"We need a land value tax or at the very least higher property taxes. That would disincentivize people from speculating into housing."
That's like saying we need a bilge pump for our basement to fix that leaky pipe. You've properly diagnosed the problem, but your solution is idiotic.
Why are people piling into hosuing right now? Answer that question and the solution becomes exceedingly obvious. It's the same reason Bill Gates and his ultra-rich friends are buying up farmland in the Midwest and the same reason people are buying into the stock market so heavily. They're trying to avoid inflation.
Inflation was 8% year over year last month. The last thing any investor wants to hold right now is dollars. If inflation stays steady for the next 12 months, you are guaranteed a value loss of 8% if you just leave it in the bank. Almost anything, baseball cards, used cars, copper pipes, etc. is a better investment than that.
And on top of that, people are realizing they can borrow $400k from the bank at 4% when inflation is raging at 8%. It's literally free money, with leverage to boot. There is no easier and faster way to use leverage to short the dollar right now than investing in real estate. It's no wonder housing prices are going nuts. Everyone and their dog is trying to avoid inflation, and the rush to buy housing exacerbates the price increases even further.
The solution to the issue is one no one will ever get behind: raise interest rates such that the real rate of inflation (nominal interest rate minus the inflation rate) is positive. That means that if inflation is 8%, interest rates need to be at least 8%.
And that's why the problem will persist for many years into the future: there is no way anyone at any level of our society will tolerate 8%+ interest rates. The housing market would collapse in such a way that 2008 would look like child's play. The bond markets would get destroyed. The stock market will absolutely crater 50%, easily. The interest due on the federal debt would go to astronomical levels, resulting in ridiculous tax increases to pay for it.
That's the solution. Or, the government can just let inflation run rampant for a few years, and default on the debt without having to not pay anyone, and without having to have a big old nasty recession. We'll just have the 1970's style stagflation for the next decade.
For those reasons inflation is here to stay. If you can find a better way to short the dollar over the next 10 years and use leverage to do it, by god, that's the best investment you can make right now.
But the saddest part of this whole ordeal is that at some point in the future, the only way to solve this inflation crisis is to do exactly what I described: make interest rates positive again. That is the lesson of the 1970's.
They tried to raise rates several times, but they never raised them enough such that the real interest rate was positive, and as you'd expect, any time the Fed got close to getting there, the economy teetered on the brink of a recession, and there was an election coming up, and well, they chickened out and lowered rates again.
Regan's election was very much a result of the economic devestation of the 1970's. Another moral of the story is that if you don't want fiscally conservative reupblican's like Regan to get elected, the guy in the White House had better deal with this shit soon.
But my money is on Desantis in 2028 after we see year over year inflation rates of 15%+ for most of the 2020's. You heard it here first.