11 hours ago, ToastJenkins said:

Gets at affordability…which no one had any right to. Rent if you cant afford it. Move if you cant afford that.

How has subsidizing demand worked in student loans? Right. Because it never works…

Again, why would a builder not maximize profits? No reason for them To build for people that are poor debt risk

6 hours ago, DrPhilly said:

Remember that good ole American Dream? It was the bedrock of the middle class and the country. When it disappears and the wealth gap goes haywire bad things happen. We’ve discussed this before. The K shape promotes instability in society. You can say it is stupid but it is what it is.

Its was the largest war bounty in the history of the planet. And the boomers managed to F it up

1 minute ago, ToastJenkins said:

Its was the largest war bounty in the history of the planet. And the boomers managed to F it up

Put the blame where you will, the situation stands

1 minute ago, DrPhilly said:

Put the blame where you will, the situation stands

If you dont acknowledge the root causes, you have no prayer of a sustainable fix. Thats just the reality people dont want to accept. That period is a historical outlier that cant be recreated. Especiallly now that we have doubled down on all these short sighted plans for 3 generations

2 minutes ago, ToastJenkins said:

If you dont acknowledge the root causes, you have no prayer of a sustainable fix. Thats just the reality people dont want to accept. That period is a historical outlier that cant be recreated. Especiallly now that we have doubled down on all these short sighted plans for 3 generations

I agree it was a very special period. The answer coming out of it isn't to go K-shaped.

Just now, DrPhilly said:

I agree it was a very special period. The answer coming out of it isn't to go K-shaped.

Says who? Actually destroying what doesnt work anymore is part of a functional capitalist economy. Will that mean people lose out? Of course it does. Expecting similar outcomes is naive and illogical. Let the failures fail

5 minutes ago, ToastJenkins said:

Says who? Actually destroying what doesnt work anymore is part of a functional capitalist economy. Will that mean people lose out? Of course it does. Expecting similar outcomes is naive and illogical. Let the failures fail

You're missing my point. A healthy society that optimally supports a strong capitalist economy cannot afford to have the wealth gap become too large because that creates a high level of instability and leads to disruption. Failures are fine and will always occur.

2 hours ago, ToastJenkins said:

Says who? Actually destroying what doesnt work anymore is part of a functional capitalist economy. Will that mean people lose out? Of course it does. Expecting similar outcomes is naive and illogical. Let the failures fail

Hey, I had no part in the system that led to the current outcome.

The current outcome is artificially high demand with artificially low supply.

Having a let them eat cake attitude works until it doesn't.

2 hours ago, DrPhilly said:

You're missing my point. A healthy society that optimally supports a strong capitalist economy cannot afford to have the wealth gap become too large because that creates a high level of instability and leads to disruption. Failures are fine and will always occur.

I would disagree the gap is a natural

Consequence bc sustained success is difficult. Much wealth gets pissed away over generations

Where we draw that line matters. I would say being broke is a pretty good indicator

10 minutes ago, Bill said:

Hey, I had no part in the system that led to the current outcome.

The current outcome is artificially high demand with artificially low supply.

Having a let them eat cake attitude works until it doesn't.

And the welfare entitled attitude clearly works worse in the long run

The boomers didnt save and insisted that their home equity was retirement and thus elected pols that would extend their stupidity

A real solution is let the boomers get wiped out and reset the market. But no pol would even dare suggest that

2 hours ago, DrPhilly said:

You're missing my point. A healthy society that optimally supports a strong capitalist economy cannot afford to have the wealth gap become too large because that creates a high level of instability and leads to disruption. Failures are fine and will always occur.

You have to stop talking in the abstract. Its just vague concepts not any real plan or solution

10 minutes ago, ToastJenkins said:

I would disagree the gap is a natural

Consequence bc sustained success is difficult. Much wealth gets pissed away over generations

Where we draw that line matters. I would say being broke is a pretty good indicator

A gap is necessary and natural. However, if the gap gets too large or too small it causes massive problems.

