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Same problem in Australia. Just to define some terms for non-Australian folk: - Negative gearing: A deduction received on net rental income losses (e.g. I'm a

• PebblesHD 11y ago
  The whole situation in Australia is infuriating at the moment. I feel like I'm in a reasonable position for a young professional but I have zero chance of getting any sort of housing security with the way things are now. Between bills and rent at the moment it would take me years to save the amount needed for a deposit, and even then I'd only be able to borrow enough money for a house more than an hour and a half's commute from work each way, which totally defeats the point. I've been willing to forgo a short travel time for a reasonable place to live for years, and it's really starting to get to me. Sadly, remote work is also out of the picture thanks to the sad state of my 'ADSL2' that tops out at 2mbit/s... It's just not a great place to be right now
  • adventured 11y ago
    Does Australia have other nice but lower cost markets that off-set the high cost areas like Sydney or Melbourne? What kind of trade-offs does that require?
    • Sir_Substance 11y ago
      >What kind of trade-offs does that require? With only a few notable exceptions, some dying fast (mining jobs), the cost of living in Australia but not Melbourne or Sydney is any chance at meaningful career advancement. Adelaide, Darwin, Perth, Cairns and to a lesser but still noticeable extent Brisbane offer only small firms. Let's not talk about Hobart.
      • reinhardt 11y ago
        How about Canberra?
        • jbarham 11y ago
          Depends on how you feel about working for the government.
        • ACow_Adonis 11y ago
          Ex-canberran here: you've got several issues: 1. Higher than average wages mean higher than average prices. It's not much different to Melbourne in terms of house prices. Two full time prof incomes is the norm. Cost of living is higher. Quality is lower. 2. Fed gov is pretty backward and hard to get into (I voluntarily left after 5 years and no real prospect of job progression while still effectively taking below market wages at my org, while non-technical unskilled bureaucrats at other departments got paid 10-20k more, and I was politely informed if I wanted to progress, I would have to become non-technical/non-expert). Job cuts in recent years, promotion based on whether the person above you has died/left yet, and a policy of redeployment rather than competitive rehiring means it's really hard for young people. 3. You have to live in Canberra. Don't get me wrong, you really can make a career of it, and if you and your SO want to plop down, live in suburbia, have a child, and not worry about merit/skills/culture/tech/life while carrying a mortgage for 25 years, I can think of worse places to try to pull it off.
• cmdrfred 11y ago
  Social Security in the US is very similar, for many years before I was born politicians elected by my parents and grandparents generation voted to take money from the federal retirement program and pass them ahead as lower taxes for my parents and grandparents. Now they are all standing around with their hands out asking "Where is my retirement? Lets raise taxes to fund it!".
  • hackerboos 11y ago
    Who's talking about raising taxes?
    • scardine 11y ago
      Government makes no money, all the money the government distributes as benefits is taken from the productive slice of society in the form of taxes. There is no magic way you can raise benefits for an aging population without also raising taxes (specially when you are already operating in deficit). OK, the government can print more money, but this causes inflation, the worst taxation of all.
• poof131 11y ago
  Agree 100%. It’s frowned upon to talk about this as a generational thing, but it very much is. Debt is the instrument to have now and pay later, and the debt burden is rampant everywhere. Modern economics has essentially disregarded the role of debt in the economy.[1] All our government institutions seem hell bent on maintaining asset prices at any cost.[2] There’s no sensible plan to even remotely reign in government debt. The world’s stuck at zero percent interest rates, handing out money to the politically connected, and growth is still anemic. Even at low rates people can hardly afford to buy anything since asset prices are so inflated. I would like to believe we can deal with this in a reasonable fashion, but am skeptical. As can already be seen by the U.S. elections and elsewhere, populism is rearing it’s head on both the left and the right. It feels like a storm is on the horizon and I only hope it doesn’t devolve into war. [1] http://blogs.lse.ac.uk/politicsandpolicy/ignoring-the-role-of-private-debt-in-an-economy-is-like-driving-without-accounting-for-your-blind-spot/ http://blogs.lse.ac.uk/politicsandpolicy/ignoring-the-role-o... [2] http://blogs.lse.ac.uk/politicsandpolicy/ignoring-the-role-of-private-debt-in-an-economy-is-like-driving-without-accounting-for-your-blind-spot/ http://blogs.lse.ac.uk/politicsandpolicy/ignoring-the-role-o...
