[patientrenter]

FormerSanDiegan, if removing housing subsidies would likely reallocate capital to more productive activities (and I agree), then why shouldn’t we target getting that completed, and get a schedule with an end date, and make sure that each step we take is in the direction of the ultimate target, and not some other direction? That is a rational response.

Other responses seem to me to be designed to continue to funnel general taxpayer money into the pockets of homeowners, under the guise of “saving our economy”. It’s hard to call homeowners a “special” interest group, since they are 2/3 of the population, but you get the idea.

I find myself agreeing with HLS: It is perfectly possible to have no special government subsidy (including indirect subsidies like loan guarantees) for homeowners. Most, but not all, current buyers would be able to afford a home, but at a much lower price. Is that such a terrible world?

I like the idea of owning a home, but not if the only way to get there is to inflate the price radically, and then force others to fork over most of the difference (through subsidies). And most of the benefits to society at large attributed to turning evil reckless renters into good responsible homeowners are confusions of cause and effect. Responsible people save enough and budget enough to pay for a home without any subsidy. Handing all the purchase money for a home to a reckless person doesn’t make them responsible. Homeownership in Germany is much less common than here. I haven’t heard people characterize Germans as irresponsible wastrels, or the country as an economic basket-case.

Smart people in power always knew that homeownership itself was no magic cure for irresponsibility, but 2/3 of the population loved seeing their home values go up, and smiled on any theory or action that would allow it to continue one more year, and lashed out at any threat to the free lunch source. With that support behind them, a few people who gained very large personal benefits from the bubble acted as agents for the 2/3 of the population and put through tax deductions, FNMA expansions, etc. It was always a scheme to feed on the free lunches provided by home price increases, to be funded from the public money trough, or any other source ready to give money without getting it all back (e.g the Chinese central bank).

[patientrenter]

FormerSanDiegan, if removing housing subsidies would likely reallocate capital to more productive activities (and I agree), then why shouldn’t we target getting that completed, and get a schedule with an end date, and make sure that each step we take is in the direction of the ultimate target, and not some other direction? That is a rational response.

Other responses seem to me to be designed to continue to funnel general taxpayer money into the pockets of homeowners, under the guise of “saving our economy”. It’s hard to call homeowners a “special” interest group, since they are 2/3 of the population, but you get the idea.

I find myself agreeing with HLS: It is perfectly possible to have no special government subsidy (including indirect subsidies like loan guarantees) for homeowners. Most, but not all, current buyers would be able to afford a home, but at a much lower price. Is that such a terrible world?

I like the idea of owning a home, but not if the only way to get there is to inflate the price radically, and then force others to fork over most of the difference (through subsidies). And most of the benefits to society at large attributed to turning evil reckless renters into good responsible homeowners are confusions of cause and effect. Responsible people save enough and budget enough to pay for a home without any subsidy. Handing all the purchase money for a home to a reckless person doesn’t make them responsible. Homeownership in Germany is much less common than here. I haven’t heard people characterize Germans as irresponsible wastrels, or the country as an economic basket-case.

Smart people in power always knew that homeownership itself was no magic cure for irresponsibility, but 2/3 of the population loved seeing their home values go up, and smiled on any theory or action that would allow it to continue one more year, and lashed out at any threat to the free lunch source. With that support behind them, a few people who gained very large personal benefits from the bubble acted as agents for the 2/3 of the population and put through tax deductions, FNMA expansions, etc. It was always a scheme to feed on the free lunches provided by home price increases, to be funded from the public money trough, or any other source ready to give money without getting it all back (e.g the Chinese central bank).

[patientrenter]

FormerSanDiegan, if removing housing subsidies would likely reallocate capital to more productive activities (and I agree), then why shouldn’t we target getting that completed, and get a schedule with an end date, and make sure that each step we take is in the direction of the ultimate target, and not some other direction? That is a rational response.

Other responses seem to me to be designed to continue to funnel general taxpayer money into the pockets of homeowners, under the guise of “saving our economy”. It’s hard to call homeowners a “special” interest group, since they are 2/3 of the population, but you get the idea.

