On 6 Apr 2006, at 23:19, Keith Wilde wrote:
> Wally's message from yesterday seems to suggest that when the
> consumer dividend and compensated price rebate are "spent", the
> effect is to cancel initial extensions of credit (to finance new
> production) and that there is consequently no surplus with which to
> inflate prices (especially of land, for purposes of this
> discussion). The national accounting and credit authority are
> assumed to control the quantity of credit and money in circulation,
> and to thereby maintain a stable price level. But is that
> sufficient to inhibit the dynamics of population movement and the
> consequent price pressure on land locations?
Indeed. I think even if you had no need to use tax to either "raise"
some kind of state funding or to "recoup" money from the economy you
would still want LVT, albeit at a low level, as a "sin" tax if you
will in order to maintain an incentive to use it most efficiently and
to use the rights bits when you need them and to move away from them
when you don't.
Yes, the speculative inflation of land, and especially the value
created simply because people spend debt money on land as if it's
water, would be much smaller, but the "market" in land where the
values were created by someone/something other than the occupier
would still exist.
The other reason I am keen on LVT is that land is itself the backing
for most of the debt money in our system in the UK at least. If you
deflate the debt bubble by making land less capital expensive, you
have to have some way of recreating that same money that will no
longer exist as the debts are being cancelled. So it is actually for
me a way of creating a vacuum in the money supply so big that
something radical will become glaringly obviously needed just to
enable trade with money to continue.
Jock
--
Jock Coats - Chair, Oxfordshire Community Land Trusts
c/o Warden's Flat 1e, J Block Morrell Hall, OXFORD, OX3 0FF
w: +44 (0)1865 483353 h: +44 (0)1865 485019
m: +44 (0)7769 695767 e: jock.coats@oclt.org.uk
www: http://www.oclt.org.uk/ - http://jockcoats.blogspot.com/
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