4 minutes ago, DrPhilly said:

A gap is necessary and natural. However, if the gap gets too large or too small it causes massive problems.

More abstract

Define too large or too small but you better factor in monetary policy and time on a generational scale…

The disconnect here is that you seem to think people have some intrinsic value to the system when most are a net negative

5 minutes ago, ToastJenkins said:

You have to stop talking in the abstract. Its just vague concepts not any real plan or solution

Ok, we can try to look at some things that might help and accept there is no magic bullet but rather a cocktail of things that can all help to a certain extent. My friend just arrived for the evening of NFL, etc. so I'll get back to you tomorrow to continue the discussion.

@ToastJenkins

Special times call for special measures.

First off, let me say we should absolutely continue to have a restrictive immigration policy. This should be in place for the foreseeable future.

Two things I would suggest to consider to start with are raising the default federal minimum wage and taking some measures to improve the housing market. Regulation needs to be relaxed to help spur on the construction of new single family homes as well as the various forms of condos, high rise units, townhouses, etc. Additionally, I think some use of tax credits could be offered to both builders and first time buyers. Give this industry a shot in the arm which is sorely needed. Also, we should absolutely get rid of tariffs that cause all the building materials to be more expensive.

The next area I'd look deals with corporate regulation. There is a current push to drop lots of regulations which on the face of it looks like a potential positive effort though I have zero faith in this administration's ability to do good things here. In any case, I support removing a large set of regulations through careful selection. On the flip side, I'd like to see a more aggressive stance in areas of anti trust and competition and there should be some increased rights to form unions. I'd also start a program to work with business associations to explore how to shrink the gaps between "workers" and "higher ups". The CEO to worker ratio in the US has gone from 21:1 in 1965 up to over 300:1 in 2024 (quick search on those so the numbers might not be perfect but the challenge is clear) and that's evidence of an unhealthy market in my mind. I'm looking for basic trends here to be improved and moving in a more healthy direction and no I don't have a detailed suggestion as to how to deal with this.

Another thing that I support is some form of improvement in health insurance/care. Over time my mind was changed on this topic after I'd lived in a society with a national system for many years. I think a minimum amount of insurance should be provided to all citizens to cover basic care. Everyone would continue to have the option to buy more care/insurance through private providers OR could receive more thru their work just like today. I fully realize you will just say "no" on this one but in the end it is going to be a reality at some point.

6 minutes ago, DrPhilly said:

You're missing my point. A healthy society that optimally supports a strong capitalist economy cannot afford to have the wealth gap become too large because that creates a high level of instability and leads to disruption. Failures are fine and will always occur.

Wealth disparity wrecks any society regardless the economic system. Capitalism "won" the 20th century because it was the best at creating a more even play field, until it wasn't.

44 minutes ago, dawkins4prez said:

Wealth disparity wrecks any society regardless the economic system. Capitalism "won" the 20th century because it was the best at creating a more even play field, until it wasn't.

The same is true when a system tries to create a situation with no gap. That too wrecks society though for totally different reasons.

I totally understand what TJ is saying. However, I also firmly believe a society where most young people have no hope of owning their home is not a good thing. Just talking to people in their 20's most of them just assume they will never be able to come up with 3/4 of a million for a modest home in the suburbs. When large portions of the population feel hopeless, we get fringe candidates into the main stream and we get the bull ish that's happening now. So no I do not want a cradle to the grave nanny state, but what we have now is not working.

2 minutes ago, Gannan said:

I totally understand what TJ is saying. However, I also firmly believe a society where most young people have no hope of owning their home is not a good thing. Just talking to people in their 20's most of them just assume they will never be able to come up with 3/4 of a million for a modest home in the suburbs. When large portions of the population feel hopeless, we get fringe candidates into the main stream and we get the bull ish that's happening now. So no I do not want a cradle to the grave nanny state, but what we have now is not working.

Then don't try to buy a $3.75 million dollar home.

What is confusing @Gannan ? The standard amount of money to put down on a home to obtain a mortgage is 20%.

