Comments on: You and I have to repay Gordon’s debts http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/ Incisive and topical campaigns and commentary on today's issues and tomorrow's problems Thu, 24 May 2012 20:42:09 +0000 hourly 1 By: health insurance http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/#comment-23874 health insurance Wed, 24 Feb 2010 18:59:25 +0000 http://www.johnredwoodsdiary.com/?p=5513#comment-23874 When you have the government pump borrowed money into the economy, don't forget that in the act of borrowing you are also withdrawing that same amount of money from the economy. $X in and at the same time $X out. You only improve things if the money withdrawn is put back in a more productive use than it would have been put by those who loaned the money-- and sufficiently more productive to more than cover the interest bill for the borrowing. You can't make the water rise in a swimming pool by taking buckets of water out of one end, and then dumping them back in at the other end. When you have the government pump borrowed money into the economy, don't forget that in the act of borrowing you are also withdrawing that same amount of money from the economy. $X in and at the same time $X out. You only improve things if the money withdrawn is put back in a more productive use than it would have been put by those who loaned the money– and sufficiently more productive to more than cover the interest bill for the borrowing. You can't make the water rise in a swimming pool by taking buckets of water out of one end, and then dumping them back in at the other end.

]]> By: Mark http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/#comment-23873 Mark Thu, 04 Feb 2010 11:26:58 +0000 http://www.johnredwoodsdiary.com/?p=5513#comment-23873 We are paying for our own property bubble which is far greater than the US one (our prices tripled after Brown changed the rules and dropped specialist oversight in favour of the FSA, theirs only doubled after Clinton dropped the ball permitting NINJA loans and promoting HELOC - Bush merely carried on the fumble). Brown also changed the inflation index to CPI - specifically to exclude any housing element, and stuffed the MPC with cronies like Kate Barker, Stephen Nickell and "Danny" Blanchflower who could be relied upon to ignore the asset bubble and its causes. The Barker Review is a masterpiece of economic falsehood, assuming that house prices could only ever go upwards in real terms, and completely ignoring the role of the supply of money and leverage. Banks were of course willing accomplices, because bonuses could be earned by increasing turnover. However, with proper regulation there would have been no 125% mortgages on six times the income written into the form - unverified. Developers would not have gotten away with recording fictitious sales prices in the Land Registry and making side payments in order to drag punters in. Valuers would not have become part of this seedy game. What did government do after many of the elements were exposed by Panorama in 2003? Nothing, but pouring more petrol on the flames. IHT and land banking: IHT causes assets to be sold to meet it - a distress sale. Often developers seem to wind up as purchasers, tipped the wink by a friendly solicitor (who may even be executor) or estate agent. They also tend to have an advantage in having access to funds to buy larger properties, which may have become dilapidated under ageing owners and thus less mortgageable. Part of the world how it is, rather than how economists assume it to be. We are paying for our own property bubble which is far greater than the US one (our prices tripled after Brown changed the rules and dropped specialist oversight in favour of the FSA, theirs only doubled after Clinton dropped the ball permitting NINJA loans and promoting HELOC – Bush merely carried on the fumble). Brown also changed the inflation index to CPI – specifically to exclude any housing element, and stuffed the MPC with cronies like Kate Barker, Stephen Nickell and "Danny" Blanchflower who could be relied upon to ignore the asset bubble and its causes. The Barker Review is a masterpiece of economic falsehood, assuming that house prices could only ever go upwards in real terms, and completely ignoring the role of the supply of money and leverage.

Banks were of course willing accomplices, because bonuses could be earned by increasing turnover. However, with proper regulation there would have been no 125% mortgages on six times the income written into the form – unverified. Developers would not have gotten away with recording fictitious sales prices in the Land Registry and making side payments in order to drag punters in. Valuers would not have become part of this seedy game. What did government do after many of the elements were exposed by Panorama in 2003? Nothing, but pouring more petrol on the flames.

IHT and land banking: IHT causes assets to be sold to meet it – a distress sale. Often developers seem to wind up as purchasers, tipped the wink by a friendly solicitor (who may even be executor) or estate agent. They also tend to have an advantage in having access to funds to buy larger properties, which may have become dilapidated under ageing owners and thus less mortgageable. Part of the world how it is, rather than how economists assume it to be.

]]> By: Paul S http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/#comment-23872 Paul S Wed, 03 Feb 2010 23:00:12 +0000 http://www.johnredwoodsdiary.com/?p=5513#comment-23872 How bad would things be after 4 more years of lying Labour. A total economic meltdown with anarchy and mass poverty & joblessness is not inevitable under a conservative government, with Labour I am sure it is! How bad would things be after 4 more years of lying Labour. A total economic meltdown with anarchy and mass poverty & joblessness is not inevitable under a conservative government, with Labour I am sure it is!

