Most of the above named places still have many other taxes that “drag” the impact of the land value tax, but they generally are economically healthier places than a similar neighbor that does not use the program.
Cheers, Josh

I know it was actually used in one Australian state (South Australia) but was repealed after a few decades (I’d guess after some especially well connected tax minimiser lost his property). Given how influential George’s writings were I’d be surprised if it hasn’t been tried somewhere else in the world.

Well, puts Australia in a tie with Iceland, which hasn’t defaulted on any debt either … and it has been continually inhabited 700+ more years than Australia. Which country should be AAA?

This is the central problem.

When you’re in the middle of a three-year boom, or a ten-year boom, or a sixty-year boom, it’s simply not credible that the boom could ever end. The very idea seems like a fantasy.

We see this in lots of context.

I don’t see any way to fix it.

Here’s a limited idea that I thought was interesting, from a Heinlein novel: Collect real estate taxes based on the value the owner places on his property. The value gets published and anybody who wants to buy the property at that price can do so.

Never mind the problems, I just liked the idea of that kind of valuation. You set a price you’re willing to sell at, and that’s what the property is worth to you. You pay taxes for the price you set so you don’t overvalue it too much. But you don’t want to undervalue it either. If it’s worth more to somebody else then you get your price and they say what it’s worth to them.

It seems so elegant at first thought. If only it would work.

Not to let facts get in the way of a good story, but Wamu has never been AAA, ever.

I think the real challenge is separating the two issues of the mortgage bubble – fraud and collusion on the part of investment banks and rating agencies – that is bad and folks should go to jail and companies should be sued – and the separate issue of whether a gov’t agency would have done any better.

Just like you said – “In Australia, despite the fact that no state or national government has ever defaulted” … that was similar to the preface in the US mortgage industry – prior to this crisis, real estate prices had never, ever gone down nationwide in the US since the Great Depression. If you assumed the last 60+ years meant something, any postal service type rating agency would have been hard pressed to say that the risk of a 10-20% decline in US real estate prices was anything but fantasy…

This should be the basis for criminal inquiry. The rating agencies have fundamentally abused their position of trust – they are certified by the SEC as following proper statistical methods for determining risk – and should be, at the very least, de-certified.

If that puts them out of business, it is something that they dearly deserve.

At the end of the day, ratings are bogus unless the rating entity has skin in the game. FDIC has a pretty good idea what its banks are doing. A government bond rating agency makes little sense, and insurance agency makes much more sense. But then you have the issue of political control. There is a real risk that if Republicans gained control of the insurance agency they would politicize it like they did with the DoJ.

http://www.ct.gov/ag/cwp/view.asp?a=2795&q=420390

the complaint shows how the bond insurers lobbied for the maintenance of discriminatory ratings

Same newspaper? Try same blog.

This idea is a good one, though. The ratings agencies were convenient fictions, but there’s no reason why people should let them continue now that the whole system is being propped up with public money.