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In that scheme you'd get controlled equity risk vs uncontrolled explosive equity risk - the latter being the inevitable outcome of the current system, and Not a Good Thing.

So I wouldn't see controlled equity risk as a problem, because any scheme that controls risk is also going to lower volatility. It becomes hugely less likely that the entire economy will implode because of a bubble, and the real risk of going underwater becomes much lower for everyone.

As for the political argument - you can't immediately fix a democratic deficit by moving money around. You need to have decent representation first - as in policy influence at every level, and not just token show-voting every few years - and then you can start on the rest.

Unfortunately with the current system, even if there's an outbreak of something approaching bottom-up democracy, it's soon co-opted into the usual economic tyranny, making power redistribution politically impossible.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Jun 14th, 2011 at 04:30:04 AM EST
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In that scheme you'd get controlled equity risk vs uncontrolled explosive equity risk

You also get a huge incentive for the financial sector to encourage bubbles (albeit a smaller one for homeowners to participate in them).

As for the political argument - you can't immediately fix a democratic deficit by moving money around.

But my point is that high property taxes requires that property holders are not a politically effective constituency.

In other words, they either have to be a small constituency, or they have to be labouring under a democratic deficit that prevents a large constituency from materially affecting policy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jun 14th, 2011 at 06:49:21 AM EST
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