……..It is that irrational exuberance that is so stupid…that housing will make you money. And sadly this view point did not die in CA with the last bust. Only productive assets should make you money.[/quote]
Well said. Except that the US population has become addicted to the dream that they will ultimately (when they eventually sell) get paid to sit on a couch in their home, as long as they arrange to pay a monthly mortgage instead of monthly rent.
Clearly, only productive assets should be expected to boost one’s income over the long run. One’s own house is not a productive asset in this sense. A good education is, as are great work tools, etc, but not one’s own home (unless you are renting out part of it).
So how do Americans deal with the economic unsustainability of this dream of getting paid to sit on a couch? Well, we arrange for government intervention to make it true. We transfer wealth from taxpayers and savers to homeowners. That’s what the Congress, Federal Reserve and the US Treasury have made their number 1 priority. We have government financing for 90% of home purchases, and vast printing of new currency to prevent home prices coming all the way back down to their open market economic levels. We provide one-way tickets to buyers, with the ability to walk away when prices go down, as the OP did here, or keep the gains if prices go up. All this gets paid for by someone – ultimately taxpayers and savers.
