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Forum Post: Interest v Taxes

Posted 3 years ago on May 16, 2020, 10:15 a.m. EST by agkaiser (2516) from Fredericksburg, TX
This content is user submitted and not an official statement

About every dozen years or so most people get a new house. We pay a lot of interest to the bank in the first years of a mortgage. But the loan is paid off from the sale. We put the equity down on the new, usually larger mortgage. The interest and principal from the previous loan are re-loaned to someone and so the interest is compounded. The price of real estate appreciates at the rate the banks allow by the loans they are willing to make.

Eventually the prices of real estate will rise so high that only banks or corporations like Blackstone will be able to afford them by the profits from rents or usuries on debt their activities have caused to inflate.

We will become a world of banker, landlord and productive capacity owners versus employee/debtor/tenants.

That looks a lot like feudalism. I think others have called it neo-feudalism.

So there we are and that's what we have to look forward to.

How is this playing out?

Housing prices reflect the exponential expansion of mortgage debt that grows at the rate of compound interest. That's true for the all the growth of the imaginary wealth of the FIRE sector that sucks the life out of the real economy of production and consumption of real goods.

Fools blame all the economic hardships on government and taxes. They do so in spite of the fact that they've undoubtedly spent orders of magnitude more of their earnings on interest and even real estate commissions than they have on real estate taxes. But the morons will sell their land and homes and pay a larger commission to the agent than all the taxes on the property for all the years they've lived there. [As of 2018, the median duration of homeownership in the U.S. is 13.3 years. However, homeowners in some cities have moved more recently—or more frequently—than groups in the rest of the country. - valuepenguin.com] The profit they make will barely, if at all, cover the mortgage interest paid. The more we "upgrade," the more interest we pay. Remember, the interest to principal ratio of each amortized payment is greater in the first years of a mortgage. Thus the buyer will pay even more interest and the banks and landlords (whose tenants pay the interest and taxes) not the government, will be the only real winners.

video link: https://youtu.be/PFbKQMegPqc

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[-] 1 points by ImNotMe (1488) 1 year ago

Note: "Evictions Are Climbing to Pre-Pandemic Levels in Cities Across the US"! - by Mike Ludwig:

Which starts with: "Despite billions of dollars in federal rental assistance flowing to cities and states,the number of evictions sought by landlords is climbing back to pre-pandemic levels, in all cities across the country, as wage growth continues to lag behind inflation and millions of people struggle with the rising cost of basic necessities."

omnia causa fiunt!

[-] 0 points by grapes (5232) 1 year ago

Rental assistance was never meant to solve the affordable-housing problem. Evictions reverting to pre-pandemic levels means that things are indeed returning to normal in the U.S. as Dr. Anthony Fauci had said that the U.S. had exited the CoViD-19 pandemic phase. I'm therefore not particularly disturbed by evictions' returning to normal.

Evictions are due to people not being conservative enough about what they can afford. Wants can nearly be infinite but means to satisfy those wants are always finite.

I do find fault with the countries and banks which had loaned people so much created-out-of-thin-air credit and got them into eviction troubles. Easy money leads to easy disasters. Tight money leads to some missed opportunities but that hasn't happened in the U.S. for many decades. Easy money widens the wealth gap and income inequality due to persistent inflation, which is the standard policy of the U.S. for ages. I can only recall once in my adult lifetime that the U.S. was committed to tight money (and that was when Paul Volcker was U.S. Federal Reserve chairman about forty years ago.) U.S. has been the greatest debtor in the world so high inflation is great. Red China also went for the debt binge so it certainly concurs that high inflation is great but Red China's economy is probably more vulnerable than that of the U.S.

How dangerous credit is depends upon credibility (U.S. productive capacity is still a few times greater and far more energy-efficient, especially per-unit-GDP, than Red China's { the disparity with Russia's is even greater, perhaps to an order of magnitude or more; I was foretold of this by a Red Chinese national doing business near the border with Russia who had disparaged Russia's economy "next-door" so I'm not surprised by this persistent fact even years later as Red China wasn't doing "that great" economically at that time, either, but certainly doing better due to its headstart; Red China had dumped "Socialism" in favor of "with Chinese { practiced for millennia anaerobic-primeval-remnant-nitrogen-fixing-microbe flooded-paddy-plowed-under-before-flowering-bean-pea-fodder-waterbuffalo-dung-solar-energy-driven rice farming } characteristics" years earlier than the U.S.S.R. did; Red China is eating its own vomit thrown earlier into the dustbin of history so it's getting sicker and sicker, of course; while my Mom and Dad had practiced parental Socialism, my last-child Enchanted/Magic-Beanism gets its reigning days, too } and U.S. contracted its debt in U.S. dollars so there's only an extremely low chance that the U.S. couldn't print enough U.S. dollars to pay back, unless we actually run out of the genuine horse hair { I can shed off "horse-shit" to support should that improbable situation ever come up } to put into those crispy new greenbacks.) Red China lacks that basis of support.

