Covid proved that earning a degree, and getting a salaried position becomes life long slavery. Once they pay you that monthly salary,…. Own you. Unless, like me, you had enough money saved up to say, fakk you.
Great Britain has tried numerous schemes’ to place people on the ‘property ladder’. The first time buyers they offered £50,000. Prices increased almost over night by £50,000 miraculously around 2016/2017. Since that ‘didn't work as intended’ , they decided to try a new scheme of £25,000. Guess what occurred? Government intervention and spending tax dollars to get re-elected simply wastes your money.
Do not re-elect people that have been in power over 12 years. If they can’t fix the budget to reduce deficits or fix Social Security and Medicare, no problem. Whatever reductions occur for the tax payers MUST as a percentage be applied to all Congressional persons for their PAY AND PENSIONS as well as Federal Judges and the ADMINISTRATION. If your retirement is cut, so should their retirements.
If a full budget isn’t passed that reduces the deficit, any shutdowns will remove payments to all Congressional members, Federal Judges, and Federal Administrators and there are no repayments or any reimbursements for the shut down period. Other worker - employees do receive reimbursements and back pay IF they worked at their jobs with a 3% interest for unpaid and worked funds’.
Let’s cut Congressional, Judicial, and Administrative benefits. They must be on Medicare like the general public.
Tom. I read your first two lines twice for surety and I thought >What.? a Government gave new home owners the first $50,000 without realising the obvious. After a few miiutes now I come to a conclusion > they knew what would happen but went ahead because this could be a vote catcher. Especially in an election year, >So I asked Google. and google having its preferences gave me the up to date version . "If you're a first-time buyer, you may be able to buy a home for 30% to 50% less than its market value. The home must be your only or main residence. This offer is called the First Homes scheme" When I was a boy we stood up to hear > God save the Queen at theatre shows . Now the entire Nation can be seen crumbling socially. morally and fiancially. So is New Zealand by the way > though not as advanced yet > and I think all this is all by design .
People cannot afford to sell, and cannot afford to buy. No matter how they reduce the debt, the housing rates do not go down. Very few people pay off their mortgages. This nonsense might be an advantage to people who buy and sell constantly, because most people are mobile in today's time, and will not stay long anywhere without job security. You have some great ideas, but a lot of changes would have to be made, and we have let this whole thing get away from us.
By the end of normal mortage term say 25 years you can bet something will need replacing, roof, furnace, windows etc. Imagine at 50 year term!! You'll be struggling to pay after getting fleeced and now with no extra money to update or replace things. Also the insurance companies are winners here, extra 25 years that they'll receive insurance protection plan payments from you that is mandatory from some if not most mortgage providers, you know, just in case you fall behind with a payment...
Honestly, we are living in a bloody pantomime and sadly, most of the audience are still participating by believing the daily rotten scripts of the pantomime instead of standing back, questioning and refusing to participate.
I think you know why your solution will never be implemented. It's because a government worker bee (someone I would derisively call a bureaucrat) sees his main objective is to keep his job. Said worker bee will resist improving the system he works within if it will put him out of a job.
The only bureaucrat I remember (in the US) talked his boss out of a job (on purpose) was Alfred Kahn, when he was the head of the old Civil Aeronautics Board. He was a rarity, and I can't think of anyone else that would do what he did.
2) The interest is tax-deductible and for a longer time since the loan amortizes 20 extra years.
3) The monthly savings could be used to pay PMI if the down payment is less than 20%. Assuming the value of the property increases, the homeowner can have it reassessed. If the LTV is < 80% they can drop PMI.
4) Most 30-year mortgages don't really last 30 years. People pay them off due to a sale or a refi due to lower interest rates. This is why mortgages key off the 10-year Treasury, not the 30-year.
5) The lower monthly payment (absent PMI) allows the homeowner to prepay if their income allows, but gives them flexibility should their income decline.
You ARE correct that the biggest factor in rising home prices is zoning and regs. Good luck fixing that.
1. Folks won’t hold a 50 yr mortgage for that long unless it is advantageous for them to do so. Smart folks will refinance as they go. Or not.