]]> By: DBC Reed http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/#comment-23871 DBC Reed Wed, 03 Feb 2010 20:41:15 +0000 http://www.johnredwoodsdiary.com/?p=5513#comment-23871 Blimey.This is like a collection of land value tax howlers! I mentioned land value tax first off so I was referring to that,not your reply to it. PGS the brainchild of Kate Barker was the complete opposite of LVT.It was due to be levied the moment builders started developing sites so it was madly dysfunctional.It actually inhibited developers from developing as opposed to lVT that would make it imperative that they got off their speculating chuffs. Taking back unused planning permissions is fine by me-its what they're now doing in China where they're also using 20% Land Value Tax.Fine but I don't expect you're very keen on statist solutions. I don't think you can blame Brown for the banks' rush to saddle people with whopping great mortgages,with 50% for the land under the bricks and mortar.They did the same in the US under Bush to catastrophic effect.We're paying for the American property bubble bursting,not ours. Section 106's are a straight quid pro quo.Local authority hand out a licence to have your land go up X100 in value,you pay a bit back. If I was paid for the number of times I answered these calumnies of LVT I would be a very rich man. BTW how does Inheritance tax cause land banking;that is a new one? Blimey.This is like a collection of land value tax howlers! I mentioned land value tax first off so I was referring to that,not your reply to it.
PGS the brainchild of Kate Barker was the complete opposite of LVT.It was due to be levied the moment builders started developing sites so it was madly dysfunctional.It actually inhibited developers from developing as opposed to lVT that would make it imperative that they got off their speculating chuffs.
Taking back unused planning permissions is fine by me-its what they're now doing in China where they're also using 20% Land Value Tax.Fine but I don't expect you're very keen on statist solutions.
I don't think you can blame Brown for the banks' rush to saddle people with whopping great mortgages,with 50% for the land under the bricks and mortar.They did the same in the US under Bush to catastrophic effect.We're paying for the American property bubble bursting,not ours.
Section 106's are a straight quid pro quo.Local authority hand out a licence to have your land go up X100 in value,you pay a bit back.
If I was paid for the number of times I answered these calumnies of LVT I would be a very rich man.
BTW how does Inheritance tax cause land banking;that is a new one?

]]> By: Mark http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/#comment-23870 Mark Wed, 03 Feb 2010 16:04:24 +0000 http://www.johnredwoodsdiary.com/?p=5513#comment-23870 I mentioned LTV, not LVT! House prices got out of control due to lack of proper lending criteria allied with a range of factors that promoted Brown's Ponzi scheme, and appealing to people's short sighted greed (as all Ponzi schemes do). Hoarding of land banks by developers is a problem (and IHT is in part a cause of that problem) that is mainly the result of our Byzantine planning system, including such gems as Sec.106 agreements. I can think of a variety of mechanisms that might help that don't involve land tax - e.g. giving third parties a right to buy land at the undeveloped price if work hasn't been done within a set period of planning permission, or giving land a low permitted collateral rating in a bank balance sheet. Interaction with planning law is important. There was much criticism of Brown's PGS mooted scheme, and other planning gain taxes have proved impractical. I mentioned LTV, not LVT! House prices got out of control due to lack of proper lending criteria allied with a range of factors that promoted Brown's Ponzi scheme, and appealing to people's short sighted greed (as all Ponzi schemes do).

Hoarding of land banks by developers is a problem (and IHT is in part a cause of that problem) that is mainly the result of our Byzantine planning system, including such gems as Sec.106 agreements. I can think of a variety of mechanisms that might help that don't involve land tax – e.g. giving third parties a right to buy land at the undeveloped price if work hasn't been done within a set period of planning permission, or giving land a low permitted collateral rating in a bank balance sheet. Interaction with planning law is important. There was much criticism of Brown's PGS mooted scheme, and other planning gain taxes have proved impractical.

]]> By: Stuart Fairney http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/#comment-23869 Stuart Fairney Wed, 03 Feb 2010 15:31:42 +0000 http://www.johnredwoodsdiary.com/?p=5513#comment-23869 The systems between our two countries are of course very different, but what I was comparing was private vs public education in the USA. The systems between our two countries are of course very different, but what I was comparing was private vs public education in the USA.

]]> By: DBC Reed http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/#comment-23868 DBC Reed Wed, 03 Feb 2010 12:50:03 +0000 http://www.johnredwoodsdiary.com/?p=5513#comment-23868 Believe you me writing hymns of praise of LVT is as tiresome and boring as it must be to read them. I wrote a celebration of the centenary of Henry George's LVT masterpiece Progress and Poverty in 1979 in a proper magazine.Thirty years later and I'm devoid of and hope and trolling right wing blogs (the left-wing ones are really too thick and up themselves) trying to get a word in edgeways. But LVT, it almost pains me to say,is much better than Council Tax,although Council Tax could be made over by being deducted from Income so its not so obvious; being on the land value only: and being honestly up-dated.The difference with LVT is the use or lose it aspect: because it targets unused land-banked sites,it encourages building houses so it is one tax that increases production.There are a quarter of a million unused plots for houses in the UK with extant planning permissions. I also think LVT has given me an Internet addiction (like Derek Smalls of Spinal Tap) . Restricting mortgages to low income multiples is perfectly sensible,but all restrictions of the right to buy are anathema to the main political parties. Believe you me writing hymns of praise of LVT is as tiresome and boring as it must be to read them. I wrote a celebration of the centenary of Henry George's LVT masterpiece Progress and Poverty in 1979 in a proper magazine.Thirty years later and I'm devoid of and hope and trolling right wing blogs (the left-wing ones are really too thick and up themselves) trying to get a word in edgeways.
But LVT, it almost pains me to say,is much better than Council Tax,although Council Tax could be made over by being deducted from Income so its not so obvious; being on the land value only: and being honestly up-dated.The difference with LVT is the use or lose it aspect: because it targets unused land-banked sites,it encourages building houses so it is one tax that increases production.There are a quarter of a million unused plots for houses in the UK with extant planning permissions.
I also think LVT has given me an Internet addiction (like Derek Smalls of Spinal Tap) .
Restricting mortgages to low income multiples is perfectly sensible,but all restrictions of the right to buy are anathema to the main political parties.