Only one [unnamable] Russian soldier has died in Russia's "special military operation" in Ukraine as the Tomb of the Unnamable Stool-in Poo-tin resource attests. Polish "joke" about Socialism rooted in D.P.R. Rustia, D.P.R. X, P.R.X. etc. said: "They pretend to pay; we pretend to work." Cat has died. 有生必死。

Taiwan had used bio-gas in rural areas in mid-20th century so it's pretty low-tech (essentially a concrete container with a bottom door to add a bio-feed of organic debris plus water, and tubing to draw the bio-gas from the top of the container; keeping the wet mixture warm { which close-to-Equator Taiwan was, so pig-shit yielded local power for cooking } speeds up the anaerobic composting process so excellent insulation is highly desirable in a colder climate; the wet end product of the process was often used as fertilizer for growing crops and creating more organic debris.)

Future populations on Earth will have even more Muslims (with anger-management issues) than Christians (more satiated by sex and food), not only because of converts like Cat Stevens. Microplastics might be obstructing seminiferous tubules in men's testicles causing precipitous decline in sperm count and thus collapsing fertility in the developed world. This hypothesis coupled with the fact that many artificial organic chemicals are more similar to estrogen in their structures and reactions than testosterone means that men in the developed world are being neutered and incapable of fertilizing their women. The Muslim world has less of this problem. Muslims' practice of allowing up to four wives for Islam's men is akin to that used by animal-husbandry farmers for raising domesticated animals such as chickens, cows, pigs, goats, sheep, etc. for exploitation. Having more egg producers and baby makers is better for exploitation by dominant males. Harems aren't uniquely Islamic. It all comes from the energy differences between mass puny sperm and less numerous but substantive eggs. If predation is rampant, having males guard the youngs confers a survival advantage. Males are more bred than females for wars, which deep-down are all about energy reapportionments. Russia knows best how to deal with its non-harem non-St.-Petersburg non-Moscow non-university-qualifying conscript or go-nuts males: get them onto the conveyor belt to meet maceration's glory of Red mush in Ukraine. Domestic confinement in carbon-dioxide-infused me-Thane chamber for suffocating free speech also works to "calm down the populace for good" but it's not operationally as efficient as maceration. Red China uses this trick on its excess [cannon-fodder no-female-available-due-to-not-owning-ghost-city-apartment { patriachic tradition favoring males combined with one-child policy aborted many female fetuses so females' bridal prices skyrocketed } ] males by imprisoning them in barracks.

Russia's "special military operation" in Ukraine may have come from its attempt to gain control of even more fossil fuels in the Black Sea. Red China's lies and militarization in the South China Sea may have come from the same desire to gain undersea oil and gas. Many "pie-in-the-sky" Leftists couldn't grasp the role of energy underlying most conflicts on Earth because they don't know or understand Science-Technology-Engineering-Mathematics (S.T.E.M.) subjects well. They can get somewhere else better if they know why things are the way they are. Oil when it's oxidized releases the most energy among conventional chemical fuels so mobile platforms such as cars and airplanes almost all use oil-based products exclusively. Energy density advantage of oil won't change.

Hydrogen has even higher energy-per-unit-mass than oil but its energy-per-unit-volume is much poorer. Hydrogen, methane, or ethane blimps with low-mass payloads can stay up in the sky and work for longer durations than airplanes since these gases are lighter or nearly the same in molecular mass (ethane with nearly the same density as air thus demands less of ballast management) as air, less burning of the gas is needed to provide lift to a blimp. With the breakthroughs in weight and strength of materials, hydrogen fuel-cell cars can become feasible if hydrogen can be made less leaky. Arnold Schwarzenegger wasn't wrong about hydrogen cars but he was ahead of the material breakthroughs and hydrogen infrastructure build-ups. Refueling with hydrogen can be done much quicker than charging an electric car. Efficiency of hydrogen-to-electricity fuel cells can be very high. By complementing them with supercapacitors or magnetic field pulsed-energy storage may alleviate impulse power demand. Using hydrogen in vehicles is actually older than using battery electricity, gas, or oil-based fuels.

[-] 1 points by ImNotMe (1488) 1 year ago

Note "Housing as a Human Right"?! And then fyi - please try to carefully consider the following links:

No idea wTf U've written up^there - as I've every reason to NOT spend any time reading your crap tbh!

ad iudicium?!