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Well, no shit, Sherlock!! Everybody who has been renting or has been buying a home in the last 10 years knows this... All the cash that's been "pumped into th

• DeathArrow 5y ago
  Actually if you borrow money to buy overpriced properties, you are not going to end rich. Low interests helped those who invested in equity or had real estate to sell.
• po1nt 5y ago
  What about just abolishing fractional banking and letting the credit balance itself. Heavy taxation always hurt low income families the most. If you are wealthy enough, you can just leave or find a way to bypass taxes. In the end Laffer curve dictates there will be less money to give to freshly unemployed low income families whose employers just moved to more friendly markets. Stop the money printing machine. It was supposed to be stopped earlier and it will hurt now more than ever. But the more credit you create, the more will assets that are usually bought on credit cost.
  • pas 5y ago
    > letting the credit balance itself what does that mean?
    • po1nt 5y ago
      That means no more landing fairy tale money and pushing interests even to a negative numbers just to keep people borrowing in hope their spending will recover the economy. We are beating a dead horse. If we could just let market decide the interests and not money printer, the economy would stop inflate itself. The only money banks could lend would be those that the bank really owns.
      • dash2 5y ago
        Banks do something useful. You (and many others) have some money, but you don't need it now. The bank lends it out and puts it to work. They keep enough to pay people back, assuming there isn't a bank run. If you banned fractional banking, people would find a new way to invent it.
        • po1nt 5y ago
          Yeah people would find another way to invent it. Like MLM pyramid schemes. The issue is the bank doesn't borrow money I have. Banks borrow money I have and money I don't have. Yet who is taking the risk? If something fails government will bail them out with money I no longer have as it was taken from me by taxation long before I deposited it into bank. But government runs the same scam because they also don't have enough money to lend so they borrow money from another bank, namely FED. This bank also doesn't have the money so they start up the printers and act like government owns them. The government debt is so high that if you sum up all the debt government owes and add what government promised (social security etc.) you will find out it pays so much in interest that it's basically bankrupt. Somehow we ended in system where no one has money, everyone owes each other and we all act like it's okay. We all know this will implode and the longer we wait the worse it will be.
          • dash2 5y ago
            While there are well-known risks of e.g. bank runs, manias, panics and crashes, banking has been around since medieval Florence. I believe it will still be around for a long while.
  • butMyside 5y ago
    The Laffer curve doesn’t dictate anything, laws do. We don’t need to take every math object as a physical truth. Laffer especially should be seen a political tool more than an economist.
    • dllthomas 5y ago
      Unless your laws are dictating how much people work, individual behavior dictates "the Laffer curve" in the generalized sense most people mean it. If you tax zero, you get zero revenue. If you tax 100% you get... zero revenue because no one works if you take all of the earnings. Between the two we know we find positive values. The particular shape of the curve in a particular environment is an empirical question. Where it is a political tool is where it was applied before doing that empirical work, and where it is presented with unrealistic shapes (including, notably, most of search results when I search for "Laffer curve"!)
      • imtringued 5y ago
        My laffer curve tells me tax the land and nothing else.
        • po1nt 5y ago
          Fair enough, georgism is one of the more logically sound solutions.
      • butMyside 5y ago
        No, human behavior enables things like the Laffer curve to be defined and held up like a shiny bauble by a politically motivated half-wit. Laffer has never had and never will have anything to do with pre-existing human behavior itself. He never defined any of the math objects he used. As far as I can see he’s not invented any net new value, he translated English economic babble into math. It’s elementary abstraction by today’s standards. Since most people could barely balance a checkbook in his day, he’s a genius for life. It’s like taking a child’s drawing of a tree and acting like the child gave life to the tree. It’s ridiculous to foist prestige on idiots wielding arithmetic. Look at the misogynistic, misandrist, classist, racist, culture our elders grew up in and chuck their prestige in the bin; they’re human like everyone else. You want to put a number value on others? Here’s yours; 1 of 7 billion+. Rich people are rich because everyone else worries if we tax them, everyone can’t magically become rich. They’re aren’t actually smarter, stronger, better; it’s just propaganda; aka today as data science.
