IPFS News Link • Housing
Housing's and Social Security's Necessary Solution: Slash Unjust Government
• https://www.lewrockwell.com, By James AnthonyProgressives are good at creating unworkable schemes, and they're good at messaging to help hold these schemes in place.
Conservatives are bad at repealing Progressives' schemes, and they're bad at explaining the benefits of freedom. These weaknesses of conservatives make complex schemes much harder to unravel than they otherwise would be.
Two examples of such problems are under increasing scrutiny lately: housing and Social Security.
The problems: price inflation, lowered purchasing power, economywide waste
Housing would return to 2019 affordability if mortgage interest rates would be driven down to 2.35%, prices would fall 38%, or incomes would rise 60%.
Housing affordability is an overall impact. Housing is built up from a number of component parts, and is most people's biggest purchase. Housing affordability is the net result from housing being produced using a number of inputs of materials and labor, and from housing being bought using incomes from a number of kinds of work.
Congressmen and presidents might, through their Fed people, drive interest rates lower. To do this, the Fed people would incentivize bankers to create more government money (which Progressive government people wrongly claim that they can constitutionally give bankers the privilege to do) and loan out the new money.
The new inflated money would start inflating asset prices, then producer-product prices, then consumer-product prices, and finally labor prices: wages and other compensation like the earnings that are paid into Social Security.
But these changes produced downstream by the inflated money would take away any affordability benefits. The asset-price inflation, producer-product price inflation, and labor-price inflation would further increase housing prices.
Relief through rising wages would be particularly long-delayed in first starting, and after that would not build up substantially for a long time. First, government spending, regulation, and tariffs—in all, regime uncertainty—would need to get limited adequately. It would only be when regime uncertainty finally was limited that investors and producers would first resume substantial investment to satisfy customers. Productivity would then finally start getting increased further. Wages would in general only then finally start to get increased faster than other prices.


