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On August 11 2016 05:13 DarkPlasmaBall wrote:Show nested quote +On August 11 2016 05:12 Plansix wrote:On August 11 2016 05:06 Gorsameth wrote:On August 11 2016 04:52 Plansix wrote:On August 11 2016 04:47 Gorsameth wrote:On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it. Well let me tell you. You buy the house when both people have good jobs and health care. Then one of you loses the job due to their employer being complete morons. Then the medical problem that arises is not covered by shitty unemployment health insurance. If all that shit happened 6 months later, it would have been a non-issue. That is how it happens. I'm sorry to hear that and hope your doing better now. But to make a point, this is why us Europeans are so happy with our social safety nets. Because they help to ensure stories like this do not happen so easily. Thanks, we are fine, it worked out. (#Thanks Obama) It just opened my eyes to how sideways shit can go. And we don’t even have kids. Yeah, well we are a stupid country that thinks poverty stuff like this a sign of personal weakness and social safety nets are part of the nanny state. The instant we try to set one up, someone creates a poster child of free loaders abusing the system. Clearly you just need more bootstraps /s In all seriousness though, glad it worked out for you 
How can someone become a success story if they don’t go through bankruptcy and 3 years of living out of their car while their credit recovers? Batman taught us that we fall down to pick ourselves back up.
Except batman was part of the 1%. But you get it.
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On August 11 2016 05:09 zlefin wrote:Show nested quote +On August 11 2016 04:54 Liquid`Drone wrote:On August 11 2016 04:47 Gorsameth wrote:On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it. Isn't estate considered one of the best ways of investing? So for poor people who want to escape their poverty, home ownership is a very reasonable choice to make, one that we should want to enable? Like, I'm not talking about the 'fresh out of college engineer' poor who should just rent for a couple years before fully establishing himself, but more like the 'parents of two children aged 5 and 8 who work slightly below median wage jobs and who have no real prospect of ever making much more than median wage' - isn't it really good that these groups of people can own their home, so their monthly mortgage downpayment ends up benefiting them in the future? I must add the caveat that I really don't know much about economy so if I say anything that's flat out wrong then please bear with me.. homeownership is only really beneficial because of tax incentives; it's not good social policy to encourage homeownership, for various reasons (regressive taxation, mobility issues, lack of diversity).
It heavily depend on the place you live / buy your house, and it's also one of the reason inequalities are so high. When you have a good income / capital, you can buy a house in a good neighborhood and the value of the house will increase at a higher pace than if you're poor and buy a house in a shitty neighborhood (might even lose value in real terms).
I don't know the exact numbers, but I'm pretty sure the average increase in the value of a m² in the center of New York is three of four time the increase in most other cities - good investment.
Also, the tax incentives you talk about are not the same for the first house and the second and third. Usually, there are a lot of incentive to invest in small secondary houses and rent them, because the market does not seem produce enough house in most countries - again a mecanism that benefit the rich, who can afford more than one house, and not the poor. The shitty apartment you see in shitty neighborhoods are usually owned by rich people and give pretty good tax benefit.
Kwark's entire point just don't add up if you think at it from a macro perspective.
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On August 11 2016 05:07 KwarK wrote:Show nested quote +On August 11 2016 05:03 LegalLord wrote:
I know some people who insisted that socialized healthcare wasn't necessary because if someone who is poor were sick, then the community would obviously raise money to pay whatever the bills would be. This "should have planned for the future" approach to people who develop debt troubles seems to be borne of the same out-of-touch mentality of people who both have never had money troubles, and don't see the circumstances under which others would. I take the opposite view, the assumption that money isn't something that needs to be actively managed, stewarded and accounted for is a privilege of never learning that you don't have enough. It's people who know money is precious, finite and hard to come by who think about it. Very few rich kids I've met budget. What'd be the point?
People are optimists. No one thinks that they will lose a job then have a massive medical/legal bill and suddenly be on track to lose everything they own. Nor do people living at a middle class level really have that much disposable income.
Rich kids don't budget because the wealthier you are, the less you need to spend as a proportion of your income to live a decent life. If you make 500k, it's perfectly reasonable to spend 200k and save/invest 300k and still have a shitton of money left over. If you make 30k then you either have to live under shitty conditions or you save very slowly. Many people make even less than that.
Shit can go downhill really fast even when things appear stable.