2. If dollar debasement in the next 50 yrs is anything like the last, ~$900,000 of interest will look like a bargain in 2075 nominal dollars (assuming the dollar even exists).
I know this from experience. When I moved out of home in the early 80’s, my mother’s payment on a three bedroom-two bath home in Colorado was $150/mo. A one bedroom apartment lease costed me $400/mo +. Mom’s mortgage was probably 25 years old. I remember asking myself how in the world she could pay so little for 3 bedrooms versus my one bedroom. And, remember this timeframe was less than one decade after Nixon took US off the gold standard. Debasement was just starting.
So prognosticating 50 years of mortgage slavery with only one terrible result is not a given.
Joe, thanks for this . I lived my entire life without a property mortgage until I retired. We did the borrowing inside immediate family.
I bought a home and made it my Veterinary Clinic. The most fundamental result is the feeling of freedom. When I retired > then the renting of my now living home property was wrecked by tenant damage. So I sold it and bought Gold. amd now am free again well, sort of. People may find it surprising but freedom to me is way less than $400,000 gold in a Vault
A 50-year mortgage is what you get when a system can’t allow home prices (or asset prices more broadly) to fall.
Too much pension exposure, collateralized debt, and political risk tied to housing, so policymakers stretch the timeline instead of confronting the underlying fragility. It's all so broken.
This is politicians doing what they do best: kick the can down the road a bit (until full tokenization, etc...)
Bush, Obama, Biden, Schwabe, Trump, Bessent. . . It's all a mechanism to wipe out the middle class, turn property owners into property "owners", and eliminate the only real impediment a nation has to authoritarianism - the middle class, with real property, education, and the resulting economic power bloc to demand and enforce its interests and keep the government-elitist complex in their D.C. sandbox.
Covid proved that earning a degree, and getting a salaried position becomes life long slavery. Once they pay you that monthly salary,…. Own you. Unless, like me, you had enough money saved up to say, fakk you.
Taleb puts it something like this, “the three most addictive substances are carbs, heroine, and a monthly salary”
Ha ha ha I love that. Funny 😄
Great Britain has tried numerous schemes’ to place people on the ‘property ladder’. The first time buyers they offered £50,000. Prices increased almost over night by £50,000 miraculously around 2016/2017. Since that ‘didn't work as intended’ , they decided to try a new scheme of £25,000. Guess what occurred? Government intervention and spending tax dollars to get re-elected simply wastes your money.
Do not re-elect people that have been in power over 12 years. If they can’t fix the budget to reduce deficits or fix Social Security and Medicare, no problem. Whatever reductions occur for the tax payers MUST as a percentage be applied to all Congressional persons for their PAY AND PENSIONS as well as Federal Judges and the ADMINISTRATION. If your retirement is cut, so should their retirements.
If a full budget isn’t passed that reduces the deficit, any shutdowns will remove payments to all Congressional members, Federal Judges, and Federal Administrators and there are no repayments or any reimbursements for the shut down period. Other worker - employees do receive reimbursements and back pay IF they worked at their jobs with a 3% interest for unpaid and worked funds’.
Let’s cut Congressional, Judicial, and Administrative benefits. They must be on Medicare like the general public.
Tom. I read your first two lines twice for surety and I thought >What.? a Government gave new home owners the first $50,000 without realising the obvious. After a few miiutes now I come to a conclusion > they knew what would happen but went ahead because this could be a vote catcher. Especially in an election year, >So I asked Google. and google having its preferences gave me the up to date version . "If you're a first-time buyer, you may be able to buy a home for 30% to 50% less than its market value. The home must be your only or main residence. This offer is called the First Homes scheme" When I was a boy we stood up to hear > God save the Queen at theatre shows . Now the entire Nation can be seen crumbling socially. morally and fiancially. So is New Zealand by the way > though not as advanced yet > and I think all this is all by design .
