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Originally Posted by
pizza delivery
If there was only private ownership of housing, there would be millions and millions of homeless people. Especially after the economy tanks due to deregulation in this libertarian utopia, or was that the Great Depression? Either way, yes, all things will take care of themselves when greedy rich people are left unchecked. Yes, sounds about right. At least with the government things are rightfully kept in check, in concept if nothing else. Geeze, I feel like I'm arguing HS civics here. And the tea partyers wonder why they're accused of being radical? Their vision is a total departure from today's world. It's near anarchy, which is only fun if you're drunk.
Aren't we talking about private ownership of housing? We aren't talking about the mortgage market for government owned housing. That doesn't exist.
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Especially after the economy tanks due to deregulation in this libertarian utopia, or was that the Great Depression? Either way, yes, all things will take care of themselves when greedy rich people are left unchecked. Yes, sounds about right.
If the government got out of subsidizing the mortgage business it wouldn't make it a "libertarian utopia". I wouldn't even consider it deregulation. I also don't think the Great Depression was caused by the lack of government subsidy to the mortgage market. Fill me in on that one. I also don't see your point about "greedy rich people". I bet greedy rich people have made a pretty penny from the government subsidies to the mortgage market.
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Geeze, I feel like I'm arguing HS civics here. And the tea partyers wonder why they're accused of being radical? Their vision is a total departure from today's world. It's near anarchy, which is only fun if you're drunk.
Did they teach you about the government subsidizing the mortgage industry in High School Civics? Me neither. We just had a meltdown in the mortgage markets. Is looking at the way the government subsidizes mortgages radical?
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But here’s a question rarely asked, at least in Washington: Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?
Listening to politicians, you’d think that every family should own its home — in fact, that you’re not a real American unless you’re a homeowner.
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Austan Goolsbee, a University of Chicago economist who is one of Barack Obama’s top advisers, warned against a crackdown on subprime lending. “For be it ever so humble,” he wrote, “there really is no place like home, even if it does come with a balloon payment mortgage.”
And the belief that you’re nothing if you don’t own a home is reflected in U.S. policy. Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn’t let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own.
In effect, U.S. policy is based on the premise that everyone should be a homeowner. But here’s the thing: There are some real disadvantages to homeownership.
First of all, there’s the financial risk. Although it’s rarely put this way, borrowing to buy a home is like buying stocks on margin: if the market value of the house falls, the buyer can easily lose his or her entire stake.
This isn’t a hypothetical worry. From 2005 through 2007 alone — that is, at the peak of the housing bubble — more than 22 million Americans bought either new or existing houses. Now that the bubble has burst, many of those homebuyers have lost heavily on their investment. At this point there are probably around 10 million households with negative home equity — that is, with mortgages that exceed the value of their houses.
Owning a home also ties workers down. Even in the best of times, the costs and hassle of selling one home and buying another — one estimate put the average cost of a house move at more than $60,000 — tend to make workers reluctant to go where the jobs are.
And these are not the best of times. Right now, economic distress is concentrated in the states with the biggest housing busts: Florida and California have experienced much steeper rises in unemployment than the nation as a whole. Yet homeowners in these states are constrained from seeking opportunities elsewhere, because it’s very hard to sell their houses.
Finally, there’s the cost of commuting. Buying a home usually though not always means buying a single-family house in the suburbs, often a long way out, where land is cheap. In an age of $4 gas and concerns about climate change, that’s an increasingly problematic choice.
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But homeownership isn’t for everyone. In fact, given the way U.S. policy favors owning over renting, you can make a good case that America already has too many homeowners.
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All I’m suggesting is that we drop the obsession with ownership, and try to level the playing field that, at the moment, is hugely tilted against renting.
"You can make a good case that America already has too many homeowners" = Liberal Economist Paul Krugman and the New York Times want millions of poor people to be homeless!