Inspired by Michelle Bachmann, I’ve been thinking about what a 6-6-6 response to Herman Cain might look like. Being multiply disqualified from seeking election to the US Presidency, I decided to put in as much work as Cain and his team appear to have done, but no more. Hopefully, the magic of crowdsourcing will turn this into a comprehensive blueprint. So, here are the basic goals, and over the page, some of those devilish details.The aim of the plan would be
(a) Reverse pro-rich and anti-worker policy changes of the past three decades to reduce, by 6 percentage points, the share of market income going to the top 1 per cent.
(b) Increase, by 6 percentage points of national income, the personal income tax revenue raised from the top 20 per cent of the income distribution
(c) Reallocate, or use more efficiently, current public expenditure equal to 6 per cent of national income The aim would be to raise post-tax incomes for those in the bottom 80 per cent of the income distribution by around 20 per cent, while making around 10 per cent of national income available for new or better public expenditure. For reference, US national income is currently around $13 trillion, so 1 per cent is $130 billion. Part (a) is the hardest as far as attaching specific numbers is concerned, but the number of policy options is huge. First, there are the many anti-union laws and policies implemented beginning with Reagan (and before him, for that matter) – increasing the bargaining power of workers is clearly central to a more equitable distribution of market income. Second, there are a wide variety of corporate tax breaks that could be removed.. Third, but perhaps most important is the need for a smaller, and less highly rewarded financial sector. The Tobin tax would be my first step in this direction, but there are many more. For part (b), the main component is obviously a more progressive income tax scale. But a substantial amount could be generated by ending the concessional treatment of capital gains, treating inheritances as income, and removing concessions that primarily benefit the top quintile. My back of the envelope estimate (to be corrected later) is that a 5 per cent increase in the marginal rate above 100k and a 10 per cent increase above 250k (relative to the Bush scales) would be sufficient For part (c), lower defense spending could yield savings of 2-3 per cent of national income while still leaving the US by far the world’s greatest military power. Improvements in health spending (for example, a redesign of Bush’s prescription health benefit) could yield 1-2 per cent. Scrapping the mortgage interest deduction (in combination with a once-off reset of current mortgage debts as part of the expenditure package) would save about 1 per cent. After that, there is the long list of pork-barrel items like the Farm Bill, bridges to nowhere and so on. What to do with the 12 per cent of national income generated in parts (b) and (c)? I’ve assumed that a couple of percentage points would go to reduce state and local taxes paid by those in the bottom 80 per cent of households, leaving 10 per cent of national income for new or better programs. Although that seems like a huge amount, it’s not so much when you look at the big areas of need. Among them * Poverty, which is at record levels relative to the poverty standard first set out in 1962, and updated only for inflation since then. I’d favor some form of guaranteed minimum income, but even a patchup of the existing safety net would be expensive
* Health care. The US government spends a lot in this area, but relatively ineffectively. A single-payer health insurance system is the obvious way to go, but even a public option would be a big improvement
* Education. I know more about post-secondary education, where the US used to be the world leader, but has ceased to be so, than about school education, so I’ll focus on the former. The biggest area of need is probably for an upgrading of standards in the community college sector. Success in that sector would imply more articulation into the four-year sector, which would therefore also need funding for more places and lower tuition charges. Then there is the huge problem of reforming the student loan system.
* Infrastructure. Another area where the US once led the world, and is now lagging badly in many respects.
* Debt and mortgages: Most of this plan is set out for the long term, but some action to deal with the burden of household debt, particularly mortgage debt is urgently needed. As I mentioned, this could be offset in the long run by removal of the mortgage interest deduction, which serves to inflate housing bubbles
* Overseas Development Aid: Most Americans falsely believe that the US spends much of its budget on foreign aid, and that it is still, as it was during the Marshall Plan era, the most generous nation in the world in this respect. Raising ODA from its current level, about 0.15 per cent of national income to 1 per cent would make the second of these claims true, and would be far more cost-effective in all respects than military spending
* Climate/Environment As I’ve argued before, fixing the problems of the global climate will cost much less than many people (on both sides of the debate) imagine, at least if we get started soon. Spending 1 per cent of national income now would save an awful lot in the future. A few points about the plan. Obviously, it’s way outside the realms of political feasibility, but there’s nothing in it that’s remotely as drastic as the measures in Cain’s plan, or the proposals put forward by Paul Ryan. Many of the measures would simply reverse changes of the past few decades. If implemented in full, it would still leave the US as a relatively low-tax, low-spending government with a highly powerful military, and would only partly reverse recent growth in inequality. In setting it out, I haven’t made any attempt to give a timescale, or to relate long-run proposals to the short-run need for fiscal and monetary stimulus (except as regards the mortgage debt proposal). Obviously (I hope) this is just meant as a discussion starter. Pointers to omissions and errors will be accepted with the good grace usual in such cases, and suggested improvements with even more. fn1. As will doubtless be pointed out, the CPI probably overstated inflation before the Boskin Commission changes of the 1990s, and there are various other problems with the numbers. Nevertheless, the important point is that this was designed as an absolute poverty standard, taking as its starting point the capacity to have an adequate “economy” diet by the standards of 1962.
