Friday, October 10, 2008

Another day, another reckless throw of the dice …

Financial crisis: Rising unemployment on the way as recession looms

Mr Purnell pledged that ... Those who are made redundant will get help to pay their mortgage after 13 weeks on the dole up to the value of the average house - £175,000. Dude WTF!?! The underlying message is: "If you are worried about losing your job, rush out and buy a property for £175,000 or less and you can live there rent- and mortgage-free" Subsidies for land and property ownership are the very worst kind of subsidies* as these are in fixed supply, so subsidies just feed through into artificially high prices. Being repossessed is stressful, I agree, but that house doesn;t get demolished - the new owner either lives in it or rents it out - ultimately to the very people who were repossessed in the first place. * By reverse logic, taxes on land values are the least bad taxes, of course.

Posted by mark wadsworth @ 10:39 AM (704 views)
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14 thoughts on “Another day, another reckless throw of the dice …

  • Still-waiting says:

    You will only get help to pay the interest on the mortgage, not the capital repayments.

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  • Compared to other government actions this isn’t so daft. (I’m no fan of NuLab)

    Yesterday’s Daily Mail featured an Afghan single parent getting £170,000 of taxpayer’s cash.

    The Government is headed for a bust. That will be painful. I am not advocating Cameron, but something needs to give!

    House Prices….well, we all need to live somewhere….

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  • planning4acrash says:

    Also, if reposesed, you never owned your house anyway. So to move from mortgage to renting aint much of a difference if you can’t afford the mortgage.

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  • planning4acrash says:

    Mark. I’ve said it before, Land value tax will push inflation into real commodities, causing greater harm. We need sound money, not a sticky plaster. We don’t need more taxes, we must bring our troops back, stop funding banks, EU & UN, then slash taxes.

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  • planning4acrash says:

    I am sick to death Mark, of you constantly saying that the problems caused by government cld be solved by them creating a new tax. Socialism has failed. Get over it and move on.

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  • mark wadsworth says:

    P4AC, I support LVT for the same reasons as Milton Friedman. It is not a socialist tax, it is a user charge. There is a natural upper limit to the amount that can be collected and it does not damage economy like VAT, National Insurance etc etc.

    If anything I see it as a replacement tax for Council Tax, Business Rates, Stamp Duty, Capital Gains Tax, Inheritance Tax and the TV licence fee, which between them amount to Land Value Tax, just more complicated.

    Why would keeping land values low ‘push inflation’ into other things? WIthout a land price bubble, no credit bubble. Without a credit bubble, we have sound money. What’s not to like?

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  • mark wadsworth says:

    P4AC, I agree completely that the gummint could reduce taxes by £100 billion or so (20% of all tax revenues) by cutting waste, quangoes, UN, EU all that, without a single teacher, copper, fireman losing his or her job. But why not use the savings to cut the Really Bad Taxes first – i.e. those on production and incomes and profits?

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  • planning4acrash says:

    My point is, that fiat money inflation will remain, and tax system will rush it one way or another. Land value tax may work in the way you described, but we must take back money and make it sound first. I like your idea about consolidat’n of complex taxes

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  • Another pointer to a collapse in solvency is the charging order. It is a legal process, allowing creditors of unsecured loans that are in default to tie that debt to an asset owned by the defaulter. In many cases this will be a residential property. These jumped from 9,689 in 2000 to 97,026 last year.
    Wow ! This is snowballing.

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  • planning4acrash says:

    Where can i read more about the mechanisms of land value tax, arguments for and against it?

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  • mark wadsworth says:

    P4AC, for the small government, free market liberal view, see my blog or Praguetory, for the more left wing view, see Labour Land Campaign. Or the Green Party or the Land Value Taxation Campaign. Or Liberal Democrats ALTER.

    For the arguments against, see any political party that uses rising land values as opium for the masses who don’t understand economics.

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  • planning4acrash says:

    Thanks Mark. I’ll look into it.

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  • planning4acrash says:

    Btw. Working in Brighton and, the chemtrails here are horrid. Shld be a clear day, but the sky is full of persistent trails that are forming a milky covering of the sky californiaskywatch.com i don’t understand how the general public haven’t noticed.

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  • P4C. Why has Socilaism failed?

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