patrick.net

Troy says

Anything less just pushes supply away from families and to the parasitical specuvestors that are already nearly monopolizing the market in many segments and areas.

We should probably agree to disagree at this point, but as I stated before, there are several categories for which landlords create a market. That's a good thing.

I'm not sure how true landlords, as opposed to specuvestors (which only really exist in a bubble scenario), are parasitic. They provide a necessary service in many cases. The rental market and the buying market are two sides of the same coin in many markets, although that may not be true in the Bay Area where the rent vs. buy calculation is out of whack.

What I find parasitic is realtors and mortgage brokers and other rent-seekers that accompany home buying process.

corntrollio says

What I find parasitic is realtors and mortgage brokers and other rent-seekers that accompany home buying process.

parasites everywhere, yes.

landlording start parasitic in the way renters pay the LL's mortgage, and this relationship becomes more parasitic as wages inflate rents past the fixed cost of ownership the LL enjoys, as historically has been the case.

If the LL only charged for the tenant's wear & tear and various capital costs on the property, there would be no parasitical relationship here.

Removing Prop 13 protections on rental property would go some way to fixing things, but the bottom line is that there's a lot of downside for the alleged sunny benefits that landlording brings to the housing market.

The LL's alleged "necessary service" is fulfilling a need largely of their own creation, the reduced supply of housing and the tightly-bound pricing relationship between area home prices and the capitalized value of area rents.

Without abnormal bubble inflation, the specuvestor nature of LLing takes longer to achieve, but historically rents & land values have doubled every 15 years so chances are new investors today will be enjoying wonderfully rapacious profit margins not too much farther down the road.

This is how the richer have gotten richer and the poorer have gotten nowhere. To try to blow sunshine about this very wealth transfer dynamic is disgusting.

But very much par for the course on online discussions about the economic imbalances we face today.

Troy says

PMI protects the lender should he find himself having to sell the property at a loss, so the lender does in fact get something back for the borrower having paid PMI.

If the risk is modelled correctly then the 1.15% pa PMI rate corresponds to the estimated risk of loss over the length of the loan (ignoring vested returns on unallocated premiums for the moment).

I have an even better idea. How about that borrower not go into default AT ALL? As in, their money goes into their principal balance BEFORE they start making payments, thus there will be no need for PMI, they won't lose their house, there won't be losses to mitigate, etc.

That's a lot better for everybody.

Troy says

Frankly, I don’t care about the ownership rate, I care about LLs profiting from their monopoly ownership in land.

Home ownership rate is somewhere around 66% in this country. That's not a monopoly, dumbass, and it's a much higher rate than other western countries which have less disparity between their rich and poor.

Troy says

If the LL only charged for the tenant’s wear & tear and various capital costs on the property, there would be no parasitical relationship here.

That's stupid. You're basically saying that the LL should take all the risk, eat all the losses, and never make up for them with profits. You don't understand how investment works. Somebody puts money and time into [something] expecting a return. And it's a long-term investment, not some scumbag hedge fund shorting type of operation.

Also, typical of your complete ignorance of economics, rents tied to the minimum ownership costs would create a price ceiling on rents. You know what happens when you artificially keep prices down? There demand outweighs the supply and there's a massive shortage. It's what happened when we tried capping gas prices, and it's 100% destructive.

klarek says

now you’re trying to convince us that higher DP requirements will drive prices up. This is truly comical.

The implication comes from the observation that the price is level is set by the how much lenders will lend to borrowers.

The math is simple on this, ever dollar of required downpayment increases the borrower's borrowing power by more than a dollar, thus the price level will not be lowered by high down payments, but driven higher.

I gave you the math above and you ignore it.

You assert that there will be permanent demand destruction that shifts the cost-curve over, and I assert that real estate economics doesn't work that way since supply is fixed, demand overwhelms what supply is on the market, and the transaction price is determined more by market sentiment and the second-highest bid more than anything, plus people over time will assemble whatever downpayment is required, and any demand destruction will be reduced over this process.

Instead of challenging the logical bases of this implication, you just call me names and go ad hom on my dislike for the top 10% of this country who massively profit from their collective ownership of 75% of the commercial land, turning a third of this country if not more into dispossessed rent slaves.

klarek says

Were it not for the ability to profit from being a landlord, there would be no way to prevent the market from overcorrecting on a massive scale. They’re filling a void, and taking on the risk.

Housing falling to what people can afford to pay is not "overcorrecting", LLs buying SFH are not filling a void they are inserting themselves into the system as parasites, and risk alone is what a casino is about, not capitalism.

Troy says

To assert that my economics comes from “ignorance”, I can only refute that by citing the very, very long list of highly esteemed economists and intellectuals who have found attraction in the LVT. Adam Smith. Thomas Paine. Thomas Jefferson. JS Mill and Leo Tolstoy. Sun Yat Sen. Admiral Spruance. William F Buckley. Milton Friedman. The signers of the letter to Gorbachev that included Franco Modigliani and a dozen other internationally-known academics.

You have no economic background. Listing the names of other economists does not substitute for knowledge and insight. You lack both, and I doubt you understand any theory from those philosophers and economists since you inherently reject the generally fundamental economic concepts and the required context from which they preached. You sound like a C-student poly sci major who has read a lot of books for the indulgence of your own ego, but learned nothing of substance beyond what others have to sum up and present to you.

Troy says

Investment in human chattel slavery was also a long-term investment. Just because somebody “puts money” into something doesn’t make all income from that investment morally right.

Stop it with the hyperbole. If that's how you really feel about landlords and investors, then tell it directly to other patrick.net posters. Tell Mr. Ribas that it's wrong for him to rent at a lower cost than it is costing him to own the property. See if you can make one sound argument against what he and others are doing.

Your diatribes about class warfare via rentership is annoying and insulting. Like I said above, my landlord assumes all risks in owning the property which I rent, and I don't pay very much at all. To accuse him being the moral equivalent of a bank robber or investing in human chattel slavery is such horseshit.

Troy says

This is entirely so obvious I really wonder why you are arguing it.

Because almost every point you attempt to make is based on a falsehood or an opinion. Your math is inconsistent (and barely present), you don't understand how PMI and amortizations work, you are completely ignorant of supply and demand (and price equilibrium), you don't know the fundamentals of investment or risk/reward, and you're so economically clueless that you think it would be in renters' best interests to cap what their landlords are able to take home. Gee, charge them the same rent, take it away from the person it's going towards... that makes for a really healthy lessee-lessor relationship. Then again you are wholly opposed to people renting at all, despite their inability to purchase a house, that it's no surprise you are operating in a completely batshit universe of your own.

it's worthwhile to point out that citing math as your proof is irrelevant when your math is improperly used (or just plain old sucks).

cearka says

it’s worthwhile to point out that citing math as your proof is irrelevant when your math is improperly used (or just plain old sucks).

He thinks that by putting the word "math" in his posts, it's a substitution for doing math. Much like listing the names of philosophers and economists without knowing what any of them were talking about. It's like that guy in Good Will Hunting that goes to the bar and sprouts off some random shit, assuming that the people around him are dumb enough to believe it or not challenge him.

klarek says

you don’t understand how PMI and amortizations work

utter lie. Good day sir.

It's called "Extend and Pretend"

klarek says

Because almost every point you attempt to make is based on a falsehood or an opinion. Your math is inconsistent (and barely present), you don’t understand how PMI and amortizations work, you are completely ignorant of supply and demand (and price equilibrium), you don’t know the fundamentals of investment or risk/reward, and you’re so economically clueless that you think it would be in renters’ best interests to cap what their landlords are able to take home. Gee, charge them the same rent, take it away from the person it’s going towards… that makes for a really healthy lessee-lessor relationship. Then again you are wholly opposed to people renting at all, despite their inability to purchase a house, that it’s no surprise you are operating in a completely batshit universe of your own.

