Smallest home in Los Angeles:Â 264 square foot studio selling for $550,000 highlights collective insanity.
People have once again lost their collective marbles when it comes to real estate. There is now a massive trend with momentum for non-stop housing appreciation. In other words, our housing bubble sins are now fully washed away making way for more aggressive risk taking. I’ve been traveling and seeing real estate from many different locations and thanks to ubiquitous sites like Zillow, virtually every large metro area is seeing massive housing appreciation detached from income growth and people are tracking real estate down like starving hyenas after an injured wildebeest. We are now in a market where potential buyers are in a panic to buy for no other reason beyond they feel they will miss the boat yet again. Today we highlight what is probably the smallest home we have ever featured on the site.
Smallest of the small
Los Angeles is in a big housing frenzy. Every area including those with high crime rates are seeing solid price gains. Who cares about crime when you can get a sweet taste of that housing equity nectar! Today we look at this 264 square foot gem:
10449 Scenario Ln, Los Angeles, CA 90077
Studio 1 bath 264 sqft
I love how they also use a nice perspective on these photos to give it bigger depth:
The ad is wonderfully worded:
“Zen-like retreat, perfect for a UCLA student or young professional. Secluded and private hideaway in nature. It is a 264 square foot studio with skylights and sliders leading out to the deck and backyard. Carport has storage cabinets and a washer and dryer. It is located near UCLA and Beverly Hills, it is the least expensive property in the highly desirable Beverly Canyon area.â€
In a case like this, why not buy a larger RV and park it in a mobile lot? I mean seriously, this place is 264 square feet! And the asking price is $550,000. But you can see some wild pricing here:
This is where you realize something is off in the market. So in June 2016 the place was listed for $499,000. A big stretch. Little by little they dropped the price to $299,000. That got someone’s attention and it sold for $335,000. Now, one year after that sale date someone is asking for $550,000. What caused this place to be “worth†$215,000 (64% increase) in this short period? I mean why would you work when you can buy a 264 square foot property and profit $215,000 in one year?
Let us say a lot of work was done on this place. How much work can you do on a 264 square foot home?
The market is manic. People are in a deep state of delusion. Welcome to California housing my friends!
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325 Responses to “Smallest home in Los Angeles:Â 264 square foot studio selling for $550,000 highlights collective insanity.”
Hello Doc
That is a REAL HOMES OF GENIUS. Here are some more.
Sold for $820K, prior sale was $470K 4 yrs ago
https://www.trulia.com/homes/California/Los_Angeles/sold/22108865-2109-S-Redondo-Blvd-Los-Angeles-CA-90016
Sold for $950K, prior sale was $360K in 2013 then $820K in 2015
https://www.trulia.com/homes/California/Los_Angeles/sold/3899472-5025-W-21st-St-Los-Angeles-CA-90016
Sold for $850K prior sale was $450K in 2016
https://www.trulia.com/homes/California/Los_Angeles/sold/3894412-3038-Buckingham-Rd-Los-Angeles-CA-90016
As I have posted years ago, mid cities area was booming due to low prices (under $500K for a reasonably sized home) and proximity to the Westside. Mid ciities is also gentrifying bigly.
NO TANK IN SIGHT
But as Jim Taylor has been saying for 5 years ‘housing to tank hard soon’. But when it does tank, prices will still be higher than in 2012-2013 in the meantime, you have burned through 5 years of rent.
02/06/2013
$351,821 Sold
04/18/2006
$585,000 Sold
05/23/2003
$287,500 Sold
And not only that, while stocks have gone up 300% since the crash, they’ve all been earning 0.001% interest in their money market account. Cuz you know, Dow 1K was just around the corner. Some guy on some blog said so, therefore it had to be true!!
Greetings All. One thing we should keep in mind, if we’re being honest, is time-period bias (i.e., the idea that numbers can be manipulated to fit an argument based on the specific beginning and end points put into use). So of course Mr. Landlord points us to the (February) 2012 – (August) 2017 timeframe, when the Los Angeles S&P/Case-Shiller index increased from 159.53 to 267.19. That is a smoking ~5-year price appreciation. The picture is decidedly less attractive if you stretch the graph back to July 2006, when the index peaked at 273.85; so in a ~11-year timeframe, Mr. Landlord’s asset has still not reverted to its original value (although Mr. Landlord presumably generated rental dividends and benefitted from tax shields). But maybe Mr. Landlord has owned his properties since March 1996, when the index was at 73.07. I doubt we are all going to agree on what constitutes the “proper” timeframe (and in fairness that depends on one’s individual preferences and circumstances).
One thing I will say is that, in my humble opinion, housing prices in California reached a permanently new high base in the 1996-1998 period; much like oil will never trade at $15/barrel again, no one should hold their breath for a $200,000 house anywhere on the coast again. Isn’t it curious that this new base coincides with the Greenspan put? (I’ll always return to my basic argument that assets have been abnormally inflated by the Fed’s policies of monetary socialism of the last 20 years.)
I would also, respectfully, add some nuance to Mr. Landlord’s argument that so many folks have apparently foregone 300% returns in the equity markets. For starters, time-period bias is again important. If you owned the S&P 500 at its closing record peak in October 2007 at 1565, and for whatever reason did not sell through the record closing bottom of 676 in March 2009, your portfolio would have declined by 57% (all percentage numbers ex dividends). Now, enter the pain of negative convexity (in a nutshell, the downside is worse than the upside). Do you know how much the S&P had to increase to get your portfolio back to break even? 131 percent! Furthermore, the S&P closed today at 2591, which is a mere 65% higher than the October 2007 level. So, to simply say the perm-bears missed the 300% rally is somewhere between disingenuous and not fully appreciative of the math.
The last point I will make is that it is really hard (for me anyway) to think about real estate as a great investment vehicle versus equities or even fixed income (credit and MBS mainly). As I like to say, the best time to buy a place is when you need a place to live, and the best time to sell a place is when you need to move. Otherwise real estate investment characteristics — mediocre long-term returns, illiquidity, maintenance costs, management hassles, etc. — are just not attractive to me. But kudos to those who can make a good living at it.
Cheers
Hi, QE.
The houses you listed here are really not apt comparisons with the “Tiny House” dog that featured in the good Doctor’s post. The only real dog among the three is the last, the place on Buckingham Road.
The place at 2109 S. Redondo is a BEAUTIFUL moderate sized home that I’d be happy to have for, oh, $550K, if I lived in Los Angeles. It would be more like $375K to $450K in my north side Chicago neighborhood, which has a lot of comparable houses- really cute older “storybook” cottages with a lot of charm and cute architecture.
The house the Doc featured is a runty little dog with fleas. It’s definitely a Tiny House.
Agreed – put that house in La Jolla or Del Mar and I’ll take it.
The street view of the house located at 2109 S. Redondo has a high wall around it probably for a reason. The apartment building across the street has bars on the windows and most of the other houses on the street have chain link or iron fences around them like you see in Mexican barrios. The crime map shows areas of high crime not too far away.
I forgot to ask…. how is the neighborhood around the Redondo house?
Not a great neighborhood! Dirty streets, cars parked in the front yards. There are some nice fixed up houses but they are few and far between at this point. Also all those streets dead end into a street that runs along side the 10 freeway that is a normal parking lot for Angelenos who live in their RVs and vans. Also, terrible schools.
Redondo schools are not terrible at all they are actually pretty good. At least 8 or above on greatschools. Not sure where you got that info.
The house is not in Redondo Beach, where yes, the schools are among the best in the state. It is on Redondo Blvd in mid-city, where the schools are quite bad.
The schools in the immediate area of the house located 2109 S. Redondo score poorly. For example, Alta Loma Elementary School scored a 2 of out 10. Look at the Trulia schools map.
Ah yes… it seems I was mistaken.
What do the quality of schools matter when millennial are not getting married or having children? Plus, the house is so expensive per square foot no bank is going to put a loan on that thing
I haven’t heard about RE cycles yet? Why the hell would I be shorting the market if I was that clueless?
You’re making this stupid assumption about me that I’m an “RE cheerleader” because I state the obvious, which is that housing in much of America is still affordable. That causes you to apparently believe that I’m in denial there is a bubble, and that I am blissfully unaware of real estate cycles. Are you even paying attention? Have you looked at prices anywhere besides LA and the bay area?
Cedar Rapis, IA:
https://www.zillow.com/homedetails/703-G-Ave-NW-Cedar-Rapids-IA-52405/121542432_zpid/
https://www.zillow.com/homedetails/2175-Sugar-Creek-Dr-NW-Cedar-Rapids-IA-52405/2110539150_zpid/
The median household income there is $63k. That’s enough to easily qualify for (and be able to easily afford) a $200k mortgage. You’ll notice those homes cost significantly less than that.
Orlando, FL:
https://www.zillow.com/homedetails/16423-Cedar-Run-Dr-Orlando-FL-32828/84650499_zpid/
https://www.zillow.com/homedetails/14265-Sapphire-Bay-Cir-Orlando-FL-32828/82105385_zpid/
Notice the schools. A 10, 9, and 9. That rivals the best private schools on the west coast.
Should I continue? Because you can pretty much throw a dart at a map of the U.S. and nine times out of ten land on affordable housing.
“You would probably not be able to afford the home you live in if you had to buy it now.”
I’ve posted numerous times about my situation, which is that I bought in 2009, sold in 2016 for a large profit, bought again in January of this year. Have I ever once stated that now is a good time to INVEST in the southland? NO. I only bought because it was a house with a floorplan that literally never comes on the market unless it’s new construction, and it will be my family’s home for the next 20 years. I put a crapload down, which I am fully aware will (temporarily) disappear in the next few years. Due to the built-in rental unit, my housing expense is effectively $1,000/month for the 3,200sf of the main house. The tax benefits cancel out two-thirds of that, so really, for a while at least, I’m paying more like $300/month. And yes, I gloat about that while I’m lounging in the pool with an IPA. How much do you pay in rent again?
Ugh, wrong thread…
John,
“bought in 2009”
Exactly what I assumend/said. You bought it cheap after the crash. Exactly what i am planning on doing. Why do you want millennials to lose their shirt and buy during the biggest asset bubble in history (now)?
I never, not once, said that I want millennials to buy in bubble areas now. I’m merely encouraging truth and logic over straight doom and gloom. Which means:
1) It’s okay to buy in a bubble area if it’s your dream home, not an investment, you can easily afford it, and you plan on staying for 15-20 years.
2) The entire country is not in a bubble, and in fact I believe that regardless of age, it’s wiser to put your money in a flyover rental (where positive cash flow is easy to find) than it is to keep it in the stock market right now.
“But when it does tank, prices will still be higher than in 2012-2013 in the meantime, you have burned through 5 years of rent.”
AH, that is completely wrong. Prices will be like in 2009-2012 or even 2002.
If you have rented the last few years you are way ahead of the homeowner when the crash happens. You saved tons of money and built equity while the owner will see his “book value” vaporize during the next crash. You need to do your homework when it comes to California real estate cycles…..its all about timing.
“AH, that is completely wrong. Prices will be like in 2009-2012 or even 2002.”
You’re the one who isn’t doing his homework. Look at the median sales price for the last 50 years (google image search is your friend) and then enlighten us as to why this downturn will be different. Because it’s a bigger bubble? No, it isn’t – not in 90+% of the state. And for the U.S. as a whole, the last few years are barely a blip on the charts – prices are on the long-term trend line.
Hi Millenial
Let’s play this out a little. A crash wont happen in 2017. Doubtful Trump would allow a crash on his watch, That being said, IF a crash starts in 2018, it will bottom in 2020, right? It is happens in 2019 then prices will still increase some between now and then. Then the bottom would be in 2021.
And so it just matter of to what extent a crash, in terms of % drop. For prices in 2018 to go back to prices in 2010, that would mean nearly 50% reduction in prices, right?
I am not saying you are wrong, but I am doubting prices will go lower than 2012 no matter what happens.
When the crash happens the investors will swoop in again, rent out the homes and turn this country further into a renter-nation.
For those of you who werent following housing – investors overwhelmingly bought homes either in bark-room deals at the banks or in house-by-house purchases.
Right?
“When the crash happens the investors will swoop in again, rent out the homes and turn this country further into a renter-nation.”
Investors swooped in only after a 30+% reduction in many markets AND with the help of ZIRP and easy credit. If the crash came again, how many of them would still be liquid or credit-worthy considering that corporate debt is at an all time high? And will the Fed be able to rescue the market when rates are already historically low? In other words, how many bullets left in the Fed gun chamber?
Bailing out TBTF banks is one thing, but would the public stand for bailing out private investors or Wall Street for a second time?
John,
“Because it’s a bigger bubble?” Exactly.
https://www.cbsnews.com/news/most-americans-cant-afford-a-500-emergency-expense/
from the article:
“typical American household still earning 2.4 percent below what they brought home in 1999â€
Also, most Americans can’t afford a 500 dollar emergency surprise. Meanwhile the median house prices are artificially inflated.
Nothing is different, the market always reverts back to where it should be. Bigger bubble, bigger crash. Until the market is aligned with fundamentals.
You can’t cheat your way out of it.