People cannot afford to sell, and cannot afford to buy. No matter how they reduce the debt, the housing rates do not go down. Very few people pay off their mortgages. This nonsense might be an advantage to people who buy and sell constantly, because most people are mobile in today's time, and will not stay long anywhere without job security. You have some great ideas, but a lot of changes would have to be made, and we have let this whole thing get away from us.
By the end of normal mortage term say 25 years you can bet something will need replacing, roof, furnace, windows etc. Imagine at 50 year term!! You'll be struggling to pay after getting fleeced and now with no extra money to update or replace things. Also the insurance companies are winners here, extra 25 years that they'll receive insurance protection plan payments from you that is mandatory from some if not most mortgage providers, you know, just in case you fall behind with a payment...
Honestly, we are living in a bloody pantomime and sadly, most of the audience are still participating by believing the daily rotten scripts of the pantomime instead of standing back, questioning and refusing to participate.
I think you know why your solution will never be implemented. It's because a government worker bee (someone I would derisively call a bureaucrat) sees his main objective is to keep his job. Said worker bee will resist improving the system he works within if it will put him out of a job.
The only bureaucrat I remember (in the US) talked his boss out of a job (on purpose) was Alfred Kahn, when he was the head of the old Civil Aeronautics Board. He was a rarity, and I can't think of anyone else that would do what he did.
Maybe just let prices fall during the next bust? The government can’t even do that right though
You're missing a few things...
1) A 50-year loan is a great inflation hedge.
2) The interest is tax-deductible and for a longer time since the loan amortizes 20 extra years.
3) The monthly savings could be used to pay PMI if the down payment is less than 20%. Assuming the value of the property increases, the homeowner can have it reassessed. If the LTV is < 80% they can drop PMI.
4) Most 30-year mortgages don't really last 30 years. People pay them off due to a sale or a refi due to lower interest rates. This is why mortgages key off the 10-year Treasury, not the 30-year.
5) The lower monthly payment (absent PMI) allows the homeowner to prepay if their income allows, but gives them flexibility should their income decline.
You ARE correct that the biggest factor in rising home prices is zoning and regs. Good luck fixing that.
I’m glad Joe said this.
1. Folks won’t hold a 50 yr mortgage for that long unless it is advantageous for them to do so. Smart folks will refinance as they go. Or not.
2. If dollar debasement in the next 50 yrs is anything like the last, ~$900,000 of interest will look like a bargain in 2075 nominal dollars (assuming the dollar even exists).
I know this from experience. When I moved out of home in the early 80’s, my mother’s payment on a three bedroom-two bath home in Colorado was $150/mo. A one bedroom apartment lease costed me $400/mo +. Mom’s mortgage was probably 25 years old. I remember asking myself how in the world she could pay so little for 3 bedrooms versus my one bedroom. And, remember this timeframe was less than one decade after Nixon took US off the gold standard. Debasement was just starting.
So prognosticating 50 years of mortgage slavery with only one terrible result is not a given.
Joe, thanks for this . I lived my entire life without a property mortgage until I retired. We did the borrowing inside immediate family.
I bought a home and made it my Veterinary Clinic. The most fundamental result is the feeling of freedom. When I retired > then the renting of my now living home property was wrecked by tenant damage. So I sold it and bought Gold. amd now am free again well, sort of. People may find it surprising but freedom to me is way less than $400,000 gold in a Vault
A 50-year mortgage is what you get when a system can’t allow home prices (or asset prices more broadly) to fall.
Too much pension exposure, collateralized debt, and political risk tied to housing, so policymakers stretch the timeline instead of confronting the underlying fragility. It's all so broken.
This is politicians doing what they do best: kick the can down the road a bit (until full tokenization, etc...)
Bush, Obama, Biden, Schwabe, Trump, Bessent. . . It's all a mechanism to wipe out the middle class, turn property owners into property "owners", and eliminate the only real impediment a nation has to authoritarianism - the middle class, with real property, education, and the resulting economic power bloc to demand and enforce its interests and keep the government-elitist complex in their D.C. sandbox.
You will own nothing and be happy
Classic. Probably needed to go with that as the title:)