37 thoughts on “The 6-6-6 plan”
So your solution seems to essentially be a) to implement a higher tax on the ‘rich’ – which by your definition seems to be those earning >$100k and b) create a more socialized labor force by re-introducing the power of unions? Firstly, increasing the taxes that you suggest will have little to no effect whatsoever for two reasons 1) increasing taxes like this create a large drain out of the economy and any revenue increase will quickly be reversed as the economy slows and hence tax revenues increase and social welfare payments increase and 2) the problem with the deficit is spending, not revenue – if you tax all the billionaires in america 100% of net worth (not income) you would only get ~$1.3 trillion…the deficit is $14 trillion – tax increases is not the answer. America’s problems lies in 1) too much government involvement and regulation, 2) accounting methodology allowed by financial institutional and banks, and 3) the influence of lobbyists and capital donations to influence public policy. Any serious solution must address these issues. In terms of the first issue, government policy (both Bush and Clinton) encouraged financial institutions to lend to people you never should have been given houses, in addition the guarantees of Freddie and Fannie created a moral hazard and an effective transfer of risk from the financial sector to the eventual taxpayer (implicit backer of Freddie and Fannie). In addition, the bailing out of companies has created massive moral hazard whereby bondholders are not being subjected to risk (Bear Sterns bondholders were paid out 100c in the $) and as such companies can borrow at excessively low i% and management can take excessive risk which is not being properly priced by bondholders because they are not being subjected to losses. The role of the Fed also needs to be questioned as they have continually created asset bubbles and by providing ~0% funding in addition to QE (designed to pump up the stock market) have caused a mis-allocation of recources which is hurting the overall economy and transferring wealth into the financial sector as opposed to the other sectors (btw your comment regarding the highly paid financial sector fails to point out that only 14% of the top 1% belong to the financial sector – equal to that of the medical sector). In terms of accounting – as an example, 90% of Citigroup’s recent earnings was from reductions in reserves against potential loan losses, and a “Credit Valuation Adjustment” (which allows them to report revenue if the value of their bonds fall)….the fact that they are allowed to do this is truly amazing. Raising taxes on the ‘rich’ is not the solution and real reform which addresses the issues raised above (among others including the efficiency of government spending) are needed to have a real and lasting affect on the US economy.
I was surprised that Cain came up with a 999 plan given that the people he hopes to get votes from are exactly the type of people who might interpret 999 as a disguised 666 mark of the beast. I also wonder what the real story is behind the US constitutional necessity that their elected temporary ‘king’ has to have been born in the USA. Seems strangely Xenophobic.
At the moment both we have our leader Gillard and the leader in waiting Abbott both of whom were not born in Australia and, quite rightly, no one is worried. No one is claiming they were born in Kenya, or should be disbarred for some other frivolous reason.
As a redistribution, I would give overpaid executives and bonus bingers a wealth ‘haircut’ for starters. A problem with paying executives so much is that they don’t really need to work for a living due to what they already have. The result is less effort not more, and they don’t really need to worry about anything long-term as if things for the company they are plundering go bad, the worst that can happen to them is they retire. If they were paid considerably less they would have to worry about the consequences of losing their job like the rest of us.
How much would the us government lose if it reduced it’s arms sales by, say, half? That could be more effective than increasing foreign aid, if a choice had to be made between them.
I agree with the need of income redistribution, however the problem underlies on some of the problems and instability it might cause. Raising minimum wage is the best way to redistribute income but it does harm businesses’s profit in the short term (especially if it is raised by too much, what is too much however I do not know). With the amount of investments and foreign investment in the US, this might cause a huge outflow of investment and foreign capital; which might cause the market to collapse.