  • spangry 11y ago
    Pretty much spot on, on every point. I've been starting to worry about the whole 'war' possibility as well. We might find out about the latter in a couple of weeks when the Saudis and about 10 other allies conduct massive 'training exercises' on the Syrian border. On the bright-side, even the most conventional institutional macro-economists are finally acknowledging these problems: http://www.bis.org/speeches/sp160210_slides.pdf http://www.bis.org/speeches/sp160210_slides.pdf FYI the Bank of International Settlements is 'the Central Bankers' Bank', and the slides are from a speech given by its 'Head of Monetary and Economic Department'. The last dot point on the 'summary' slide (#2) really jumps out: "Need to abandon debt-fuelled growth model"
• Florin_Andrei 11y ago
  > Personally, I think the main issue is that the distortionary effect of untaxed land rents are greatly amplified by capital gains tax exemptions. Personally, I think the main issue is greed unchecked.
  • brbsix 11y ago
    The thing is, in a free market, greed is checked. IRS, not so much.
    • Florin_Andrei 11y ago
      > The thing is, in a free market, greed is checked. Ah, yes, the Ayn Rand Derangement Syndrome.
    • ionised 11y ago
      > The thing is, in a free market, greed is checked Doesn't seem that way.
• vacri 11y ago
  So, one thing these gen-Y-complains-about-the-boomers screeds always miss is how life was for the boomers at the same age. Home ownership also wasn't huge when the boomers were 20something. I'm a gen-Xer myself, and I always find it amusing when someone just out of tertiary education is complaining that they don't have the accumulated wealth of someone in their 50s, who has been working for the past few decades; that people somehow find it wrong that someone who has barely started their working life somehow doesn't own a string of properties. Keep in mind also that negative gearing was brought in to try and stimulate house-building. It has overstayed it's purpose, but it wasn't brought in as a 'fuck the young' measure.
  • fratlas 11y ago
    No, we're complaining about baby boomers complaining that we just need to "work harder". The cost of houses (relative to inflation/wages) in their 20-30's was multitudes cheaper. Anyone who thinks the young have it nearly as good as baby boomers hasn't done the maths.
    • vacri 11y ago
      > Anyone who thinks the young have it nearly as good as baby boomers hasn't done the maths. Damn, you guys have a lack of empathy. Life isn't absolutely perfect for you, so whine whine whine. Medicare? Gay rights? Indigenous rights? Advances in medicine? Equal rights for gender? Same wage regardless of gender? Women even being able to work at what they want? End of the WAP and far greater multiculturalism? Strong public attitude shifts against domestic violence? Global travel? Cheap travel? Legal abortions? Working in airconditioned offices instead of brick factories being the norm? Cheaper food and clothing? Much cheaper technical doodads. Colour television as standard? Vastly greater entertainment offerings, and cheaper too? Entertainment on demand? Food revolution? Coffee revolution? Bars closing later than 6pm? No conscription? Safer vehicles? The bloody internet? But no, you guys can only see the one issue right now about house pricing. ONE problem, and bam! it's 'worse than the boomers ever had it'. Whine whine whine; it's the only thing the young have to say about the difference between the generations. Show some empathy, and have a go at understanding how it was for the people before you. Then you'll better understand how things got to be that way today - and you'll start to see a lot of the things that you take for granted today are considered luxuries by the boomers, and you'll start to understand why they say "work harder". Whether or not they're right is a different thing, but jeez, the whining. Instead of just focusing on this one issue and assuming they had it better than you, tell them to shut up and show them that you are already working hard - show them the hours or the effort. But most importantly, try and understand where they're coming from, why they say what they do. Show some damn empathy instead of just complaining that you didn't get dealt a perfect hand.
