4 ms·

Upper middle class and rich people benefit from debt. Lower middle class and poor people suffer from it. - lower middle class/poor: A cleaner working hand-to-m

Upper middle class and rich people benefit from debt. Lower middle class and poor people suffer from it. - lower middle class/poor: A cleaner working hand-to-mouth taking a payday loan isn't inflation hedging. She's paying through the nose for the privilege of a 33% loan because she's a risky debtor. - middle class: I make money on my mortgage. I see my 1.22% 20 years fixed mortgage melt away against a salary that is raising with inflation. Plus I get rewarded by government with a tax deduction. Similar story for our rental. - rich: Elon Musk can live off margin loans against a fraction of his investment portfolio if and when it makes sense.

lotsofpulp 5y ago
> middle class: I make money on my mortgage. I see my 1.22% 20 years fixed mortgage melt away against a salary that is raising with inflation. Plus I get rewarded by government with a tax deduction. Similar story for our rental. The mortgage interest tax deduction only applies if you itemize, which literally 90% of people do not do as of 2019 IRS statistics. Effectively, there is no mortgage interest tax deduction for middle class since the 2017 tax cut ACA jobs act.
- markvdb 5y ago
  I don't live in the US. Plenty of places have some form of mortgage fiscal stimulus. Even without the fiscal advantage, I would still be making money on this.
  - lotsofpulp 5y ago
    My bad. I did not know anywhere else offered mortgage incentives. Chalked tax deduction up to being uniquely US way of implementing regressive taxes.
  - disgruntledphd2 5y ago
    > see my 1.22% 20 years fixed mortgage melt away Wow, if you don't live in the US, where are you getting a 20 year fixed rate? Honestly just curious as I thought those were really only a US thing.
    - markvdb 5y ago
      The mortgage is in Belgium. Friends have even lower fixed rates. Some others have negative interest rates on their adjustable ones. Their bank literally pays them.
      - disgruntledphd2 5y ago
        Wow, I'd heard about that but it seems so alien to me here in ireland (we get at best 2% ten year fixed, and that's only under certain circumstances). Mind you, it's literally impossible to get evicted from your primary home here, which is presumably what drives the differences.
      - tekknik 5y ago
        > Their bank literally pays them. How does this work? Do they get a free house and a check cut monthly? Or is the mortgage cheaper than what it would have been?

lotsofpulp 5y ago

> middle class: I make money on my mortgage. I see my 1.22% 20 years fixed mortgage melt away against a salary that is raising with inflation. Plus I get rewarded by government with a tax deduction. Similar story for our rental. The mortgage interest tax deduction only applies if you itemize, which literally 90% of people do not do as of 2019 IRS statistics. Effectively, there is no mortgage interest tax deduction for middle class since the 2017 tax cut ACA jobs act.

markvdb 5y ago
I don't live in the US. Plenty of places have some form of mortgage fiscal stimulus. Even without the fiscal advantage, I would still be making money on this.
- lotsofpulp 5y ago
  My bad. I did not know anywhere else offered mortgage incentives. Chalked tax deduction up to being uniquely US way of implementing regressive taxes.
- disgruntledphd2 5y ago
  > see my 1.22% 20 years fixed mortgage melt away Wow, if you don't live in the US, where are you getting a 20 year fixed rate? Honestly just curious as I thought those were really only a US thing.
  - markvdb 5y ago
    The mortgage is in Belgium. Friends have even lower fixed rates. Some others have negative interest rates on their adjustable ones. Their bank literally pays them.
    - disgruntledphd2 5y ago
      Wow, I'd heard about that but it seems so alien to me here in ireland (we get at best 2% ten year fixed, and that's only under certain circumstances). Mind you, it's literally impossible to get evicted from your primary home here, which is presumably what drives the differences.
    - tekknik 5y ago
      > Their bank literally pays them. How does this work? Do they get a free house and a check cut monthly? Or is the mortgage cheaper than what it would have been?