QE Abyss,
“That being said, IF a crash starts in 2018, it will bottom in 2020, right? It is happens in 2019 then prices will still increase some between now and then. Then the bottom would be in 2021.”
>>Yes
“For prices in 2018 to go back to prices in 2010, that would mean nearly 50% reduction in prices, right?”
>>>Absolutely, 50-70% IMO.
“When the crash happens the investors will swoop in again, rent out the homes and turn this country further into a renter-nation.
For those of you who werent following housing – investors overwhelmingly bought homes either in bark-room deals at the banks or in house-by-house purchases.”
>>>Whats stopping me from being like an investor and buying in all cash?
Even if its not all cash, many people I know bought between 2009-2012 on a conventional mortgage. You make it sound like its rocket science.
Millennial:
In other words, you didn’t actually check. Most Americans not being able to afford a $500 emergency expense, or earning 2.4% below what they did in 1999, has nothing to do with whether we’re in a bigger bubble than the last one (which we are not). You sound like an evangelical arguing against evolution by putting on a blindfold and earplugs.
“Where’s your proof?”
“It’s literally inside you and all around you. In your DNA. We watch it happen in living creatures in real time. There are countless fossil records which show evolution step-by-step.”
“That’s your opinion.”
Sigh.
John,
“Proof”
I understand were your confusion is coming from. For some reason you think I am supposed to prove something to you. Lol.
Let me tell you a secret. I couldn’t care less if you deny that this is the mother of all bubbles.
In a few years when I buy at 50-70% less from today’s prices I will gladly share that info with you. But I doubt you or other RE cheerleaders will still be here.
Millennial:
I see the analogy went right over your head. I don’t need proof from you, because unlike you, I look at the data.
One of your problems is that you never qualify your statements. “…this is the mother of all bubbles.” Where exactly? The bay area? Yes. LA? Yes. California? No. The U.S.? No.
You can believe whatever you like, but you’re just making yourself look foolish by making statements that are demonstrably false, and for the benefit of readers who may not know any better, if I happen to be around I’ll call you out on it.
If prices keep rising, this will eventually become the bigger bubble, which is fine with me, because I hold real estate. When it drops, I’m all-in shorting the market. I’m a realist, you’re a perma-bear, and as a result of wearing blinders, you have no idea what a long-term trend line is, or why it and inflation make this bubble a non-event for the U.S. as a whole.
Millennial:
I see the analogy went right over your head. I don’t need proof from you, because unlike you, I look at the data. One of your problems is that you never qualify your statements. “…this is the mother of all bubbles.” Where exactly? The bay area? Yes. LA? Yes. California? No. The U.S.? No.
You can believe whatever you like, but you’re just making yourself look foolish by making statements that are demonstrably false, and for the benefit of readers who may not know any better, if I happen to be around I’ll call you out on it.
If prices keep rising, this will eventually become the bigger bubble, which is fine with me, because I hold real estate. When it drops, I’m all-in shorting the market. I’m a realist, you’re a perma-bear, and as a result of wearing those perma-bear blinders, you apparently have no idea what a long-term trend line is, or why it and inflation make this bubble a minor bump for the U.S. as a whole.
John,
You probably haven’t heard about RE cycles yet. Bubbles always pop. These are just facts and have nothing to do with being a perma-bear. Just google it.
Its very simple to see that this is the mother of all bubbles. Prices have never been that disconnected from fundamentals. Americans are broke and most cant even cover a 500 dollar emergency expense.
Yes, you own a home and therefore you think everything is fine. What people like you forget is that when you bought the home it was a steal compared to today’s prices. You would probably not be able to afford the home you live in if you had to buy it now.
If you think this housing bubble can just go on forever, why waste your time here? Go out and buy!
Greetings All. One thing we should keep in mind, if we’re being honest, is time-period bias (i.e., the idea that numbers can be manipulated to fit an argument based on the specific beginning and end points put into use). So of course Mr. Landlord points us to the (February) 2012 – (August) 2017 timeframe, when the Los Angeles S&P/Case-Shiller index increased from 159.53 to 267.19. That is a smoking ~5-year price appreciation. The picture is decidedly less attractive if you stretch the graph back to July 2006, when the index peaked at 273.85; so in a ~11-year timeframe, Mr. Landlord’s asset has still not reverted to its original value (although Mr. Landlord presumably generated rental dividends and benefitted from tax shields). But maybe Mr. Landlord has owned his properties since March 1996, when the index was at 73.07. I doubt we are all going to agree on what constitutes the “proper” timeframe (and in fairness that depends on one’s individual preferences and circumstances).
One thing I will say is that, in my humble opinion, housing prices in California reached a permanently new high base in the 1996-1998 period; much like oil will never trade at $15/barrel again, no one should hold their breath for a $200,000 house anywhere on the coast again. Isn’t it curious that this new base coincides with the Greenspan put? (I’ll always return to my basic argument that assets have been abnormally inflated by the Fed’s policies of monetary socialism of the last 20 years.)
I would also, respectfully, add some nuance to Mr. Landlord’s argument that so many folks have apparently foregone 300% returns in the equity markets. For starters, time-period bias is again important. If you owned the S&P 500 at its closing record peak in October 2007 at 1565, and for whatever reason did not sell through the record closing bottom of 676 in March 2009, your portfolio would have declined by 57% (all percentage numbers ex dividends). Now, enter the pain of negative convexity (in a nutshell, the downside is worse than the upside). Do you know how much the S&P had to increase to get your portfolio back to break even? 131 percent! Furthermore, the S&P closed today at 2591, which is a mere 65% higher than the October 2007 level. So, to simply say the perm-bears missed the 300% rally is somewhere between disingenuous and not fully appreciative of the math.
The last point I will make is that it is really hard (for me anyway) to think about real estate as a great investment vehicle versus equities or even fixed income (credit and MBS mainly). As I like to say, the best time to buy a place is when you need a place to live, and the best time to sell a place is when you need to move. Otherwise real estate investment characteristics — mediocre long-term returns, illiquidity, maintenance costs, management hassles, etc. — are just not attractive to me. But kudos to those who can make a good living at it.
Cheers
Great article Doc. 264 sq.ft. for 550k? America is almost great again! Meanwhile the homeownership rates plunged to a 50 year low. The RE cheerleaders must be right this time: this is the year when millennials go out and buy in droves!
Nah, just another year with more landlord ownership and more renters.
Expect more of the same, rinse and repeat.
Gotcha! So this is not the year! Just like 2016 and 2015….so just wait until January to hear it again. 2018: the year when millennials go out and buy in droves!
Yeah, the new economic paradigm: renting out to each other. Rentiers will never compete against each other for renters during this time of high rents. This time is truly different.
Well, day-um. Can you post the listing for this ? It may make me move back to Kali !!
In case you missed it:A $500 surprise expense would put most Americans into debt
https://www.cbsnews.com/news/most-americans-cant-afford-a-500-emergency-expense/
Here a conversation I overheard between a Millie and a RE Cheerleader regarding the article:
Millie: Mhm, the article states that student debt is one of the reasons why people cant cover a 500 bucks emergency.
RE Cheerleader: When we were young we worked AND went to college. We had to pay for everything. Kids are spoiled and lazy nowadays.
Millie: Ah ok. Well, another reason is that incomes are down: “typical American household still earning 2.4 percent below what they brought home in 1999”
RE Cheerleader: It does not matter. That’s not the issue. Americans and especially Millie’s are lousy savers. They keep buying Bavarian cars (BMW’s and Audi’s) and spend a fortune at Starbucks!
Millie: But, but, but, I drive a beater car and I don’t drink coffee.
RE Cheerleader: Quiet! Don’t try to kill my argument you spoiled brat. Millie’s are lousy savers! That’s the whole problem.
Millie: Ah ok. So what should we do?
RE Cheerleader: For the umpteen’s time. Buy a house!
Millie: Huh?? But as I said, I have student debt and salaries are not enough to pay for these insane prices?
RE Cheerleader: Do I really have to spell it out for the umpteen’s time? Buy a house! Its a path to being financially independent. Also, its like a forced saving account!
Millie: Ah ok! I get it now. Buy a house! Thank you for the advice (with C).
Re Cheerleader: Finally there is still hope. Just make sure you buy this house very, very soon. Like almost now. Because otherwise you will be priced out. Forever!
Millie: Ah okay, okay. Please advise (with S) which realtor to use? There are so many and I heard some are dishonest?
RE Cheerleader: They all lie, so it doesn’t matter!
Millie: Ah ok. One more question. I don’t have a down payment?!
RE Cheerleader: Zero down is back. Just go now, your lender and realtor will get you into a house. Soon you will be one of the many millionaires on Dr. Housing bubble.
You could enter that as exhibit A for the definition of Straw Man Argument.
Millie, there is some truth in what the RE cheerleader and millie are saying. That is the puzzle part.
Like I said before, life is full of obstacle for those determined to win. It is like in football – you need a strong offense and a strong defense at the same time. Then you have to fight. And most of the time you can not run in a straight line due to many fighting against you to take your ball (in this case money). It is not easy and it is not for the faint of heart. There are always obstacle. Otherwise all will be winners and that is impossible. You can make them all losers by kicking them out from the field but you can not make them all winners.
I used to live in SoCal; I went to college there. At that time I realized that fighting in a straight line does not work. Now I live in flyover country. I scored big but not in a strait line. I lived in Seattle, too. When I moved to Seattle, that was pretty much flyover country comparative to SoCal where all the action was. Microsoft was just beginning to grow.
In socialism and communism all are losers; they can’t even play. In capitalism or something close to it, at least you have a chance to play – some will win and some will lose. This opportunity does not exist in a central planned economy like we used to have in Eastern Europe.
Try to find a growing city, where the balance between RE prices and incomes is reasonably good and where you can find employment. However, in this global economy if you really want to get ahead, use a job ONLY as a stepping stone and always aim for your own business. That is when you really get rewarded. My landscaper who is from Mexico does not have a year under six figure (not even in recession). He has many employees. His English is OK to communicate but poor. However, the service he provides, reliability and cheerful attitude are second to none. Everyone wants to hire him even if he is not the cheapest. Six figure where I live, based on cost of living is like half a million in SF. If he would have continued to live in CA and compete with millions from his previous country and pay for the cost of living in LA, he would still live in poverty.
In football you don’t say that I can not win because I can not go in a straight line and there are too many who tackle you – you just fight and every second watch for what works.
Yeah, the sensible solution is to leave CA and buy elsewhere. I guess this blog tnen is for those of us who are staying for other reasons.
People hanging out here hoping for a huge crash in prices in the near future would be far better served by leaving honestly.
No no the real reason that millenials can’t buy is avocado toast. That $10 toast once a week adds up to $520 which over 5 years is 2500 which is a sizable downpayment on a home.
Oceanbreeze,
That’s a good one! I forgot about the $10 avocado toast that is mentioned so many times…lol.
Keep cheering it on! But, when it goes bad, it will go bad fast!
A couple of interesting points …
If you follow the USGS, earthquake activity appears to be increasing all along the San Andreas, at oil drilling/pumping operations, and at most of the ancient volcanic sites in the State, yet less than 20% of Californians carry earthquake insurance!
According to a recent article the State and all of its local jurisdictions have surpassed $1.3 trillion in debt and liabilities, and the condition of streets, utility infrastructure, and services continue to decline!
Fully 1/3 of all welfare recipients in the U.S. live in California, while realtors and you homeowners gloat over those values!
And, a recent survey indicated that 1/3 of those visiting a Doctor in California are considered diabetic or pre-diabetic, so you own a home but aren’t healthy!
Progressives here should be happy. Think of all the energy saved!! No more global warming!!
Corp tax rate is going to 20% immediately. That is bigly yuugely big! Did I mention it’s yuuge?
Hang on tight boyz and girlz, this Trumpian economy is about to take off lie we haven’t seen since the Reagan days.
I’ve been in business for decades and never ever meet a corporation that paid over 20% in incomes taxes. The rate is fucking meaningless.
oh and over 50% of US corporation pay zero income taxes…….but you knew that.
And here in my neck of the woods in socal for sale signs are everywhere, I think the market has turned.
While you are right, no company actually pays 35%, more like 20-25% after all the deductions, the same will be true with the new rate. No company will pay 20%, more like 5-10% after all the deductions. Point is there will be less money being stolen by the federal govt. And that is a good thing.
Too funny. The insanity of trickle down economics continues. It didn’t work 30 years ago when Reagan politicized it. The country is worse off than it’s ever been even as effective tax rates have fallen for the top .0001%. The tax burden will once again fall on future generations.
The Republicans didn’t have anything new to offer as part of their economic platform. The Democrats, most recently with Obama, adopted the same supply side ideas without advertising it for fear of angering their base.
For the government to truly not want to steal from taxpayers, it would first and foremost cut spending drastically. Have we seen any such effective efforts from either sides of the political aisles?
“Too funny. The insanity of trickle down economics continues. It didn’t work 30 years ago when Reagan politicized it.”
Yeah 22M new jobs created under Reagan. GDP growth averaging 3.5% during his 8 years (compare that to under 2% for Obama). Only a lunatic leftists would call that insanity. No wonder nobody takes you people seriously anymore.
