7 ms·

I agree, with exception of housing. Most people can't buy home with cash, and for many this is a necessity. But homes are an appreciating asset, which cannot be

by msm_ 1y ago

I agree, with exception of housing. Most people can't buy home with cash, and for many this is a necessity. But homes are an appreciating asset, which cannot be said about cars or food - this is an investment, actually. But for everything else - cars, phones, electronics, food, subscriptions, jewelry - I 100% agree. Consider two people: * One person has $10k saved, invested into something safe and liquid. Then buys something for $10k, earns and invests that $10k back, and because of investing is a bit up (let's say now they own $10.3k) * The other person borrows $10k, and repays $11k over time. This buy-and-earn cycle will repeat, and each time the person that fronted $10k is $1.3k up (and due to interest, this is only growing with time). The difference quickly becomes staggering. Tragic, and a classic rich-get-richer situation. And the only difference is the starting $10k and some discipline.

api 1y ago
Housing being an appreciating asset is a social ill. It means that housing can never be affordable, and that as it appreciates it locks out progressively more people. This is true unless wages are also always going up, which is not the case unless it’s all just inflation in which case nothing is really appreciating.
cousin_it 1y ago
I think without mortgages most people would rent or rent-to-own, rents wouldn't be dragged up by housing appreciation, and affordable/social housing would be cheaper to provide because of lower opportunity cost.
blagie 1y ago
Personally, I think we should have all rent-extracting industries nationalized. Land, like in China, should be available only under a 99-year lease (perhaps with a modest homestead exemption). The government should own radio airwaves, natural resources, and banking. This doesn't mean that it couldn't hire private contractors to do the work (e.g. bidding on oil extraction), but Chevron and Exxon shouldn't own the oil field. And I think the government should provide very basic, minimal, Soviet-grade housing free to everyone. If you'd like your kids to have their own bedrooms, you pay. If you're happy with a 2-bedroom for a family of four (kids room, adults room), or dorm-style housing for adults, you can live there for free. Having a free option would, in fact, drive costs down for everyone. More broadly, we should rationalize what's nationalized. For example, a lot of parts of education make sense with a lot more open competition.
- monero-xmr 1y ago
  I am so so happy we live in a democracy. Because if your ilk managed to take power, it would only have been possible through violent authoritarian revolution
  - const_cast 1y ago
    No you can definitely vote this stuff in, especially if you let capitalists extract money from vulnerable populations for long enough. People have a misunderstand of protections or government spending. The New Deal isn't socialism, it's the perfect capitalist policy. If we never had the New Deal, there's a good chance we would be a socialist democracy today. We got really, really close. When things get bad you have to throw people a bone in order to maintain the current systems. Our newest generations of the ultra-rich and ultra-powerful don't seem to understand that. Ultimately we, the working class, hold everything together. We're the majority and it's not even close. If we wanted to change things for our own selfish benefit, we could.
  - sweeter 1y ago
    [flagged]
  - platevoltage 1y ago
    Just think. If the capitalist soul sucking robber barons weren't hoarding every morsel of wealth they possibly could, policies like this wouldn't cross anyone's mind in the first place.
    - poincaredisk 1y ago
      [flagged]
    - hgomersall 1y ago
      Part of the trick is to foist on us the economic priests that tell us of the fire and brimstone that will fall on us if governments ever use their currency issuing power for social improvements.
buzzerbetrayed 1y ago
Aren’t mortgages the number one reason houses cost so much? If mortgages weren’t allowed, the price of houses would plummet.
maxerickson 1y ago
It's likely enough that 30 year mortgages contribute to asset appreciation more than affordability. Which doesn't mean you get rid of mortgages entirely, but maybe don't have the main policy intervention in the market be like that.
Ekaros 1y ago
House appreciation is a bad thing. Outside well inflation of replacement, but even there should be some depreciation with wear and tear and aging... Rents not covering most of amortization would make lot more reasonable system to live in.
- margalabargala 1y ago
  Houses themselves don't really appreciate in and of themselves, not the way a stock might. It's more that the land price goes up, as does the cost of replacement due to materials and labor prices also increasing. If you have two identical lots side by side, and you build a house one one and 10 years later build the identical floor plan next door, they will not sell for particularly different prices.

by msm_ 1y ago

api 1y ago

Housing being an appreciating asset is a social ill. It means that housing can never be affordable, and that as it appreciates it locks out progressively more people. This is true unless wages are also always going up, which is not the case unless it’s all just inflation in which case nothing is really appreciating.

cousin_it 1y ago

I think without mortgages most people would rent or rent-to-own, rents wouldn't be dragged up by housing appreciation, and affordable/social housing would be cheaper to provide because of lower opportunity cost.

blagie 1y ago

Personally, I think we should have all rent-extracting industries nationalized. Land, like in China, should be available only under a 99-year lease (perhaps with a modest homestead exemption). The government should own radio airwaves, natural resources, and banking. This doesn't mean that it couldn't hire private contractors to do the work (e.g. bidding on oil extraction), but Chevron and Exxon shouldn't own the oil field. And I think the government should provide very basic, minimal, Soviet-grade housing free to everyone. If you'd like your kids to have their own bedrooms, you pay. If you're happy with a 2-bedroom for a family of four (kids room, adults room), or dorm-style housing for adults, you can live there for free. Having a free option would, in fact, drive costs down for everyone. More broadly, we should rationalize what's nationalized. For example, a lot of parts of education make sense with a lot more open competition.

monero-xmr 1y ago
I am so so happy we live in a democracy. Because if your ilk managed to take power, it would only have been possible through violent authoritarian revolution
- const_cast 1y ago
  No you can definitely vote this stuff in, especially if you let capitalists extract money from vulnerable populations for long enough. People have a misunderstand of protections or government spending. The New Deal isn't socialism, it's the perfect capitalist policy. If we never had the New Deal, there's a good chance we would be a socialist democracy today. We got really, really close. When things get bad you have to throw people a bone in order to maintain the current systems. Our newest generations of the ultra-rich and ultra-powerful don't seem to understand that. Ultimately we, the working class, hold everything together. We're the majority and it's not even close. If we wanted to change things for our own selfish benefit, we could.
- sweeter 1y ago
  [flagged]
- platevoltage 1y ago
  Just think. If the capitalist soul sucking robber barons weren't hoarding every morsel of wealth they possibly could, policies like this wouldn't cross anyone's mind in the first place.
  - poincaredisk 1y ago
    [flagged]
  - hgomersall 1y ago
    Part of the trick is to foist on us the economic priests that tell us of the fire and brimstone that will fall on us if governments ever use their currency issuing power for social improvements.

buzzerbetrayed 1y ago

Aren’t mortgages the number one reason houses cost so much? If mortgages weren’t allowed, the price of houses would plummet.

maxerickson 1y ago

It's likely enough that 30 year mortgages contribute to asset appreciation more than affordability. Which doesn't mean you get rid of mortgages entirely, but maybe don't have the main policy intervention in the market be like that.

Ekaros 1y ago

House appreciation is a bad thing. Outside well inflation of replacement, but even there should be some depreciation with wear and tear and aging... Rents not covering most of amortization would make lot more reasonable system to live in.

margalabargala 1y ago
Houses themselves don't really appreciate in and of themselves, not the way a stock might. It's more that the land price goes up, as does the cost of replacement due to materials and labor prices also increasing. If you have two identical lots side by side, and you build a house one one and 10 years later build the identical floor plan next door, they will not sell for particularly different prices.