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In some respects it is similar to the student loan industry: when the system makes money readily "available" but it's hard to actually increase the supply, pric
by o11c 2y ago
In some respects it is similar to the student loan industry: when the system makes money readily "available" but it's hard to actually increase the supply, prices rise radically; since this is a loan rather than a handout that means making people actually worse off. Or in other words, it mainly just steals (the industry term is "extracts value from") the productivity gains from other parts of the economy, rather than actually adding productivity.
I'm not trying to make a philosophical point really - just pointing out that you can't get a honest picture of economic concerns if you think from the perspective of the finance industry.
- mmooss 2y agoThat's what small government, anti-welfare political groups say about student loans (and it's popular on places like HN), but it doesn't match basic microeconomics. If demand goes up and then prices follow, then the market attracts supply until prices drop to essentially the least profit that suppliers can sustain. In the end, you have more demand - including students who couldn't otherwise afford college - and more supply. Of course, colleges will anticipate that and increase supply before prices peak. > it's hard to actually increase the supply Why would it be hard to increase supply of homes or college educations? > you can't get a honest picture of economic concerns if you think from the perspective of the finance industry. Yes, agreed.