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> Yet housing costs are rising in all OECD economies. Exactly. Especially in economies that are struggling to turn the education into something real. The US fa

> Yet housing costs are rising in all OECD economies. Exactly. Especially in economies that are struggling to turn the education into something real. The US fares a little better here compared to many other OCED countries because of its strong tech industry creating things that are real, but it is certainly not immune. After all, if you spend $100,000 on an education, and then use that education to create a widget that sees buyers send $100,000 back to you there is no impact on housing. You got an education, they got widgets, you can pay your loan back. This is a win-win situation and the economy is better for it. If students turn the debt into something real, you don't have a problem. This is why we offer student loans. They can be leveraged to benefit an economy. The problem is when someone spends $100,000 on an education and then resorts to taking a regular job – a job just like they would have done anyway. Now you have an extra $100,000 floating around in the economy with no home. An extra $100,000 that needs to find a home, and it turns out a literal home has been a good place for it to end up. At least with traditional debt, if you failed to create a compelling widget you'd be forced to give up your security, and the $100,000 you borrowed would go back into someone else buying that security. Worst case, if someone declares bankruptcy then someone else ends up giving up something real. But student loans create a 'fake' situation if the student fails to create something real afterwards. There is nothing real that already exists to fall back on if they fail to succeed, and if it is also not dischargeable in bankruptcy... > higher education doesn't cost an arm and a leg. Not true. Any unsecured, non-dischargeable debt always costs an arm and a leg. The only way to repay it is to put those arms and legs to use. The same arm and leg that one would have otherwise used to buy their own home, now helping to pay for someone else's. It turns out that when you help someone else pay for their home with your arms and legs, they can pay more than they would be able to without your help. Who'd a thunk it.

bumby 2y ago
>strong tech industry creating things that are real I don't think this is as clear of a claim as, say, the manufacturing economy of previous generations. Tech creates a lot of speculative value which sometimes turns into something real, but often does not.
- randomdata 2y ago
  There is real value there. American tech sells things people actually want. And, indeed, we even saw home prices fall quite considerably when that real value creation was at its peak (iPhone, Facebook, etc.) as the money started wanting to buy what that real value had to offer. I think it is fair to say since that peak we've seen more speculation than actual value creation, but that's why money is taking more interest in housing again. Still, the US is in a better place than many OCED countries with respect to housing thanks to still seeing some real value creation (and more of it, relatively speaking).
  - bumby 2y ago
    I'm not implying there is no value. I'm drawing a distinction with high-PE industries, like tech, where the market value is highly biased to future (unrealized) potential. Previous generations, where hardware manufacturing was the dominant industry, had "value" more tightly coupled to realized value.
    - randomdata 2y ago
      Meaning that the 'fake' student loan value is not limiting itself to housing, but also propping up the stock market? I think that's fair.
      - bumby 2y ago
        That’s not my claim, but it would seemingly follow with your hypothesis (along with a range of other asset classes). The tough part is actually showing good data of the causal relationship.

bumby 2y ago

>strong tech industry creating things that are real I don't think this is as clear of a claim as, say, the manufacturing economy of previous generations. Tech creates a lot of speculative value which sometimes turns into something real, but often does not.

randomdata 2y ago
There is real value there. American tech sells things people actually want. And, indeed, we even saw home prices fall quite considerably when that real value creation was at its peak (iPhone, Facebook, etc.) as the money started wanting to buy what that real value had to offer. I think it is fair to say since that peak we've seen more speculation than actual value creation, but that's why money is taking more interest in housing again. Still, the US is in a better place than many OCED countries with respect to housing thanks to still seeing some real value creation (and more of it, relatively speaking).
- bumby 2y ago
  I'm not implying there is no value. I'm drawing a distinction with high-PE industries, like tech, where the market value is highly biased to future (unrealized) potential. Previous generations, where hardware manufacturing was the dominant industry, had "value" more tightly coupled to realized value.
  - randomdata 2y ago
    Meaning that the 'fake' student loan value is not limiting itself to housing, but also propping up the stock market? I think that's fair.
    - bumby 2y ago
      That’s not my claim, but it would seemingly follow with your hypothesis (along with a range of other asset classes). The tough part is actually showing good data of the causal relationship.