Why is There a Housing Crisis?

[Jimmy Higgins]

Taxation is a form of central management.

But it is democratic. We elect the people who raise our taxes.

The fed can do anything it wants at any time and I do not even get to vote for them.

Which is a good thing. Centralized monetary policy should not be regulated by people who have the most to gain in the short-term.

 

[TSwizzle]

The people making over $200k/year need to pay a LOT more tax than they do now. Especially in the locations with high home prices.

No we fucking don't.

 

[Harry Bosch]

Taxation is a form of central management.

But it is democratic. We elect the people who raise our taxes.

The fed can do anything it wants at any time and I do not even get to vote for them.

Which is a good thing. Centralized monetary policy should not be regulated by people who have the most to gain in the short-term.

Short term??! Congress can't pass a budget that lasts more than 2 months! They can't pass simple bills (border, funding for Ukraine and Israel, and etc) that a majority approve of. And we want them to know determine long term interest rates that will have lasting implications on our economy for a generation?! No thanks.....

 

[laughing dog]

Another words, serious side effects from central management of the economy. Just let supply and demand work like it should and stop trying to fuck with what wasn't broke.

There are can be serious negative side effects from letting supply and demand like it should. Why are those side effects less undesirable than those under "central management".

Because good economic decisions based on price will still be possible. As long as supply and demand remains unrestricted everyone in the system is assured the price is real. Also, with no central management everyone can be assured to be on the same footing with no secret thumbs on the scale. Its more fair to everyone.

All prices are real in that they exist. .

They do exist but they do not reflect true reality.

Historically, the average cost of a house in the US has been around 5 times the yearly household income

https://www.longtermtrends.net/home-price-median-annual-income-ratio/#:~:text=Historically, the average cost of,times the yearly household income

So we know from average nationwide home pricing data, any local home price that is more than 5x is artificial and will not hold up to the test of time. It is only a matter of when the bubble breaks. Or when the fed does something else unpredictable.

You assume that the local relationship between income and housing price is the same as the national relationship. There is no reason to think that is true. And, if one really believes that the market price in a free market reflects true reality, then one should acknowledge that local conditions are likely to be different than national ones.

Local housing prices are also affected by local zoning regulations and building codes. Of all markets in the US, the housing market is generally not a free market in any sense of the word.

 

[laughing dog]

Taxation is a form of central management.

But it is democratic. We elect the people who raise our taxes.

The fed can do anything it wants at any time and I do not even get to vote for them.

So you are not against central management of the economy. So the issue is not central management per se.

 

[Elixir]

Taxation is a form of central management.

But it is democratic. We elect the people who raise our taxes.

The fed can do anything it wants at any time and I do not even get to vote for them.

So you are not against central management of the economy. So the issue is not central management per se.

That does seem to be the case.
Right now, there is still a quiet part about the ”conservatives” feel about it.
The mega billionaires who will be vying to buy the coming election, don’t care for an entity like the Fed. Their fortunes are not in cash, and if cash goes to hell they just get richer.
Notice how they have fared over the COVID induced inflation spike.

 

[RVonse]

The people making over $200k/year need to pay a LOT more tax than they do now. Especially in the locations with high home prices.

No we fucking don't.

I don't like to pay taxes either. In fact, I don't think anyone likes to pay taxes. I'm just saying this is the easiest and fastest way to fix a broke housing market. Because the only way everyone can have equal access to an artificial high price market is to reduce the disparity of after tax disposable buying power. Then when the high wage earners can't bid a house so high the price will come down to a reasonable level again.

If you are in the high income camp, would you rather pay high taxes and still have all the infrastructure that has to be done by low income people? Or would you rather have low taxes and live in an area with high crime, extreme squalor and people pooping everywhere? I would vote the former instead of the latter however you might feel differently. Especially if you only viewed the city as your work and planned to move out after making some cash.

But the biggest point is that it would be something everyone gets to vote for or against. That's not the case with the fed.

 

[RVonse]

Taxation is a form of central management.

But it is democratic. We elect the people who raise our taxes.