]]> By: Paddy http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/#comment-23867 Paddy Wed, 03 Feb 2010 11:40:09 +0000 http://www.johnredwoodsdiary.com/?p=5513#comment-23867 No, I don't have to repay Gordon's debts. I can just leave. I am finishing a doctorate in hard science and I will have no trouble in finding a job. Living in Switzerland pays double the current UK salaries for jobs I'm looking into and the SwissGov only demands half the tax that the UKGov does. It isn't ever a problem to fly back from Geneva to the UK - easyjet flights are very cheap, in fact cheaper from Switzerland to the UK than from the UK to Switzerland because of... lower taxes. So I go, with regret, to greater opportunities abroad. I have a duty to look after my family's best interests. All services work better over there and I greatly improve the quality of life for myself and my loved ones. I'm not fleeing an oppressive regime, but looking at opportunity. This country no longer offers relative opportunity - why would anyone hang around to earn Weimar Republic pounds? Don't underestimate the power of this brain-drain. The only real value added to any economy is when people take new ideas and harness them into new products that improve human life through efficiency savings. Most of the UK economy is government employees buying lunch from private companies. The industrial sector is small in the UK but is huge internationally. We must urgently restructure our country towards allowing for reward in this real industry, value part of our economy. This includes curing the UK of the disease of house price inflation. The policy of encouraging people to borrow money to invest in inflation can only ever blow up in our faces. Imagine if all that wasted effort had been invested in productive activities. No, I don't have to repay Gordon's debts.

I can just leave. I am finishing a doctorate in hard science and I will have no trouble in finding a job.

Living in Switzerland pays double the current UK salaries for jobs I'm looking into and the SwissGov only demands half the tax that the UKGov does.

It isn't ever a problem to fly back from Geneva to the UK – easyjet flights are very cheap, in fact cheaper from Switzerland to the UK than from the UK to Switzerland because of… lower taxes.

So I go, with regret, to greater opportunities abroad. I have a duty to look after my family's best interests. All services work better over there and I greatly improve the quality of life for myself and my loved ones. I'm not fleeing an oppressive regime, but looking at opportunity. This country no longer offers relative opportunity – why would anyone hang around to earn Weimar Republic pounds?

Don't underestimate the power of this brain-drain. The only real value added to any economy is when people take new ideas and harness them into new products that improve human life through efficiency savings. Most of the UK economy is government employees buying lunch from private companies. The industrial sector is small in the UK but is huge internationally. We must urgently restructure our country towards allowing for reward in this real industry, value part of our economy. This includes curing the UK of the disease of house price inflation. The policy of encouraging people to borrow money to invest in inflation can only ever blow up in our faces. Imagine if all that wasted effort had been invested in productive activities.

]]> By: Mark http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/#comment-23866 Mark Wed, 03 Feb 2010 09:15:24 +0000 http://www.johnredwoodsdiary.com/?p=5513#comment-23866 Don't you think that restricting mortgages to say 3 times income and 85% LTV (65% for BTL) wouldn't be rather more effective than say doubling Council Tax? Don't you think that restricting mortgages to say 3 times income and 85% LTV (65% for BTL) wouldn't be rather more effective than say doubling Council Tax?

]]> By: DBC Reed http://johnredwoodsdiary.com/2010/02/01/you-and-i-have-to-repay-gordons-debts/#comment-23865 DBC Reed Tue, 02 Feb 2010 20:40:04 +0000 http://www.johnredwoodsdiary.com/?p=5513#comment-23865 Young British people are saddled with a 100k mortgage debt for the land beneath their own houses. I know Land Value Tax enthusiasts,like myself, can get on people's nerves through repetition,but do you really think that it is good idea putting this burden on people's backs,for the good of our own children, young people or the whole economy? Young British people are saddled with a 100k mortgage debt for the land beneath their own houses. I know Land Value Tax enthusiasts,like myself, can get on people's nerves through repetition,but do you really think that it is good idea putting this burden on people's backs,for the good of our own children, young people or the whole economy?

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