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On August 11 2016 05:19 WhiteDog wrote:Show nested quote +On August 11 2016 05:09 zlefin wrote:On August 11 2016 04:54 Liquid`Drone wrote:On August 11 2016 04:47 Gorsameth wrote:On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it. Isn't estate considered one of the best ways of investing? So for poor people who want to escape their poverty, home ownership is a very reasonable choice to make, one that we should want to enable? Like, I'm not talking about the 'fresh out of college engineer' poor who should just rent for a couple years before fully establishing himself, but more like the 'parents of two children aged 5 and 8 who work slightly below median wage jobs and who have no real prospect of ever making much more than median wage' - isn't it really good that these groups of people can own their home, so their monthly mortgage downpayment ends up benefiting them in the future? I must add the caveat that I really don't know much about economy so if I say anything that's flat out wrong then please bear with me.. homeownership is only really beneficial because of tax incentives; it's not good social policy to encourage homeownership, for various reasons (regressive taxation, mobility issues, lack of diversity). It heavily depend on the place you live / buy your house, and it's also one of the reason inequalities are so high. When you have a good income / capital, you can buy a house in a good neighborhood and the value of the house will increase at a higher pace than if you're poor and buy a house in a shitty neighborhood (might even lose value in real terms). Also, the tax incentives you talk about are not the same for the first house and the second and third. Usually, there are a lot of incentive to invest in small house and rent them, because the market does not seem produce enough house in most countries - again a mecanism that benefit the rich, who can afford more than one house, and not the poor. Kwark's entire point just don't add up if you think at it from a macro perspective.
i'm not talking about kwark's point, i'm talking only about my own and what I replied to; also, i'm talking about the tax incentives in America, since that's the thread for this.
here the tax incentives (that I know of) are more for the first house rather than for rental houses.
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On August 11 2016 05:21 zlefin wrote:Show nested quote +On August 11 2016 05:19 WhiteDog wrote:On August 11 2016 05:09 zlefin wrote:On August 11 2016 04:54 Liquid`Drone wrote:On August 11 2016 04:47 Gorsameth wrote:On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it. Isn't estate considered one of the best ways of investing? So for poor people who want to escape their poverty, home ownership is a very reasonable choice to make, one that we should want to enable? Like, I'm not talking about the 'fresh out of college engineer' poor who should just rent for a couple years before fully establishing himself, but more like the 'parents of two children aged 5 and 8 who work slightly below median wage jobs and who have no real prospect of ever making much more than median wage' - isn't it really good that these groups of people can own their home, so their monthly mortgage downpayment ends up benefiting them in the future? I must add the caveat that I really don't know much about economy so if I say anything that's flat out wrong then please bear with me.. homeownership is only really beneficial because of tax incentives; it's not good social policy to encourage homeownership, for various reasons (regressive taxation, mobility issues, lack of diversity). It heavily depend on the place you live / buy your house, and it's also one of the reason inequalities are so high. When you have a good income / capital, you can buy a house in a good neighborhood and the value of the house will increase at a higher pace than if you're poor and buy a house in a shitty neighborhood (might even lose value in real terms). Also, the tax incentives you talk about are not the same for the first house and the second and third. Usually, there are a lot of incentive to invest in small house and rent them, because the market does not seem produce enough house in most countries - again a mecanism that benefit the rich, who can afford more than one house, and not the poor. Kwark's entire point just don't add up if you think at it from a macro perspective. i'm not talking about kwark's point, i'm talking only about my own and what I replied to; also, i'm talking about the tax incentives in America, since that's the thread for this. here the tax incentives (that I know of) are more for the first house rather than for rental houses.
Depend on the type of house.
https://en.wikipedia.org/wiki/Low-Income_Housing_Tax_Credit
And I was not saying you were wrong, just adding something.