The fed can do anything it wants at any time and I do not even get to vote for them.

So you are not against central management of the economy. So the issue is not central management per se.

I'm not against taxation as long as I am represented. Even the hardest core libertarians like Ron Paul recognize the need for public common infrastructure and that it has to be paid for.

But after that it makes more sense to let the free market determine prices rather than put in place some soviet style elite group to run our economy. And free market capitalism is more democratic as well.

 

[TSwizzle]

The people making over $200k/year need to pay a LOT more tax than they do now. Especially in the locations with high home prices.

No we fucking don't.

I don't like to pay taxes either.

I already pay high taxes.

In fact, I don't think anyone likes to pay taxes.

Not true. Most people understand that to have a functioning society and government taxation is requirement. But people do not like to see their tax dollars get wasted on shit.

I'm just saying this is the easiest and fastest way to fix a broke housing market.

Government interference rarely fixes anything. Usually government makes things worse.

Because the only way everyone can have equal access to an artificial high price market is to reduce the disparity of after tax disposable buying power. Then when the high wage earners can't bid a house so high the price will come down to a reasonable level again.

I highly doubt that.

If you are in the high income camp, would you rather pay high taxes and still have all the infrastructure that has to be done by low income people? Or would you rather have low taxes and live in an area with high crime, extreme squalor and people pooping everywhere?

What the fuck are you on about? I live in Los Angeles, I have high taxes and am surrounded by crime and squalor and you want me to pay more in taxes? Get outta here.

 

[Jimmy Higgins]

The people making over $200k/year need to pay a LOT more tax than they do now. Especially in the locations with high home prices.

No we fucking don't.

I don't like to pay taxes either. In fact, I don't think anyone likes to pay taxes. I'm just saying this is the easiest and fastest way to fix a broke housing market. Because the only way everyone can have equal access to an artificial high price market is to reduce the disparity of after tax disposable buying power. Then when the high wage earners can't bid a house so high the price will come down to a reasonable level again.

If you are in the high income camp, would you rather pay high taxes and still have all the infrastructure that has to be done by low income people? Or would you rather have low taxes and live in an area with high crime, extreme squalor and people pooping everywhere? I would vote the former instead of the latter however you might feel differently. Especially if you only viewed the city as your work and planned to move out after making some cash.

But the biggest point is that it would be something everyone gets to vote for or against. That's not the case with the fed.

I don't want to vote on Fed action! I'm not remotely arrogant enough to think I belong in that room.

 

[RVonse]

.

Because the only way everyone can have equal access to an artificial high price market is to reduce the disparity of after tax disposable buying power. Then when the high wage earners can't bid a house so high the price will come down to a reasonable level again.

I highly doubt that.

Really? How do you think housing prices got so high? Did the prices become so high because someone did not have the ability pay?

 

[RVonse]

I don't want to vote on Fed action! I'm not remotely arrogant enough to think I belong in that room.

Its perfectly fine with me if you want to trust other people who say they are smarter than you.

I would rather vote for my destiny because I believe in democracy.

 

[TSwizzle]

Because the only way everyone can have equal access to an artificial high price market is to reduce the disparity of after tax disposable buying power. Then when the high wage earners can't bid a house so high the price will come down to a reasonable level again.

I highly doubt that.

Really? How do you think housing prices got so high? Did the prices become so high because someone did not have the ability pay?

I don't know how exactly but very low interest rates went some way towards it. People overpaid for their house because they could afford to pay it, they weren't paying attention to how much the property was actually worth.

 

[Jimmy Higgins]

I don't want to vote on Fed action! I'm not remotely arrogant enough to think I belong in that room.

Its perfectly fine with me if you want to trust other people who say they are smarter than you.

I would rather vote for my destiny because I believe in democracy.

Based on your posting history, I don't think you are remotely qualified either.

Attention passengers, we are currently approaching turbulence due to some very heavy thunderstorm activity ahead. The stewards are passing out the voting tablets to provide you the option of choosing how we will transit this serious weather condition. You have two minutes to vote and I will let you know the results. We appreciate your assistance and thanks again for flying Ayn Rand Air.

