Here’s the script:
Hello in this tutorial we’re going to look at setting up a 21st century functioning economy.
So let’s get started. Open the app. And you get the basic template, which is some old houses, built a while ago.
Now you can buy these for not much more than it costs to build them, so the first thing we need to do to push up prices is to get some debt into this market, so click on invent mortgage. (NB: mortgages only really came into being in the 1930s and 1950s)
And then we need to get this market rigged, so let’s get some planning laws installed. This is the UK version and that will automatically update.
So we’ve created a situation in which hardly anything can get built except by a few large institutions and that means we’ve restricted supply to what’s already there and a few crappy newbuilds.
Next we need to flood this market with money, so let’s have a fiddle with the money system.
So we’ve got house prices nicely going up which means interest rates will have to go up as well, so if you’re a central banker monitoring inflation, click on ignore.
We’ve got a bubble now that is going to pop and when it does I want you to click on bail out banks, slash interest rates and Quantitative Easing – and that will prop prices.
If people start complaining, install help to buy and that should mute them. And it’ll be a nice little earner for the housebuilding companies as well.
And you’re going have situation now in which even though a house is cheap to build, pretty much anyone under the age of about 35 isn’t going to be able to afford one. Just to buy or rent even the tiniest place, they’re going to have to work like slaves, pool their wealth , get subsidised by their parents, put off starting a family and take on loads of debt.
And there we have it a functioning 21st century economy.
To recap the key ingredients here are our money system, planning laws, our subsidise home owners at all costs mentality in the policy setting classes.
I’ll be posting more of these tutorials, so yeah please subscribe to my YouTube channel.
Barking up the wrong tree blaming the supply side and the banks. The only problem with the supply side is that landowners are not paying for the right to exclude others from valuable locations, as renters do now. Leading to misallocation and over consumption of existing property resources.
Worse still, a title deed for gains an exchange price above it’s capital only value. Hence the average selling price of a house is £220K instead of £80K.
And private debt in the UK nearer to £1.5trn than £500bn
A 100% LVT is merely the way we equally share the value nature supplies for free. It would drop the selling price of land to zero (or close to it) and raise the discretionary incomes for the majority of UK households.
For those interested in the distributional consequences, the YPPUK has a LVT/flat tax comparison app at Google Play.