The long term benefit of improvements in income for lower/middle class worker will be greater but investors and executives will need to be willing or forced to give up short term benefits. Also large capital outflow and reduction in investment will need to be avoided/prevented when this happens.
David, I once made $102,000 in a year. I didn’t feel ‘rich’. I felt rich.
No evidence for this – see the 1990s
The 2012 deficit is projected to be $1.101 trillion, you are talking about the debt not the deficit. The huge Bush Tax Cuts for the 1% (which have failed to stimulate the economy for the past decade) are one of the main reasons for the size of the debt. Just because they are not the only reason does not mean that they aren’t a problem; just because you need both revenue increases and spending cuts does not mean that “revenue is not the problem”.
The rest of David’s comment is mainly just the old favorite Community Reinvestment Act talking-point which has been debunked a million times. Suffice to say that without the deregulation of the securities market the subprime bubble would have been impossible, making the problem not “too much government involvement and regulation” but actually the lack of it.
David @ 1, your comment would’ve been slightly less unreadable if you used paragraphs, however I’ve gleaned from a quick scan that you still believe that canard about the US’ problems being caused by lending money to people who couldn’t pay it back.
After that, it’s hard to take you seriously.
Never mind the lack of paragraphs. It’s hard to take seriously someone who uses the total stock of debt of $14 trillion, calls it the deficit, and then makes another silly stock argument rather than focusing on flows. A small increase in tax paid by the upper quintile (and with a tilt towards the top end of that) would generate increased revenue which would start to bring down the deficit each year and the debt over time. At least, until another set of GWB tax cuts arrived.
Apologies, I meant total debt, not deficit.
The argument remains the same in that an increase in tax will not solve any of the current problems that the US faces and would simply make the problem worse by slowing the economy. If you want a flows argument, the current deficit is over $1tr…if you imposed a 10% surcharge on the 236k individuals that earn over $1mn per year (total gross income is $730bn) you would raise $73bn – so we would have a deficit of more $900bn next year. So in this scenario the budget would be balanced in around 15yrs. So that means that the total debt is not being reduced and will continue to grow throughout that time…this is the rosy scenario and assumes that there is no associated economic slowdown by increasing taxes (which is highly unlikely)…if the economy does slow and these millionaires actually having falling incomes then your tax revenues will decrease and it will take longer to close up the deficit. Again, the deficit/debt is the result of spending not lack of taxation.
Mind you, I am not against raising taxes on the ultra-rich if you want to re-distribute income more (the top 5% already pay 70% of incomes which allows ~50% of the population not to work and 44mn people to receive food stamps each month) but this is separate issue and will do little to solve the deficit/debt issue. There is already a pretty incredible subsidization of the less fortunate but to have an additional billionaire tax might make some additional difference – especially if you lower the taxes for the middle/lower class to offset it.
@David Irving (no relation)
I am not sure what you can’t take seriously? My point was essentially that the US needs structure reform so that a similar crisis can’t happen again – band-aid solutions such as increasing taxes won’t have any effect unless you make structural changes to the way corporates manage their balance sheets and the way government (and fed) influences moral hazard and the pricing of risk for bond holders.
I don’t really understand what you can’t take that seriously as you have made no objective arguments in your comment. Could you please highlight some issues.
BTW, sorry about the paragraphs…didn’t realize until I posted. 🙂
I don’t feel that anyone here has read David (#1) writings or perhaps Haiku and David Irving (no relation) don’t have the mental capacity to understand his logic. Neither of you make any logical argument and the arguments you do make show your shallow understanding of economics. It’s obvious that our public schooling system has failed both of you. As a capitalist American, I’m sorry…I only wish we had taxed more and spent that extra money on the education system.
Just a few points to expand on:
“(the top 5% already pay 70% of incomes which allows ~50% of the population not to work and 44mn people to receive food stamps each month)”
The top quintile is responsible for almost 70% of all federal income tax, but that’s not because they are taxed at 70% of their income. The rate is progressive among the different quitiles, but I believe it tops out under 24%.
However, the top 20% receive over 50% of all income in the US. They earn more money and owe more in tax on this larger piece of the pie. This is fair.
I’m not sure where you get the 50% “not working” statistic. Is this the unofficial unemployment rate? Is this a statistic that includes seniors and children? It seems overly high.