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On August 11 2016 05:12 Gorsameth wrote:Show nested quote +On August 11 2016 05:05 IgnE wrote:On August 11 2016 04:49 KwarK wrote:On August 11 2016 04:39 IgnE wrote:On August 11 2016 04:35 Plansix wrote:On August 11 2016 04:33 Gorsameth wrote:On August 11 2016 04:24 Liquid`Drone wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Yeah, it's a simple point to make, but it fails to address the pressing situation of 'I absolutely need to fix this right now'. Like, if this was the 'take personal responsibility megathread', kwark's posts would be entirely on point. But 'take personal responsibility for yourself and your future' is not a viable policy suggestion because we have a whole lot of empirical evidence suggesting that people at large are either incapable of or unwilling to fully take personal responsibility for themselves - at least unless they have the necessary education/knowledge/mental aptitude/discipline. (Where I am personally of the opinion that people cannot be personally blamed for their lacking education/knowledge/mental aptitude or discipline). Large swaths of the population can't ask friends or family for 5-digit dollar numbers and don't have that type of money saved up as dispensable money. I mean, extending the argument that your ultimate goal should be to build as much capital for the future post-work society then why have any money not tied into long-term investments anyway? Is it okay to spend $30k on fixing your roof if you have $80k, but not if you have $40k? Basically to me this sounds like someone having a logically well founded philosophical theory on how people should best spend their money but that they lack the necessary insight in either people's financial situations and life situations and mental dispositions to relate to actual problems real people might encounter through their actual lifetimes. If you go deeper you just go into "why do you own a house without connection to the water mains if you cannot afford to fix a broken pump" or 'why are you not renting so its someone else's cost to pay". Unexpected expenses happen. Its what we have insurance for. Home owners insurance doesn’t cover well pump failure. I would love if they did. They really should, those things last 30 years. On August 11 2016 04:35 IgnE wrote:On August 11 2016 04:21 brian wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? wait so for this you are selling credit as something you're into, but for the $10k water pump you find it impossible to afford and also contribute to a 401k and want us to buy that too? apologies if I missed sarcasm somewhere. I'm having a hard time keeping up tbh. The practical question you might want to ask is whether it's better to borrow $10k to fix the pump or crush your 401k. Its better to borrow, but you need someone to lend you the money. And in the case that brought that up, it was 45K of surprise expense in the span of 2 months. You think a bank makes a loan to Joe Six Pack at a low interest rate to fix his water pump? Do you think 10k plus penalties in your 401k outpaces interest on a credit card? If you have a big ongoing risk then you self insure by depositing premiums into a liquid form of low yield investment. If the event happens then ideally you have the $ ready but if not then you at least have some $ ready and the premiums can become payments against the principal borrowed to get you the rest of the way. If you have a number of low likelihood high cost possibilities then you can actually group them together in a self insurance policy which is much more efficient because it evens out the variance. "the insurance company didn't offer that policy" isn't an excuse to believe that the event would never happen and not prepare. As for $10k + penalties, yes, for two reasons. Firstly if you cash it out you'll never pay it back in, there is always something, especially if you view it as extra spending money which you apparently do. People don't typically repay it. Secondly, yes, because even if you were to put it on a credit card credit card companies are very happy to loan considerable amounts of money for periods over a year completely interest free. You don't even need especially good credit. So you use whatever you saved so far to pay as much as you can and put the rest on the credit card and then use what you continue to save towards the event to pay off the credit card. The point that it ultimately comes down to is that the system tries very hard to get even poor working Americans a cut of the economic growth and there has been an awful, awful lot of economic growth under the Obama administration. This idea that the working poor have been kept from all the extra $ by the system is absurd, they're offered double and triple matches just to buy in. Poor financial literacy, incidentally something Igne is trying very hard to promote, is letting them commit cardinal sins but there is no institutional reason why someone making half median income cannot ride the same wave as the 1%ers and indeed they'd have to turn down free extra money if they wanted to refuse to. The consumption by the "poor" is what is ultimately driving the returns. All the poor start saving and you enter an unvirtuous downward spiral. These are the contradictions in the system. We want the poor to save but only so that we can say it's their fault that they don't. Shouldn't it be the middle class that primary drives consumption? since they should be able to afford to spend their money while holding back enough for a rainy day? As well as being numerous enough to have their consumption be a major impact. The poor should be a small enough group that them saving instead of spending should not have a significant detrimental effect on the economy.
Is this a normative ethical position or are you guessing about what the economy should look like in the real world given the current set of conditions?
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Yeah, there are some development credits too; but those of course come with considerable limits on rent. I may have underestimated how many of those there are, but none of that changes the core point of what I had said, it was more of a tangent anyways. (the core point being that encouraging the poor to buy homes isn't good social policy)
it'd be nice if they'd just let people build more affordable housing.
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Interest on mortgages for your primary residence is tax deductible. It is a huge tax incentive to buy a house.
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On August 11 2016 05:25 Plansix wrote:
Interest on mortgages for your primary residence is tax deductible. It is a huge tax incentive to buy a house.
aye, and very popular last I heard. So I'm not sure I'd vote against it if I were in congress.
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On August 11 2016 05:25 zlefin wrote:
Yeah, there are some development credits too; but those of course come with considerable limits on rent. I may have underestimated how many of those there are, but none of that changes the core point of what I had said, it was more of a tangent anyways. (the core point being that encouraging the poor to buy homes isn't good social policy)
it'd be nice if they'd just let people build more affordable housing.
i don't think that home ownership restricting mobility is necessarily a downside. rootedness is an important factor in quality of life, both for individuals and for communities. you seem to be assuming here that encouraging mobility, presumably in response to economic pressures, is a desirable national policy.
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On August 11 2016 05:28 zlefin wrote:Show nested quote +On August 11 2016 05:25 Plansix wrote:
Interest on mortgages for your primary residence is tax deductible. It is a huge tax incentive to buy a house. aye, and very popular last I heard. So I'm not sure I'd vote against it if I were in congress.
We are a very large, spread out country, so it does make sense for the US as a whole. Renting very challenging in some regions
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On August 11 2016 05:25 IgnE wrote:Show nested quote +On August 11 2016 05:12 Gorsameth wrote:On August 11 2016 05:05 IgnE wrote:On August 11 2016 04:49 KwarK wrote:On August 11 2016 04:39 IgnE wrote:On August 11 2016 04:35 Plansix wrote:On August 11 2016 04:33 Gorsameth wrote:On August 11 2016 04:24 Liquid`Drone wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Yeah, it's a simple point to make, but it fails to address the pressing situation of 'I absolutely need to fix this right now'. Like, if this was the 'take personal responsibility megathread', kwark's posts would be entirely on point. But 'take personal responsibility for yourself and your future' is not a viable policy suggestion because we have a whole lot of empirical evidence suggesting that people at large are either incapable of or unwilling to fully take personal responsibility for themselves - at least unless they have the necessary education/knowledge/mental aptitude/discipline. (Where I am personally of the opinion that people cannot be personally blamed for their lacking education/knowledge/mental aptitude or discipline). Large swaths of the population can't ask friends or family for 5-digit dollar numbers and don't have that type of money saved up as dispensable money. I mean, extending the argument that your ultimate goal should be to build as much capital for the future post-work society then why have any money not tied into long-term investments anyway? Is it okay to spend $30k on fixing your roof if you have $80k, but not if you have $40k? Basically to me this sounds like someone having a logically well founded philosophical theory on how people should best spend their money but that they lack the necessary insight in either people's financial situations and life situations and mental dispositions to relate to actual problems real people might encounter through their actual lifetimes. If you go deeper you just go into "why do you own a house without connection to the water mains if you cannot afford to fix a broken pump" or 'why are you not renting so its someone else's cost to pay". Unexpected expenses happen. Its what we have insurance for. Home owners insurance doesn’t cover well pump failure. I would love if they did. They really should, those things last 30 years. On August 11 2016 04:35 IgnE wrote:On August 11 2016 04:21 brian wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? wait so for this you are selling credit as something you're into, but for the $10k water pump you find it impossible to afford and also contribute to a 401k and want us to buy that too? apologies if I missed sarcasm somewhere. I'm having a hard time keeping up tbh. The practical question you might want to ask is whether it's better to borrow $10k to fix the pump or crush your 401k. Its better to borrow, but you need someone to lend you the money. And in the case that brought that up, it was 45K of surprise expense in the span of 2 months. You think a bank makes a loan to Joe Six Pack at a low interest rate to fix his water pump? Do you think 10k plus penalties in your 401k outpaces interest on a credit card? If you have a big ongoing risk then you self insure by depositing premiums into a liquid form of low yield investment. If the event happens then ideally you have the $ ready but if not then you at least have some $ ready and the premiums can become payments against the principal borrowed to get you the rest of the way. If you have a number of low likelihood high cost possibilities then you can actually group them together in a self insurance policy which is much more efficient because it evens out the variance. "the insurance company didn't offer that policy" isn't an excuse to believe that the event would never happen and not prepare. As for $10k + penalties, yes, for two reasons. Firstly if you cash it out you'll never pay it back in, there is always something, especially if you view it as extra spending money which you apparently do. People don't typically repay it. Secondly, yes, because even if you were to put it on a credit card credit card companies are very happy to loan considerable amounts of money for periods over a year completely interest free. You don't even need especially good credit. So you use whatever you saved so far to pay as much as you can and put the rest on the credit card and then use what you continue to save towards the event to pay off the credit card. The point that it ultimately comes down to is that the system tries very hard to get even poor working Americans a cut of the economic growth and there has been an awful, awful lot of economic growth under the Obama administration. This idea that the working poor have been kept from all the extra $ by the system is absurd, they're offered double and triple matches just to buy in. Poor financial literacy, incidentally something Igne is trying very hard to promote, is letting them commit cardinal sins but there is no institutional reason why someone making half median income cannot ride the same wave as the 1%ers and indeed they'd have to turn down free extra money if they wanted to refuse to. The consumption by the "poor" is what is ultimately driving the returns. All the poor start saving and you enter an unvirtuous downward spiral. These are the contradictions in the system. We want the poor to save but only so that we can say it's their fault that they don't. Shouldn't it be the middle class that primary drives consumption? since they should be able to afford to spend their money while holding back enough for a rainy day? As well as being numerous enough to have their consumption be a major impact. The poor should be a small enough group that them saving instead of spending should not have a significant detrimental effect on the economy. Is this a normative ethical position or are you guessing about what the economy should look like in the real world given the current set of conditions?
