from public services. The problem we have today is that the super rich now have very little ties to their own countries. They are hyper mobile with private jets, multiple passports, secret tax havens, and armies of lawyers and accountants to hide money and assets. They don’t have the same pride or sense of civic duty they once did in 1939-1945 where many of them took command positions in the war or oversaw industrial production. Nowadays, they are all snapping up mansions in New Zealand and other perceived safe havens in case shit goes sideways and governments decide to play hardball. Getting them to pay their fair share to keep the system running would be exceptionally difficult, perhaps even impossible. So where does that leave us? With either a form of brutal neo-feudalism and potentially a peasant revolt or, perhaps most likely, a technology driven dystopia where enough of the populous is given just enough support to survive. Creative can kicking accounting from the civil service to quell the threat. To make it more tolerable, the populous will be plowed with endless distractions to sedate them into compliance. Bread and circuses, quite literally the standard playbook for millennia. Eventually, once the surplus older generations have died off and the global birth rate has declined sufficiently everywhere, all of the world’s wealth will have been concentrated into a smaller set of hands and enough resources will be in circulation that life will be comfortable once again. A generation or two will go by with no direct experience of the hardships of the past and they will start living large again. Borrowing from tomorrow to pay for today. And thus the cycle continues…
- alvah 4y ago
  Ultra-high tax rates during WWII, when governments used tax to raise the money they needed, may have made sense. Ultra-high tax rates in an unbacked fiat currency world are purely an attempt to punish the ultra-rich (which ends up punishing the upper-middle class as the ultra-rich can afford to either package their income or escape to a lower-tax jurisdiction). In an unbacked fiat currency world, income tax rates are used to heat & cool the economy, not really as a fundraising tool for government works.
  - rcarr 4y ago
    So what is your suggestion then, to punish the poor some more? Is there not enough homeless on the streets of San Francisco for you? Are the slums of Bombay too small in scope? As I said in the comment it would be very difficult or perhaps impossible to achieve and the dangers are high (you don’t want a USSR situation happening). You might even need coordinated effort across multiple governments and there is evidence that this is kind of happening with the move towards a global 15% tax rate on corporate business. At the end of the day, steps need to be taken to tax capital at the same rate or higher than labour. Until that happens inequality will continue to grow. As the scales have been out of balance for so long I don’t think having capital gains and other taxes at parity with or a couple of percentage points above income tax is really going to cut it. A couple of short, sharp years at 90% and all of it invested into major, physical public infrastructure projects to create jobs and filter the money down. Whatever happens, if we continue allowing wealth to concentrate in fewer and fewer hands we are going to end up with a dangerous situation. And the problem is that it is being framed as “punishment” in the first place rather than as an opportunity to be the actual hero and save your country and fellow citizens from being thrown to the dogs. Once upon a time men used to follow leaders into battle because they had faith in them as leaders. Would we do the same today? Probably not because they’re not acting like leaders, they’re acting like arseholes who would rather get in pissing contests over the length of their super yacht than invest in making their cities and countries a better place.
    - alvah 4y ago
      It's a very complex topic, which sadly I don't have time to delve deeply into at the moment. My intent with the previous comment was only to point out a fairly large flaw in the "tax the rich" argument as previously implemented, not to suggest that the actual ultra-wealthy shouldn't pay more than they are currently. In theory there are steps that could be taken to fix the massively broken housing market in most of the Western world. Unfortunately the vested interests and massive financial house of cards built on top of property prices make these steps politically impossible. Therefore, what can't continue forever (unsustainable house prices) will not continue forever, but it will end messily & at some unpredictable future time.