I find myself agreeing with HLS: It is perfectly possible to have no special government subsidy (including indirect subsidies like loan guarantees) for homeowners. Most, but not all, current buyers would be able to afford a home, but at a much lower price. Is that such a terrible world?

I like the idea of owning a home, but not if the only way to get there is to inflate the price radically, and then force others to fork over most of the difference (through subsidies). And most of the benefits to society at large attributed to turning evil reckless renters into good responsible homeowners are confusions of cause and effect. Responsible people save enough and budget enough to pay for a home without any subsidy. Handing all the purchase money for a home to a reckless person doesn’t make them responsible. Homeownership in Germany is much less common than here. I haven’t heard people characterize Germans as irresponsible wastrels, or the country as an economic basket-case.

Smart people in power always knew that homeownership itself was no magic cure for irresponsibility, but 2/3 of the population loved seeing their home values go up, and smiled on any theory or action that would allow it to continue one more year, and lashed out at any threat to the free lunch source. With that support behind them, a few people who gained very large personal benefits from the bubble acted as agents for the 2/3 of the population and put through tax deductions, FNMA expansions, etc. It was always a scheme to feed on the free lunches provided by home price increases, to be funded from the public money trough, or any other source ready to give money without getting it all back (e.g the Chinese central bank).

[patientrenter]

FormerSanDiegan, if removing housing subsidies would likely reallocate capital to more productive activities (and I agree), then why shouldn’t we target getting that completed, and get a schedule with an end date, and make sure that each step we take is in the direction of the ultimate target, and not some other direction? That is a rational response.

Other responses seem to me to be designed to continue to funnel general taxpayer money into the pockets of homeowners, under the guise of “saving our economy”. It’s hard to call homeowners a “special” interest group, since they are 2/3 of the population, but you get the idea.

I find myself agreeing with HLS: It is perfectly possible to have no special government subsidy (including indirect subsidies like loan guarantees) for homeowners. Most, but not all, current buyers would be able to afford a home, but at a much lower price. Is that such a terrible world?

I like the idea of owning a home, but not if the only way to get there is to inflate the price radically, and then force others to fork over most of the difference (through subsidies). And most of the benefits to society at large attributed to turning evil reckless renters into good responsible homeowners are confusions of cause and effect. Responsible people save enough and budget enough to pay for a home without any subsidy. Handing all the purchase money for a home to a reckless person doesn’t make them responsible. Homeownership in Germany is much less common than here. I haven’t heard people characterize Germans as irresponsible wastrels, or the country as an economic basket-case.

Smart people in power always knew that homeownership itself was no magic cure for irresponsibility, but 2/3 of the population loved seeing their home values go up, and smiled on any theory or action that would allow it to continue one more year, and lashed out at any threat to the free lunch source. With that support behind them, a few people who gained very large personal benefits from the bubble acted as agents for the 2/3 of the population and put through tax deductions, FNMA expansions, etc. It was always a scheme to feed on the free lunches provided by home price increases, to be funded from the public money trough, or any other source ready to give money without getting it all back (e.g the Chinese central bank).

[patientrenter]

A good friend of mine, well-educated, hardworking, etc, grew up with 8 family members in a 2-bedroom apartment.

You don’t NEED a large home. It’s a luxury, and if you buy it it’s because you want to spend on a luxury. If you bought a Ferrari, I would wish you lots of enjoyment and I wouldn’t throw mud at you… unless you claimed it was a necessity and you came back 30 years later saying you couldn’t retire on your own unsubsidized savings.

[patientrenter]

A good friend of mine, well-educated, hardworking, etc, grew up with 8 family members in a 2-bedroom apartment.

You don’t NEED a large home. It’s a luxury, and if you buy it it’s because you want to spend on a luxury. If you bought a Ferrari, I would wish you lots of enjoyment and I wouldn’t throw mud at you… unless you claimed it was a necessity and you came back 30 years later saying you couldn’t retire on your own unsubsidized savings.

[patientrenter]

A good friend of mine, well-educated, hardworking, etc, grew up with 8 family members in a 2-bedroom apartment.

