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Everything posted by matroskin

  1. Contribution-based pensions - very likely yes. State pensions - yes but less likely. The state pension will be paid (no one dares to rob Russian pensioners twice in ~20 years) but the value of state pension is not going to hold up against prices or hard currency.
  2. The original question was "which one do you prefer", not "what hurts more if both fell together" I don't think they can fall together (either cash purchasing power drops or house prices fall) so your 2nd question makes little sense to me - only as 100% theoretical scenario. The rent would fall as well, but not taxes - they probably will go up a lot %-wise, to feed the state/public sector. And capital controls will be put in place but this would not stop capital flight. So - all in all - cash owner will be better off since s/he could still escape abroad with most part of his/her money (allegedly, even now one could get out of Cyprus with 20% upfront fee) whereas home owner would be stuck with unsellable asset which eventually will drop in price to "replacement value". IMHO
  3. After the price of a given house falls 50%, the mortgagor still owns full amount outstanding. After cash loses 50% of its purchase power (nominal value is still the same), the owner owns nothing except in case he is also a mortgagor :-) I personally prefer the latter since I could buy the 50%-depreciated house with 50% of nominal value of my cash pile. Now, if we are getting into a discussion what happens after 50% of cash in the bank was confiscated a la Cyprus, then my decision would be different...
  4. Their success is built on debt. For 2011, Barcelona's gross debt stands at around €483m and the net debt is at €364m. http://en.wikipedia.org/wiki/FC_Barcelona#Finances_and_ownership Good for players, making hay while sun shines.
  5. So does "denying opportunity to others" argument apply only to cities' locations then? If something is not owned, it won't be maintained. What do I have to do then if I displaced no one? If someone claims that I denied opportunity to him/her when s/he wasn't even born when I started to use the land, am I still liable? Tell this to those living in Beijing. It seems you concentrate on big cities' locations - and this actually reinforces my comparison with air. Air pollution in Beijing proves that breathable air is not superabundant as You claim it to be. So, does "denying opportunity to others" argument apply to cities' air? If yes, does it apply _only_ to cities' air? Again, does it apply only to land around cities then? Well, at this point I believe you are debating from slightly modified "libertarian" stance, which I saw before. I use "libertarian" in quotes because the purpose of true libertarianism is to relieve people from undue coercion, the said "libertarianism" just replaces coercion with debt resulting from outrageous claim that anyone actually making use of something on or under the land is "denying opportunity to others" and must compensate anyone laying such claim, however imaginary foundation such claim might have.
  6. I argue that land is also abundant on earth. Building a farm on the particular patch of land does not prevent anyone from doing the same next to the 1st farm. I argue that land is also used temporarily unless it is fertilized/crops rotated/weeds are kept under control etc. Not-cared-for land is no more useful than exhaled air. The best you can get from not-cared-for land is diminishing returns until they stop. Same for exhaled air - perhaps 1-2-3 more inhales of the same air and it is toxic. Try it with a plastic bag for proof. in what way am I exploiting the land, when anyone else can both farm the land freely (next to each other or distant, does not matter)? At the moment it is being done by govts which levy royalties/green taxes and mix them together* with other taxes so there is no trace left where royalties/green taxes go to. If you noticed, I did not say anything about govt taxation and spending, only about compensating the society which is entirely different thing. We may need govt force to levy these taxes (no one in the right mind would pay money now to save society as a whole and perhaps 100s of years later) but right to spend royalty money must belong to society as a whole, not to the govts. (*) Notable exceptions include Norway and Russia which keep royalties in separate funds. However, Russia uses royalties fund to prop up general economy which in itself is another problem. Arable land _does_ get used up if not cared for, turning to dust and ultimately to desert. I guess you won't object on the grounds of "denying opportunity to others" if I build a farm in the desert?
  7. It is an observable fact in the same sense as my inhaling of 1L of atmospheric air denies the inhaling of the same 1L of atmospheric air to anyone else. Should I offer compensation to those who sit next to me in the same room inhaling the same air? On the simple grounds that natural resources are finite and society must find ways to survive after ALL natural resources are consumed. Even if our planet were a hollow sphere full of nat.resources to the brim, they will end sometime in the future. That's why society has to levy a tax on nat.resource extraction to research/develop/prepare for that eventual outcome. Even if the only outcome for human society is to leave the planet.
  8. I do disagree. Land, locations and natural resources cannot "belong equally to all". Otherwise no one in right mind would extract minerals/fertilize the soil knowing that anyone could come any time and claim that patch of land (with mine or farm already built upon it) under "libertarian" pretense of "denying opportunity to others by using that patch of land". I do not deny that there should be a tax/excise/royalty paid on extracted natural resources, to compensate society for value extracted (once extracted, the nat.resources generally cannot regrow/be reinjected back, unlike fertilizing of soil which enriches/restores the agricultural value of land).
  9. I had a very similar dispute some time ago on this board with "libertarians" whose argument in essence was "if one owns the land, then s/he takes opportunity (to do something with this land) away from others". One "libertarian" was so kind to extend this argument even to Palm Jumeirah land One of my questions about Dutch "polder" land is still unanswered but I guess the "Palm Jumeirah" answer would apply as well in "libertarian" minds. (The diference betwen Palm Jumeirah and Dutch polders is that former was built by private company and latter by local societies who has to pool personal resources and labor)
  10. USA has already run out of "open uninhabited land to drill" http://www.testosteronepit.com/home/2013/1/2/fracking-activities-enter-urban-areas.html And it tok them how long? - 2013-2002=11 - just 11 short years for the USA as a whole to begin urban fracking. I reckon if fracking does deliver cheap gas in the UK, we are looking at 5, max 7 years before urban fracking is successfully lobbied here. And cheap as chips houses will spring all along the abandoned fracking wells... Fun times indeed
  11. Fair point, how do you distinguish buying oppo from selling ? FTSE up==selling oppo, FTSE down==buying oppo? Or it it other way around?