Yeah 22M new jobs created under Reagan. GDP growth averaging 3.5% during his 8 years (compare that to under 2% for Obama). Only a lunatic leftists would call that insanity. No wonder nobody takes you people seriously anymore.
Reagan added $1.86 trillion, or 186%, more in debt from Carter. Based on your job numbers, that’s $84.5K/ job. Wow, great ROI.
My research says that 16M, not 22M, new jobs were added under Reagan. Under Clinton, 21.5M jobs were added, and GDP growth averaged 3.8% (despite higher taxes). Of course, both achievements were based on cheap debt.
Conclusions:
Trickle down economics is still voodoo economics
The market is still based on organic demand, not supply, over the long term.
Ditto head Neanderthals like you can’t help but wallow in your own delusions of political grandeur.
Well,…it looks like tiny homes are all the rage these days!!!…LOL
It shows that there is no limit to insanity…That is the reason prices in CA fluctuate widely. They go to stratosphere and then they crash; rinse and repeat. Who’s next for the cleaners????….In flyover country the ups and downs are way smaller.
This time around your neck of the woods is pretty darn frothed out IMO. If I recall you are somewhere in NID? If my memory serves me right, otherwise disregard everything I say below haha.
I track NID pretty closely and it is waayyyy overpriced given local incomes. It could be said that many retirees and RE investors don’t pay taxes and therefor isn’t reflected in your local income stats–but even so NID is super rich right now and will head south fast when the tide goes out. NID has no clothes. Don’t get me wrong, I love it there, I’m speaking only in terms of valuations.
NID (kootenai, benewah, some parts of bonner co.) is handily more expensive than where I live in Northern CA and I’m about 1hr20min from Commiefornia’s state capitol. Even though it is a liberal toilet bowl here there are robust demand drivers in terms of money swirling around (compared to anywhere in NID.) NID is rich right now. I see a bigly correction there when things mean revert.
All of you RE whiners can buy super cheap nice rural property around the Sacramento region (Sierra Nevada foothills) and buy dirt cheap rentals when the market gets hammered here. Happens like clockwork. You can’t do that in many places but can here.
To be clear, not calling you Flyover a RE whiner, I’m referring to the Millennial and Alex in San Jose type creatures.
nor cal fella,
RE whiner, huh? Let’s see if you can bring a little bit more to the table than accusations.
Can you provide an example? Are you calling Warren Buffet a whiner too? Probably not, but he is saying the same thing: Buy low and sell high.
I am saying in a heavily overpriced market its better to save money and build a war chest. Wait for the collapse and buy when prices are down by 50-70%. IMO the odds are 99% that we get another big crash. I also said, in case the market will never crash I would simply own RE at point of inheritance. This is to address the ridiculous claim of RE cheerleaders “If you dont buy now, you will never own”. “You will be priced out forever”. You are probably confusing whining with smart investing.
The def. of a whiner is to “complain in a feeble or petulant way.”
Isn’t that exactly what most RE cheerleaders are doing? They want millennials to rush into buying overpriced houses to keep the highly inflated house prices alive. Since millennials don’t buy, RE cheerleaders complain in a feeble and petulant way about these “loser” millennials. Maybe the RE cheerleaders are frustrated because first-time-home buyers are supposed to listen to older, “wiser” generations and chose not to? We had 7 MIO foreclosures during the last bubble. Maybe the older generation cant believe that millennials are not following the same mistakes that devastated millions before?
So the rhetorical question is, who is the RE whiner?
I do understand why this is frustrating to RE cheerleaders. And to me this is prime entertainment.
I’m not in NID, but I agree with you. I bought property there in 2011 and sold recently to cash in those valuation. That market has a spill over effect from SoCal and Seattle with about 6 months lag time. Watch the other 2 markets and get an idea where NID is heading.
Long term I’m a RE cheerleader but I watch valuations for short term moves. I go in and out based on the market conditions (like in stocks). I prefer to leave some money on the table to let someone else to be trampled in the rush for the exit. I’m not greedy. I go in and out in a civilized way happy that I got the direction right. That way I have peace of mind and don’t have to suffer complications from stress or use Tums pills. There are still some deals once in a blue moon but at this point I am a seller.
NID is one of many markets I’m watching.
This about sums it up: “Perfect for a UCLA student.” How many college students have 100K to put down on a house and then be able to afford a 450K mortgage? This is insanity. Prices will tank to 2002 levels. Meanwhile, I will continue to pay my cheap rent that hasn’t been raised in 10 years and wait for the RE carnage.
Mommy and Daddy, buying a place for their perfect little UCLA student is fairly common.
“Prices will tank to 2002 levels.”
No, they won’t. Take a look at the median history.
It could be much worse than 2002. At some point incomes will be the driving force in RE pricing contrary to what many here think. And when, not if, that day arrives prices will fall to the level where the average person can afford a home. so I would say 1999 values.
So now we have people predicting a crash that takes us back to 1999 and 2002 RE prices. Wait for these prices at your own peril. Just like the screaming buying opportunity in 2010-12, many people didn’t pull the trigger because they wanted another 25% discount. Prices back then (monthly payment wise) were the lowest in decades. We will have a pullback, but WISHING for 99/02 prices is insanity.
Lord,
My wife just alerted me that the home we sold in 2005 was on the market again.
We sold it for $455K…….a ridiculous amount at the time but here in 2017 it’s listed at ……$450K….RE only goes up.
“It could be much worse than 2002. At some point incomes will be the driving force in RE pricing contrary to what many here think. And when, not if, that day arrives prices will fall to the level where the average person can afford a home. so I would say 1999 values.”
It could be much worse, but probably won’t. A drop of a couple of percent in incomes doesn’t equal a 70% drop in home prices. I know people want prices to fall to a point where the average person can afford them, but in reality they’ll only drop to the point where a LOT of people start getting interested in investing when they see a nice discount. Momentum and low rates do the rest, and you’re back on the upswing. In 2008 you had two types of people – those who were waiting for another 20% drop, and the smarter ones who were putting in offers.
I really hope it tanks 70%. I stand to make a lot of money if it does. But it most likely won’t.
Yeah my buddy used to say all the time, “I got it so good, cheap rent in a good neighborhood with no maintenance headaches, why would I buy or move.”, until his building sold and his rent went to market rate. Now he whines nonstop about the additional $500 monthly rent increase.
500 dollar monthly rent increase seems very unlikely. I think you are exaggerating. For a landlord its much more lucrative to keep the good renters happy. Its not worth the hassle to increase the rent and lose a good renter for a worse one. Not to mention the loss for vacancies in between old renters leaving and waiting for a new one. Be good to your landlord, pay on time and don’t cause trouble. The favor will be returned. I pride myself with being an excellent renter. This behavior lets me save a ton of money and as a bonus my landlord has kept the rate stable.
Millennial,
He said the “building sold.”
The previous owners probably inherited a building purchased in 1965 by their grandparents. No payments, next to no taxes.
The new owner just bought the building for millions of dollars. Big payments. Big taxes.
I’m guessing the rent will go up another 300 in a year. Remember it had been a cheap price in a good neighborhood.
The Bank’s gotta get paid.
Lowly Teacher
Exactly teacher. Rental properties get sold all the time for various reasons. You can not predict when someone is going to die, get ill, retire, get divorced, relocate, go bankrupt, etc. The new owners end up paying a premium and rents go up to market rate overnight. This can and is happening everywhere in S. Cali where they don’t have rent control. Not just apartments buildings, but rental condos and rental SFH as well.
When my sister went to college, my parents bought her a condo as well. They didn’t buy it for her, as in she owned it, but they bought it for her to live in. She went to college in a very expensive city, where renting an was insanely expensive as was living in dorms. So they figured, buy a 2 bedroom condo, get a roommate to pay 1/2 the carrying costs, get a tax deduction on it as well. Worked out pretty well. They ended up renting it out for a few years after she graduated as well and when it was sold, they ended up making about $100K profit on it, which more or less was the cost of her tuition.
so what you are saying is kids today can not afford to buy a house…..which means they are over valued.
They are targeting foreign buyers most likely.
THEY ARE TARGETING CHINESE BUYER
Been there, done that. For those out there struggling to afford a house in CA, why not move to where housing is affordable? To those of you who probably can find work elsewhere, but can’t give up the California lifestyle and weather, is it worth the 30-year mortgage? For those who may have difficulty finding a job in another state, here’s an idea: Borrow $100k and get your Master’s or Doctor’s Degree, so you can get work anywhere in the country where the jobs pay well, housing is affordable and live a comfortable, potentially debt-free life. That $100k investment reaps far greater rewards than the $500k home loan.
We sold our home in CA and moved to Texas two years ago and haven’t looked back. There’s nothing like having zero mortgage. (You can’t escape property tax, though.) Near my work place there’s a little cottage on sale that’s built around the same time, comparable condition and twice the size, for 14% of the cost of that shack in California. https://www.redfin.com/TX/Stephenville/359-S-Columbia-St-76401/home/101379856
Yeah, at some point we need to put a banner at the top of this blog saying:
NOTE: The sensible solution to CA prices is to LEAVE. HOWEVER, if you want to stay, we can discuss housing prices on this forum.
And if you must have a grand house, here’s one at $450k asking price–and an hour away from Fort Worth Area, which is booming: https://www.redfin.com/TX/Stephenville/1484-Highland-View-Rd-76401/home/55027627
Cracking me up. Been in Long Beach for a month, searching for rental property for my buyer. Haha, back to ‘05. All overpriced, all just sitting, agents so-trying to create anxiety – “lotsa calls, gonna fly off the shelf soonâ€. In reality, the RE tires are stuck in tar and the Millennials are NOT buying houses; their parents are paying to rent them apts; even the 50-somethings are using mom and pop’s money to rent. 5,000 apts being built “downtown†Long Beach. Couple hundred condos. Street sweeping has been replaced by street sleeping…..EVERYWHERE!!
I follow the market and see lots of house just sitting on the market and several price reductions over time. It looks like these greedy sellers missed the boat. We will have fun once the panic comes.
Dispite all the “quaintness”, what would really concern me about a property such as this one would be fire, homeowners insurance rates.
Insurance for this dog can’t possibly be cheap.
Do a Google street view.. Road frontage is so narrow, that it must of started as some sort of horse trail in the 1800′.s
Good ‘f’ing luck if you have to get out in a hurry.
2006 = bubble.
2017 = not a bubble.
even though the median income finally passed the all time high from 1999……how does this math work?
The math works like this.
Roughly 2006: 509k Median Price @ 6.5 percent mortgage rates = $3,217 per month
Roughly Today: 580k Median Price @ 3.5 percent Mortgage rates = $2,604 per month
Median price of homes today would have to be around 725k to get the equivalent monthly payment of 2006.
99 percent of Americans ask “How much per month?” vs “How much does it cost?”
Thank the Federal Reserve.
McDuck,
That’s a good example for the math challenged. Not to mention you are paying much more towards principal with the super low rates. And people still wonder why 2010-2012 prices were screaming bargains.
@LB
Huh…I think McDuck is pointing out the lunacy of buyers who base their decisions on monthly payments rather than total cost. The Fed’s slight of hand tactics are all too evident in his remarks.
@POH,
Whatever point McDuck was trying to make, the numbers clearly show it is significantly cheaper to buy TODAY even though prices are higher. And as I mentioned, you are paying significantly more in principal today due to the super low rates. And as McDuck said, 99% people only look at monthly payments. Trying to wait these people out looking for the perfect opportunity to buy is an exercise in futility. And here we are almost in 2018 and rates are right around 4%. And they will be LOW for years to come.
Back in 2010-2012, McDucks same example would have been a giant buy signal. And people still couldn’t do the math or wanted another 25% discount..
@POH,
“Whatever point McDuck was trying to make, the numbers clearly show it is significantly cheaper to buy TODAY even though prices are higher. And as I mentioned, you are paying significantly more in principal today due to the super low rates. And as McDuck said, 99% people only look at monthly payments. Trying to wait these people out looking for the perfect opportunity to buy is an exercise in futility. And here we are almost in 2018 and rates are right around 4%. And they will be LOW for years to come.”
Using 2006, the biggest bubble back up till then, as a barometer simply masks the horrendous economics behind today’s market. Two similar scenarios stick out: 1. based on the afore-mentioned numbers, the price/income ratio is similar and 2. looking strictly at monthly payments often leads to financial distress if not ruin. So yes, you want to wait out the lemmings. If you depend your idea of financial stability is dependent on perpetually low rates and easy credit, then you sure can’t see the big picture.
“Back in 2010-2012, McDucks same example would have been a giant buy signal. And people still couldn’t do the math or wanted another 25% discount.”
Hindsight is indeed 20/20. Must be nice to be aware of the Fed and government financial put after the fact. As I said before, the economics did not make sense for many potential organic buyers back then.
By the way, try taking a look around the world outside of Orange County/L.A. Housing in many overpriced markets isn’t doing too well DESPITE ongoing the cheap and easy credit. Think we’re insulated from this?
I do not see the point in waiting anymore. The next “crash” will spur lower rates which would benefit previous buyers to refinance at lower rates. The term low rates is all relative. What if we get negative 10 percent interest rates? It distorts pricing, yes, but it is out of your control.
Waiting for rates to go back up is foolish. The only reason rates would go higher is if we had massive inflation. If we have massive inflation, then you would be rewarded for locking in at today’s prices and rates.
Try to be neutral in the marketplace. Buy something small. If it crashes then walk away since California is a non-recourse state. I was waiting for stocks and housing to crash further in 2010/2011. The only thing that crashed was the value of the dollar I put into my savings account.
http://www.sec.marketwatch.com/story/millennials-communism-sounds-pretty-chill-2017-11-01
1 out of 3 millennials would rather live in a socialist country. Of course! If you are fed up with this bullcrap you want something else. we need a dramatic change! Socialism will take over!!!!!!!
100/100 children would eat chocolate for dinner every night too. This just proves that millenials are children, who can’t think rationally.
The millennials in that article are lying through their teeth. If they REALLY wanted communism, they would all ask for political asylum in Cuba, N. Korea or Venezuela, wherever they will accept them. If they don’t, that means they are lying the same way they were lying when they said that if Trump wins they will all move to other socialist countries. Guess what? None of them moved.
When I lived in a communist country, everyone was willing to ask for political asylum to any free country where they would accept them, but not everyone was willing to risk their lives to escape that “paradise”. Many who dared to ask for a passport were killed. That kept away the pretenders from contenders. I risked my life and I am here. I asked for a visa from any country willing to give me one. Only the US accepted me. Many other millions of young people left wherever they were willing to accept them. The situation was the same in ALL communist countries. How many millennials are willing to risk their lives to get to live in a communist country? NONE.
What they mean in that survey is that they are willing for the government to use force to steal from the producers and share with them while they have fun and pretend to work (for a government job). There is a word for that – LEECHES.
Yap!
That’s the reality. No matter how much anyone farts, in the end the word Leeches describes these carnivores perfectly.
He said that students said they would rather live in a socialist country, not communist. They are not the same thing. I don’t know why you changed the word… it’s something politicians do. Think U.K., Canada, Ireland….
Family units are socialist in nature, everyone does what is expected of them and in a perfect world, everyone’s basic needs are met. In a middle-class family, the kiddos do their chores, they are fed, dressed and receive medical care. What’s not to like?
I love my country, I love my home state. I do not want to move. I know we can do better. Smile, put yourself in someone else’s shoes, feel empathy, know that if you lift up your neighbor, you are lifting up yourself.
Crousehouse,
I forgot to mention that none of the countries in Eastern block were called “communist”. ALL of them, without exception were called “Socialists”.
In those countries you mentioned, all the producers are angry at government policies stealing from the fruits of their labor. Only the leaches living in the “government projects” are happy to do nothing and be compensated for it.
Like I said, a big centralized government always picks the winners and losers. The winners are the leaches and the well connected (oligarchs). The losers are those who actually produce wealth for the country. If you reward the leaches, you will get more of them. If you punish the wealth creators you will get less of them. Long term, being concerned with the size of the slice each gets will lead to no cake to slice. That is what you see in all communist socialist countries. I used them interchangeably because the ideology is the same. The only thing which varies is the speed of implementation and how far they went. It is a bankrupt ideology regardless of how you look at it. I studied it in school and in real life. If you live long enough under it, you will understand it too.
It is easy for you to dream of socialism with a full belly and comfort brought to you by a capitalistic economic system (more so than other nations). In practice it never worked and never will. Initially you feel a high like in taking drugs. When you’ll run out of other peoples money and wealth creators you will feel very depressed, poor and destitute. Everything is great when you just start charging a new credit card. The pain comes later when you suffer the effects of having to pay it back. One way or another, you will pay.
Where I live, the state government decided to improve the housing condition of the poor by installing new bathroom fans in mobile homes. The cost based on the local manager in charge is more than $20,000 per fan, including all the administrative overhead. A non-profit can do that easily for under $1,000 labor and material, including power and overhead. That is just a small example of government inefficiencies at a small scale. The more the government grows, the more that type of inefficiency expands at the whole economy till everything collapses. All those taxes and printing of money leaves all families poorer and more dependent on government.
Also, because this action is not market driven, do you know what those poor people do? They cover the fans because the heat escape in the process and they don’t have enough money to heat the place. So, something well meaning ends with no benefit to the poor or the middle class paying for it in taxes – everyone gets poorer. Government misallocates funds. It is the size of misallocation and the extent of it which collapses the economy sooner or later. Government can never eliminate poverty regardless how much it tries. The unintended consequence of government intervention is widespread poverty.
There is a limited role for the government: to preserve the market system, fight corruption,administer justice and enforce laws, defense and foreign affairs. Of course, given human nature, the government is where you’ll find the most corruption. The smaller the government, the smaller the corruption.
Look at all the policies the government enacts in the name of “helping people buy houses”. What you see, is all prices going through the roof and the only beneficiaries are the banks.
Crousehaus,
All socialists eventually grow up to be communists. Their end goal is govt control of everything and everyone. Open your eyes man.
Of course I am not going to move to a communist country. I’ll stay with my parents but I want to make America more like a socialist country. Like in Germany. They have a government pension system, government healthcare, free tuition, labor unions, heavily regulated housing market. Do they have homeless people all over like we have?
Do we have 30 days of paid vacation? But dont be mistaken. Germany is also a capitalist country because you can own property and assets.
This is the form of government we need.
The US is controlled by the rich who just pay everybody off. Nothing that will benefit the masses will ever get done here. The rich will own it all and the middle class will be their servants. Modern day slavery!
We need to act now. Vote for the most leftist guy out there. It will never be like soviet union….but it will go towards a social democracy like Germany, Switzerland, Austria, France, Norway, Sweden etc. Dont listen to these fear-monger who tell you there is only what we have here in the US or communism. Its BS! Open your eyes and research!
Richard Star,
You can’t live like in Norway because Norway has 4 million people and an ocean of oil (relative to population). When prices for oil were high they built reserves for a rainy day. Before they discovered oil, they built a civilized country based on high level of education, hard work and financial discipline. That culture does not change overnight. Also, they don’t allow too much immigration. Their economic model will fail in US in few months.
Germany, the same way, build a solid economy based on a culture where hard work, high level of education and financial discipline where highly valued. In all their history, they had a homogenous population with a uniform culture conducive to national unity. All that started to change since they have Merkel. The more they will embrace multiculturalism, the more poor they will become. Watch and see – it is not going to take too long. Socialism will fail in Germany and all european nations the more foreign cultures will be introduced there. Those cultures mix like iron and clay. That is a fact. I already know lots of germans leaving the country of their grandparents. The Germany in the future will no longer resemble the Germany from the past so you can no longer bring that example (same with Sweeden).
Switzerland, I agree with you. It is better than most countries and financially/economically they are more to the right than US. They have a VERY decentralized political and economic system (like the founding fathers in US proposed), which is not the case in US now. How many times do you hear about president/PM of Switzerland?!…I have relatives living there. Swiss people and government don’t want any immigration, they have good work ethics, high level of education and they don’t have too many leaches to seep wealth from the producers. Therefore, the vast majority are wealthy. You can have a a waterfront palace in Switzerland and pay $1,500/yr in prop. taxes without Prop 13. They embrace the wealthy not tax them to death (to punish them for being successful). Even with those low taxes, they have better schools, roads, fire stations than in US. Why? Because they don’t have open borders like in US where millions and millions come every year legal and illegal.
You CAN NOT have open borders and socialism at the same time; very soon, everyone will be equally poor, contrary to what the democrats say. We know that, and very soon, the Germans, Swedes and those in other socialist countries will find out the hard way and they will be unable to right the ship.
Trump is making some attempts to enforce the existing immigration laws and the whole MSM and liberals scream “racist” and “Fuhrer”. He didn’t even make the laws; just trying to enforce laws made by Congress. All the liberal judges start legislating from the bench against him. If all poverty from the south is moved to US, you CAN NOT have socialism in this country EVER. The only way the government can pay for it is to “print money” which means very high prices and inflation (which is the most regressive form of taxation). High prices means low quality of life; simple like that. US already spend one Trillion dollar more per year, increasing the debt exponentially. How much more do you want them to spend? Higher taxes mean less disposable income, which means recession and lower quality of life for everyone. Do you think the high prices in SoCal developed in a vacuum? Just imagine the prices in SoCal without the immigration in the last 30 years!!!….Do you see the correlation??!!!….
Those countries in Europe don’t build empires, therefore they don’t have to spend a lot on military. The problem in US is that both Democrats and Republicans spend to much to police and control the whole world.
You know what Germany doesn’t have? Google, Amazon, Microsoft, Twitter, Facebook, Apple etc…
None of your darling socialist countries have any of that.
Now think to yourself why is that?
Tick tock….
Just make sure you don’t get cancer in Germany. It’s “free” but you’ll die.
Among the most common cancers, age-specific survival differences were particularly pronounced for older patients with breast, colorectal and prostate cancer. Survival advantages of breast cancer patients in the US were mainly due to more favorable stage distributions. This comprehensive survival comparison between Germany and the US suggests that although survival was similar for the majority of the compared cancer sites, long-term prognosis of patients continues to be better in the US for many of the most common forms of cancer. Among these, differences between patients with breast and prostate cancer are probably due to more intensive screening activities.
More of that awesome “FREE” health care in Europe. Won’t it be great when a DMV-like govt bureaucrat decided who lives and who dies?
https://www.forbes.com/sites/tomasphilipson/2016/09/06/eu-vs-us-cancer-care-you-get-what-you-pay-for/#5ddfe17f6ba5
A recent report suggests that cancer patients in England are suffering from serious lack of access to vital treatments due, in part, to problems with the drug assessment and approval process. The UK and other European health systems use central health technology assessment (HTA) to decide whether to cover a given treatment, but these processes are ultimately designed to help manage healthcare budgets – not get the best outcomes for patients. In cancer care, however, you get what you pay for.
Germany as a socialist democracy is extremely wealthy.
Out of 10 top manufacturing companies in Europe, 7 are German!
https://en.wikipedia.org/wiki/List_of_largest_European_manufacturing_companies_by_revenue
Volkswagen, Daimler (Mercedes Benz), BASF, SIEMENS, BMW, Bosch & Airbus.
Uneducated/brainwashed Americans don’t know that. They only want to believe America is the greatest country. The truth is, its great for the 1%. Every other American is suffering under this Aristocracy.
Poor Gary. Wow!! 7 of the top 10 in Europe. So Germany is the tallest midget.
Where is Germany’s Google? Or Amazon? Or Facebook? or Microsoft? Or Salesforce? Or Twitter? Or Apple?
They don’t exist in Germany. Or anywhere else in France. All those things are in the US. Gee, I wonder why that is…..I’ll let you think about it for a while Gary.
My bad Landlord. I assumed these German company names mean something to you. You only know twitter and facebook. Maybe this will help you:
German’s debt burden per GDP is 68%.
The US debt burden per GDP is 106%.
Total debt in the US is about 20 Trillion? Germany’s debt is 2,3 Trillion (in USD).
How can that be? Germany is such a bad, bad social democracy!! Nobody works! Everyone wants hand outs!!!! Everybody knows that in social democracies you only find lazy people!!!!!!!!
He’s a troll – and not a very bright one. Notice how he never responds to the replies his comments get.
That is true. However, those who are bright on a blog, read and understand, will get smarter. The stupid are always hopeless – you can’t fix stupid.
It’s actually 51% and climbing. The majority of millenials polled believe that the current economic system works against them. They’re right.
It’s always hilarious when communists (or pardon me, I mean Democrat Socialists) like Gary and Richard Star use their Apple made/designed/engineered laptops/iPads to bash capitalism. They truly are that unaware of their surroundings. LOL
Los Angeles is still a lot cheaper than The City, that is because it is still the land of the philistines.
Be vocal and tell your congressman or women to work towards banning foreigners from purchasing American real estate. Until you do that, don’t complain because your complaints mean nothing.
First of all I think any law like that would be thrown out by courts. If Trump can’t ban radical muslims from entering the country, good luck banning rich Chinese from buying homes.
Second, it is ridiculous to tell foreign people who want to bring money and invest it here “sorry we don’t want your money”. Actually ridiculous isn’t the right word….down right insane is a better description.
Now having said that, I think it would be reasonable for municipalities to enact rules against people buying homes and leaving them empty. Zoning laws can do that and possibly tax properties at a higher rate that are not occupied full time. Or things like that.
But a blanket “no foreigners are allowed to buy real estate” law….no way.
New Zealand has a no foreigner law on real estate purchases and our intellectual superiors, Vancouver BC has a similar law, that is why the Chinese money came to California.
Do you know how easy it would be to get around a “no foreign ownership” rule? There are already booming businesses acting as nominees and fronts for people in their property purchases. How many layers of companies/trusts would you have to look through in order to find out that the ultimate beneficial owner is a foreign person if your search didn’t instead lead to a nominee and you never find out that it’s actually owned by a foreign person?
@ JR and Landlord: I don’t know, I think Vancouver has already done that in Canada and Australia has, or is working on passing just that sort of thing. Mexico didn’t allow foreigners to purchase RE for many years.
Good idea or bad, it’s not a new concept.