• contingencies 11y ago
  As an Australian, I came to say the same thing. I have one of the highest income brackets in Australia, when I choose to work. But currently I choose live in China. Renting. Why? All the reasons you mentioned, but also one big one... Owing to the shorter engagement norm with any given employer, and the constant acceleration of change through technology, we cannot bet against entropy (unemployed, economy has tanked, etc.) as surely we once did. This is particularly the case for singles, who are faced with the entire gambit themselves, whereas traditionally more people were in partnerships which would effectively halve the chances of a particularly 'bad run', as it were. In short, not only is it unaffordable, but the degree to which one takes ones chances even when committing to a long-term attempt at investment has increased significantly. In my family, which is probably representative of upper middle class Australia, my brother has taken the conventional route and worked his ass off for most of a decade, and now has the deposit down and a fat mortgage on a shoebox with a view ... in conjunction with his 10-year long-term partner (they are unmarried). I on the other hand have studiously avoided such a commitment, living a year in London, a year in Hollywood, a year in Bangkok, traveling the world, seeing the Arab Spring first hand, spending months on end in 5 star hotels, having a family, and spending the rest of my time here in China, where I play with expensive toys like sailboats. In the end, out net worth is the same. Most of my friends from youth in Australia, who are generally also higher income bracket people, are still unable to buy property or are locked in seemingly loveless relationships just to get past mortgage go. My 'uncle' (actually somewhat more distant) recently sold the highest value property ever recorded in Melbourne (Toorak). He is the ex chairman of the board for Rothschild in the region, as well as ex-CEO of famous companies. When I last saw him, he said something is fundamentally broken in Australia, because his kids couldn't afford the downpayment on a house without his help (they have literally had all the opportunities you can pay for, and are not doing badly). In Europe, the will to own is commonly seen as dissipated, in fact in Italy it has sunk so low as to be replaced by "the will to live away from one's parents", which many, many 30-something can ill-afford. The world has changed. Travel gives you perspective. Individual countries, policies regardless, may have extreme difficulty changing this new reality. I say cheat. Leave your homeland, enjoy the differences. We are too intelligent to live stuck in a box. Eat someone else's young, or at least get drunk with them.
  • 11y ago
• Gustomaximus 11y ago
  I know how hated negative gearing is in Australia but I believe removing this is solving the wrong problem and may exacerbate the top end owning a greater proportion of real estate over the longer term. It;'s a different view but hear me out. Once negative gearing is removed, the wealthy can simply debt shift against asset classes that still allow negative gearing. e.g shares. The very wealthy have this asset base to increase debt ratios against share type assets, then buying property for that cash borrowed, effectively leaving them with the same negative geared net benefit just more higher leveraged against shares (and likely debt covenants against the property for collateral). Meanwhile the middle class can never do that so you just knocked them out of the property investment game reducing competition for the wealthy. Secondly, removing negative gearing doesn't stop property hoarding of all those people that own a bunch of houses debt free. Ultimately I believe the goal should be to allow people to own a home if they wish, and this group should always have a financial advantage to doing so over someone simply investing/spectating as residential property should not be a speculative asset class. The best way to solve investment hoarding of residential property is to remove/reduce land tax on owner occupied houses, and place a premium % land tax on investment properties. This will influence people buying both with and without debt. Further it will be easier for government to increase/decrease the % land tax differential to get the ratio right between investment opportunity and not overheating the market. Whilst Removing negative gearing is a one time move. I'd also look to do the same deal for farmland or we're likely to find rural Australia largely owned by corporate interests over the next couple of generations.
  • spronkey 11y ago
    If you remove negative gearing for property investment in isolation, sure, agreed. But I think there are ways via taxation and other policy to effectively nullify any advantages to shifting to assets such as shares. I mean, the general problem you describe is that money creates means, to create more money. How do you solve this problem now that existing policies have resulted in a skewed distribution of existing money? Absolutely agree though that owner occupied houses should be massively incentivised compared to investment properties. IMO it's advantageous for society to have most people owning property. I think a good goal would be to have most people both owning property, and not being cash-poor at the same time.
• stevetrewick 11y ago
  >theft Alice takes some of Bob's property without Bob's permission and with the intent to permanently deprive him of it. Alice is a thief.
  • adaml_623 11y ago
    Alice forces Bob to pay more than his fair share of a shared asset. Alice is committing ?fraud?