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> rich have been transferring money from the poor to themselves at a dramatic rate Anyone not familiar with it needs to look up Georgism. This transfer happen

> rich have been transferring money from the poor to themselves at a dramatic rate Anyone not familiar with it needs to look up Georgism. This transfer happens primarily via housing costs and rent payments. The stratification of the rich happens via investment opportunities, but the core underlying mechanism for the majority of the population is via housing costs and Ricardo's law of rent.

hnthrow90348765 2y ago
Yeah, you can't have an realistic economy that will eventually inflate small, entry-level houses to $1mm+ and college costs to the $100k's but still have jobs paying $10-20/hr (or less). Any kid who does the math will realize how hopeless that economy is. Even if you scrape by, one emergency turns you into a debt slave. Housing needs to stop increasing in price for a number of generations. Surely the rich can find someplace else for their money.
- jarsin 2y ago
  And then there's Australia.
- btilly 2y ago
  For housing to stop increasing in price, a lot of it has to be built. The YIMBY movement is pushing in the right direction, but doesn't have the political power that they need. Particularly in California. And, as long as they don't, those with houses will continue to win against those who don't.
  - adverbly 2y ago
    > For housing to stop increasing in price, a lot of it has to be built. False. You can depress the land-based monopolistic component of housing via a land value tax. If speculating on land values stops being a good investment strategy, the price will drop. Many economists/nobel prize winners have been quietly pointing this out for over a century at this point. Here is a pretty good primer: https://www.youtube.com/watch?v=smi_iIoKybg https://www.youtube.com/watch?v=smi_iIoKybg
    - btilly 2y ago
      As long as there are more people needing housing than housing, prices will be high. California has such a shortage, and the people side of the equation is going up faster than housing is constructed. Making the problem worse over time. A land value tax could indeed help with housing costs - but that's because it encourages development. It is the construction that makes the really big difference here.
      - adverbly 2y ago
        Correct. Thank you for clarifying. Just want to point out that this is different from your initial claim. > housing to stop INCREASING in price Land value tax would immediately start decreasing the housing price. You are correct that it would stay high until demand and supply rebalanced, but it would start decreasing. In fact, you actually pointed out a second mechanism that could lead to decreasing prices in your comment: a decrease in demand. As you mentioned, that decrease in demand could come from a decline in population. However, it could also come from a decrease in that population's capability to match their existing level of spend. People can't spend more than they have so if that amount goes down then prices would also have to go down as a result. In fact, prices for housing are far more sensitive to changes in demand than for normal goods. Land supply supply is fixed and cannot increase. But likewise, it cannot decrease either and this is what makes land value tax so amazing! Normally, a decrease in price would lead to a decrease in production, but with land, supply never changes so you get a larger decrease in price. Economists refer to this property as having zero deadweight loss, and it is what makes land value tax the most efficient theoretical tax possible as was mentioned by Adam Smith over 100 years ago. Effectively, you can tax land up to its full theoretical rental value and supply will never change. Land is an economic edge case. It's like a massive glitch in normal economic assumptions. And that glitch is literally the largest asset class globally and makes up the majority of bank lending. It needs special attention that it's not currently being given. Practically speaking, land value tax advocates are not proposing full rental capture, but rather first replacing property taxes, and slowly increasing the tax rate while decreasing other taxes.
        btilly 2y ago
  - anticensor 2y ago
    > For housing to stop increasing in price, a lot of it has to be built. There is excess supply of housing which is intentionally kept empty, hence this is not applicable.
    - HDThoreaun 2y ago
      No there isnt. This claim is pretty much 100% bullshit. All the housing that people want is pretty much full.
      - anticensor 2y ago
        Corporate landlord owned housing indeed has occupancy rate management, typically between 95% and 99.5%.
        HDThoreaun 2y ago
        its impossible to have 100% occupancy. People move, units are remodeled.
  - d0mine 2y ago
    There are alternatives: make it expensive to own a house/apartment unless you physically live in it. It would benefit ordinary people, therefore it is unlikely to be implemented for long if ever.
- amscanne 2y ago
  I think a common mistake (and one you’re doing here) is implying those things are fixed measurements. The common definition of a “small, entry-level” house has dramatically inflated over the last 70 years. When people compare to their parents generation, it’s not at all apples to apples — those houses were about half the size and much, much shittier and cheaper. Similarly, college has become a thing that went from <40% of high school graduates prior to the 1950s, to 80-90%+ today. The demand has increased enormously, so of course prices has gone up. Isn’t the point of markets to provide feedback and change behaviors? Live in a smaller house, go into trades instead of college, etc. (like many in the last generations did, in reality). Instead, everyone is trying funnel into the patterns that had the most success in the past, leading those to become oversubscribed and not working as well.

hnthrow90348765 2y ago

Yeah, you can't have an realistic economy that will eventually inflate small, entry-level houses to $1mm+ and college costs to the $100k's but still have jobs paying $10-20/hr (or less). Any kid who does the math will realize how hopeless that economy is. Even if you scrape by, one emergency turns you into a debt slave. Housing needs to stop increasing in price for a number of generations. Surely the rich can find someplace else for their money.

jarsin 2y ago
And then there's Australia.
btilly 2y ago
For housing to stop increasing in price, a lot of it has to be built. The YIMBY movement is pushing in the right direction, but doesn't have the political power that they need. Particularly in California. And, as long as they don't, those with houses will continue to win against those who don't.
- adverbly 2y ago
  > For housing to stop increasing in price, a lot of it has to be built. False. You can depress the land-based monopolistic component of housing via a land value tax. If speculating on land values stops being a good investment strategy, the price will drop. Many economists/nobel prize winners have been quietly pointing this out for over a century at this point. Here is a pretty good primer: https://www.youtube.com/watch?v=smi_iIoKybg https://www.youtube.com/watch?v=smi_iIoKybg
  - btilly 2y ago
    As long as there are more people needing housing than housing, prices will be high. California has such a shortage, and the people side of the equation is going up faster than housing is constructed. Making the problem worse over time. A land value tax could indeed help with housing costs - but that's because it encourages development. It is the construction that makes the really big difference here.
    - adverbly 2y ago
      Correct. Thank you for clarifying. Just want to point out that this is different from your initial claim. > housing to stop INCREASING in price Land value tax would immediately start decreasing the housing price. You are correct that it would stay high until demand and supply rebalanced, but it would start decreasing. In fact, you actually pointed out a second mechanism that could lead to decreasing prices in your comment: a decrease in demand. As you mentioned, that decrease in demand could come from a decline in population. However, it could also come from a decrease in that population's capability to match their existing level of spend. People can't spend more than they have so if that amount goes down then prices would also have to go down as a result. In fact, prices for housing are far more sensitive to changes in demand than for normal goods. Land supply supply is fixed and cannot increase. But likewise, it cannot decrease either and this is what makes land value tax so amazing! Normally, a decrease in price would lead to a decrease in production, but with land, supply never changes so you get a larger decrease in price. Economists refer to this property as having zero deadweight loss, and it is what makes land value tax the most efficient theoretical tax possible as was mentioned by Adam Smith over 100 years ago. Effectively, you can tax land up to its full theoretical rental value and supply will never change. Land is an economic edge case. It's like a massive glitch in normal economic assumptions. And that glitch is literally the largest asset class globally and makes up the majority of bank lending. It needs special attention that it's not currently being given. Practically speaking, land value tax advocates are not proposing full rental capture, but rather first replacing property taxes, and slowly increasing the tax rate while decreasing other taxes.
      - btilly 2y ago
- anticensor 2y ago
  > For housing to stop increasing in price, a lot of it has to be built. There is excess supply of housing which is intentionally kept empty, hence this is not applicable.
  - HDThoreaun 2y ago
    No there isnt. This claim is pretty much 100% bullshit. All the housing that people want is pretty much full.
    - anticensor 2y ago
      Corporate landlord owned housing indeed has occupancy rate management, typically between 95% and 99.5%.
      - HDThoreaun 2y ago
        its impossible to have 100% occupancy. People move, units are remodeled.
- d0mine 2y ago
  There are alternatives: make it expensive to own a house/apartment unless you physically live in it. It would benefit ordinary people, therefore it is unlikely to be implemented for long if ever.
amscanne 2y ago
I think a common mistake (and one you’re doing here) is implying those things are fixed measurements. The common definition of a “small, entry-level” house has dramatically inflated over the last 70 years. When people compare to their parents generation, it’s not at all apples to apples — those houses were about half the size and much, much shittier and cheaper. Similarly, college has become a thing that went from <40% of high school graduates prior to the 1950s, to 80-90%+ today. The demand has increased enormously, so of course prices has gone up. Isn’t the point of markets to provide feedback and change behaviors? Live in a smaller house, go into trades instead of college, etc. (like many in the last generations did, in reality). Instead, everyone is trying funnel into the patterns that had the most success in the past, leading those to become oversubscribed and not working as well.