Klarek--

No offense, but you really don't understand what Troy is saying at all. Calm down, take a step back, and read his posts again.

Personally, I'm not sure it would be so easy for buyers to save up 20%, but his math is right if you assume they can. And his logic on risk/reward is very interesting. I agree with him.

Wow, NAR wants to brew another bubble.

tatupu70 says

No offense, but you really don’t understand what Troy is saying at all.

Unfortunately, I do understand what Troy is saying, and his idea is basically if we throw massive amounts of central planning and massive government subsidies into housing, we could have a 100% homeownership rate where everyone puts 0% down. This might be some sort of weird utopia for Troy, but it makes no financial sense and it's not practical.

corntrollio says

tatupu70 says

No offense, but you really don’t understand what Troy is saying at all.

Unfortunately, I do understand what Troy is saying, and his idea is basically if we throw massive amounts of central planning and massive government subsidies into housing, we could have a 100% homeownership rate where everyone puts 0% down. This might be some sort of weird utopia for Troy, but it makes no financial sense and it’s not practical.

It may or may not be practical, but it does make financial sense...

tatupu70 says

It may or may not be practical, but it does make financial sense…

Only if you assume that spending that much taxpayer money to provide massive loan subsidies is cost-effective. So far, it doesn't seem to be benefiting our economy that much and doesn't seem to be cost-effective, and mostly seems to blow more bubbles, make banksters more rich, and encourage moral hazard...

corntrollio says

Only if you assume that spending that much taxpayer money to provide massive loan subsidies is cost-effective. So far, it doesn’t seem to be benefiting our economy that much and doesn’t seem to be cost-effective, and mostly seems to blow more bubbles, make banksters more rich, and encourage moral hazard…

So far? To what massive loan subsidies do you refer? Hopefully you aren't implying that the housing bubble was caused by government subsidies?

In any event, I was refering to your statement about government planning of housing.

tatupu70 says

Hopefully you aren’t implying that the housing bubble was caused by government subsidies?

The housing bubble itself was largely not created by government subsidies. This can be shown by statistics, even though ideologues want to blame the CRE or cite similar nonsense.

However, the way Fannie, Freddie, and FHA are being managed right now is basically Bubble Part 2. It's extend and pretend, with the hope that it can slow down the deleveraging that is necessary for things to get better. Subsidizing $729K loans in any city is stupid.

In order to achieve Troy's utopia, you'd have to spend quite a bit more in order to provide all the subsidies necessary.

FunTime says

Troy says
Nope. Non-recourse makes “skin in the game” a sunk cost.

Agreed, and I think it’s insane that non-recourse is still a provision of mortgages today.

I think I understand the two concepts separately...but I'm having a hard time understanding how non-recourse makes the "skin in the game" (I presume you are talking about down payment) a sunk cost. Do you mean only when the house value declines by more than the down payment? What am I missing?

corntrollio says

and his idea is basically if we throw massive amounts of central planning and massive government subsidies into housing, we could have a 100% homeownership rate where everyone puts 0% down. This might be some sort of weird utopia for Troy, but it makes no financial sense and it’s not practical.

My general point here is that housing values aren't supposed to go down enough to ruin people financially after they've bought.

http://research.stlouisfed.org/fred2/graph/?g=Cn

(this chart is annual change in real estate asset value / GDP)

This only happens in the downstroke of a speculative bubble, and these cyclical bubbles have been coming like clockwork since before the Louisiana Purchase.

The financier of the revolution himself -- Robert Morris -- once the richest man in the colonies, found himself in debtors prison after his NY land deal went bust in the aftermath of some Napoleonic war BS.

