Comment by ozgrakkurt
6 days ago
Yeah, pretty sure a government won’t bail me out if I invested in a stock so much that it would crush me if the stock went down. If buying a house is an investment and not for living, then it should be treated like it is.
> pretty sure a government won’t bail me out if I invested in a stock
https://en.wikipedia.org/wiki/Greenspan_put
More pointedly, you're not in a position to block equity capital markets reforms in the way homeowners are in respect of housing reform.
Homeowners shouldn't be either. Locals should have less of a say in zoning decisions since they've demonstrated they won't act in their community's interest.
Also, making the public hold the bag in a bubble is perhaps the most sinister form of theft imaginable.
Yeah everyone involved in that should have been shot. That's part of what led to the situation we have today.
Short term thinking dominates economics these days. Managing the current downturn is most important, when people ask about longterm implications do a bunch of hand wavy stuff about it being temporary and then kick the can to the next guys who do the same thing.
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people call buying a house to live in an investment but that's because they don't know the technical term is a "hedge"
so you know: most localities do treat the house you live in very differently from a tax perspective than they do any additional properties you might have, because everyone is born short housing, until they own 1 place to live.
so yes, the proposed bailouts up thread would be for people who bought a house because they didn't want to be short housing; a hedge, not an investment.
also if the house has hedges then your hedges are a hedge. I'll see myself out
Buying a house is more than an "investment" though: It's achieving the American dream. And while this dream might have been a farce, it's like everything else in that you hear it enough combined with not understanding the economics and policies underlying home ownership and the lie is reality.
And let's not even get to your point about hedges. I don't know many people that can define it let alone consider housing as a hedge.
If the house price goes down you don't lose the house. You just end up paying more for it than you could have if the price was lower when you bought it. You are just keeping your promise to pay your mortgage. This whole "unrealized gains need to be compensated" thing is insane. Responsible policymakers would ignore such greedy, self-centered, anti-community sentiments.
Basically everyone considers housing as a hedge - homes are expected to grow steadily in value or at the very least not depreciate.
This is not a good policy goal, but the fact is that the wealth of the American middle class is mostly stored in property, and tanking property values would be a disaster for a broad swath of society which otherwise only has long-term retirement accounts to rely on.
They will vote to protect their interests, no matter how badly it screws their kids or contributes to homelessness.
Buying a house is investment. Living in a house you own is consumption.
These are two distinct things that are coupled through life choices. It's a real pity that tax regulations are different just because you make individual life choices.
Many people have places to live without owning a house. Me for example!
Ah a counter example to a probablistic argument. Whodathunkit
It isn't, though. Housing is a basic human need; investing in the stock market is not.