  • imtringued 5y ago
    There is no money printing machine, only a central bank reserve printing machine.
• AnthonyMouse 5y ago
  > We need to erode all that capital concentration, and the only way to do it without hurting the regular guy is through heavy taxation. Bob bought a house this year. He paid $500,000 even though it should've been $200,000. He's paid $100,000 and still owes $400,000. If you cause his house to be worth $200,000, as it ought to be, regardless of the method, he's going to default on the loan and you'll have screwed him out of $100,000 and (at scale) bankrupted all the banks. How is raising somebody else's taxes going to fix that? > And now the FED can't really reverse it. If you start raising rates, and stopping QE, you're not actually getting the money back from the people you gave it to, you'll just get a lot of businesses to close. The solution is to move the incentives back the other way. Raise interest rates on debt. This will cause people to pay back existing debts. At the same time, print money and give it out to everyone. This will give people the money to use to pay back their debts, without screwing over the people who didn't take out debts to begin with, because they still get the money. Now asset prices come down in real dollars, because people aren't as willing to borrow money to invest when interest rates are high. We need that not to happen in nominal dollars or everybody will be underwater on their mortgage, but that's okay, because we're printing a lot of money and all the people who didn't have debts to pay back are going to spend it. We get inflation, which counteracts the nominal fall in asset prices. Instead of having asset prices fall to parity with wages and consumer prices and causing everyone to default on their mortgages, we need wages and consumer prices to rise to parity with asset prices. It's got to be one or the other.
  • chaorace 5y ago
    That's a bit of a stretch, isn't it? Being underwater on a loan doesn't instantly bankrupt you. As long as Mr. Bob is actually living in his house and not just speculating on the market, he's still quite likely to come out ahead in the long run, despite the unfortunate setback.
    • ricardonunez 5y ago
      You don’t have to declare bankruptcy to default on a house. Many people did it 2008.
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• ozim 5y ago
  That was my first reaction as well :) Especially if any alternative is buying stocks ... everyone knows stocks is just another paper and real estate is ... real deal. Not going into bitcoins as still for normal people it is not something they can grasp and for me it is pure ... how to say a pyramid scheme but less offensive... Stocks are pyramid scheme currently as much as bitcoin is. With P/E ratios waay over what is healthy it is just "there will suckers in the future that will pay more for that". If all goes to the ground real estate will still have at least some value even if people also use it in a way where "there will be suckers in the future that will pay more for that".
• LudwigNagasena 5y ago
  People have loans in nominal values, so just giving people money is far more productive than taxation.
• deleted 5y ago
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• mgh2 5y ago
  Hoping for the FED raise interest rates and the zoning law prohibition to take its effect in CA, house supply to increase and tank the market.
  • new_realist 5y ago
    That would be only temporary. Building more houses decreases prices like building more roads decreases traffic. It doesn’t. Humans are animals and, like any animal, will breed into any available habitat until it is full.
  • almost_usual 5y ago
    Only means older SFH in CA will get much more expensive, especially in HOA neighborhoods.
• mancerayder 5y ago
  Tax what exactly in the specific context of real estate? If you tax the ownership, that's property tax, it already exists, and 1) It's already high in the most HCOL states (imagine paying 30K a year for a property worth 750K, that's Westchester, NY or many parts of NJ, and a handful of other states) 2) Imagine you're 75, retired, and suddenly your property tax spikes and the house you bought 20 years ago for 150 is now worth 750K, and now you're on the hook for 30K. So that's out. Next we have taxing transactions. OK, so we up flip taxes (ownership less than X months), we increase transaction taxes on a sale, we can even rid ourselves of the cap gains tax exclusion for single and married couples, and perhaps even tax everything as short-term cap gains. So now people will never sell. What have you accomplished? Or were you just expressing your emotions and letting others figure out the incredibly complicated logistics of your suggestions?