Every Panic of 18XX had a land speculation component:

"The American people with one consent gave themselves to an amazing extravagance of land speculation. "

http://en.wikipedia.org/wiki/Panic_of_1837

The Florida land boom of the 1920s precipitated the GD. The baby boom bubble of the late 1980s was also a land boom/bust cycle that led to the 1990s recession. And of course the last cycle, perhaps the mother of all bubbles.

http://research.stlouisfed.org/fred2/series/OEHRENWBSHNO

Land is a very sensitive component of our economy. Even though there is 8 acres of land per person here, the reality of modern life is that there's several orders of magnitude of suppressed land demand vs. the supply. We'd all like a half acre in the city, a house on 40 acres on the lake, etc etc.

Georgists say the best way to allocate land in the face of this supply crunch is let the rents flow by generally letting the highest bidder for land lease the land from the state.

The total land value of this nation is simply immense, and the rents the landowners are taking are also immense. And economically, these rents are also economic rents in the sense that land is not produced by its owner, it was a product of the Great Creator millions of years ago. Same thing with existing housing stock, the cost of production of housing stock is drastically lower than its market value, given the scarcity rents and the fact that housing is a very durable good.

There are a lot of serious economic problems this country faces, and the land economy is pretty high on the list.

I don't think subsidies are the answer, I think we need to purge the idea that land and housing in general is a profitable sector to invest from our economic structure, since, as Churchill said over 100 years ago, land is "a perpetual monopoly, and it is the mother of all other forms of monopoly", and the "unearned increment" that landlords collect from the working class is a very large reason why 30-40% of this society are fucked economically and find themselves on foodstamps or worse.

It's very annoying to see us at the national and state level bickering over 300 bps of income tax changes in the face of our $1.5T national deficit and similarly large long-run state deficit (here in Cali) when there's an immense and dare I say "constructive" source of revenue -- the LVT -- sitting only 10-20% tapped.

I don't know if my crazy idea to put the 400,000 unemployed residential construction workers to work building new MFH stock is a workable idea or bollocks. My intent with this wasn't to create a centrally planned economy, but actively intervene in the economy to dramatically increase the supply of quality MFH to drive the scarcity rents out of the sector so wage earners can devote more of their earning power towards other forms of spending other than adding more 0s to their LL's bank account.

Of course, this would be highly disruptive to existing REIC business plans.

I'd like to say tough shit -- they're highly disruptive to a free and just society, but that's impolitic.

As for low down buying, in the absence of a downcycle low down is perfectly safe.

Knowledge of how the economy actually works is not something I see many public intellectuals have the first understanding of.

Krugman, DeLong, Mankiw, the other various opinionators in the press, they're largely silent on the credit cycle and appear ideologically compelled to refuse to understand how the 2007-2008 shutting off of the $1T/yr of free cash that was flowing into the economy 2004-2007 via the housing bubble had any causative connection to the recession of 2007-now.

We're still looking at trillions of dollars of more lost equity coming our way if we can't figure out how to get U-6 back under 10%, or we find ourselves forced to raise taxes to pay for Medicare, Social Security, and/or the $1T/yr defense bill, or the world stops lending us our money back to us at current ZIRP rates, forcing us to raise rates across the board to attract it.

All the policy stuff I propose now is with an eye to preserving what market stability we have or, failing that, what we should do when everything turns into that smoking crater.

I fully admit this is all wankery. I'm just sharing my viewpoints for the helluva it.

corntrollio says

You’re not taking an overall view of risk.

He is only looking at it from a lender's perspective. He has no problem with buyers getting assraped with insurance fees or defaulting, so long as the market is flooded by every living being that can get a loan. Read his posts, that is his bottom line.

klarek says

corntrollio says

You’re not taking an overall view of risk.

He is only looking at it from a lender’s perspective. He has no problem with buyers getting assraped with insurance fees or defaulting, so long as the market is flooded by every living being that can get a loan. Read his posts, that is his bottom line.

Jesus--you really don't get it. The chip on your shoulder is so large that you can't read any post objectively.

tatupu70 says

Jesus–you really don’t get it.