And you’re both right: not likely to happen in the US
Very true. Governments are cracking down on this in general regarding financial accounts (FATCA, CRS), it won’t be too long before the government knows about all money moving in an out of the country. Now whether they are able to enforce and take action is a different story.
I don’t really care what Canada and Australia do. And I absolutely don’t give a shit what Mexico does. We believe in capitalism (or we used to any way), not bullshit socialist/protectionism like they practice in Canada and Mexico.
And besides Canada didn’t ban foreign ownership, they just slapped an extra tax on them. Not quite the same thing. And you really want to follow Mexico’s lead on economic policy? Jeeezuz.
A mania is a mania. The greater the mania, the greater the eventual crash. However, this endless rise in prices is getting boring to watch. Maybe we should just stop following the real estate market for a few years and do something else.
So what should first time home buyers that can not move 2000 miles away do? Even a solid income of around 200k annually can’t afford you a nice home in a good school district to raise a family.
Cry me a river, $200K can easily buy a nice homes with good schools in beautiful south OC. Plenty of jobs in OC, traffic comes into Irvine not the other way.
+1
200K income and can’t buy a starter home in a decent neighborhood? Either you have massive debt, major spending problems or your idea of decent neighborhood is Manhattan Beach. Not buying this one bit.
You only have to move 50-100 miles away, not 2,000. $200k will get you an amazing house in a great school district. Just not in LA.
If you can not move 2000 miles away, you move 1000 miles away. If prices are still prohibitive, you stay where you are and rent. If rent is prohibitive, you sleep under a bridge or you move. It is a free country. It doesn’t matter how much you make; what counts is what can you buy after all the taxes. In Zimbabwe even the poorest person is a billionaire. After the taxes, it is not too much he can buy with a billion. It is the same everywhere. Try to find the best balance between income and cost of living – that changes all the time depending on location. But if you insist that SoCal offers the best balance, then live there and don’t complain. Nobody keeps you there by force. It is your own decision and you can blame only yourself.
With the assumption that you are living in the Golden State, if you are making $200k in salary and want to own a house, you should be able to find a job anywhere outside of California for even half that amount and be able to afford to buy a very nice house in a good school district. Why rule out moving to another state? Family? Weather? But, with a $200k salary, you can rent a nice house in CA and still have a lot of money leftover. Let’s see, a comfortable rental would put you back maybe $3000-$4000 a month in a good school district in CA. That still leaves you at least $150k in annual salary. So my advice is to decide how important home ownership is to you, with all its benefits and negatives, versus staying in California.
So what should first time home buyers that can not move 2000 miles away do?
—
You mean doesn’t WANT to move. Anybody can move. Stop making excuses and either move, or learn to live in your situation. Option 3 is whining about it, which is what you’re doing.
I can understand not moving for a variety of reasons. Namely, in the case of teachers in California, they will lose their pensions.
The posters on this board constantly express their disgust with anyone of the Latino persuasion. So the responses here are much nastier than they would otherwise be.
Alejandra, why can’t you and your fam bam live off of $100,000 for a few years and save the rest? Sounds like a great problem to have!!!!
Those are excuses for not moving. It is a CHOICE not to move. That is my point.
Tax bill cuts mortgage interest deduction in half. Its a start.
The Tax Plan: One bug F. U. to upper middle class peeps in blue states. BWA HA HA HA HA HA. I love it. All those progressive assholes in Silicon Valley making $200K a year are about to be reamed. No more state income tax deduction, no more deduction on $1M mortgages, no more deduction of $25K property tax bills.
Mr. Landlord, what the GOP tax plan does is simply transfer wealth from Blue states to Red states just because the Dem states have a higher cost of living and higher salaries. It is simply a Robin Hood plan pretending to be a middle class tax cut. Why are Congressmen from Blue states selling out their own Rep. voters? I don’t get the logic of taxing the same income twice (by ending the SALT deductions) while giving huge standard deductions to people in Rep. states who simply live in lower cost of living states and, therefore, have little or nothing to really deduct.
Gary,
Please explain to me why someone making $50K, with a $200K home in Kansas, should subsidize someone making $200K with a $1M house in California.
I’ll wait.
Why reward states for having obscenely overpriced housing that drives out the next generation of society? States like CA care more about foreign nationals that Americans.
The state of california taxes you on taxes you pay to the federal government.
Mr. Landlord, you don’t seem to mind having those living in low cost of living areas subsidizing real estate investors in high cost of living states with a ton of tax deductions for real estate taxes and interest expenses. What makes landlords so much more deserving of the same tax breaks which you don’t believe individuals deserve? Also, why should someone in a low income state, with no major deductions, be given a $12,000 gift for imaginary deductions. The GOP tax plan is a sort of modified flat tax plan which favors those in low cost of living states. The only good thing about the tax plan is that hits upper middle class and lower upper class people who usually gain big in Republican tax cuts.
Finally, the high cost of living states always receive less from the Federal govt. in benefits than they pay in Fed. taxes. This change just makes that income transfer from the high cost of living states to the lower cost of living states much greater.
If this plan passes, I will consider moving out of California to one of the low cost of living states where you apparently living. Do you have a suggestion about which state would be the best one to move to for someone who is retired like me? My itemized deductions are not significantly more than the new $12,000 standard deduction so I personally would only pay a little more in income taxes under the Republican plan.
“Finally, the high cost of living states always receive less from the Federal govt. in benefits than they pay in Fed. taxes. ”
That’s because of the military for the most part. Red states have more military installations than blue states. Take away the military and that imbalance pretty much goes away.
I’m not a progressive asshole nor do I live in Silicon Valley. This will hurt me and many people I know if it passes. Corporate profits will go up but I don’t think it’s going to equal huuuuuge pay raises for everyone.
If by everyone, you mean the corporate executives then I agree. Corporate cash is up 9.2% since the end of 2015, yet wages have stagnated. They have the money, they just are not spending it, especially on wages.
https://www.moodys.com/research/Moodys-US-corporate-cash-pile-grows-to-184-trillion-led–PR_369922
I wouldn’t have thought the both of us would like the plan. Maybe its for different reasons but we both like it.
Millie,
Politics makes strange bedfellows. I think the two of us agree on a lot of more than you think.
I like the tax plan and I also like the reduction of the MID to $500K. Median home price in the country is $250K or something like that. Which means the vast, vast, vast majority of people won’t be affected by the cap coming down from $1M to $500K.
The people affected will be a small number in places like LA, SF, Seattle and NYC. And to them I say boo fucking hoo. Same with the elimination of state income tax deductions. If residents of CA and NY keep voting in Dems who raise taxes to 10% and more, that’s your problem not mine. I shouldn’t have to subsidize your tax and spend policies. If you want to pay less tax, move to a low tax state or start voting in people who will lower your state/local taxes.
Agree 100%. Even though I live in California I believe the plan goes in the right direction. I hope it goes through.
It is nice medicine I agree, just hope they don’t all come up your way 😉 The regressives love to ruin nice areas. They can’t help themselves.
I sure hope E. WA and NID never go purple. The only thing that will save you is making it too hostile for leftist scum to feel comfortable there. If you can succeed in that you will save your communities. Otherwise you will become California’s with crappier weather.
Probably add fuel to the Prop 13 resistance movement as well, Landlord
The GOP tax bill lowers the mortgage tax deduction to $500,000. If you look at housing stocks today, they are down. To me, this is going to put pressure on housing prices since lowering the deductibility of mortgages will eliminate some of the artificial demand for housing. When you subsidize something less, the demand should decrease (or the pricing power will decrease), which will allow for prices to go down.
If you are an investor and buy to then rent out the house, this is a business like Trump owns. You can fully deduct your mortgage if you are a landlord because it is a business. Trump wouldn’t screw himself. He only appears to be targeting Blue State homeowners.
If the property is a rental you can fully deduct the property taxes, mortgage interest, and any other expenses/overhead since it is considered a business. The proposed limits on mortgage interest deductions and property tax deductions would apply to primary and secondary residences.
I highly doubt that the proposed tax plan will go through as it stands right now. In fact I highly doubt ANY tax reform gets done. So far Trump is batting a big fat zero as far as passing any meaningful legislation out of congress.These people are so out of touch from the everyday American and furthermore can’t agree on the color of the sky let alone meaningful tax reform.
I agree that so far Trump has been unsuccessful in passing anything. However I feel an energy and enthusiasm for this plan from the Republicans that lead me to believe it will pass.
The part that you guys don’t get is that Landlords get to deduct interest regardless, so if this happens… (and it won’t, nothing will get done as per usual)… renters and landlords are no longer at even playing field. There will simply continue to be more landlords since they have an economic advantage to being with and now can deduct interest while renters can not.
Also, don’t forget $1,000,000 is grandfathered in to the plan… but nothing and I mean nothing will pass the next 4 years so it’s all a waste of time.
I dont care if my landlord can deduct taxes or not. My landlord is giving me a huge gift for letting me rent at a rate that is way below the cost of ownership. That allows me so save money and purchase with a large downpayment when the market tanks.
This tax bill will pass. It may get tinkered a little here and there but it’s passing.
“When you subsidize something less, the demand should decrease (or the pricing power will decrease), which will allow for prices to go down.”
That’s spot on. The tax plan is going in the right direction. Which is very surprising giving its coming from Trump.
I recently moved to DTLA. My apartment building gave me 1 month free! Considering my rent is $2,200 that is a huge bonus. And no, my building is not one to do that “1 month free” scam year round. A few weeks after I moved in that promo was done.
Moving from Hollyhood DTLA is great. There is so much building going on, the closest thing to a free market i have ever seen in CA. Someone call the press. There is some real competition.
Unfortunately this means i lost all my Hollywood friends since no one leaves their bubbles in LA. Anyone in DTLA want to go out and get drunk?
You’d have to be drunk to want to live in DTLA which is the homeless and thug capital of the US.
http://www.dailymail.co.uk/news/article-2468014/Life-Skid-Row-Where-homeless-fight-demons-drug-addiction-alcoholism-downtown-Los-Angeles.html
Man, Trumps Tax plan is fantastic news and I cant believe I am saying it…..
What got me convinced is the what I read on the devils website:
https://www.nar.realtor/nar-statement-on-tax-reform
From NAR President William E. Brown:
“We are currently reviewing the details of the tax proposal released today, but at first glance it appears to confirm many of our biggest concerns about the Unified Framework. Eliminating or nullifying the tax incentives for homeownership puts home values and middle class homeowners at risk, and from a cursory examination this legislation appears to do just that. We will have additional details upon a more thorough reading of the bill.”
That is music to my ears…..”Eliminating or nullifying the tax incentives for homeownership puts home values and middle class homeowners at risk”
Doesn’t it sound so beautiful? That this comes from the NAR makes it so much better!
I think the NAR are going to see less million or multi-million dollar closures after this passes. I think in the intern it may get some to buy now to be grandfathered into the current tax system. However, after that is anyone’s game. If the plan was to stimulate the economy I think this may bring prices back to reality and maybe give new buyers an opportunity to be part of the amerikan dream. The question is how soon?
Millennial you still don’t get it.
Landlords can deduct interest regardless of the tax plan. This is a huge boon for landlords giving them further economic advantage over renters.
Nothing is going to pass so it’s all a huge waste of time, but at least understand what is going to happen…. even more landlords and even more renters.
Also don’t forget of course if this plan passes there is a $1,000,0000 grand fathered clause for mortgage deduction, you didn’t think they would screw themselves did you?…. just like they are all on their own health care better than yours.
TankinSight.
Maybe you dont get it.
I like the plan….because….
>>My taxes will go down (a little).
>>He is targeting blue states
>>The NAR does not support the plan
Who cares about landlords? Taking away incentives for potential buyers is great news.
As previous posters said: “When you subsidize something less, the demand should decrease (or the pricing power will decrease), which will allow for prices to go down.”
The only thing I am interested in is lower RE prices. Deflation is great for consumers.
You still don’t get it Millennial.
There was a massive transfer of home ownership to landlords in 2009-2013.
This is exactly why you are renting and will continue to rent.
Tank in Sight,
Huh?
How do you figure that an increased number of landlords are somehow the reason why I rent?
I thought I am renting because I want to save money. By renting and not buying I save 750 bucks a months. Why in the world would I buy and pay that much more money for a similar place + closing costs + maintenance?
BTW, I could buy a house now….but why would I do that if I anticipate a 50-70% crash on the horizon?
“By renting and not buying I save 750 bucks a months. ”
Do you account for the tax deduction (property and MID)?
Do you account for the principal you’re paying back every month?
Probably not. It’s easy to look at a payment and say renting is $X less so I’m saving $X a month. But that’s not the way you calculate the two choices.
The tax laws and other finance laws were totally stacked in favor of homeownership…to the point it was absurdly unfair. MID, property tax deduction, Prop 13, tax free profits of up 250K/500K for selling a home, etc. This is one of the reasons people (especially in CA) would buy RE at all costs. We’ll see what happens and what passes. Looks like renters will get more money in their pockets every month…landlords will take notice!
“The tax laws and other finance laws were totally stacked in favor of homeownership…to the point it was absurdly unfair.”
Exactly. Its time we change that!
