Sunday, April 01, 2007

Owners and Renters

Owners and Renters

A good measure of prosperity within any particular nation is the percentage of home ownership. The reason is simple. It is because the percentage of your workday labor that goes towards your housing cost is eventually recouped when you sell your property. The renter receives none of his labor back and in some places like the US, the landlord/homeowners receive the tax write-off but the usually poorer renter receives nothing. The effect is the renter’s labor is being used by the homeowner to buy and maintain the owner’s investment. Poor renters are spending half or more of their labor output for this vital human need. Exasperating this situation is the urban housing available is reduced drastically by tax law that places a high tax on the house but little tax on the land value itself. So the high building tax adds to the purchase price over what the poor can afford while the low land value tax permits the land baron speculator class to hoard land until the price skyrockets. Then they sell high just before the crash; lock in the middleclass with inflated mortgages, allowing the barons to snap up four times more property available from foreclosure. The icing on this foul cake is the income tax that provides a generous subsidy for going into debt. But once the principle has been paid down and the interest payment is less then the IRS grabs more of your labor. So after five years or so you must sell your home to get into another mortgage along with the interest deduction. Neighborhoods are ripped apart every five years and people wonder why nobody knows their neighbor. And all this falls in the backdrop of the income tax which snatches at least a third of an individual’s workday labor right off the top. But the richer you are the smaller the percentage of your labor output seized by income tax because it can be invested in tax shelters while the poor must use the small percentage of their remaining labor output to eat and drink, seek medical care, clothing, etc.

This income tax monster has grown so large now that it forces both the mother and father into the workplace to support the above perverse economic scheme. So juvenile delinquency soars alone with drug abuse and violence. Test scores continue to plunge because before you can teach a child you must teach them how to behave. Naturally the people cry out for more government to protect them from the results of this stupid government tax policy and government is always happy to take on this responsibility along with a greater and greater share of your labor output.

Adding to the woes of the above wage slaves is the mechanism used to exchange human labor output (the dollar) is manipulated by the rich banker/land baron class. They constantly printout extra labor output units (those very same dollars) which means the value of our labor output units declines as the money is inflated. So we demand higher wages to allow us to have the same labor output purchasing power as before but that shoves us into a higher tax bracket. It has been almost 100 years since 1913 when these crooks figured out how to broker this free range slave setup. Now the Internet provides the final piece necessary to easily track slaves and measure their labor output for extraction.

Still, even this slave labor tax setup for the benefit of the lazy elite allows for most to survive. Compare this to Cuba. In Cuba there is one main landlord/owner, Raul, and a small percentage of elite in the military and civilian upper echelon. The vast majority of Cubans rent. Because no one owns their home they have little or no incentive to maintain the property. It makes no sense to fix the roof and not eat if you don’t own the house. Complicating the misery of the average Cuban is he is forbidden to invest his personal labor output for his own benefit. He can only create wealth for the state. And who is the state? Why it’s Raul and those very same elites who can negotiate capital investments as well as decide how ALL the labor output and investment profits can be spent. This is why these elites have the nicest houses complete with working roofs and real toilet paper.

Like all other governments Cuba also inflates its money supply to make the peso virtually worthless. So because wealth cannot be conjured up from thin air, there is little or nothing to buy in the peso stores but anything you want in the dollar stores where both the Cuban government and the customers must pay up front using more reliable, stable and valuable dollars, pounds or euros.

So I’ve been wondering why things are the way they are. Why do people in Cuba and the US put up with these schemes that clearly do not benefit them and very much benefit the small percentage of the elite? Then I realized that the average guy does not understand how this unfair system works. This is why I take my time to try to explain to you clearly how it operates. My hope is that if enough of you understand how we are ALL being screwed then it will change. Thereafter the vast majority of people will get wealthier and we will all live in a more peaceful world.

Tomás Estrada-Palma

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