Tell me, what don't I get? It's not in any owner's best interest to be pumping their cashflow into interest and insurance just for the sake of being an "owner". This is the same sort of high-risk, screw-the-customer b.s. that the bubble should have taught us to avoid. Higher DPs = lower chance of default. By offsetting the costs of default with insurance paid by the buyer, it does nothing to economically improve their wealth preservation.

Maybe you don't get it?

Nope--I get it. There are two reasons why homeowners default:
1. They can't make the monthly payments. This was common recently due to the crazy loans given out recently with neg. amort, liar loans, and teaser rates.
2. They decide they don't want to make the payments. Usually, the home value has declined so much that the owners make a financial decision to take the credit hit and move on.

High down payments do nothing in case 1. If you can't make the monthly payments, it doesn't matter how much skin you have in the game, you will lose the house eventually. In case 2, high down payments may prevent strategic foreclosures, this is true. That is why banks used to require 20%. They figure that even if some defaults, the 20% should cover any lost home value plus foreclosure costs.

What the PMI does is take the place of the down payment for the bank by covering any losses due foreclosure. I think you get this, so I'm not sure why you are still arguing.

The buyer has a choice of paying insurance or saving 20% for a downpayment. How is giving someone a choice "assraping" them as you so eloquently put it?

tatupu70 says

High down payments do nothing in case 1. If you can’t make the monthly payments, it doesn’t matter how much skin you have in the game, you will lose the house eventually. In case 2, high down payments may prevent strategic foreclosures, this is true. That is why banks used to require 20%. They figure that even if some defaults, the 20% should cover any lost home value plus foreclosure costs.

You're missing the obvious caveat to defaulting and foreclosure which is that if you are above water, you can sell the house and the whole problem is averted. DP can resolve this issue no matter what the problem is (resetting ARM, loss of job, etc).

tatupu70 says

What the PMI does is take the place of the down payment for the bank by covering any losses due foreclosure. I think you get this, so I’m not sure why you are still arguing.

Yes I know this, but why can't you see how this works against the borrowers' interests and doesn't mitigate the possibility of default? It mitigates the problem of systemic risk from the investor's position, but at the expense of the borrower. Why would anybody prefer a system which keeps the lending risk neutralized, decreases the capital investment from the borrower, and drastically increases the probability of default? How is that preferrable to making the buyer wait until he or she has a good down payment, if in the end the down payment actually goes into their purchase rather than someone else's insurance pool?

tatupu70 says

The buyer has a choice of paying insurance or saving 20% for a downpayment. How is giving someone a choice “assraping” them as you so eloquently put it?

Trace back up the conversation. Troy is saying that a low DP is no problem. I've argued that it adds risk, and it's better that people have at least something put down on the principal both for their own sake as well as the lender's. His position is that as many buyers should get into the game as possible because landlords ought to be driven off the face of the Earth. This can be done by eliminating the barrier to entry (down payment) as much as possible, then covering the risk on the lending side by making the borrowers pay a lot of insurance which doesn't go into the principal.

This isn't an argument about what's wrong with giving them a choice, this is about whether this is a good idea at all. People are often stupid, so choice is not even an issue to be debated here. It's about the merit of the idea. I say that it's dumb to use people as pawns like this, just like it was dumb during the bubble. By lowering the barrier to entry and having them with less skin in the game, it's not exactly fair to the borrower to then be paying an equivalent amount to make up for the missing principal in paying for expensive insurance.

It's a shell game and it's dumb. Higher down payments negate the need for any of this crap.

klarek says

This isn’t an argument about what’s wrong with giving them a choice, this is about whether this is a good idea at all. People are often stupid, so choice is not even an issue to be debated here. It’s about the merit of the idea. I say that it’s dumb to use people as pawns like this, just like it was dumb during the bubble. By lowering the barrier to entry and having them with less skin in the game, it’s not exactly fair to the borrower to then be paying an equivalent amount to make up for the missing principal in paying for expensive insurance.

