Dan Sullivan pretty much sums up why headless Keynesianism will not solve the current social and economic problems of our time. === The point is that there are proximate causes (look it up) and underlying causes. Land price is an underlying cause that adjusts to the economy in the short term, but continually aggravates the situation by taking more and more of the GDP until the system collapses. Debt allows labor and capital to avoid the collapse by going deeper and deeper in debt. An inflation policy is then necessary to mitigate the debt burdens on labor and capital, and to stimulate an economy so it can cope with the crushing debt. This plays out over 18 year cycles within larger cycles. If you want to see an absolute correlation, housing prices peak 3-4 years before every recession. If you want to see another correlation, compare the affordability of housing during the 2005 peak with real estate taxes. The higher the tax, the more affordable the housing. This holds even where overall taxation is lower. savingcommunities.org/issues/taxes/property/affordabilitycharts.html (Facebook fetcher fails again, and I cant remove the 404 preview.)
Posted on: Fri, 28 Mar 2014 14:21:29 +0000