Millenial, you do realize that reducing the tax benefits for homeownership will make it more difficult for people to purchase homes? This will also affect you supposedly one day when you want to purchase a crap shack of your very own and want to benefit from these tax breaks. Regardless the GOP caved and is already reinstating a 10K deduction for property taxes and a deduction for the first 500K on mortgage interest. So the overall tax consequences will be minimal to most homeowners.
WheelinDealin,
“Millenial, you do realize that reducing the tax benefits for homeownership will make it more difficult for people to purchase homes? ”
Yes, and that’s of course a good thing! We dont need the government to subsidize housing. If you let the market alone and take away silly government intervention the prices would be much lower. There should be no tax incentive to purchase a home. These incentives (tax savings and lower interest rates) push prices up. Thats why people refuse to buy. Lower prices will make it easier for people to get homes not more difficult.
This will also affect you supposedly one day when you want to purchase a crap shack of your very own and want to benefit from these tax breaks.
Yes, the crap shack will be cheaper. That’s a good thing.
No need for any future “tax breaks.” The buyer will enjoy the financial benefits upfront, via a lower purchase price.
NAR (I’m mostly talking about the CAR right now) has mixed loyalties here. One one hand it is the stance you pointed out trying to preserve home subsidies.
On the other hand they do support massive construction of housing which I agree with. Naturally, if you are selling houses you want to ensure a huge supply. You don’t want to have to turn away buyers because they cannot afford anything.
I do feel like the tax system needs reform. I am not 100% convinced that this plan will improve society but I am willing to give it a shot.
How are the middle class home owners at risk when you can still deduct up to 500k and it grandfathers everyone who already bought in. What it does is disincentive huge mortgages on mcmansions going forward which generate huge commissions for their members.
Interest rates are so low that cutting the mortgage deduction cap to 500K is a non-issue. Furthermore, the real estate industry will have a big pissy so the change will never happen. If you are financially ready to buy and have located the home which appears to be a good investment, then buy and ignore this 500K mortgage deduction issue. Most famous investors will tell you not to make an investment decision based on a tax law.
jt, I don’t see this being a big issue either. Anybody who can comfortably afford a 1M mortgage is likely being hit with the AMT. Not sure what will be done with the AMT with this new plan. The AMT likely ate into many of these deductions, making it a moot point.
If this tax law goes through, there could be unintended consequences where already low inventory goes even lower…and we all know what that means for home prices.
” Most famous investors will tell you not to make an investment decision based on a tax law.”
Yep, I am with you….buy low sell high….just like Buffet said….wait for a nice crash and buy at 50-70% less.
If one large SALT tax is eliminated, the government is effectively eliminating all of them. To get above the Standard Deduction, one has to have all or most of the present SALT deductions. Therefore, there are many unintended consequences to the proposed tax legislation which would hit California real estate particularly very hard. It the property tax deduction and the interest deduction are eliminated or reduced, the CA real estate bubble would likely pop. Also, charitable deductions will be greatly reduced, and there will be less mobility of people within California because Proposition 13 would become even greater motive to never move than it is now. Personally, I know that I will never move again, within the State of California, if the proposed tax plan passes. However, I might seriously consider moving out of state to a purple or red state which is favored by the proposed tax changes.
How does charitable deductions help social mobility. I agree limiting the mortgage deduction to 500,000 could reduce prices by at least 100,000 in some markets but the other statement I don’t understand. By the way, prop 13 keeps less people in their houses than you think. The Inland Empire has a lot of middle age people according to rent cafe that are moving into apartments. Prop 13 benefits more middle age and older people if people were sitting in their houses why is it that Riverside has one of the highest growth rates for middle age people moving into apartments.
If anything, these proposed tax changes will further reduce inventory if homeowners must hold their principal residence for five years instead of two to avoid taxes. And some homeowners may think twice before trading up to a larger home if they are going to lose a portion of the mortgage interest deduction which is grandfathered in. The problem right now is the uncertainty of what is going to happen, and this may cause people to act irrationally.
“Under current law, a couple who sells their home is able to exclude up to $500,000 in capital gains from their gross income, as long as they used the home as their principal residence for two of the past five years. Under the new plan, they’d need to use it as their principal residence for five of the past eight years to qualify. Instead of being able to use that exclusion every two years, they’d be able to use it only every five years.”
“The mortgage-deduction limits may also worsen one of the housing market’s most vexing issues right now: a severe shortage of inventory in many areas. Homeowners with high-balance mortgages will be reluctant to sell and lose the deduction that would be grandfathered in for current owners, said Zandi of Moody’s.”
http://www.chicagotribune.com/business/ct-biz-gop-tax-plan-mortgage-deduction-20171103-story.html
Either way you look at these tax proposals if it is not under DT’s watch someone else will likely propose these type of changes or similar measures in order to change the focus on what a home is for. I think maybe some fear what is happening in Canada is too extreme to even get to and we may need a reality check before it gets out of hand IMO.
The good old “no inventory myth”…if that were true we would not see price reductions all over…you can keep denying the existence of RE cycles as much as you want….it wont change a thing.
Yes, you are absolutely correct.
Also don’t forget that prior purchases with deductions up to $1,000,000 is part of the plan.
This will act much like Prop 13 where people who are grandfathered in will not want to sell their home.
Why sell your home and not only pay more taxes but also lose your interest deduction up to $1M.
This won’t pass, but if it does it will be a HUGE win for landlords who can still deduct interest up to any limit… while the renters looking to buy can’t.
Besides the NAR, some RE cheerleaders seem to get very nervous about the proposed tax plan. That’s a good sign. Lets hope it passes. But regardless, the market already shows signs of weakness. It seems to go downhill from now on.
I agree. This is unfolding into the renter securitized market mania. Why else would the Invitation Homes IPO and similar businesses come out before this. I think it all makes sense now. I think the rental mania is going to go into overdrive coming soon to a town near you. If the new standard deduction comes that money will likely just ensure that all these properties will get their rental rate incomes. In my opinion, I think the new standard deduction proposal is just a smoke screen to cover struggling renters while rents creep up. Sure seems like if rents go up when does this begin to deflate? When there are more evictions or vacancies? There has to be some number that is probably being monitored as rents go up. When do renters say enough is enough? Until the renters start paying for all the overpriced properties?
To me it seems like people are overreacting to the new tax plan. If you crunch the numbers it seems like many people who currently take the standard deduction and don’t itemize will save a few hundred dollars and those that do itemize may pay a few hundred dollars more due to the loss of some deductions. This is a generalization and may vary for each situation, but I don’t think these tax changes are going to be life changing for anyone. Based on the current proposal I would pay a few hundred more, therefore I am against it but it is not going to break the bank.
You guys debate this all you want, every democrat in congress and NY & NJ republicans will vote no on this awful bill. Like everything else Trump, Paul Ryan, Mitch, Pence, Kevin Brady and the rest of the GOP swamp tries to do will fail.
LJ, the Republicans can afford to lose all the Republican Congressmen in NY and NJ and still pass this bill. The best hope of defeating it is in the Senate where only a few Republicans members need to come to their senses to defeat it. The Senate vote will tell us if any Republican senators have brains or if they are all really mechanical robots.
It appears Trump’s tax plan punishes the wealthy liberal blue states which didn’t vote for him and rewards the poor red states with that did. Maybe this is his plan for getting a 2nd term? It’s actually kind of a clever actually. The problem is that majority of us on this blog are in a blue state ;^(
“The problem is that majority of us on this blog are in a blue state ;^(”
Why is that a problem? I live in California and hope that the law will punish blue states. We don’t need government intervention in the housing market. Take the incentives away. That will put pressure on inflated house prices. Whatever helps to put pressure on prices is great news.
I agree that tax plan is not necessarily a game changer but it goes in the right direction. I am happy with that….especially coming from Trump.
No need to break in: Just pick it up & take it with you …
A few points on various issues.
Tax breaks aside, I think you’d have to be crazy buy rental real estate now in the “hot” markets. Unless you are laundering foreign money, that is.
I know for a fact that a lot of LA firemen buy houses in other states and commute by air to their LA jobs. They don’t do it because of cost, as a long Social commute would be cheaper, and probably quicker. They do it for lifestyle, and community values. They trade work times with other guys doing the same thing. This link (probably posted before) will show you what LA firemen make:
https://transparentcalifornia.com/agencies/salaries/#cities
I own my house free and clear so I am under zero financial pressure to move. I also have a job I can stay at presumably until I keel over or go senile. There is a train that runs from 3 miles from my house to 4 miles from my work, and Uber/Lyft or a public bus to get me to and from the stations. That’s 7 miles out of a 22-25 mile commute (which is now variable due to road closures that should be finished by 2020).
Damn spell checker changed Socal to social!
Here’s a conversation that will never be had:
Husband: Honey, let’s buy a $1M house
Wife: Hmm, you know up until yesterday, that was a great idea. But now that the MID has been cut in half, I think we should rent instead.
This whole thing is a big nothing burger.
For the vast majority, yes absolutely I would agree. I’m in that industry and rarely does someone ever ask about the MID, and if they do, it’s never a deciding factor.
I’m not pro buying or against it, but I do think that this conversation could happen. The ability to deduct home mortgage interest is one of the cornerstones of the modern housing market. In areas such as LA, a one million dollar home is very standard. I realize that in the majority of the US that’s way above average. Here that’s a starter home.
Ocean,
It’s a conerstone, but so is a lot of stupid shit that won’t be missed when it’s gone. At 3-4% mortgages, the interest deduction is almost meaningless, even on a $1M mortgage. It mattered a lot when mortgages were 8,9, 10% and the top marginal rate was as high as 70%. But when 90% of the country is in a marginal tax rate of 28% or less and interest rates are under 4%, it’s really not that much of an impact.
It’s one of those things where it would be nice to have, but not having it won’t make people alter their financial decisions.
And remember, the $500K is still available, so at worst on a $1M mortgage, 1/2 the deduction will still be there.
These guys are missing it. It is absolutely a factor in high cost areas where potential buyers go for maximum monthly payment. That said, it will lead to adjacent marginal areas becoming a more desirable alternative than previously while inventory in the higher cost areas dries up even more. It will also encourage more potential buyers making the choice to leave the region altogether. On the other hand, there will be more rental SFH come on the market in the higher cost areas.
Mr. LL,
So if you take out a one million dollar loan then the yearly interest is 40k. To me, that does seem like a substantial amount yearly. So if you can only deduct 20K then you might lose 6-7K per year in tax breaks. Seems substantial even to someone making 200k per year annually.
At least to me. Not sure what others think.
$40K interest at a tax rate of 25% is a $10K deduction. Cut that in 1/2 and yeah you lose $5K.
But….this is only in year 1. Ever year you pay less interest so the impact is lessened.
Second, let’s get real here. If someone can afford a $1M mortgage, which at 4% is $5K a month, losing $400/mo in tax deduction isn’t going to be make it or break it for them. On a $1M mortgage, property tax is at least $15K, insurance is $2K. So total monthly payment is $6-7K a month. If someone can swing $7K a month for housing costs, losing $400/mo in tax deduction won’t be that big a deal.
And what everyone keeps forgetiing is that the rates themselves will be lower. You lose this $5K a year deduction but the old rate of 28% goes to 25%. For someone earning $200K or $300K (the types of people who have a $1M mortgage) that’s going to save thousands of dollars in taxes. Ballpark, for someone making $250K it will be about a $4K reduction in taxes based on the rate reduction, which pretty much makes up for the lowered MID.
Mr. Landlord,
Those are all good points backed by math that is hard to argue with. You may have less of an MID, but your tax bracket is also reduced…likely a wash in the grand scheme of things. If anything, I see less inventory if a tax plan like this passes. Less inventory in coastal CA ain’t a good thing for potential buyers…
Yeah I don’t think you realize there are enough stretched to the monthly payment margin buyers of million dollar homes in SoCal. Regarding the decreasing value of the deduction, these million dollar home buyers also assume they’ll have more income in future years just like $250K monthly payment home buyers do.
There are only a couple of ways to make money off of real estate! Either you sell after your house has appreciated, you flip homes, you own rentals, or you are a builder/developer! Sitting in the home you live in, watching the Zillow estimates go up, or the home next door sell for a lot of money, are creating a false sense of wealth! I for one am concerned at how many people are sitting on their properties … at some point there will be no one left to pay you a premium for that house, and an increasing chance that a hedge fund will eventually get your house for $.75 on the dollar because you missed out and now need the cash in that home!!!!
JNS, that’s very true. That book value on your house means little to nothing until you sell.
It’s supposed to make you feel wealthy because the government knows that stupid people who feel wealthy will increase consumption. The funniest thing is when people tell me, well a RE crash might be good for you since you are a first time home buyer but what about me (the homeowner). I always, reply, yea what about you? Are you planning on selling when the market crashes?
If you own outright and are healthy enough to keep the place up, you can pretty much say what Ruth Brown said in tis song on youtube:
https://video.search.yahoo.com/search/video?fr=sfp&p=if+i+can%27t+sell+it+i%27ll+keep+sittin+on+it#action=view&id=3&vid=895bd1e080b0cf601e220c2b90681e92
As pointed out above, if I was a RE investor, and if I was renting all of my properties, I would see no change in what I can deduct on my Federal Taxes. I can deduct the mortgage interest to an unlimited value and all of my property taxes since rentals are treated as a business. I can also continue to enjoy the benefits of Prop 13 on my properties. I will have no incentive to sell or lower rents.
