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Rau
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Do you mean there is too much, or unjustified, social welfare in the US!
The Immorality of Money Printing and Why It's Driving the World To Socialism
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Freddy
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Rau
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A house in 2000 is a far cry from the standard of house several decades ago. Further, land values have increased dramatically because land is finite and properties positioned where people want to live are finite and in demand. I wouldn’t blame these particular things on a conspiracy of elites.
I don’t think interest margins are too bad in the US given a reasonably competitive finance sector.
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phil3
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But the question is, Who makes money off printed money?
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Maximus1
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Is that the only option?
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Rau
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In the current era? It’s the owners of assets.
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Annie
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tafan2
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I thought it was developed by Chesterton and Belloc.
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phil3
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Yes, I own several rental properties and they only go up in value. But there are other things that cause that property to go up in value. Not just the inflationary cause and effect. Location location location is a big factor. Most of my properties are location in high growth areas, so supply and demand is a big factor.
But who just make money off the printing of money? Now I know the answer but what organizations get all that money and does that free money out perform real inflation?
But who just make money off the printing of money? Now I know the answer but what organizations get all that money and does that free money out perform real inflation?
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boldlygo
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What a strange conclusion…right now, there’s plenty of work for anyone who wants to work, and wanting to work is key. The system works when everyone does a fair share, and there are no slackers. St. Paul addressed this in his second letter to the Thessalonians when he said that if anyone was unwilling to work, neither should that one eat.
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PetraG
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You’ve set a median-priced home built in 1940 next to a median-priced home built in 2000 and looked at them? (And, by the way, the rate of home ownership now is about 64%, whereas it was below 50% in 1940. People weren’t more likely to own their own homes back then than they are now.)
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There are also differences in building codes that have taken place between 1940 and 2000. It wouldn’t be legal to build a house as they built them in 1940. The timber available cannot be had the way it was in 1940. Land close to jobs is more scarce. You may as well blame television for the price of a home.
Adjusted for inflation, the price per square foot of a median-priced home has hardly changed since 1975. The living space per person has increased from 507 to 971 square feet using the median size house and from 551 to 1,058 square feet using the average size house.
The expected standard of living has gone up across the board. That took buyers to buy what the “moneyed elite” were selling.
In adjusted dollars, the price of the home and the size of a home are what have gone up together. The added population brought the price of land up along with those two, especially in desirable locations.
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PetraG
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Do you mean whose wagon is hitched to deficit spending? People who want to get elected, that’s who.
I don’t know how we can understand monetary policy without getting that bit. The people deciding monetary policy need (a) a stable society, so no poverty riots and (b) money coming in from wealthy campaign donors. That’s where the balance seems to sit, like it or not.
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HarryStotle
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Ah, yes.phil3:
In the current era? It’s the owners of assets.
And how did this occur? Not through capitalism, but through crony capitalism where the wealthy began to use, by buying off the political class, political regulation in their favour. The next step is globalism, where national sovereignty is being undermined in order to remove all encumbrances to creating more wealth for those with sufficient wealth to dictate policy. This is why Soros, et al, wish to marshal NGOs and media organizations to remove political opposition to globalism.
Globalism is not a grassroots, bottom up, attempt to equalize resources and individual rights. It is a top down push to remove individual rights and control resources. This is why the apparent “rights” of marginalized groups and group think are being promoted at the expense of actual individual human rights such as the right to life, the right to freedom of speech, and the right of conscience.
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HarryStotle
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That figure would be more convincing if it included comparables regarding mortgages. Home ownership may be at 64%, but what proportion of that is mere “ownership” on paper? In those cases, the banks could be the de facto owners while the title holders are so on “paper.”
Perhaps you could find data comparing 1940 to 2000 that is based upon full legal title WITH paid out mortgages?
There is this…
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tafan2
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Using 1940 as a comparison date is likely cherry picking at best.
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PetraG
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You’re kind of moving the goal posts, friend. What would this statistic even mean now, when people buy homes not with the goal of paying them off, but with the goal of building equity? How do you factor in the people who now have reverse mortgages?
The problem of the mortgage debt to income ratio has to do with (a) people buying larger homes than they used to believe they needed and (b) the stagnation of wages. (The median red line income has hardly budged, but the median house is twice as big…)
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HarryStotle
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Here is what we know about 2013…
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Less than 20% of homes in the US were owner occupied without a mortgage.
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Only 9% of housing debt was less than 20% of the property value. 15% were in debt to more than what the property was worth.
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HarryStotle
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No, actually, if we are speaking of who actually owns the asset of a home, we need to stick to that goal post for a proper comparison.HarryStotle:
You’re kind of moving the goal posts, friend. What would this statistic even mean now, when people buy homes not with the goal of paying them off, but with the goal of building equity? How do you factor in the people who now have reverse mortgages?
If the banks are the de facto owners of a property in 2000, you cannot claim that home ownership on the part of the individual has risen. They may hold the title, but that, in no way, means they actually own the property.
The comparison of actual debt-free ownership between 1940 and 2000 would be telling the real story.
The best figure I can find is 32% have paid off their mortgage as of 2013.
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PetraG
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Again: People do not buy houses that they even intend to pay off. They buy houses that have payments they think they can afford.
I used to watch HGTV (which I call the Your House Isn’t Good Enough Channel) with my sons. When I heard real estate agents telling clients that the bank wouldn’t give them loans they couldn’t manage, I would mute the TV, turn to my sons and say “Is that TRUE?” The answer, of course, was “no.” It is up to the client to decide what payment is in their best overall financial interest. It is up to the client to consider the purchase not just as a home but as a financial investment.
This is not the way buyers are being encouraged to think. If you’re blaming real estate salesmen for trying to sell the most expensive home they can get their buyers to buy and home builders for building homes that attract buyers, there is some merit to the complaint that people are being sold homes that are bigger and fancier than they ought to be aiming for. Still, it isn’t as if the buyers are complaining that the builders or sellers are forcing them to buy expensive add-ons they don’t want. No, the buyers have also preferred to buy more than they need and more than is in their best financial interest. People put expensive “updates” on their homes in order to be competitive. That drives up prices.
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