4 ms·

Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country? (Assuming the acquisition process isn’t slow AF because governme

by b34r 6y ago

Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country? (Assuming the acquisition process isn’t slow AF because government.) Real estate seems like a pretty important part of the economy and, more importantly, the government artificially making housing more accessible for potential first time buyers creates a virtuous cycle where people can finally save money and the eventually spend that money to stimulate their micro economies.

mrfusion 6y ago
It didn’t go so well with college loans. Any market government gets into gets distorted.
- ceejayoz 6y ago
  Most of the rest of the developed world doesn't really consider college a market in the American fashion, though. Half-hearted government is a problem; education and healthcare both suffer in the US from trying to split the baby Solomon-style.
- charlesu 6y ago
  Maybe higher education shouldn't be a market.
qeternity 6y ago
> Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country? > Real estate seems like a pretty important part of the economy... You just answered your own question. Governments do not have a history of distributing scarce resources effectively. You need various market forces. > the government artificially making housing more accessible for potential first time buyers creates a virtuous cycle where people can finally save money and the eventually spend that money to stimulate their micro economies This is not what happens. As you said - it's artificial. Markets, like the internet, route around this sort of censorship. Any attempt to make housing artificially more affordable will have the effect of increasing demand (by design). When you increase demand, prices rise. And thus becomes unaffordable again. You can then increase the subsidies further to try to offset your original manipulation, which will only worsen the problem. This is precisely what happened in the 90s/early 00s and the result was the 2008 housing bubble.
- horsemessiah 6y ago
  Markets are basically anarchy... there are countless examples of markets inefficiently allocating resources (homes, for one). Not sure I buy this.
  - qeternity 6y ago
    This thread is literally about how the housing market isn't a true market...it's a government run welfare program backed by the Fed. You're proving my point.
- black_puppydog 6y ago
  > Governments do not have a history of distributing scarce resources effectively. To be fair, "various market forces" also don't have the best track record of distributing resources, especially scarce ones. Somehow those always end up being "distributed" into the same few hands...
  - pyronik19 6y ago
    Karl Marx has entered the chat
  - crisdux 6y ago
    To be fair, how is that even remotely true? Look at the wealth, convenience, leisure and abundance all around you. Even people with lower income experience high standards of living. The system we have now is not without fault, but it has done better than any other before in meeting our needs and desires. I don't understand why people make wild claims that everything is distributed to only a few hands, thats preposterous. If you really believe that, you are poisoned by ideology.
    - charlesu 6y ago
      > Look at the wealth, convenience, leisure and abundance all around you. Even people with lower income experience high standards of living. The system we have now is not without fault, but it has done better than any other before in meeting our needs and desires. You should spend some time in Appalachia if you think that's true.
tenpies 6y ago
Because the government is a terrible market participant. It has infinite money, they suffer no consequences, and ideologues come up every so often and let their agendas take over any economic objective the program had in mind. This is happening now more than ever with the Democrats seemingly deciding that the US Fed has the additional mandate of fighting systemic racism.
- NationalPark 6y ago
  The Fed board is appointed by the President and approved by the Senate. The current chairman was appointed by Trump. The article doesn't even mention racism so I guess this is probably a throwaway culture war post but I have a hard time seeing how this of all things could be pinned on the Democrats. If anything it's the anti-public-health Republicans who let the pandemic get out of control and lead to a Fed buying spree.
OCASM 6y ago
Government messing with the housing market is what caused the 2008 recession. I think that's a very good reason not to want that.
qes 6y ago
You know the Federal Reserve is not a government agency, right?

by b34r 6y ago

mrfusion 6y ago

It didn’t go so well with college loans. Any market government gets into gets distorted.

ceejayoz 6y ago
Most of the rest of the developed world doesn't really consider college a market in the American fashion, though. Half-hearted government is a problem; education and healthcare both suffer in the US from trying to split the baby Solomon-style.
charlesu 6y ago
Maybe higher education shouldn't be a market.

qeternity 6y ago

> Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country? > Real estate seems like a pretty important part of the economy... You just answered your own question. Governments do not have a history of distributing scarce resources effectively. You need various market forces. > the government artificially making housing more accessible for potential first time buyers creates a virtuous cycle where people can finally save money and the eventually spend that money to stimulate their micro economies This is not what happens. As you said - it's artificial. Markets, like the internet, route around this sort of censorship. Any attempt to make housing artificially more affordable will have the effect of increasing demand (by design). When you increase demand, prices rise. And thus becomes unaffordable again. You can then increase the subsidies further to try to offset your original manipulation, which will only worsen the problem. This is precisely what happened in the 90s/early 00s and the result was the 2008 housing bubble.

horsemessiah 6y ago
Markets are basically anarchy... there are countless examples of markets inefficiently allocating resources (homes, for one). Not sure I buy this.
- qeternity 6y ago
  This thread is literally about how the housing market isn't a true market...it's a government run welfare program backed by the Fed. You're proving my point.
black_puppydog 6y ago
> Governments do not have a history of distributing scarce resources effectively. To be fair, "various market forces" also don't have the best track record of distributing resources, especially scarce ones. Somehow those always end up being "distributed" into the same few hands...
- pyronik19 6y ago
  Karl Marx has entered the chat
- crisdux 6y ago
  To be fair, how is that even remotely true? Look at the wealth, convenience, leisure and abundance all around you. Even people with lower income experience high standards of living. The system we have now is not without fault, but it has done better than any other before in meeting our needs and desires. I don't understand why people make wild claims that everything is distributed to only a few hands, thats preposterous. If you really believe that, you are poisoned by ideology.
  - charlesu 6y ago
    > Look at the wealth, convenience, leisure and abundance all around you. Even people with lower income experience high standards of living. The system we have now is not without fault, but it has done better than any other before in meeting our needs and desires. You should spend some time in Appalachia if you think that's true.

tenpies 6y ago

Because the government is a terrible market participant. It has infinite money, they suffer no consequences, and ideologues come up every so often and let their agendas take over any economic objective the program had in mind. This is happening now more than ever with the Democrats seemingly deciding that the US Fed has the additional mandate of fighting systemic racism.

NationalPark 6y ago
The Fed board is appointed by the President and approved by the Senate. The current chairman was appointed by Trump. The article doesn't even mention racism so I guess this is probably a throwaway culture war post but I have a hard time seeing how this of all things could be pinned on the Democrats. If anything it's the anti-public-health Republicans who let the pandemic get out of control and lead to a Fed buying spree.

OCASM 6y ago

Government messing with the housing market is what caused the 2008 recession. I think that's a very good reason not to want that.

qes 6y ago

You know the Federal Reserve is not a government agency, right?