I may have more incentive to buy more rental properties if the rental income makes sense. This will continue to put pressure on home prices.
For this reason, I don’t think housing will crash hard just because of these laws.
It is likely rents will continue to rise.
It may put more pressure on luxury homes and McMansions which are more often greater than $1M and more difficult to rent. Also, true crapshacks at inflated prices will likely decline in price since most can’t achieve rental parity.
If I were in the market for a 1st or second primary home, I would be competing with investors who have a better tax advantage.
Over the weekend a lunatic leftist attacked Sen. Ran Paul and a militant atheist (possibly AntiFa member) murdered 26 people in a Texas church.
The left in this country is unhinged and dangerous.
Why are you turning this into a political matter? You’ll never know the true story about Rand Paul. Maybe he was banging his neighbor’s wife and got caught. The guy who shot up the church was mentally ill. Maybe if the right would stop blocking gun reform laws and provide health care for the mentally ill this wouldn’t have happened.
Yesterday, a father in Henderson NV shot and killed his 14 yr old son because he was gay.
It seems like we should be fearing crazy white men with guns. Not sure if political affiliation has anything to do with it.
A Republican senator was attacked by his self-proclaimed socialist neighbor but no need to make it political.
LOL
You lefties crack me up some times….
https://www.iheart.com/content/2017-11-06-neighbors-say-rand-pauls-attacker-was-an-avowed-socialist/
Jeff Jones, a registered nurse who worked with Boucher at the Bowling Green Medical Center, described Paul’s attacker’s politics as “liberal.” “He was active on social media and said some negative things about the Republican agenda,” Jones said of Boucher, a Bowling Green, Ky., citizen who lives in the same gated community as Paul. “I think it was unfortunate that they lived so close together.”
A liberal/socialist who spewed anti-Paul diatribes online…..yeah couldn’t possibly have been a politically motivated attack
Boucher is a divorced socialist who is “pretty much the opposite of Rand Paul in every way,†Jim Bullington, a former member of the city commission who knows both men well, told reporters Sunday.
John Allen Muhummad was a crazy Black guy with a gun. The Texas shooter should not have been legally allowed to buy the guns but did so because the Air Force dropped the ball.The main problem with gun control is that the current gun control laws are poorly enforced. Enforce current laws to the max first before enacting more laws, please.
The Texas attack apparently was at the shooter’s ex-Mother-In Law’s church. Nothing to do with politics, although he was an atheist. There are right wing atheists, too. Rand Paul and the Liberal goof-ball who blindsided him had a long standing property line dispute, I believe. Not every Liberal is a peace and love type. Like the former Bernie backer who shot up the Republican softball practice. (Now, that one was definitely political.)
“But Boucher’s lawyer said in a statement on Monday that the incident had “absolutely nothing to do with either’s politics or political agendas” and described the dispute between the men as “trivial.”
There are two sides to every story but the reality is no one will ever know the truth.
“After the multiple posts Gary has made regarding the proposed tax plan, it’s safe to assume at best he simply doesn’t understand basic income tax filing.”
Which sadly describes most Americans. The typical person thinks if they get a tax refund it means they pay no taxes. That’s part of why the govt gets away with taxing at the levels they do. The masses think they pay no taxes because every April they get a check from the IRS. Sadly, this country is populated mainly by imbeciles and cretins. How else do you explain the 2008 and 2012 elections?
“How else do you explain the 2008 and 2012 elections?”
Landlord, look at Richard Star on this blog and you will have the answer.
“Which sadly describes most Americans. The typical person thinks if they get a tax refund it means they pay no taxes. That’s part of why the govt gets away with taxing at the levels they do. The masses think they pay no taxes because every April they get a check from the IRS. Sadly, this country is populated mainly by imbeciles and cretins. How else do you explain the 2008 and 2012 elections?”
Congratulations, you described why trickle down economics is still so popular in politics.
WheelinDealin has it all wrong. Many middle class and upper class persons in California will pay thousands of dollars more in state and federal income taxes. My gross income is $110,000, and I will pay about $2,000 more in income taxes. Since I actually have less tax deductions than most people, almost everyone with a gross income near $100,000 will also pay thousands of dollars more in taxes. The real killers in the proposal tax plan are the loss of the personal exception and the loss of the state income tax deduction. These make the doubling in the standard deduction insignificant for
most families.
The other factor, which everyone seems to forget, is that the loss of even one large deduction may mean that you loss all deductions since they are cumulative. The total of the deductions must add up to more than the standard deduction or you can’t claim any of them. For me, the inability to deduct state income tax is the killer.
The cumulative losing the rest of the deductions issue seems a meaningless point because the standard deduction is comparative. Any benefit to itemizing is always in excess of the standard deduction.
I am going to assume you are single and have no children otherwise your effective tax rate is in the low single digits.
How do you figure?
Right now the standard deduction is $12K. It doubles to $24K. At $110K gross income, no way you will be worse off. You don’t make enough to have you state income tax be that much of a factor.
You’re also forgetting that the 10 and 15% rates are replaced with a 12% rate up to $97,000. Right now the 25% rate kicks in starts at $75K. So the first $100K will be taxed lower under the new plan vs what exists right now.
You will at worse break even and most likely come out a little bit better.
He has to be a single flier because itemizing for them is much more valuable. They hit higher tax brackets sooner and get a smaller standard deduction. This saves them a ton by itemizing.
After the multiple posts Gary has made regarding the proposed tax plan, it’s safe to assume at best he simply doesn’t understand basic income tax filing.
On the proposed income tax change, I found one rational Republican Congressman from Long Island. See:
https://www.youtube.com/watch?v=P63YDlf8LuM
Even he doesn’t think the plan can be stopped from passing in the House of Representatives.
They’ll kill it like they did O-Care
http://www.zerohedge.com/news/2017-11-06/john-mccain-confirms-tax-reform-doa-senate
Lots of greedy pigs out there in this current bubble. Even tiny towns with no economic drivers are bubbled out. Podunk America is super speedy at present. These pigs will get slaughtered. Buying now is for bozos, barring the off great deal that can emerge…and they do.
Super ‘spendy’ at the moment not speedy.
What’s wrong with being a greedy pig exactly?
To begin with, pigs wallow in their own piss and shit…not exactly desirable.
“Wherever the crowd goes, run in the other direction. They’re always wrong…”
-Charles Bukowski
First it was millennials will go out and buy in droves.
Than it was boomers are not selling their homes and millennials will rent until they die or keep living in Mom’s basement.
But now its this:
http://blog.sfgate.com/ontheblock/2017/11/06/move-over-millennials-a-surprising-new-demographic-is-taking-over-the-rental-market/
From the article:
“Many of us have an image of renters as young, single, twenty-somethings, getting their first place in the city. But according to new analysis of U.S. Census data, the demographic group driving the rental market nationwide is actually educated, empty-nest baby boomers who prefer to live in the suburbs.”
Whaaat?
I know a few Boomers who cashed out and are now true millionaires. They are now renting on the sidelines with closets full of cash waiting for the crash so they can buy again. Or some have cashed out and are living in an assisted living apartment waiting to buy an assisted living condo when the prices crash.
My poor mom is staying put with her $1100 yearly Prop 13 property taxes. She is kind of lonely in her 1500 sq foot $1.3 million dollar 1960’s tract home but it is home to her. She was a millionaire on paper in 2006 and then when her house dropped by 50% in 2009, she was no longer a millionaire. Now she is a millionaire again but only on paper. At her age, she likes the security of a $200/month PITI living with room for her stuff and less than a mile from the beach. An example of buying low and holding for 30+ years.
Awesome! I have several properties in the ‘burbs, and older, well educated, high income earners are the perfect tenants. Millie, this is music to my ears. Thanks for sharing.
https://www.marketwatch.com/story/how-the-gop-tax-plan-would-affect-home-owners-and-buyers-2017-11-06?link=sfmw_fb
Tax plan will result in lower prices if it passes. Who would have thought trump is going to do something productive.
Did you read the article?
“Price declines would be short-lived and likely not too widespread though. As experts have argued, few homeowners are already taking the mortgage interest deduction as is. And over time, the market will adjust to the new equilibrium caused by the change to the mortgage interest deduction.”
“Firstly, the change to the mortgage interest deduction grandfathers in people whose loans are larger than the new cap. Some of these homeowners may decide against moving to a larger, more expensive home if it means they would lose their tax benefits. Instead, they might decide to get a cash-out refinance or to take out a home equity loan to make home improvements.
Secondly, homeowners must now stay in their house for longer and move less frequently to qualify for the tax breaks on the proceeds of a home sale.
Both reasons will exacerbate existing problems. “It’s just another way that we’re de-incentivizing mobility,†said Hale. It also threatens to make inventory shortages worse and to drive up home prices. As a result, first-time home buyers have less affordable inventory to choose from.”
I don’t think it will in the short term. It’s more likely going to create further disincentive to sell and that will constrain supply even further. The only option will be move into the ghetto or leave SoCal. Eventually the state of CA will come into dire straits and drop a bomb on property tax payers which will ignite the fuse of selling you’ve been wishing for, but it could take many more years before the hypocrites running the show in Sacramento will be forced to sacrifice their golden goose.
Agreed. In order for CA to meet it’s future pension obligations the money will have to come from somewhere and it will most likely be from property owners and businesses. Prop 13 will be repealed and/or amended at some point. If incomes continue to stagnate, increasing state income taxes (which are already highest in the nation) won’t be tenable.
But whatever the actual number is – and it’s hard to pinpoint exactly when a generation starts and ends, the yuutes of today are more conservative than the yuutes of 10ish years ago.
They grew up in social media, yes. But because of social media, they’ve grown up with access to all sorts of opinions online. They know that there is no one source of truth. CNN says something? Big deal. There are 100 other blogs/websites/twitter accounts that say the opposite.
Maybe they won’t be more conservative per say, but more receptive to different opinions. And since MSM/Hollywood/Academia is full on communist, by definition, they will be exposed to more right wing points of view.
That’s one thing I’ve noticed with the yuutes I know. They’re willing to listen to everything and everyone. With music too. Thanks to streaming, there’s few people who are into just rock or just hip hop or just country. Everyone listens to everything. If something sounds good, they embrace it. And that’s how they view life in general. There are few black and whites, lots of grays. And I think that is going to change the political landscape and nobody is really ready for it.
Clearly, this link points to an article that was written by a renter wishing that prices will fall.
too bad, mille.Lol.
https://www.marketwatch.com/story/move-over-millennials-generation-z-can-hardly-wait-to-start-buying-homes-2017-09-27
That is truly funny Jed. Next we will hear This is the year Generation Z will go out and buy in droves. We heard that the last three years about millennials. RE cheerleader always come up with some new bs.
I’ve been seeing many data points about Gen Z that gives me hope for the future. They are the anti-Millenial generation. A lot more conservative socially and fiscally. The oldest GenZers are about to start voting and all those “just wait a few years until the boomers start dying off and Democrats will never lose again” predictions are about to be turned on their heads.
I’ve been seeing this first hand as well. Teens I know seem to have their heads on straight. Their fashion sense is still WTF to me, but hey we all looked stupid in high school, when seen 20 years later, right?
Mr. Landlord: The oldest GenZers are about to start voting…
Depends on how you demarcate the generational lines. Not everyone agrees.
Some say that Millennials were born from 1981 to 1995. Which means the oldest Gen Z — born in 1996 — is 21 and has already started voting.
I wouldn’t assume Gen Z is socially and fiscally conservative. They grew up in social media echo chambers. They’re even worse snowflakes than the Millennials.
Those college girls bawling after Hillary lost. They’re Gen Z.
Millenials are generally those born between 1982-2000. So it follows then that GenZ is those born 2000 and on, which means that the first batch of GenZers will turn 18 next year and hence, start voting.
I think this is quietly drawing the line on what a home is for. Is it for flipping/investment or to live in? The breaks are definitely being applied and by valuing the primary residence first with tax incentives is a start IMO.
Wow, I haven’t seen Millennial excited about anything as much as the new tax plan except maybe his new selfie-stick.
I have extremely low expectations when it comes to Trump. No matter if the plan passes or not it was a pleasant surprise. New tax lows will have little to no impact to the upcoming recession and RE crash. The crash cannot be avoided.
If I every buy a selfie stick I would order it from wish.com. The Chinese version of Amazon and its exactly what you would expect. Ridiculous low prices for the same quality. Shipping is very cheap as well. The only disadvantage compared to Amazon is the delivery time. It takes several weeks. Fortunately, I am gifted with patience. Waiting in order to save money is a no-brainer to me.
What you are going to see is people purchasing homes then renting it back to themselves. That gets around any mortgage or property tax write off caps. My friend is an accountant and he said wealthy people are already inquiring about such a deal.