More a view of how a healthy economy should run then how things are currently, sorry should have made that more clear.
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United States43222 Posts
On August 11 2016 05:25 Plansix wrote:
Interest on mortgages for your primary residence is tax deductible. It is a huge tax incentive to buy a house.
Not really a huge incentive unless you were itemizing already. The first $12,600 of interest doesn't save you a dollar in tax. After that it saves you $0.25 on the dollar if you're in the 25% bracket etc. It's mostly a benefit to the rich who buy more expensive houses.
The median US house price is $189,000 so if we assume you still owe 100% of the home value and that you're paying 5% interest you still wouldn't get a cent in tax credits unless you were itemizing. And the poor don't itemize. It's a gift to the rich.
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On August 11 2016 05:29 IgnE wrote:Show nested quote +On August 11 2016 05:25 zlefin wrote:
Yeah, there are some development credits too; but those of course come with considerable limits on rent. I may have underestimated how many of those there are, but none of that changes the core point of what I had said, it was more of a tangent anyways. (the core point being that encouraging the poor to buy homes isn't good social policy)
it'd be nice if they'd just let people build more affordable housing. i don't think that home ownership restricting mobility is necessarily a downside. rootedness is an important factor in quality of life, both for individuals and for communities. you seem to be assuming here that encouraging mobility, presumably in response to economic pressures, is a desirable national policy.
it's not that rootedness is a downside, it's that it's not an upside worth using market distortions for.
the point is not to ACTIVELY encourage immobility.
re: plansix And the shortage of rental housing, i'm not sure about the sources by region, but I suspect tha tin most places, it's for the same reason for housing shortages in general: poor policy. the way to fix shortages of rental units is by adding more rental units, not subsidizing homeownership. I also don't see how the US being a large country affects anything on this topic.
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On August 11 2016 05:31 KwarK wrote:Show nested quote +On August 11 2016 05:25 Plansix wrote:
Interest on mortgages for your primary residence is tax deductible. It is a huge tax incentive to buy a house. Not really a huge incentive unless you were itemizing already. The first $12,600 of interest doesn't save you a dollar in tax. After that it saves you $0.25 on the dollar if you're in the 25% bracket etc. It's mostly a benefit to the rich who buy more expensive houses. The median US house price is $189,000 so if we assume you still owe 100% of the home value and that you're paying 5% interest you still wouldn't get a cent in tax credits unless you were itemizing. And the poor don't itemize. It's a gift to the rich.
You certainly don't need to be rich to itemize. It isn't that hard to get enough deductions to beat the alternative deduction.
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On August 11 2016 05:31 KwarK wrote:Show nested quote +On August 11 2016 05:25 Plansix wrote:
Interest on mortgages for your primary residence is tax deductible. It is a huge tax incentive to buy a house. Not really a huge incentive unless you were itemizing already. The first $12,600 of interest doesn't save you a dollar in tax. After that it saves you $0.25 on the dollar if you're in the 25% bracket etc. It's mostly a benefit to the rich who buy more expensive houses. The median US house price is $189,000 so if we assume you still owe 100% of the home value and that you're paying 5% interest you still wouldn't get a cent in tax credits unless you were itemizing. And the poor don't itemize. It's a gift to the rich.
It saves me about 2k a year, which is... something I suppose.
On August 11 2016 05:38 xDaunt wrote:Show nested quote +On August 11 2016 05:31 KwarK wrote:On August 11 2016 05:25 Plansix wrote:
Interest on mortgages for your primary residence is tax deductible. It is a huge tax incentive to buy a house. Not really a huge incentive unless you were itemizing already. The first $12,600 of interest doesn't save you a dollar in tax. After that it saves you $0.25 on the dollar if you're in the 25% bracket etc. It's mostly a benefit to the rich who buy more expensive houses. The median US house price is $189,000 so if we assume you still owe 100% of the home value and that you're paying 5% interest you still wouldn't get a cent in tax credits unless you were itemizing. And the poor don't itemize. It's a gift to the rich. You certainly don't need to be rich to itemize. It isn't that hard to get enough deductions to beat the alternative deduction.
It is fairly hard if you are single and not self employed though.
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I grew up in a very rural section of my state where they still don’t have high speed internet or cable TV. There is a large section of that area that a family could not rent in due to a lack of 3-4 bedroom apartments or houses for rent. You either buy or live someplace else. And there are not enough renters to support subsidizing rental development.
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rental developments don't/shouldn't need subsidizing, at least not in such a place. If there's not enough houses it's because there's not enough demand for it (in the place you're talking abohut plans; other places have other sources for such shortages).
and further, it's still not a reason to use the kind of homeownership subsidy, especially given all the serious problems it can cause.
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On August 11 2016 05:34 zlefin wrote:Show nested quote +On August 11 2016 05:29 IgnE wrote:On August 11 2016 05:25 zlefin wrote:
Yeah, there are some development credits too; but those of course come with considerable limits on rent. I may have underestimated how many of those there are, but none of that changes the core point of what I had said, it was more of a tangent anyways. (the core point being that encouraging the poor to buy homes isn't good social policy)
it'd be nice if they'd just let people build more affordable housing. i don't think that home ownership restricting mobility is necessarily a downside. rootedness is an important factor in quality of life, both for individuals and for communities. you seem to be assuming here that encouraging mobility, presumably in response to economic pressures, is a desirable national policy. it's not that rootedness is a downside, it's that it's not an upside worth using market distortions for. the point is not to ACTIVELY encourage immobility. re: plansix And the shortage of rental housing, i'm not sure about the sources by region, but I suspect tha tin most places, it's for the same reason for housing shortages in general: poor policy. the way to fix shortages of rental units is by adding more rental units, not subsidizing homeownership. I also don't see how the US being a large country affects anything on this topic.
seems like there are plenty of reasons not to introduce distortions into the mortgage market, but that promoting rootedness and community may be a small, maybe insignificant upside.
of course the real problem is that even if you "own" your house on credit vast swaths of the most desirable real estate in this country are owned by a few huge conglomerates like vornado
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United States43222 Posts
On August 11 2016 05:38 xDaunt wrote:Show nested quote +On August 11 2016 05:31 KwarK wrote:On August 11 2016 05:25 Plansix wrote:
Interest on mortgages for your primary residence is tax deductible. It is a huge tax incentive to buy a house. Not really a huge incentive unless you were itemizing already. The first $12,600 of interest doesn't save you a dollar in tax. After that it saves you $0.25 on the dollar if you're in the 25% bracket etc. It's mostly a benefit to the rich who buy more expensive houses. The median US house price is $189,000 so if we assume you still owe 100% of the home value and that you're paying 5% interest you still wouldn't get a cent in tax credits unless you were itemizing. And the poor don't itemize. It's a gift to the rich. You certainly don't need to be rich to itemize. It isn't that hard to get enough deductions to beat the alternative deduction.
$12,600 of deductions is a shit ton for an average family. The median household income in 2014 was $52,000. A family making $52,000 is extremely unlikely to have over $12,600 of deductible expenses in a single given year and even if they do have $13,000 of deductions the benefit of those $13,000 is only the tax exemption of the $400 difference.
The standard deductible is super high and that's absolutely great for the poor. It creates a 0% tax bracket of over $20,000 per family (if you include the exemptions). But the fact that you lose the standard deductible when you itemize means that itemization has very limited benefits to the poor because the difference between "literally every dollar you earned that could possibly be spent on something deductible" and the standard deductible just isn't very big.
The itemization benefit is only the the 12,601st dollar onwards which means that the more dollars you have the more dollars it's worth.
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EPT