I guess I just don't get how it's not fair to the borrower. There's more risk for the lender, so it's compensated by higher fees. There's nothing predatory about it--the fee isn't outrageous IMO.

klarek says

Why would anybody prefer a system which keeps the lending risk neutralized, decreases the capital investment from the borrower, and drastically increases the probability of default?

I would argue that it doesn't drastically increase the probability of default. The last 10 years are a huge anomaly.

Whatever eventually works, hopefully irresponsibilty is not being encouraged. I do like the LVT as far as I understand it.

Whatever eventually works, hopefully financial irresponsibilty would not be encouraged. I do like the LVT as far as I understand it.

tatupu70 says

I guess I just don’t get how it’s not fair to the borrower. There’s more risk for the lender, so it’s compensated by higher fees. There’s nothing predatory about it–the fee isn’t outrageous IMO.

It's not "fair" because the borrower is plowing their money into something other than their investment. It's the same concept as getting an absurdly-high interest credit card to make a series of purchases. People spend months or years trying to chase down their principal, but because they're stifled with interest, they're stuck in a debt trap. "But it's their option" is true, but financially it's really hurting them a lot.

So back to the home buyer, whose money which would have gone into the principal or DP later on, they're now paying hundreds per month in insurance while never really tackling their principal. Systemically, the risk is covered (assuming this is all a wash from the lender's perspective), but the buyer has a greater risk of default since their revolving cashflow is limited and they're more likely to be underwater without options.

So my contention with Troy above is "what's the point in doing all of this?" He believes that the ends (flooding the market with premature buyers) are worth the means (in this case, making those borrowers pawns, conduits for money in an insurance game). In the end though it doesn't benefit them at all. Sure, the lenders are covered, but do we want the system to be engineered for large defaults (which, again, are covered from the lender's position) at the expense of these buyers' financial viability? Is sacking "poor" people with mountains of debt really going to "stick it to the man", in this case, the landlord? Is it worth it?

tatupu70 says

I would argue that it doesn’t drastically increase the probability of default. The last 10 years are a huge anomaly.

Fair enough. But in the case where default occurs, it does drastically increase the chance that it will end in foreclosure. Above-water borrowers who default have options. Those who are on the edge or underwater do not.

Troy says

I fully admit this is all wankery. I’m just sharing my viewpoints for the helluva it.

Hence why I'm not really taking it seriously any more. Basically, you're trying to solve a few simple things by making massive and sweeping changes that will cost a lot and probably won't achieve the end goals.

corntrollio says

you’re trying to solve a few simple things

Housing being a $10T rathole

http://research.stlouisfed.org/fred2/series/HHMSDODNS

is pretty far from an inconsequential thing.

and sweeping changes that will cost a lot and probably won’t achieve the end goals.

These sweeping changes don't cost anything. The private capture of ground rent is an immense, systemic flaw in the system and is what is costing the actual productive element of this economy a trillion or more in losses to successful rent-seekers.

The sweeping changes essentially eliminate the foundational corruption of our current economy -- a very sizable number of people pocketing a significant chunk of the nation's GDP in return for providing nothing that did not already exist without their intermediary presence.

Eliminating this long-standing and continuously ongoing and even increasing theft of the commons could arguably solve "everything", and I have some very powerful minds in agreement with this, ranging from Adam Smith himself through Jefferson, Paine, JS Mill, Samuel Clemens and to the modern day:

"Social collection of the rent of land and natural resources serves three purposes. First, it guarantees that no one dispossesses fellow citizens by obtaining a disproportionate share of what nature provides for humanity. Second, it provides revenue with which governments can pay for socially valuable activities without discouraging capital formation or work effort, or interfering in other ways with the efficient allocation of resources. Third, the resulting revenue permits utility and other services that have marked economies of scale or density to be priced at levels conducive to their efficient use."

http://en.wikisource.org/wiki/Open_letter_to_Mikhail_Gorbachev

The critics are generally full of shit in their complaints:

http://www.cooperativeindividualism.org/pollard_response_to_rothbard.html

I don't argue that the LVT is flawless, but it has historically worked well where it has been tried. And I do like encouraging people to think about how the present world is arranged and how much these old 19th century ideas still make sense.