40 minutes ago, paco said:

What is confusing @Gannan ? The standard amount of money to put down on a home to obtain a mortgage is 20%.

He means that a $600,000-$750,000 home isn't obtainable to people outside of just the down payment (which is still pretty substantial on its own.)

I thought it was pretty clear what he was getting at.

17 minutes ago, Paul852 said:

He means that a $600,000-$750,000 home isn't obtainable to people outside of just the down payment (which is still pretty substantial on its own.)

I thought it was pretty clear what he was getting at.

Typically when someone talks about the money that they need to "come up with”, it’s 20% down and closing costs.

He said come up with a 3/4 million. If he wanted to talk about what it takes to buy a $750k home, he should have said come up with $150k plus closing costs, which is a valid argument as a barrier to entry.

I would counter, depending on the location, if a $750k home is a proper first home anyway and would also point out there are other loan types like FHA that lower the barrier to entry (but come with their own downsides as well)

TL;DR: my wife is a realtor.

1 hour ago, Gannan said:

I totally understand what TJ is saying. However, I also firmly believe a society where most young people have no hope of owning their home is not a good thing. Just talking to people in their 20's most of them just assume they will never be able to come up with 3/4 of a million for a modest home in the suburbs. When large portions of the population feel hopeless, we get fringe candidates into the main stream and we get the bull ish that's happening now. So no I do not want a cradle to the grave nanny state, but what we have now is not working.

But the answer isn't more government interference, since government interference is the root cause of the problem. The reason nobody builds "affordable" housing is that local governments have made it unprofitable with insane regulations, inspections, approvals, etc. Once you acquire the land at an inflated cost and spend millions upon millions getting it entitled (EIRs, CEQA in California, lobbying local government for zoning and entitlements, etc.), you have no choice other than maximizing the value per lot with the biggest house possible. That's why the entitlement process now involves a shakedown -- to get something entitled, a builder has to agree to 10-20% "affordable" housing where it loses money; you then build McMansions on the rest to offset losses. But the "affordable" housing is multi-tenant, sometimes Section 8, because that's what the politicians want. So once you absorb that loss, you don't build entry level single family homes on the rest, you build higher end homes with better margins.

We have dealt with this a lot with property we acquire, get entitled and then flip to developers. Land is too expensive to start (thanks to cheap money), then we sink millions into the entitlement process, and then the developers pay up for entitled land and need to maximize return. Small example -- in California, anyone can file a CEQA challenge for a couple hundred bucks and cause years of delay and millions in expense. It's a broken system. And politicians broke it.

24 minutes ago, paco said:

Typically when someone talks about the money that they need to "come up with”, it’s 20% down and closing costs.

He said come up with a 3/4 million. If he wanted to talk about what it takes to buy a $750k home, he should have said come up with $150k plus closing costs, which is a valid argument as a barrier to entry.

I would counter, depending on the location, if a $750k home is a proper first home anyway and would also point out there are other loan types like FHA that lower the barrier to entry (but come with their own downsides as well)

TL;DR: my wife is a realtor.

Do you want to actually have a discussion about the problem or split hairs? It was clear he wasn't implying people were trying to buy 4 million dollar homes. I'd imagine most everyone here has taken part in the homebuying process. It's not that complicated so we don't need it explained to us.

There is a housing crisis on top of the alarmingly high costs of raising children in general. A "starter" home in a desirable area with good schools to raise a family will run you 500k.

5 minutes ago, Paul852 said:

Do you want to actually have a discussion about the problem or split hairs? It was clear he wasn't implying people were trying to buy 4 million dollar homes. I'd imagine most everyone here has taken part in the homebuying process. It's not that complicated so we don't need it explained to us.

There is a housing crisis on top of the alarmingly high costs of raising children in general. A "starter" home in a desirable area with good schools to raise a family will run you 500k.

And as Vikas already pointed out though, the government caused this problem. So if they try to "fix” it, they’ll just make it even worse than it already is. As happens every time they try to "fix” an affordability problem.