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> ...as a country real estate provides a huge amount of our economic backbone. I could do without the economy depending on real estate being a good investment.

wdewind 8y ago
Well, real estate is a very close proxy for "this place is worth living" which is a very close proxy for absolute population which isn't a direct proxy but is certainly a deeply contributing factor to all around economic growth/success. So while there are tons of policies we can tweak, and I'm sure there are horrible ones that create artificial bubbles, it's not really fully divorceable for the economy.
- mullingitover 8y ago
  > Well, real estate is a very close proxy for "this place is worth living" which is a very close proxy for absolute population which isn't a direct proxy but is certainly a deeply contributing factor to all around economic growth/success. When the government is primarily working on the numbers (real estate values, tax revenues from real estate) there's a perverse incentive to maximize the numbers rather than serving the needs of the entire population. SF is a great example of this--the real estate market is a disaster for the middle class, but it's fantastic for the landowners and the city. Indeed, it's in the interests of both of those aforementioned parties to drive out the middle class from the region and replace them with more wealthy buyers. The whole system depends on this happening or it risks collapse.
nostromo 8y ago
That day will never come - at least not without blood in the streets - because we've painted ourselves into a corner. Money is created via bank loans. The largest bucket of loans in the US is mortgage debt -- and it's worth trillions more than any other type. Should this source of newly minted dollars dry up, the US could very quickly fall into a liquidity crisis. So, yeah, it's easy to shake our fists at high housing costs -- but what most people don't realize is that almost every dollar you've ever touched or earned was born in some other person's mortgage.
- robotrout 8y ago
  Systems that depend on infinite population growth seem like a bad idea. Mayors of cities who constantly need to grow their population base to prop up housing prices, all the way up to countries who constantly need to grow their population base to prop up entitlements ponzis. At some point, you end up with an unstable system that will fail catastrophically. While you wait for that time, the average quality of life decreases incrementally for all (till the collapse, when the quality of life may collapse all the way to death for many). Non-debt based monetary systems (gold, bitcoin, etc) will result in slower growth, since developers and governments will need to wait until they can attract enough saved capital to start their projects. This is why people turn up their noses at these systems. But is slower growth really such a bad thing?
  - TeMPOraL 8y ago
    > But is slower growth really such a bad thing? Yes and no. But it doesn't matter, since countries are competing with each other. If one decides to forgo growth, it'll lose politically and economically against those who didn't.
    - robotrout 8y ago
      I agree. It has to be obvious to those in charge that this debt bubble that every single country is blowing cannot continue to grow forever, yet no country has succeeded in halting or even slowing their debt growth. They're trapped, as you say, by each other. None can get off the ride before the others do. They will all need to fail together in a worldwide economic collapse, or agree unilaterally on some sort of global debt reset. But that's not how grownups should run a planet, and it will doubtless lead to a lot of human death. It's already lead to uncontrolled growth that has damaged ecologies, fisheries, and aquifers for thousands of years to come.
- pteredactyl 8y ago
  What about quantitative easing? I don't think those dollars were born in a mortgage.

wdewind 8y ago

Well, real estate is a very close proxy for "this place is worth living" which is a very close proxy for absolute population which isn't a direct proxy but is certainly a deeply contributing factor to all around economic growth/success. So while there are tons of policies we can tweak, and I'm sure there are horrible ones that create artificial bubbles, it's not really fully divorceable for the economy.

mullingitover 8y ago
> Well, real estate is a very close proxy for "this place is worth living" which is a very close proxy for absolute population which isn't a direct proxy but is certainly a deeply contributing factor to all around economic growth/success. When the government is primarily working on the numbers (real estate values, tax revenues from real estate) there's a perverse incentive to maximize the numbers rather than serving the needs of the entire population. SF is a great example of this--the real estate market is a disaster for the middle class, but it's fantastic for the landowners and the city. Indeed, it's in the interests of both of those aforementioned parties to drive out the middle class from the region and replace them with more wealthy buyers. The whole system depends on this happening or it risks collapse.

nostromo 8y ago

That day will never come - at least not without blood in the streets - because we've painted ourselves into a corner. Money is created via bank loans. The largest bucket of loans in the US is mortgage debt -- and it's worth trillions more than any other type. Should this source of newly minted dollars dry up, the US could very quickly fall into a liquidity crisis. So, yeah, it's easy to shake our fists at high housing costs -- but what most people don't realize is that almost every dollar you've ever touched or earned was born in some other person's mortgage.

robotrout 8y ago
Systems that depend on infinite population growth seem like a bad idea. Mayors of cities who constantly need to grow their population base to prop up housing prices, all the way up to countries who constantly need to grow their population base to prop up entitlements ponzis. At some point, you end up with an unstable system that will fail catastrophically. While you wait for that time, the average quality of life decreases incrementally for all (till the collapse, when the quality of life may collapse all the way to death for many). Non-debt based monetary systems (gold, bitcoin, etc) will result in slower growth, since developers and governments will need to wait until they can attract enough saved capital to start their projects. This is why people turn up their noses at these systems. But is slower growth really such a bad thing?
- TeMPOraL 8y ago
  > But is slower growth really such a bad thing? Yes and no. But it doesn't matter, since countries are competing with each other. If one decides to forgo growth, it'll lose politically and economically against those who didn't.
  - robotrout 8y ago
    I agree. It has to be obvious to those in charge that this debt bubble that every single country is blowing cannot continue to grow forever, yet no country has succeeded in halting or even slowing their debt growth. They're trapped, as you say, by each other. None can get off the ride before the others do. They will all need to fail together in a worldwide economic collapse, or agree unilaterally on some sort of global debt reset. But that's not how grownups should run a planet, and it will doubtless lead to a lot of human death. It's already lead to uncontrolled growth that has damaged ecologies, fisheries, and aquifers for thousands of years to come.
pteredactyl 8y ago
What about quantitative easing? I don't think those dollars were born in a mortgage.