Discovering Georgism back in 2002 was simply the most mind-altering thing I'd been exposed to up to then.

Before then, I did not understand what capital, wealth, money, etc really was. With the classical division of the neo-classical concept of capital into natural capital (land) and physical capital (manufactured goods), how the world works became a whole lot clearer.

It's almost as if the neo-classical school was intentionaly muddying the picture.

http://homepage.ntlworld.com/janusg/coe/cofe00.htm

Troy says

These sweeping changes don’t cost anything.

Riiiiight.

Troy says

Housing being a $10T rathole

http://research.stlouisfed.org/fred2/series/HHMSDODNS

is pretty far from an inconsequential thing.

Don't change my words. I said simple things about housing finance or policy could be changed quite easily, and you are now saying housing is not inconsequential.

corntrollio says

I said simple things about housing finance or policy could be changed quite easily

Just bandaids on a broken system. We're spending $30B in section 8, $80B on food stamps, $120B per year on the MID (which reminds me, we should really kill that for non owner-occupied) etc etc.

Without purging the rent-seeking, all attempts at helping people end up in the LL's pocket at the end of month.

Even the minimum wage.

So there is no simple fix to all this. The system is corrupted to the core, because the land economy is the base of all human activity.

That's why Churchill called it the mother of all monopolies. Trying existing without land. Even on a boat it's difficult. If you try to live like a native American you will be arrested eventually. The only solution that would work would be investing in some sort of zeppelin or something, and living and working up in the sky.

Troy says

Just bandaids on a broken system. We’re spending $30B in section 8, $80B on food stamps, $120B per year on the MID (which reminds me, we should really kill that for non owner-occupied) etc etc.

Why not kill the MID period?

klarek says

Why not kill the MID period?

It should be phased out over 10 years, yes.

It was when housing boosters objected that this would give an asymmetric/unfair advantage to investors that it occurred to that we should just kill it for non-owner occupied SFH/condo too.

problem solved, as it were.

"Why not kill the MID period?"

Why should we get rid of it when corporations are getting massive subsidies? Does that sound fair?

HousingWatcher says

“Why not kill the MID period?”
Why should we get rid of it when corporations are getting massive subsidies? Does that sound fair?

Only if you believe one evil justifies another. Maybe you should look into where the hundreds of billions in MID are going. It's disproportionally helping the wealthy people which statists like you want to draw-and-quarter.

klarek says

It’s disproportionally helping the wealthy people

actually, it's not even doing that. Giving a subsidy to absolutely everyone for a good with inelastic supply just shifts the cost of that good over by the subsidy.

Government could offer everyone $1/gallon vouchers, and we'd soon seen $5 gas here.

which statists like you want to draw-and-quarter.

Actually, it was Georgism that made me understand the difference between the good wealthy people and the wealthy people that are ungood.

It all comes down to what wealth *creation* they themselves contribute to society -- "wealth creation" here being the provision of new goods and services into the economy.

The Nordic countries, and mixed economies in general, do not punish entrepreneurial effort, though if they listened to me they'd tax wage income less and actual rentier income more.

Troy says

actually, it’s not even doing that. Giving a subsidy to absolutely everyone for a good with inelastic supply just shifts the cost of that good over by the subsidy.

Agreed, they're largely paying for it in the bloated price they're bidding up on their purchase. But the MID is giving more breaks to the wealthy, dollar-wise.

Troy says

The system is corrupted to the core, because the land economy is the base of all human activity.

I agree. The system is designed to use the government to redistribute wealth -- UPWARD. Wealth gets redistributed from the middle class and the poor to the rich by force of law. It's socialism, but because it's socialism for the rich, it is somehow "good", so there are no complaints from the Fox News crowd.

Question: What's the difference between the people who do no useful work but get welfare checks and the people who do no useful work but get to use the police to collect rents and interest?

Answer: A few trillion dollars.