rcarr 4y ago

This, unfortunately, is correct. The birth rate means jack shit. People with the capital to do so will just buy multiple homes. Holiday homes, homes closer to work, rental properties etc. If the crash ever came it would be so bad it would make the Great Depression look like a picnic. This is why governments will go to ludicrous measures such as bailing out the banks during the financial crisis and then pumping the markets with money for an entire decade (!!!) afterwards. The problem is that the system might well collapse anyway. Here in the UK we seem to be right in the center of it and it’s not looking good. The health system is on the verge of collapse and almost every public profession is striking or in the process of voting to strike and there’s now talk of coordinated action between the unions for maximum pain because the government is flat out refusing to talk. I’ve said it before but I will say it again: the government came out and said during Covid that we were essentially running a war time economy. And the war in Ukraine and the disruption it is causing means we’re essentially still in one. During WW2, tax on the wealthiest in society was around 90%. To be quite frank, that kind of tax rate for a few years on the super rich and the globo corps is the only thing that is going to turn the ship around. No-one expects that as a long term solution, no-one is saying that is how it should always be, but in times of real, actual crisis like this, the super wealthy have to step up and take responsibility to save the system they have profited from. Temporary, very high tax rates to get some normality back and then the cycle can start over again. The poor cannot shoulder the burden anymore because they’ve been shouldering it for the last decade. They have nothing left to give and there is nothing left to cut from public services. The problem we have today is that the super rich now have very little ties to their own countries. They are hyper mobile with private jets, multiple passports, secret tax havens, and armies of lawyers and accountants to hide money and assets. They don’t have the same pride or sense of civic duty they once did in 1939-1945 where many of them took command positions in the war or oversaw industrial production. Nowadays, they are all snapping up mansions in New Zealand and other perceived safe havens in case shit goes sideways and governments decide to play hardball. Getting them to pay their fair share to keep the system running would be exceptionally difficult, perhaps even impossible. So where does that leave us? With either a form of brutal neo-feudalism and potentially a peasant revolt or, perhaps most likely, a technology driven dystopia where enough of the populous is given just enough support to survive. Creative can kicking accounting from the civil service to quell the threat. To make it more tolerable, the populous will be plowed with endless distractions to sedate them into compliance. Bread and circuses, quite literally the standard playbook for millennia. Eventually, once the surplus older generations have died off and the global birth rate has declined sufficiently everywhere, all of the world’s wealth will have been concentrated into a smaller set of hands and enough resources will be in circulation that life will be comfortable once again. A generation or two will go by with no direct experience of the hardships of the past and they will start living large again. Borrowing from tomorrow to pay for today. And thus the cycle continues…

alvah 4y ago
Ultra-high tax rates during WWII, when governments used tax to raise the money they needed, may have made sense. Ultra-high tax rates in an unbacked fiat currency world are purely an attempt to punish the ultra-rich (which ends up punishing the upper-middle class as the ultra-rich can afford to either package their income or escape to a lower-tax jurisdiction). In an unbacked fiat currency world, income tax rates are used to heat & cool the economy, not really as a fundraising tool for government works.
- rcarr 4y ago
  So what is your suggestion then, to punish the poor some more? Is there not enough homeless on the streets of San Francisco for you? Are the slums of Bombay too small in scope? As I said in the comment it would be very difficult or perhaps impossible to achieve and the dangers are high (you don’t want a USSR situation happening). You might even need coordinated effort across multiple governments and there is evidence that this is kind of happening with the move towards a global 15% tax rate on corporate business. At the end of the day, steps need to be taken to tax capital at the same rate or higher than labour. Until that happens inequality will continue to grow. As the scales have been out of balance for so long I don’t think having capital gains and other taxes at parity with or a couple of percentage points above income tax is really going to cut it. A couple of short, sharp years at 90% and all of it invested into major, physical public infrastructure projects to create jobs and filter the money down. Whatever happens, if we continue allowing wealth to concentrate in fewer and fewer hands we are going to end up with a dangerous situation. And the problem is that it is being framed as “punishment” in the first place rather than as an opportunity to be the actual hero and save your country and fellow citizens from being thrown to the dogs. Once upon a time men used to follow leaders into battle because they had faith in them as leaders. Would we do the same today? Probably not because they’re not acting like leaders, they’re acting like arseholes who would rather get in pissing contests over the length of their super yacht than invest in making their cities and countries a better place.
  - alvah 4y ago
    It's a very complex topic, which sadly I don't have time to delve deeply into at the moment. My intent with the previous comment was only to point out a fairly large flaw in the "tax the rich" argument as previously implemented, not to suggest that the actual ultra-wealthy shouldn't pay more than they are currently. In theory there are steps that could be taken to fix the massively broken housing market in most of the Western world. Unfortunately the vested interests and massive financial house of cards built on top of property prices make these steps politically impossible. Therefore, what can't continue forever (unsustainable house prices) will not continue forever, but it will end messily & at some unpredictable future time.