The boom and bust cycle has been driven primarily by land speculation since classical antiquity. The ability of banks to use their credit creation powers to fue

The boom and bust cycle has been driven primarily by land speculation since classical antiquity. The ability of banks to use their credit creation powers to fuel real estate bubbles through mortgage lending can be halted using a frequently reassessed land value tax and land value increment tax. In the early 1900s Germany completely eliminated land speculation in the colony of Kiautschou using a 6% annual tax on assessed unimproved value of land, of what lots would sell for if cleared of improvements, and a 33% land value increment tax on increases in assessed land value. This allowed the colony to develop rapidly and continuously without any period of recession while running a budget surplus.