Forecast of world market prices of real estate remains negative. The real estate market is experiencing the most difficult times in the past 50 years, assured analysts believe. Unable to learn the lesson of history from the first time, be sure to tread on the same rake again and again.
This applies to the deep economic and financial crisis engulfed the entire world. What's behind it? The answer is simple: cyclic processes on the real estate market, driven by credit. Living in the USA, UK, Spain and Ireland began to actively speculate in land and real estate.
The negative consequences of such behavior is still poisoning the lives of the world economy. In 1984 I bought a house in London. At today's prices, the land on which it is built, would cost me at 100 000 pounds. Its price has risen sharply, quite possibly, ten times. However, I did not implicated in such impressive rise in price.
This piece of land went up in price thanks to the efforts of others, the hard mode of urban planning and generous tax policies - property tax is low, and the profit motive and is not taxable. Thus, it appears that I am a land speculator, a kind of mini-aristocrat, for which a regular appropriation of the results of the efforts of other people is the first step on the path to riches. What I done to deserve such an increase in their welfare? Nothing.
So clearly the consequences will be sad. First, the country needs to finance itself through taxation, ingenuity and vision. Taxes on labor income and capital gains and reduce labor income and capital. However, this does not apply to the tax on resources, because natural resources are granted. Such taxes reduce the unearned income of their owners. Secondly, the system triggers the formation of harmful political incentives.
In a world in which people gained enormous debt to own land, increasing land prices will be greeted by cheers, and everything will be done to prevent their decline. Thus, before we played fantastic spectacle: the newspapers proclaim the coming of the increase in home prices - the most important benefit. Those who benefit from these higher prices - not just land speculators. They are inspired followers of the ideas market manipulation.
For example, in the UK, landowners warmly welcomed the creation of artificial shortage of land by absurd restrictive regime for the control of urban planning. This is one of the most important ways to move wealth from the poor young man to the propertied old. In his new book, David Willett, the Minister of University Affairs and Science, considers the problem of unfair distribution of wealth between generations.
Speculative land market - the main reason for the disaster occurred. Third, we are caught in a vicious circle: the opportunity for land speculation provokes the development of the credit cycle, and vice versa, again and again destabilizing the economy. The journalist Fred Harrison argues that this cycle is a period of 18 years had been widely anticipated and predicted, at least for him.
In fact, buyers have rented property from the bankers, but instead played for promotion. The mass of agents to profit from the fees for the preparation, beautiful packaging and entertainment benefits of a highly speculative. During the long economic expansion (the most recent cycle of growth in the UK lasted 11 years) they are enriched by an explosive surge in lending and the use of borrowed funds.
Until the crash, yesterday's borrowers, financial institutions and taxpayers will suffer huge losses. This is nothing more than a giant pyramid selling scheme with familiar sad consequences. Ultimately, according to Harrison, this way of doing business will lead to disaster.
For a long time, we are convinced that the fee for using the resources should be unified for all and not increase for individual owners. Nevertheless, according to Harrison, "as a society, we are socializing their hard-earned income (wages and salaries), while our public revenue (from the ownership of land) remains private.
Who would have thought that neither the fairness of such a system, in practice it has led to horrific results. Do we want to re-start the credit-oriented process in the real estate market, as only succeed in removing the effects of the previous one?
If the "crisis - it is an intolerable situation, you want to take advantage of, now is the time to act. Full socialization rental value of land will destroy the financial system and the welfare of a large part of society. Clearly, this is impossible. However, the socialization of profits, starting now will be less painful. This decision will help cool the ardor of speculators. It would also shift the burden of taxation. H
e is less important plans of Great Britain, concerning the revision of laws on urban planning. Many believe that such liberalization will negatively affect the situation in the countryside. But those fears are absolutely groundless: Increase radius to 5 miles of London to increase the available space by 50%. Can it could somehow affect the charming greenery of British land?
No government is able to reclaim the British from their belief that land speculation - is the way to riches. But you can at least try. The growth of housing costs and inefficient taxes - is in itself bad. But the fact that the speculative fever destabilized the entire world economy - even worse. Let this guess until only a few, but the time for change has come.