5 ms·

Let's see. Housing is propped up by the policies of a government that is currently borrowing 43% of the largest budget in human history. Will it be able to co

Let's see. Housing is propped up by the policies of a government that is currently borrowing 43% of the largest budget in human history. Will it be able to continue doing either indefinitely? If you think so, by all means buy a house. But if you think everybody reaps what they sow, think twice.

barrkel 16y ago
FWIW: the dynamics of governments borrowing - particularly governments with control of their currency, and debts denominated in that currency - are in no way like personal borrowing. If the country we are talking about was at or close to its richest point, and it is in a bad recession, I would expect its budget to be very large with a significant portion of borrowing. To do otherwise would be irresponsible.
- stretchwithme 16y ago
  No, I think its irresponsible, especially in light of all the nonsense being funded. Stimulus does not create recovery, any more than the stimulus of a massive housing bubble and two ways prevented the current economic trouble. In fact, government created this bubble and the inevitable with stimulus. A phony economy where building things that people would not ordinarily demand requires building an expensive infrastructure which becomes useless when the phony economy collapses. We can either let the economy return to normal, building things people are willing to pay for. Or we can try to create another phony government-directed economy with another recession to follow.
Tichy 16y ago
Not living in the US, but also worried about my government giving away all my money: isn't real estate one of the safer options? All my money and other investments, the government can simply take away (taxes) or devalue. Even gold is not safe - history shows that the government will try to get it, too. Now the government could of course also try to take my house, but I think the public outcry would be bigger than for other investments - so it seems even more of a last resort governments would choose than other forms of taxpayer exploitation. Am I wrong?
- MichaelSalib 16y ago
  isn't real estate one of the safer options In the US, property owners generally have to pay property taxes. In places where tech folk congregate, such taxes can be quite significant. Most municipalities fund education primarily through property tax levies and given the long term trends in the costs of primary and secondary education, I expect that property taxes increases will outpace inflation over the next decade or two. There are two reasons: technological improvements haven't raised productivity in this part of the economy and aren't likely to in the near future. Secondly, it seems that some (many?) municipalities are engaged in a status arms race regarding education spending and since most people are not equipped to assess educational outcomes, decisions often turn on more easily measured proxies that have little effect on outcomes. Now the government could of course also try to take my house, but I think the public outcry would be bigger than for other investments - so it seems even more of a last resort governments would choose than other forms of taxpayer exploitation. Am I wrong? I don't think you're wrong so much as that you haven't assembled evidence to make a convincing case. You're speculating. But without evidence, I don't find your speculation to be persuasive. I don't see much difference between the government raising property taxes and raising income or capital gains taxes. There's no need to seize your home.
  - stretchwithme 16y ago
    exactly. They can take your house more quickly than they are by raising your taxes. And when they do, the value of your house will decline rapidly, as it is no longer as good an investment. I remember when Massachusetts reduced property taxes in the 80s, housing prices went up rapidly. It suddenly became a better investment, costing much less every year to maintain. The opposite will happen if they raise the taxes.

barrkel 16y ago

FWIW: the dynamics of governments borrowing - particularly governments with control of their currency, and debts denominated in that currency - are in no way like personal borrowing. If the country we are talking about was at or close to its richest point, and it is in a bad recession, I would expect its budget to be very large with a significant portion of borrowing. To do otherwise would be irresponsible.

stretchwithme 16y ago
No, I think its irresponsible, especially in light of all the nonsense being funded. Stimulus does not create recovery, any more than the stimulus of a massive housing bubble and two ways prevented the current economic trouble. In fact, government created this bubble and the inevitable with stimulus. A phony economy where building things that people would not ordinarily demand requires building an expensive infrastructure which becomes useless when the phony economy collapses. We can either let the economy return to normal, building things people are willing to pay for. Or we can try to create another phony government-directed economy with another recession to follow.

Tichy 16y ago

Not living in the US, but also worried about my government giving away all my money: isn't real estate one of the safer options? All my money and other investments, the government can simply take away (taxes) or devalue. Even gold is not safe - history shows that the government will try to get it, too. Now the government could of course also try to take my house, but I think the public outcry would be bigger than for other investments - so it seems even more of a last resort governments would choose than other forms of taxpayer exploitation. Am I wrong?

MichaelSalib 16y ago
isn't real estate one of the safer options In the US, property owners generally have to pay property taxes. In places where tech folk congregate, such taxes can be quite significant. Most municipalities fund education primarily through property tax levies and given the long term trends in the costs of primary and secondary education, I expect that property taxes increases will outpace inflation over the next decade or two. There are two reasons: technological improvements haven't raised productivity in this part of the economy and aren't likely to in the near future. Secondly, it seems that some (many?) municipalities are engaged in a status arms race regarding education spending and since most people are not equipped to assess educational outcomes, decisions often turn on more easily measured proxies that have little effect on outcomes. Now the government could of course also try to take my house, but I think the public outcry would be bigger than for other investments - so it seems even more of a last resort governments would choose than other forms of taxpayer exploitation. Am I wrong? I don't think you're wrong so much as that you haven't assembled evidence to make a convincing case. You're speculating. But without evidence, I don't find your speculation to be persuasive. I don't see much difference between the government raising property taxes and raising income or capital gains taxes. There's no need to seize your home.
- stretchwithme 16y ago
  exactly. They can take your house more quickly than they are by raising your taxes. And when they do, the value of your house will decline rapidly, as it is no longer as good an investment. I remember when Massachusetts reduced property taxes in the 80s, housing prices went up rapidly. It suddenly became a better investment, costing much less every year to maintain. The opposite will happen if they raise the taxes.