Also, you repeatedly claim that higher tax rates on the rich will somehow slow the economy, but don’t cite anything to back this up. Historically periods of higher taxation correspond with periods of great productivity, higher GDP, and general prosperity. If you expand outside of the US you’ll also find no correlation between higher tax rates and economic strength.
I believe the highest federal tax bracket in the U.S. is 35%.
The U.S. does not make much profit from it’s sales of arms. Also, France and China distribute more arms than the U.S. We are only helping people defend themselves by selling them their much needed weapons in order to defend themselves from tyranny and oppression.
This is the top marginal tax rate. The average tax is much lower –I should have been more specific.
This was meant to be 70% of income taxes (ie. total taxes collected) – I am not a typist. The highest tax rate is 35%, however the highest average tax rate is 29.7% for those earning $2-5 million (source is the IRS).
The 50% does include all non-working americans so however you want to splice it 53% of americans support the 47$ who don’t. In terms in income tax receipts, 46% of US households don’t pay income tax…again close to 50% of americans are supporting the economy for the other 50%.
In terms of your comment regarding taxes – simple logic will tell you that if you take $73 billion out of the economy by increasing taxes and don’t have a corresponding increase in spending and/or credit expansion how can the economy grow? the only answer would be for exports to grow to support the domestic economy. In the US at the moment, you have contractionary fiscal policy in place due to debt ceiling concerns, a trade deficit which is not turning into a surplus and very marginal credit growth which is not going to accelerate given the period of de-leveraging which we are going (see savings rate increases) through and the stagnant economy. A such a tax increase would be a drain on the economy. I would be happy to hear how this logic doesn’t work?
Anyway, thanks for the response – nice to get some actual objective argument.
How can I become one of the 46% of households who don’t pay income tax? I’m starting to like what I’m hearing.
On a side note, I found this entertaining:
Actual quote from protesters occupying street of Toronto’s stock exchange:
“It’s weird protesting on Bay Street. You get there at 9 a.m. and the rich bankers who you want to hurl insults at and change their world view have been at work for two hours already. And then when it’s time to go, they’re still there! I guess that’s why they call them the one per cent. I mean, who wants to work those kinds of hours? That’s the power of greed.” – Jeremy, 38
So how do you propose to fix the problem of ~50% of Americans not working? Bring back child labor? Make it illegal for a parent to raise a child and not work? Stop paying out Social Security and end this silly experiment we call “retirement”?
The overall participation rate in the labor force peaked during the late 90’s boom. This was in part due to the economic boom (which followed a tax increase, but that’s another story), but also due in large part to more dual-income families with kids raised in day care. Short of outlawing stay at home parents, or maybe just outlawing children altogether, it’s hard to imagine how we could get more people into the workforce.
Or maybe you’re confusing the popular statistic about nearly 50% of households pay no federal income tax. That’s a completely different thing from not working. I will grant you that studies have shown nearly half of the households that pay no income tax are retired seniors who enjoy numerous tax benefits that eliminate any federal income tax liability…yet still they gather at Tea Party events to demand lower taxes (sorry, going off topic again). However, the other half that pay no federal income taxes are working people who pay significant federal employment taxes in addition to numerous state and local taxes. They simply don’t make enough money to pay federal income taxes, which account for only about 25% of all tax revenues in this nation. But they do pay a disproportionately large share of the other 75% of taxes. I’d hardly call that freeloading.
However, I do have to congratulate you. On the checklist of right-wing talking points, I think you get a near perfect score. Nicely done.
Just an alert that, in US parlance, “income tax” does not include the payroll tax on workers incomes used to fund the Social Security system. Any statement to the effect that “only x per cent of people pay income tax” is essentially meaningless. Nearly all workers pay tax on their incomes.
(I see Devin has made this point, but it might be buried a bit deep)
The 90’s was a very interesting period of growth when taxes in the US did in fact increase while GDP also increased – what you fail to mention is that consumer credit expanded some 90% during the 90’s which made up for the tax drain…so you are not isolating the tax/growth effect. Given current credit conditions, I don’t think the credit expansion in the US will be similar to the 1990’s and as such your reference to the 90’s is not relevant to today’s economy….unless of course you think that credit will suddenly explode as the global economy continues to slow and lending standards get tighter?
This appealing little meme was I believe first published last Friday, less than five days ago, as ideologically inspired humour in a Globe and Mail column by Mark Schatzker titled “Occupy Toronto: The one-week anniversary party” – hyuk hyuk hyuk. By today Google is reporting approximately 58 blog repetitions and 175 web hits.
