A great lesson of economics is that if you subsidize housing (cheap loans/mortgages), you actually make housing MORE EXPENSIVE. Unless you also increase supply you are punishing the people who don't get the subsidy. It's the wrong way to make housing "affordable." #econ101
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You can start here: https://russroberts.info/classroom_resources/supply-and-demand-introduction/ … There are more parts. The price is right...
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Russ, I would suggest that clear-eyed Econ 101 thinking would regard rent as the true measure of affordability, not price. And, that way of looking at it changes some of the analysis. Also, the scale of the subsidy created by federal lending programs is just not that high.
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I posted a series at Mercatus building on this framework. Here is a short piece I posted at Mercatus that discusses housing expenditures, and how they have been affected by changes in mortgage markets.https://www.mercatus.org/bridge/commentary/real-estate-investment-doesnt-increase-spending …
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Tweet je nedostupan.
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Existing homeowners are a far more impt part of the electorate (and the advocates of the policy) so a bias (even if it might not be conscientious) is built in...
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Well. Yes and no. A PROPER Econ101 seems near nonexistent in college. Besides some professors mumbling something about the supply and demand curve, follow by a nut shell version of the garbage Keynesian economics, there's nothing much else.
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The road to hell is paved with good intentions and unintended consequences
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"things are more expensive if you don't get the subsidy" is basically the whole point of means-testing, no? The argument is really about targeted benefits vs cash.
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Agree!
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Čini se da učitavanje traje već neko vrijeme.
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