You don’t NEED a large home. It’s a luxury, and if you buy it it’s because you want to spend on a luxury. If you bought a Ferrari, I would wish you lots of enjoyment and I wouldn’t throw mud at you… unless you claimed it was a necessity and you came back 30 years later saying you couldn’t retire on your own unsubsidized savings.

[patientrenter]

A good friend of mine, well-educated, hardworking, etc, grew up with 8 family members in a 2-bedroom apartment.

You don’t NEED a large home. It’s a luxury, and if you buy it it’s because you want to spend on a luxury. If you bought a Ferrari, I would wish you lots of enjoyment and I wouldn’t throw mud at you… unless you claimed it was a necessity and you came back 30 years later saying you couldn’t retire on your own unsubsidized savings.

[patientrenter]

A good friend of mine, well-educated, hardworking, etc, grew up with 8 family members in a 2-bedroom apartment.

You don’t NEED a large home. It’s a luxury, and if you buy it it’s because you want to spend on a luxury. If you bought a Ferrari, I would wish you lots of enjoyment and I wouldn’t throw mud at you… unless you claimed it was a necessity and you came back 30 years later saying you couldn’t retire on your own unsubsidized savings.

[patientrenter]

I’ll let myself vent a little here…

Republicans good, Democrats bad. Me Republican.

Did I catch the essence of this post about right:)

Good posts are those that trigger thoughtful responses, ones that avoid knee-jerk reactions common in other forums. (And, BTW, I think ideologically pure and devout Democrats are equally useless.)

[patientrenter]

I’ll let myself vent a little here…

Republicans good, Democrats bad. Me Republican.

Did I catch the essence of this post about right:)

Good posts are those that trigger thoughtful responses, ones that avoid knee-jerk reactions common in other forums. (And, BTW, I think ideologically pure and devout Democrats are equally useless.)

[patientrenter]

I’ll let myself vent a little here…

Republicans good, Democrats bad. Me Republican.

Did I catch the essence of this post about right:)

Good posts are those that trigger thoughtful responses, ones that avoid knee-jerk reactions common in other forums. (And, BTW, I think ideologically pure and devout Democrats are equally useless.)

[patientrenter]

I’ll let myself vent a little here…

Republicans good, Democrats bad. Me Republican.

Did I catch the essence of this post about right:)

Good posts are those that trigger thoughtful responses, ones that avoid knee-jerk reactions common in other forums. (And, BTW, I think ideologically pure and devout Democrats are equally useless.)

[patientrenter]

I’ll let myself vent a little here…

Republicans good, Democrats bad. Me Republican.

Did I catch the essence of this post about right:)

Good posts are those that trigger thoughtful responses, ones that avoid knee-jerk reactions common in other forums. (And, BTW, I think ideologically pure and devout Democrats are equally useless.)

[patientrenter]

ice9,

My situation is not so different from yours. If you assume that your investments are now worth $500K, and you can buy stocks that pay dividends of 4% on average, that’s $20,000 of pre-tax income. Call that $15,000 after-tax.

Even if you got a home for free, you don’t have anything close to enough to retire or semi-retire. If you pay $300K for a home, then you will get that much less in dividend income, maybe $6K a year after tax. It’ll just pay for property tax and basic maintenance costs or HOA fees.

Last year, I had well over a million in dividend-paying stocks, throwing off over $75K a year in pre-tax income. Now, I have… less:) I still have $300K in separate cash funds for a home, and another $200K cash waiting for the right opportunities in more dividend stocks, but I don’t consider myself even close to being able to retire.

My brother-in-law, who is retired, gave me this advice even last year, when I had much more: It’s a lot more expensive than you think to retire. (He’s doing fine, but he knows what it’s like to have lots of time and the desire to travel, play golf, and engage in other amusements, and he knows it costs money.)

Don’t let the nostrums of the financial planners catering to the baby boomers fool you. Assets won’t earn enough in the foreseeable future to let you retire for most of your life for less than the cost of an average home.

My advice is to keep working hard and saving and investing. And only buy a home in the near future when it’s cheap, doesn’t take much of your own cash, and you can get cheap financing at a fixed rate.

[Author]

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