Do you need to be told the tribal affiliations of the blogs that are repeating it as “fact!”? No, I didn’t think so.
My point is that you have no evidence that a return to Clinton-era tax rates will cause a slowdown in growth, it is purely “Laffer Curve” theoretical conjecture that is basically refuted by comparing rates of tax with rates of growth over the whole twentieth century (not just the 90s). Republicans back in the 90s were forecasting the same type of outcome that you are now forecasting and it didn’t happen. What happened is that the deficit was closed and the country came close to paying off Reagan’s debt.
Similarly, the Bush Tax Cuts were forecast to lead to terrific prosperity, which just didn’t happen – unsurprisingly since most of that money went to the absolutely wealthiest Americans, with the lowest marginal propensities to consume (and the lowest dependence on consumer credit, incidentally). What did happen, predictably, was the return of Reagan-sized deficits and an exploding national debt, which you are now trying to pin on food-stamp recipients.
Higher taxes will allow the government to avoid contractionary spending cuts elsewhere. Aggregate demand will be much more reduced by austerity policies than by increased taxes on the wealthiest. Lower taxes mean more government spending-cuts will be made at a time when demand is already weak and the country is increasingly becoming a desperate basket-case with exploding poverty.
Plainly, there’s a lot one could do but it seems to me that housing is foundational (no pun intended). This is the single biggest point of differentiation between quite wealthy people and quite poor people. Wealthy people (as opposed to super wealthy people) have significant assets tied up in real property, and especially residential property. Cap risies in the real value of that, and make it a very marginal investment, and you will reduce inequality substantially and lower the cost of it to everyone and make it relate more closely to its use value. We also know that if borrowing for residential property had not included anything that was ‘sub-prime’ then most of the US population would not be hostages to the vagaries of right-of-centre politics. That’s true here too.
What should happen is effectively a credit squeeze on all residential property, most especially, owner-occupied.
If over a number of years, the equity requirement to support a purchase were progressively ramped up to 20% and at the same time the maximum repayment one could make were 30% of taxable income, then residential prices would, over time decline in real terms. By contrast with today, saving would be a feasible strategy for home purchase. Combine that with a capital gains tax that effectively treated capital growth as if it were income in the relevant tax year (you could offset interest or other expenditure relevant to the capital gain paid against it in this case) and housing would cease to be seen as a way to get wealthy.
People buying investment property already pay CGT of course, but they too would have to show that their income (and those of their tenants) could support the loan. If their income ever fell below this amount, the mortgagee could foreclose immediately. Failure to do so or secure complinace by other means would expose the lender to irrecoverable losses since this would be a failure of due diligence.
In the end, most win under this arrangement since mortgagee sales would be unlikely, given the income and equity tests. High levels of saving mean that funds available for investment are larger and people spend less on consumables.
We get a more egalitarian society with more modest and probably higher density housing. We get rid of the over-leveraged mortgage belt, which is a bulwark of rightwing politics. You also wedge all those RWDBs by selling this on the basis of “not living beyond your means”.
What’s not to like here?
In the current environment of economic uncertainty, the rich are just sitting on their money; they have too much to spend and nothing to invest it in (except Treasury Bonds, which still have extremely low yields despite the debt-ceiling debacle and ratings downgrade).
Taxing and spending that money would increase the velocity of circulation, which is why the net effect would be expansionary.
Fran, I’d agree with you, up until the point of “….residential property, most especially, owner-occupied.”
My first target would be negatively geared property. It’s a wealth creation scheme for the moderately well-off to use other taxpayers’ funds to convert extremely modest amounts of money used as deposits on property into marginally taxed, but sizeable, capital gains when the rental property is sold. Largish increase in personal wealth, even if not by wealthy people’s standards.
It’s still a case of capitalising profits and socialising losses. And the social loss is magnified, because the owners have to make a real loss to get tax deductions but not so much that the bank won’t lend. So rents go up – for tenants who can’t afford the deposit for any kind of property. And the higher rents make the possibility even more remote. And public housing agencies increase their rents to ‘match’ commercial rates. Thus driving all prices higher for people on low and moderate incomes.
Deal with this distortion in housing availability and pricing first. Then move on to the owner-occupied area.
At last we should reflect on measuring poverty vs mindless CPI – talk.
In the 1930’s you were poor if you could not aford a record player.
In the 50’s you were poor if you could not afford a mantle radio.
In the 70’s you were poor if you could not afford in BW TV.
In the 90’s you were poor if you could not afford a computer.
In 2010, you are poor if you cannot afford housing.
In 2030, we will be poor because we will not be able to afford food.
You need to learn about relative prices
I’ve no problem with going after negatively geared property — indeed, I strongly support it. My remark about owner-occupied property merely reflected the fact that theses were more of a tax haven than copmmercial property.
Sorry, but this makes no sense at all. Those with commercial property would happily trade taxation benefits for higher income. What they are after is ROI. If interest rates decline, their negative gearing advantage declines but they get a net benefit. They can use this to support other investment that is also negatively geared and expand their capital-appreciating assets.
“… happily trade taxation benefits for higher income..” Not quite. Some of them are so barmy about tax that they happily spend more on tax “advice” from lawyers and accountants than they save in tax not paid.
But this is not really about income. It really is about capitalising profits and socialising losses – in a single step. The income lost annually in a negative gearing arrangement is ameliorated by the tax therefore not paid, and most of that loss is attributable to interest paid on loans. So the tax ‘system’ as a whole is really paying a third or so of the interest expense of acquiring the asset. Regardless of how well one thinks the eventual tax on the capital gain on sale calculation works, the whole process is one of extracting income benefits from the tax system year after year, and converting them to net cash assets at the end.
The losses were socialised. Any profits is capitalised.
The current returns on domestic property, around 3% with all deductions, are hardly what you would describe as wealth creation. Construction costs are manifold and should returns drop it is likely that the supply of property would decrease making rentals more difficult.
For many people the greatest investment that they will ever make is in their home and to have that investment devalued by govt policy would be electoral poison, as Frank Walker in NSW found out.
If so, then the lending body pays tax on that income.
I disagree. Obviously you’d need to phase in such a policy — perhaps over 10-15 years so the plateau or decline was very slow, but in the end what you’d achieve is a shift from investment in residential property to more productive sectors of the economy and such investment as was tied up in real property would be very much based on the use value of the property.
You’d also ensure that there was a more fluid market in property and a better fit between people’s needs and the housing available. You would encourage saving and reduce debt and make arguments over interest rates far less salient to public policy debate.
You’d probably also have a better trade balance and less purchase of semi-disposable fashionable consumer junk, fewer people working crazy hours to stay ahead of debt and commuting 2 hours each day. In short, almost everyone but the property speculators and the banks wins.
This low substainable return is the only reason why Australia’s house prices did not crash during the GFC because it is still affordable for the home buyers. If Australia is too become like US, then there will be a huge boom and drive up all property prices and when it becomes unaffordable; it will collapse and take a few banks with it just like the US.
There are a couple of reason why no housing collapse in Australia during the GFC. They include, first, Australia didn’t suffer the GFC the way others did because of the quick action of the government. Indeed, Australia didn’t even have a technical recession. Second, housing starts have been very poor for the last few years, in good part because those resources have been attracted away to mining and related sectors. As a consequence rental and housing markets were tight. Neither of these suggest that housing will be immune in future. If real incomes tighten, so will Australians tighten their belts, and one item will be their expenditure on housing.
I do agree on your point, but I was just pointing out that if Australia didn’t have so much tax on properties(i.e. stamp duty and capital gains tax), it will generate a property boom like the US. Property boom is not a good sign for the society as a whole because incomes don’t rise as fast as the increase in property price itself. Eventually it will reach to a stage that people will have to borrow beyond their ability to service the debt. Once this happens, any speculations of a coming recession will crash the housing industry.
The property boom in the US was fuelled by Ninja loans with the financing provided by magically turning junk CDOs into AAA bonds with the application of CDSs. Through in massive dollops of fraud, and you have the catastrophe we had to have. Unless a great number of people in Oz are struck by some type of madness, that type of boom is not going to happen. Ordinary booms, however, remain a possibility, but everyone seems immune to believing straw can be turned into gold at the moment, so we may have to wait some time for the next boom.
At the moment? We are on a permanently high plateau.
This boom will not happen as long as there are heavy taxes on property investments such as now, as soon as these taxes are removed; the inflow of foreign investment combined with investment speculation would create that boom as well. Think of the ShenZhen Stock Exchange for example, how long did it take for it to collapse from 19600 points to below 8000 points.