4 ms·

> I'm lost. How did people being poorer (having more student debt) push prices higher? Huh? Why would it make people poorer? If you take a $100,000 loan and th

> I'm lost. How did people being poorer (having more student debt) push prices higher? Huh? Why would it make people poorer? If you take a $100,000 loan and then give the $100,000 to me, I'll be $100,000 richer. That is $100,000 more than I can spend on a house. A college brings more indirection than you simply handing me $100,000, but the essence is the same. Were you under the impression that colleges burn the money?

maxsilver 2y ago
> Why would it make people poorer? Because people buying something means they no longer have the money, and are thus, poorer. If you have $20, and you buy lunch for $10, you now are $10 poorer. > Were you under the impression that colleges burn the money? (looking around at my alma mater, which has tripled the size of administration and built like four new sports stadiums, while the wages of professors have remained flat for ten years and cost-per-credit-hour has tripled) -- um, yes? Are there colleges that don't just burn the money, or dump it into stocks/bonds/trusts/etc?
- randomdata 2y ago
  > Because people buying something means they no longer have the money, and are thus, poorer. How does you, hypothetically, paying me $100,000 to teach you how to weave baskets under water make me poorer? By my math I gained $100,000. $100,000 more I now have to spend on a house that I wouldn't have had otherwise. > Are there colleges that don't just burn the money? Presumably all of them. At very least they pass a large portion of that money off to administrators, who then often buy houses with the money.
  - AnimalMuppet 2y ago
    And if the driver of higher housing prices was college administrators, you'd have a point. Would you care to demonstrate that college administrators are in fact the cause? Because without presenting such data, you're not going to convince many of us, who currently believe that college administrators are, at best, a very minor contributor to high overall housing prices.
    - randomdata 2y ago
      > And if the driver of higher housing prices was college administrators, you'd have a point. I don't follow. If college administrators were driving the price of housing, my point would fall apart immediately. That was in response to someone who thought colleges burn money, not the greater topic at hand. > you're not going to convince many of us Okay...? Why would I want to convince anyone of anything? That doesn't make any sense.
bumby 2y ago
Do you know of anyone who took out student loans to buy a home? Presumably, the OP was saying that debt was already spent on something non-fungible (like education). By most examples, that money is spent by the time a student graduates.
- randomdata 2y ago
  You still haven't made clear how I am poorer when I, the hypothetical provider of education, gained $100,000 from the student. The student is giving up the future money they would have otherwise used to buy a home in order to give it to me, sure, but we already know that. That was established in the comment about Michigan. Did you forget to the read the entire thread, or something?
  - bumby 2y ago
    Is your point that student loan debt is flowing to the administrators of higher education and making it's way back to the economy to push up home prices? If so, it's an interesting hypothesis, but there's a few questions like a) why did it only start to occur in the last decade or so when student loans have been increasing for decades, b) why does this specifically impact housing prices and not other CPI items, and c) has there been any empirical data to actually show this relationship?
    - randomdata 2y ago
      > Is your point that student loan debt is flowing to the administrators of higher education and making its way back to the economy to push up home prices? I'm saying taking on debt comes with the assumption that you can create new value, over and above the debt value, in the future. Normally, lenders require a promise of value you have already created (security) to fall back on if you fail to create that future value in order to keep things in check. Not so for student loans, though. They are assumable by those who haven't created any value in the past, and who may struggle to create new value in the future. This creates a distortion in the economy. > why did it only start to occur in the last decade or so Why do you say that? As far as I can see it started in and around the 1950s and really started accelerating in the 1970s. Before that housing prices were almost perfectly stagnant. > why does this specifically impact housing prices and not other CPI items Mostly a function of what else are you going to buy? I wouldn't say housing is the only place that has attracted money (remember Bitcoin?), but may be the most notable. If everyone saw a share of the money then you might find competition in buying things like bread, but if it is only the top 10% (for the sake of illustration) taking the proceeds, there isn't much pressure for them to pay more for bread. Only for the things the other people in the "top 10%" want to compete for.

maxsilver 2y ago

> Why would it make people poorer? Because people buying something means they no longer have the money, and are thus, poorer. If you have $20, and you buy lunch for $10, you now are $10 poorer. > Were you under the impression that colleges burn the money? (looking around at my alma mater, which has tripled the size of administration and built like four new sports stadiums, while the wages of professors have remained flat for ten years and cost-per-credit-hour has tripled) -- um, yes? Are there colleges that don't just burn the money, or dump it into stocks/bonds/trusts/etc?

randomdata 2y ago
> Because people buying something means they no longer have the money, and are thus, poorer. How does you, hypothetically, paying me $100,000 to teach you how to weave baskets under water make me poorer? By my math I gained $100,000. $100,000 more I now have to spend on a house that I wouldn't have had otherwise. > Are there colleges that don't just burn the money? Presumably all of them. At very least they pass a large portion of that money off to administrators, who then often buy houses with the money.
- AnimalMuppet 2y ago
  And if the driver of higher housing prices was college administrators, you'd have a point. Would you care to demonstrate that college administrators are in fact the cause? Because without presenting such data, you're not going to convince many of us, who currently believe that college administrators are, at best, a very minor contributor to high overall housing prices.
  - randomdata 2y ago
    > And if the driver of higher housing prices was college administrators, you'd have a point. I don't follow. If college administrators were driving the price of housing, my point would fall apart immediately. That was in response to someone who thought colleges burn money, not the greater topic at hand. > you're not going to convince many of us Okay...? Why would I want to convince anyone of anything? That doesn't make any sense.

bumby 2y ago

Do you know of anyone who took out student loans to buy a home? Presumably, the OP was saying that debt was already spent on something non-fungible (like education). By most examples, that money is spent by the time a student graduates.

randomdata 2y ago
You still haven't made clear how I am poorer when I, the hypothetical provider of education, gained $100,000 from the student. The student is giving up the future money they would have otherwise used to buy a home in order to give it to me, sure, but we already know that. That was established in the comment about Michigan. Did you forget to the read the entire thread, or something?
- bumby 2y ago
  Is your point that student loan debt is flowing to the administrators of higher education and making it's way back to the economy to push up home prices? If so, it's an interesting hypothesis, but there's a few questions like a) why did it only start to occur in the last decade or so when student loans have been increasing for decades, b) why does this specifically impact housing prices and not other CPI items, and c) has there been any empirical data to actually show this relationship?
  - randomdata 2y ago
    > Is your point that student loan debt is flowing to the administrators of higher education and making its way back to the economy to push up home prices? I'm saying taking on debt comes with the assumption that you can create new value, over and above the debt value, in the future. Normally, lenders require a promise of value you have already created (security) to fall back on if you fail to create that future value in order to keep things in check. Not so for student loans, though. They are assumable by those who haven't created any value in the past, and who may struggle to create new value in the future. This creates a distortion in the economy. > why did it only start to occur in the last decade or so Why do you say that? As far as I can see it started in and around the 1950s and really started accelerating in the 1970s. Before that housing prices were almost perfectly stagnant. > why does this specifically impact housing prices and not other CPI items Mostly a function of what else are you going to buy? I wouldn't say housing is the only place that has attracted money (remember Bitcoin?), but may be the most notable. If everyone saw a share of the money then you might find competition in buying things like bread, but if it is only the top 10% (for the sake of illustration) taking the proceeds, there isn't much pressure for them to pay more for bread. Only for the things the other people in the "top 10%" want to compete for.