  • slt2021 5y ago
    people will just title houses in the LLC name and flip LLC's shares. Very easy to avoid stupid tax ideas, a million way to avoid
  • kazinator 5y ago
    > Imagine you're 75, retired, and suddenly your property tax spikes and the house you bought 20 years ago for 150 is now worth 750K, and now you're on the hook for 30K. Easily solved by not hitting people who own one property which is their primary residence. I'd go easy on two-property people; some people need two places for various reasons, and they occupy both. The tax rules can be crafted such that heavy penalties are imposed on people with three or more properties, and on house flipping activity. Only reason you don't see more of that is because, doh, the rules are written by the rich. The politicians themselves or their rich chums are doing a lot of that speculating.
    • atweiden 5y ago
      > Easily solved by not hitting people who own one property which is their primary residence. This would discourage individuals from renting out their property for a small profit, which is exactly what you want to see more of to increase affordability (and liveability — not everyone likes renting from big investment firms and property management companies).
• swman 5y ago
  As a naturalized US citizen whose family doesn't own a home anywhere on Earth and is actively trying to build wealth- FUCK NO to heavier taxes. Y'all got yours, now what - screw me? I want to build my wealth - give people like me a 5 year tax break or something instead. I can't afford to live where I work (California) unless I'm willing to live in a shitty area with high crime and terrible schools.
  • horns4lyfe 5y ago
    The vast majority of government policy is written by and intended to benefit those that already have theirs. People these days seem to think politics is some kind of moral battle, when it’s really mostly just people trying to protect their wealth.
  • hndamien 5y ago
    You can target taxes such that they don't hit poor people.
    • csomar 5y ago
      I don't think your parent poster is poor but prices are too high for even middle-income people in California.
      • hndamien 5y ago
        Well, the greater point is that you can target taxes.
        • jhickok 5y ago
          Well yeah but the struggle is still those with incredible amounts of money locked away in static capital. We can't rightly liquidate capital assets can we?
    • deleted 5y ago
      [deleted]
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• nnx 5y ago
  The solution is sound money, money not based on thin air like the current fiat system. So that nobody can "pump into the economy" and reinforce the Cantillon effect over and over.
  • atweiden 5y ago
    Seconded. Currency debasement plays an instrumental role in real estate speculation. If investors could just count on their cash to retain and increase in value over time, their insatiable appetite to own real estate as an inflation-resistant asset would relent. Fix the money, and fix the housing affordability crisis. Slash the demand to buy housing as an investment.
    • randomhodler84 5y ago
      Eventually, a house will be a fraction of a Bitcoin. How do I know this? There are many more than 21 million houses on Earth.
      • chii 5y ago
        you'd sooner see houses sell for bullets and guns than for bitcoins imho.
    • imtringued 5y ago
      If you make money more expensive nominal house prices might drop but you also made it harder to acquire money in the first place. Ultimately the only difference is that more money goes to the banks instead of the land owner. It doesn't create more land or housing. The supply and demand mismatch hasn't been solved.
      • atweiden 5y ago
        > If you make money more expensive nominal house prices might drop but you also made it harder to acquire money in the first place. In a deflationary environment, as housing/rent prices drop, savers are rewarded. Renting doesn’t entail taking out a mortgage. > It doesn't create more land or housing. Nor does building more housing in an inflationary environment necessarily satiate investor demand for inflation-resistant assets in the form of residential property.
• emodendroket 5y ago
  Wages are increasing faster than inflation, so what you are saying does not really follow.
  • mrcode007 5y ago
    They aren’t. Real wages have been stagnant for a long time (since about 1990s) until recently they started going up Have a look at data before you spread FUD https://www.bls.gov/bls/news-release/realer.htm#2010 https://www.bls.gov/bls/news-release/realer.htm#2010
    • dllthomas 5y ago
      The claim was "are", not "were" or "typically". I don't have a sense of the actual numbers but you say yourself that "recently they started going up", which if accurate matches the claim you respond to. And even if the claim is entirely off base, isn't it sort of the opposite of FUD? (being unrealistically rosy, rather than motivating "fear, uncertainty, and doubt")
      • mrcode007 5y ago
        The implicit point was that the current increases are insufficient to catch up to the value lost due to inflation over the past decade due to compounding effects. More details: https://insight.kellogg.northwestern.edu/article/wage-stagnation-in-america/ https://insight.kellogg.northwestern.edu/article/wage-stagna...
        • mrcode007 5y ago
          As a side note, during the pandemic, I drove from NYC to SF by car and when being confronted with the non-coastal real America reality, I don’t think a one off 10% wage raise from $20/hr to $22/hr will make a lot of difference to a lot of people who are in a whole lot of serious economic need. As a simple example, the prices of wheat this year increased by more than 50% which translates directly into cost of food.
    • 5y ago
• eru 5y ago
  > All the cash that's been "pumped into the economy" has only fueled inequalities. How do we know that? > And now the FED can't really reverse it. By the way, Fed is not an initialism, so it doesn't really make sense to write about them in all-caps. > We need to erode all that capital concentration, and the only way to do it without hurting the regular guy is through heavy taxation. What do you want to tax? Land Value Taxes are pretty neat (or rather, the least bad taxation).
  • Aeolun 5y ago
    > Land Value Taxes are pretty neat Are they? From what I read they’d heavily mess with anyone that bought a family home anywhere near a city more than 10 years ago. You can argue that their net worth has increased, but their salary is still the same, so increasing their taxes based on the current value of their house just makes them lose the house (and forces them to buy a new house much further from city center). Maybe exclude property that’s actually lived in?
    • eru 5y ago
      > Maybe exclude property that’s actually lived in? Alas, that would be a terribly idea, because all of a sudden you have the government snooping into your living arrangements. Especially for grey areas where people share their time between multiple apartments. Way too complicated. And, people living in bigger places would get effectively get a discount this way. Your argument does highlight a problem with the transition phase of the introduction of the tax, though. There's a few ways to solve this, eg by slowly phasing the tax in over a decade or more. (It's not a problem in the long run, because land prices will drop until the financial burden of tax plus mortgage payment is the same as today.)
      • Broken_Hippo 5y ago
        "Alas, that would be a terribly idea, because all of a sudden you have the government snooping into your living arrangements. Especially for grey areas where people share their time between multiple apartments. Way too complicated." ... not really. Most folks only own one house, so nothing complicated. A few folks own multiple houses. These folks already need to establish residency in one house for tax purposes in a lot of places: Taxes vary from city to city and state to state. It isn't a new grey area, and we can use this established system to tax. The folks can, in general, just use one house or apartment or pay more for more than one house.
• muttantt 5y ago
  Spoken like a person who missed the boat on all these "bubbles".
• headmelted 5y ago
  “The whole economical landscape is bubbles everywhere.” This is why measuring CPI doesn’t work anymore to track inflation and why the quoted rates are nonsense. When people had less income you could measure their spending at the till to see how much it’s increasing. In 2021, people aren’t spending more at the till because they largely don’t need to right now so these asset bubbles are serving as many people’s emergency fund. If/when things start to turn the rush of forced selling could be unprecedented.
• rdlecler1 5y ago
  Instead of zero sum thinking why don’t we change policies that allow for more housing so the market can work effectively. Taxes don't create abundance, capitalism does.
• closeparen 5y ago
  Income tax makes it difficult for workers to accumulate any wealth, but leaves existing portfolios intact and free to grow. If you look at really wealthy people, they are not squirreling away fat paychecks; they may not have paychecks at all. What they do is own assets that perform well. Their wealth grows totally immune to taxation.
  • sobani 5y ago
    There are other taxes than just income tax. There's also capital gains tax or even wealth tax. Especially the last one will target the wealthy.