  12. You are a bit late in praising Sark as state-free territory And the Sark laws are only as good as people willing to obey them voluntarily. With 600 inhabitants, that's a no-brainer. I am sure even Somalia would be a heaven on earth if inhabited only by 600 humans. Please give us an example of a economically prosperous state-free territory with 600K population, or better 60 million.
  13. Employers liability insurance? Compensation culture is rife nowadays http://www.accident-claim-expert.co.uk/en/employers-liability/accident-at-work-compensation.html You can but you will be hard pressed to find someone who would risk a limb/life for 8K p.a.
  14. Easy Assuming PAYE and using online calcs and rounding to nearest integer http://www.uktaxcalculators.co.uk/ http://nicecalculator.hmrc.gov.uk/Class1NICs1.aspx 1/ lower-end higher-rate taxpayer (43K p.a.) tax 7084, employer+employee NI 9097, effective tax rate 37% 2/ higher-end higher-rate taxpayer (150K p.a.) tax 53126, employer+employee NI 26004, effective tax rate 53% [EDIT] got tax bands for 2012-2013 wrong
  15. Get your facts right please. Soviet income tax system was old but not byzantine: 13% flat rate tax, +6% for people without children. Wages were heavily regulated though. The 90% personal income tax you are inferring to did not ever exist, top income tax rate under Yeltsin was 35%. The real problem is not income tax, it is social security taxes payable by employer which never fell below 26%. So in Yeltsin years the cumulative taxes attributable to wages and payable by employee+employer could reach as high as ~50-70%. That encouraged widespread payment of wages as cash in envelopes, undeclared and untaxed. The 13% flat rate tax under Putin was directly borrowed from Soviet tax system and only applies to personal income tax.
  16. GDP measures consumption in current tokens. Whereas movement of money is also counted in GDP, it is minuscule. Otherwise GDP would have shot up with invention of online banking and again with invention of mobile banking. Back to the topic - GDP is the best proxy of wealth because the only thing which can count as wealth is consumption (current or deferred, a.k.a savings, measured in current tokens). Everyhing else (property, cars, jewelry, rare stamps, wine collection, gold etc) is a durable consumer good and a liability.
  17. Why discount the kids? Any rationale except legalese (below legal age)? They are humans and have a right to consume own share of wealth. And why GDP per capita is not wealth?
  18. It is already shared, no single person owns all the world's wealth. But not equally, of course. If you are after a per-capita number, divide world's GDP by number of humans on the planet. But if such redistribution/division ever takes place, then total wealth and wealth per capita will go down with time since there are no incentives to work at all. BTW, that's why there will never be a debt jubilee on any large scale, and hyperinflation events are rare.
  19. Expanding the example: If your salary/pension/savings interest rate is linked to either RPI or CPI as presented in this example, you would choose RPI because you got to keep (100 * 1.02 * 0.986)=100.572 after 2 years. The CPI link would result in you being out of pocket 100.* 1.017 * 0.983 = 99.9711 Obvious choice, really
  20. So much for exports-led recovereh... BAE should be trying to sell these to Somalia instead - or swap for all hijacked ships, crews and cargoes: (1) Somalians have no trained pilots anyway; (2) peaceful release of all hostages - great promoshun for British diplomacy and trade; (3) plane software remains under BAE control anyway. What possibly go wrong with this plan?
  21. Not until West's air forces replenish the high precision missiles, bombs etc spent on Libya. N.Korea has more tanks than there are Apache attack helicopters in the US army, let alone S.Korea's and Japan's. Problem is UK hasn't got enough good ol' naval equipment to repeat the 1982 Falklands victory. Harriers are no longer in production and are on their way to retirement http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_191634.pdf with nothing to replace them until 2014.
  22. "Kicking out" and SMI handouts are completely different things. SMI ending does not automatically mean "kicking out". Look at recent Morgan Stanley report, they reckon some 14% of UK mortgages receive some kind of forbearance. Yes and no doubt about it. No, the state should not pick up the tab and let the bank owning the mortgage to go down. Pay up to old £36K limit to any saver who loses money as a result. Then the bank's assets (mortgages) will be sold on open market and same people who got delinquent would be able to buy a house much cheaper. Such order of things was going on for decades, if not centuries, before "financialization" of everything got out of control. This would create even more bureaucracy who will "police" "savings" and £1000 limit. I generally oppose UC/CW but let's call it "hardship benefit" for purposes of this discussion. Correct, and people should be able to spend HB as they please and live where they can afford.
  23. That would help too. If a house is not for sale and not for rent, then it's not counted as "supply". By your logic, we should count army tanks & AFVs as "car supply" and RN warships as "boat supply".
  24. Because getting rid of SMI bound to increase supply? And getting rid of HB bound to lower private rents which is not the same thing. And please no more silly arguments about "people will be sleeping rough if HB is abolished" - there is no shortage of houses in this country. Also, Travelodge is £12/night if you book early, used to be £9.
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