 

[bilby]

Historically, the average cost of a house in the US has been around 5 times the yearly household income

https://www.longtermtrends.net/home-price-median-annual-income-ratio/#:~:text=Historically, the average cost of,times the yearly household income

So we know from average nationwide home pricing data, any local home price that is more than 5x is artificial and will not hold up to the test of time.

Historically the average number of horses per US household has been close to one. So we know from the current data that most households owning no horses is artificial, and won't hold up to the test of time.

I recommend that you invest in providing stables for suburban homes. It's only a matter of time before we see a massive boom in demand for such facilities.

 

[bilby]

But it is democratic. We elect the people who raise our taxes.

The fed can do anything it wants at any time and I do not even get to vote for them.

"Democratic" isn't a synonym for "good", nor does democracy ensure good decisions when popular but bad decisions are also an option.

I am very relieved to hear that you have no say whatsoever in the decisions made by the fed.

 

[laughing dog]

I'm not against taxation as long as I am represented. Even the hardest core libertarians like Ron Paul recognize the need for public common infrastructure and that it has to be paid for.

But after that it makes more sense to let the free market determine prices rather than put in place some soviet style elite group to run our economy. And free market capitalism is more democratic as well.

To characterize people who are appointed by democratically elected officials as "some soviet style elite group" is hyperbolic rhetoric.

Free market capitalism is voting with dollars. I don't view that as "more democratic" than voting to elect people who appoint others.

 

[Loren Pechtel]

Another words, serious side effects from central management of the economy. Just let supply and demand work like it should and stop trying to fuck with what wasn't broke.

There are can be serious negative side effects from letting supply and demand like it should. Why are those side effects less undesirable than those under "central management".

Because good economic decisions based on price will still be possible. As long as supply and demand remains unrestricted everyone in the system is assured the price is real. Also, with no central management everyone can be assured to be on the same footing with no secret thumbs on the scale. Its more fair to everyone.

And why do we think the price isn't real now???

Besides, the Fed doesn't mess with supply and demand per se. They change the interest rate which changes how much people are willing to borrow which changes the money supply. But note that they are always trying to change it towards a steady value. While economists can't exactly predict Fed actions they come close--which means everyone can have a pretty good idea of what will happen in the short run. And in the long run nobody knows anyway.

If there are side effects of supply and demand, those should be addressed without using central management. Taxation is still a huge tool of the government. And unlike central government, taxation is so simple it can more democratically be turned off or on.

<Thwack! with a clue-by-4>
Turned on and off? That will cause huge economic ripples. And you have already said you don't want government borrowing so that will translate into changes in government spending--lots of people put out of work. Sorry, it's your ox that's going to get gored when this happens.

 

[Loren Pechtel]

So, I really don't understand what your point is. Whether or not there is "central management", markets allocate resources. There are winners and losers in any case. "More fair" is in the eye of the beholder - it is not an objective measure. Which means people will disagree over which system is better depending on their notions of fairness.

It's a bogeyman. Of course it doesn't make sense.

 

[Worldtraveller]

Another words, serious side effects from central management of the economy. Just let supply and demand work like it should and stop trying to fuck with what wasn't broke.

There are can be serious negative side effects from letting supply and demand like it should. Why are those side effects less undesirable than those under "central management".

Because good economic decisions based on price will still be possible. As long as supply and demand remains unrestricted everyone in the system is assured the price is real. Also, with no central management everyone can be assured to be on the same footing with no secret thumbs on the scale. Its more fair to everyone.

And why do we think the price isn't real now???

Besides, the Fed doesn't mess with supply and demand per se. They change the interest rate which changes how much people are willing to borrow which changes the money supply. But note that they are always trying to change it towards a steady value. While economists can't exactly predict Fed actions they come close--which means everyone can have a pretty good idea of what will happen in the short run. And in the long run nobody knows anyway.

Yeah, about that. Jon Stewart deconstructs that as policy pretty well here: