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 Post subject: Re: Can't Buy A Home? - That's The Idea And This Is Why
PostPosted: Tue Mar 13, 2018 2:20 pm 
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Real Estate Developer

Joined: Aug 19, 2011
Posts: 785
Quote:
State-supported capitalism...

Quote:
What they are doing is benefitting from a system of non-taxes which doesn't redistribute the wealth.


@Eschatologist
But rich people pay most of the taxes? (In the US something like 80% of income tax is paid by 20% of the population.... the top earners)

I agree with you on the low interest rates.


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 Post subject: Re: Can't Buy A Home? - That's The Idea And This Is Why
PostPosted: Tue Mar 13, 2018 2:56 pm 
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Of Systemic Importance

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Posts: 5194
snaps wrote:
But rich people pay most of the taxes? (In the US something like 80% of income tax is paid by 20% of the population.... the top earners)

And yet still they get richer.

But this isn't just about "rich" people, it's about "asset rich" people - ageing populations and reliance on private pensions.

There is no particular reason that we need people to have private pensions. They could pay higher taxes in exchange for a higher future State pension.

But we don't do that, we encourage saving for old age. And so people save, and buy assets, and the price of those assets go up.

According to simplistic capitalism, that savings glut should produce capital investment, like.....building houses! And it does, in some places. But not Ireland, at least not yet in any great quantity.

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 Post subject: Re: Can't Buy A Home? - That's The Idea And This Is Why
PostPosted: Tue Mar 13, 2018 3:00 pm 
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Of Systemic Importance

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Oh, and if anyone who thinks low interest rates are a bad idea can explain how Ireland's housing market would be helped by 10% interest rates, I'd love to hear it

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"It's easy to confuse what is with what ought to be, especially when what is has worked out in your favour"
Tyrion Lannister


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 Post subject: Re: Can't Buy A Home? - That's The Idea And This Is Why
PostPosted: Tue Mar 13, 2018 3:10 pm 
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Too Big to Fail
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My take on this phenomenon of the anglosphere (as it seems to be most prevalent in Can/OZ/NZ/USA/UK) is that the babyboomers always saw housing as affordable, the average house being 3 times the average salary over many decades, until the dip in buyers in the demographic wake of the Boomers.

Drop in property demand meant lower returns in the 90s so retirement funds piled into the Dot-com bubble, after the bust interest rates were kept low to cushion the blow for boomers, which begat a speculative borrowing frenzy by boomers, which begat a property bubble and bust, which begat QE to support boomers.....all for the boomers.

During all that credit expansion and post crash support wages stagnated as real value creation jobs went elsewhere as companies sought cost savings in cheaper countries to pay more dividends to their Boomer investors at home, leaving only a monopoly game for an economy behind.

After 08 Canada/NZ and Canada became commodity economies supplying China (australia reportedly has a less diverse economy now than Saudi Arabia!) which supported their banks lending needs and thus kept their bubbles inflated, while the USA bubble deflated and angry boomers who lost in the monopoly economy turned to a populist to get them back in the game.

That's my 2c musing. Now off to do errands.

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 Post subject: Re: Can't Buy A Home? - That's The Idea And This Is Why
PostPosted: Tue Mar 13, 2018 3:27 pm 
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Real Estate Developer

Joined: Aug 19, 2011
Posts: 785
Quote:
There is no particular reason that we need people to have private pensions. They could pay higher taxes in exchange for a higher future State pension.


@Eschatologist
Are you describing a communist system? Those types of system haven't ended well in the past.



How will it be different the next time round?

@catbear
I'd agree with all that.


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 Post subject: Re: Can't Buy A Home? - That's The Idea And This Is Why
PostPosted: Tue Mar 13, 2018 3:53 pm 
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Of Systemic Importance

Joined: Sep 13, 2012
Posts: 5194
snaps wrote:
Quote:
There is no particular reason that we need people to have private pensions. They could pay higher taxes in exchange for a higher future State pension.


@Eschatologist
Are you describing a communist system? Those types of system haven't ended well in the past.

No. And that's why the problems go unresolved, because the left cries profit-is-evil and the right cries Communism-is-evil, and the status quo is retained as if it were the least of all evils.

_________________
"It's easy to confuse what is with what ought to be, especially when what is has worked out in your favour"
Tyrion Lannister


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 Post subject: Re: Can't Buy A Home? - That's The Idea And This Is Why
PostPosted: Tue Mar 13, 2018 4:06 pm 
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Neo Landlord

Joined: Sep 9, 2017
Posts: 236
I guess a point in all this, is that there used to be some divergence around the world, so while there were tough times in Ireland, then Australia, Canada or somewhere else in the West would be booming. This 'safety valve' having been very important in recent memory.

Now we seem to have a hell of a lot of convergence, with increased globalisation. So the same issues come up everywhere. So it raises a question around how much will be done to address housing costs and wage stagnation locally, in somewhere as relatively small as Ireland, or even the UK.

We have huge global players in the Irish market, and concentration of ownership, so the global outlook for them is more important than ever before.


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