Speaker: Sprawled out
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Sacha, in reply to
I had to weigh up that precious extra kilometre from the city that we've moved. I can't any longer pretend to be a central suburbs boy, this is full West.
And the (finally) impending CRL construction effectively shifts you to Mt Albert. Good move.
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BenWilson, in reply to
A crash would definitely jolt the economy out of something, but I don't know what it would jolt it into. It could something much worse. There are often big time predatory winners from crashes, those guys waiting with their cash in something else for a chance to switch in at the bottom. Banks are likely to become hyper conservative to new lending so those locked out could be locked out even harder. Depending on the government, a likely outcome of a crash is austerity measures.
Ironically a crash also goes a long way to restoring faith in free markets, the much vaunted "correction", setting everything to rights again.
What is scary about our spiraling prices that it's not driven by the overstretched financially. Measures have already long since been taken prevent that. It's much more people like me, who have significant equity. A correction would not ruin us but it could trigger a very long recession.
Once again in a property debate I'm left thinking we've become very good at seeing the problems, but unifying on a solution just isn't happening. My own feeling that we need new levers of economic control. An asset deflationary one seems like one of the few that could actually tackle house prices. I keep coming back to a UBI. It's looking more and more essential as we slide into shocking inequity. It's the only solution that seems to align with what the future work is really shaping up to be.
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Moz, in reply to
My own feeling that we need new levers of economic control.
Yep. Various governments keep whining that there's no money so they "have to" cut spending. The alternative is to raise taxes, which is apparently something they can't think of (I'm an ecognomic geeniuz, I teels ya).
We could just fix the taxes we have, because right now an awful lot of what most people consider "income" is not taxed, and some of it is even officially not taxable. So we could start by taxing all income. I'm kind of attracted to the NZ/US view that capital gains and so on count as "unearned income" and should be taxed differently. But unlike NZ I think they should be taxed, and unlike the US I think it should be at a higher rate. Say, 50%, or "maximum possible marginal rate on all income".
Similarly with company tax, I think it's quite reasonable to do a sanity check by saying "your company made $X in the most recent year we have numbers for, and about 4% of your activity was in NZ. You must pay 4% x $total profit x NZ tax rate, as the absolute minimum income tax.
Also, a financial transactions tax. I think we may need to also tax empty/unused land and houses too.
But really, a big chunk of the problem is foreign money regarding NZ as a combination safe haven and tax shelter. That needs to be fixed too. Perhaps trusts with no beneficial owner (ie, the physical person who owns them) get a declared tax rate, and if necessary a declared income from their assets/turnover.
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Kumara Republic, in reply to
Ironically a crash also goes a long way to restoring faith in free markets, the much vaunted "correction", setting everything to rights again.
And because what we have right now isn't much of an actual free market. I worked out early on that it's more like a rentier system where those lucky enough to inherit wealth and/or get in 20+ years ago wilfully pull up the ladder behind them, and then have the cheek to lecture the rest of us about "honest hard work".
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Kumara Republic, in reply to
A crash would definitely jolt the economy out of something, but I don't know what it would jolt it into. It could something much worse.
One possible scenario is that those who are too narcissistic and born-to-rule to get the message if/when the bubble bursts could go full-on Trump or even Weimar Republic. They'll continue to blame anything and everything for the sudden loss of their wealth, except themselves.
I liken it to a financial equivalent of the Ku Klux Klan, which went out of its way to bring back the old order in the American South following the Civil War.
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