This is exactly what Trump does. He even had his campaign headquarters paying him rent in Trump Towers from campaign funds. I would assume that he rents his principal home in Trump Towers from himself. No way is this tax plan going to hurt him or his kids. And when he kicks the bucket he can leave them a fortune minus the estate taxes which he plans on eliminating. This plan hugely benefits millionaires while throwing a measly couple bucks at blue-collar workers in middle-America all the while increasing the deficit by over a trillion dollars. If you force landlords to pay more taxes on their principal residences they are going to look for ways to make up the difference, like increasing rents. And it will be easy knowing that their tenant Joe the plumber has more money in his pocket due to tax breaks.
That’s mortgage fraud. You cannot purchase as a primary residence and then convert immediately to an investment property. You sign an affidavit at closing which states you will occupy the property as a primary residence.
There are severe penalties for mortgage fraud.
You can buy a home as a primary residence, move in, then turn it into a rental after a year or two. Perfectly legal. I do it all the time.
Jt,
That is correct you can do that after one year but stating that somebody will buy a primary residence and turn around immediately and turn into a rental that is considered mortgage fraud
“That’s mortgage fraud. You cannot purchase as a primary residence and then convert immediately to an investment property. You sign an affidavit at closing which states you will occupy the property as a primary residence.”
I’ll let you in on a little secret Dan. “PEOPLE LIE & NO ONE CARES.” Once you get the mortgage, no one gives a crap what you do as long as you keep paying. Besides who you going to call, the mortgage police? Now if you go into default or have a dispute with the mortgage holder, then I assume something like this could be used against you.
JT, I don’t think that the IRS will fall for that. They will crack down on that hard. It is not that I am for higher taxes, it is just how those goons act.
If you study financial history, you will find the reason interest and taxes are deductible is to even the field with rentals … that is the main reason.
There is a fair market rent value rule that the IRS can spring on you if you rent to relatives, etc.
https://bizfluent.com/info-8617156-irs-rent-property-management-services.html
The accountants on the forum (link below) I found say it’s personal use and therefore not allowed:
https://www.accountantforums.com/threads/can-i-rent-my-own-house-to-myself.14044/
Maybe if you incorporated, handed over control to a rental agency and then rented from them, your corporation could deduct all of that stuff, but at what overhead cost to you? Maybe you’re better off just forgetting the whole thing.
I think you misread your link. It says something different …
But, as to your particular situation, IRC 280A probably
applies. That section would, in so many words, define this
situation as “personal” use and therefore no deductions
other than interest, taxes and casualty losses would be
allowed.
So, your link says you can write off interest, taxes, and casualty losses, but nothing else. That is all you need. Just as my friend said, you can rent it back to yourself. And, you can write off interest, taxes.
No, what will happen is more potential sellers will either not sell or opt to become landlords instead of selling. The available inventory in high cost areas will dry up and that will leave only the deepest pocketed buyers participating for a relatively small set of available homes.
So much noise on this site…everyone knows JT is wrong
http://www.zerohedge.com/news/2017-11-07/there-home-price-bubble-your-city
The Republican tax plan may fail by a few votes, but I will never forgive them for trying to raise my income taxes by thousands of dollars and have the gall to call it a tax cut for the middle class. They have permanently lost my vote accept perhaps on the local level.
The biggest losers under the proposed GOP tax plan are actually single persons who will pay over 50% more in come taxes than married couples with the same income because married couples will have twice the standard deduction and a much lower taxes rate at the same income level.
Here is example of the punishment which single person will suffer under the proposed tax plan. The single person would pay 73% more in income taxes than the married couple even if only one of them were working. Also, if one spouse died, there would be a sudden 73% increase in taxes to be paid by the surviving one if he/she were the only one working or if the couple had been living on a retirement income. If there were only one working spouse and the couple got divorced, that working spouse would probably go bankrupt since he/she couldn’t even deduct the alimony he now had to pay to his spouse and his taxes would increase by $73%.
Taxable income: $90,000
Single person taking standard deduction with an income of $90,000:
$90,000 – $12,000 standard deduction = $78,000 taxable income
$45,000 at 12% = $5,400 and $33,000 at 25% = $8,250 for a total of $13,650
Married couple taking the standard deduction with an income of $90,000:
$90,000 – $24,000 = $66,000 taxable income
$66,000 at 12% = $7,900
If you are going to be fair then you need to run the numbers for the CURRENT plan as well.
90k-(6300+4050)=79,650 of taxable income
Income 0-37950=$5,226.25 (10%-15% bracket)
37950-79650=$10,425 Total tax under current law=$15651
You are still getting a tax cut
Woody makes a good point, but most people making $90,000 in California would probably itemize. For a single person, it would not take very many deductions to get above the current $6,300 standard deduction plus one $4,050 personal exemption. SALT and charitable contributions would be enough for most single persons. However, many couples would probably do a little better with the proposed $24,000 standard deduction ($12,600 + $8,100 = $20,700 versus $24,000). I said, it is the mainly the single (divorced, widowed, etc.) person who would do worse under the proposed tax plan.
That’s how it currently works with the standard deduction. Marrieds filing jointly get double the standard deduction of single filers, how is the proposed plan any different in that regard?
It isn’t any different and the single person still gets a tax cut when comparing like for like under the current GOP plan.
The only problem with the tax plan is it doesn’t go far enough but is far better than existing law.
According to Zillow the lot is almost 3,700 sqft. Seems you could demo the studio and build a decent sized home, no? Assuming you could get the permit of course…
https://www.zillow.com/homedetails/10449-Scenario-Ln-Los-Angeles-CA-90077/20531764_zpid/
To all the socialists here advocating for “free” govt run health care….just make sure you don’t ever, you know, get sick.
https://www.forbes.com/sites/tomasphilipson/2016/09/06/eu-vs-us-cancer-care-you-get-what-you-pay-for/#5ddfe17f6ba5
American women have a 63 percent chance of living at least five years after a cancer diagnosis, compared to 56 percent for European women.
American men have a five-year survival rate of 66 percent — compared to only 47 percent for European men.
Lights out for the housing market
The Republican Tax Plan Will Crush These Housing Markets
Thank you Drumpf for making the housing market great again!
http://www.zerohedge.com/news/2017-11-08/republican-tax-plan-will-crush-these-housing-markets
Doesn’t look like this thing is going anywhere
The chances of the tax plan passing in it’s current form are slim to none. Sorry to burst your bubble Millie.
WheelinDealin,
its not all just doom and gloom. Trump is your boy. Believe in him and hope the tax plan will pass!
You’re only fooling yourself with this nonsense. It’s not getting better anytime soon. Sometimes you have to put the hubris pipe down to clear the smoke in order to get an unclouded view of things. The proposed tax plan will make your situation even worse. You don’t seem to understand that as long as there is a grandfather clause, existing owners are going to adapt their behavior in ways that will lead to the exact opposite of what you want to happen.
Avi,
just have some patience. The RE cycle is already nearing its end. Interest rate hikes, the tax plan and the upcoming recession will do the rest! Just wait and see!
Dude, there’s patience and then there’s wasting time.
I mean, California has been getting progressively worse for decades. No pun intended! Every time it seems like there’s going to be a reprieve, something else unexpected immediately comes along to prop up the suck factor. But hey best of luck with the don’t buy and hand in there plan. We’re not getting any younger.
Avi,
“then there’s wasting time.”
How is waiting and saving for a crash a waste of time? I live a stress free life (financially). That alone is worth a lot and most Americans do suffer from financial stress. I define a waste of time as “profitless activity”. By not buying I am able to invest money and see my bank account go up each month. I don’t see the connection you make. Can you please elaborate and help me understand what you mean?
I don’t think it needs to be explained. What you really want is a house.
Avi,
“What you really want is a house.”
Sure! If its 50-70% less than what the asking prices are today.
Otherwise I really want to rent a house in today’s market and save tons of money!
No worries, mille. In about 4 decades your parents will pass on their home to you. Until then, find a good hobby to keep you busy.
Hi Jed,
“In about 4 decades your parents will pass on their home to you. Until then, find a good hobby to keep you busy.”
That’s correct! One o my hobbies is to post and read here. In addition I will utilize the knowledge I gained on blogs like this one to buy a house at a deep discount during the crashes. Roughly every ten years the housing market crashes in California. If I buy cheap property every ten years it will keep me busy.
The things millenials are doing to live in the city.. further exacerbating home prices in the city.
http://www.businessinsider.com/how-millennials-live-in-san-francisco-2017-2/#martin-greenberg-crashed-in-conference-rooms-when-he-was-enrolled-in-a-boston-based-startup-accelerator-in-2016-he-heads-up-an-on-demand-housing-startup-called-bedly-that-allows-renters-to-lease-a-fully-furnished-apartment-with-the-click-of-a-button-15
a worldwide trend also
https://graylinegroup.com/urbanization-catalyst-overview/
This trend is more mature in the United States, but specific cities are still growing. Today, 82% of North Americans live in urban areas and are increasingly concentrating in mid-sized and large cities. In 2010 41 urban areas in the United States housed more than 1 million people, up from 12 areas in 1950 and projected to grow to 53 by 2030.
Love the way they spin it: way to make new friends, perks like free internet, living with intention, embracing community.
In reality this is comparable to living in 3rd world countries where people are crammed into densely built housing with multiple families sharing bathrooms and kitchens.
Great job Republicans:
Three Americans Now Own More Wealth Than Bottom Half of US Combined: Report
http://www.zerohedge.com/news/2017-11-09/three-americans-now-own-more-wealth-bottom-half-us-combined-report
Remember: Capitalism = Great! Everything else = communism/bad
And this GOP tax plan is going to benefit the rich. People are squabbling over paying an extra couple grand a year while the rich are drooling over no more AMT. I read on Donnie’s 2005 leaked tax return it would have saved him about $31 mil that year alone. All this right vs left, blue vs red is a distraction from what’s really going on. This is aristocracy vs democracy. No one wants true communism but fascism isn’t all that great either.
There is no difference between communists and fascists. Ask those who lived under Stalin or Hitler if there was any difference. In both cases the government is very big, above the law and have absolute power over individuals. Whatever freedom an individual has is granted by the government.
In a democratic republic the government is very small, it is under the law and it doesn’t have more power than granted by the individuals. It is opposite.
That is the reason we have an ideological battle in US between those supporting big government and globalism (democrats and RINOs=collectivists) and those who fight against big government to preserve the Constitution, the Bill of Rights and individual freedoms. That is the real fight.
What difference does it make if the government is big and owns everything (communism) or big and control any business like it belongs to the government (fascism). In both cases you have a very small number of individuals who are dictators and they pick the winners and losers. In both cases they kill anyone who oppose them. That is a false paradigm propagated by the MSM with their propaganda. It does not matter if you end in the ditch from the right or the ditch from the left. You are still in the ditch and under tyranny.
If the government is big enough to give, it is big to take away anything it wants, including individual freedom – see Patriot Act and TSA and all spying taking place on citizens like in communism.
If 3 people in the game own more than half of the rest of the players, this game of Monopoly is starting the final remaining turns around the board. If you don’t have any properties, you will be out of the game first. The property owners will happily squeeze the renters out (at least this is how my friends play the game). However, what does out of the game mean in the real world?
I’ll just hang out in jail for the rest of all this and probably do better than the rest.
Like a true communist you did not mention the names of those 3: Gates, Buffet and Bezos – all three globalists who give money to the democrats and RINOs (Democrats with R after their names).
Bezos is not only the larges shareholder of Amazon but the owner of Washington Post – the mosts collectivist/democrat/liberal/globalist/”progressive” paper you can find – in other words the one who spoon feed you with communist/bolshevik propaganda.
Buffet is the one who not only voted for your idols Obama and Hitlery but financed them heavily. He still funds most of the democrats, because they are globalists and further his agenda.
Bill Gates is another globalist, good buddy with Buffet and on the same page on their political view.
All these globalists want to take from the middle class and give to other despots in third world countries to advance their agenda. They also want a US without borders where all the mass of humanity is free to come and share in the wealth of former middle class and compete with whatever is left of the middle class in a race to the bottom. More millions from India saves Microsoft lots of money and keep the workers from US with no hope to get ahead. Not only the salaries are capped by the H1 visa immigrants but the cost of living in Seattle goes through stratosphere due to enormous demand on RE.
You???!!!!….just a victim of their manipulations or paid by them.
Flyover, you just proved Richard Stars point about capitalism.
Policies that favor the ultra rich only serve to move wealth from the middle class (that would most likely be used for consumption and produce American jobs) to a few people who either move money out of the country, manipulate the entire country through media, and control both parties..
The argument for both Bolshevik/communists propagandists and zerohedge/breitbart nuts should be that a democratic government should work for the good of most. If it’s not, then both sides lose.
Flyover, are you actually saying Warren Buffet is a Commie?
I understand your experience with communism, but Warren Buffet isn’t one of them.
My comment above is closer to the truth. True Capitalism is like a game of Monopoly. More and more people will be out of the game shortly. Since this isn’t a game, they will be homeless and marching on Washington just like they did in the 30’s. If we are lucky, they will vote for another FDR who was much more socialist than Bernie. If we are less lucky, we will get a true Commie elected by very desperate starving people.
As some here have noted, red/blue, capitalist/socialist/communist bickering are mere distractions. I imagine most on this blog have read/heard about the paradise papers that have been in the news recently. If not, here is a link followed by a few key thoughts worthy of mention:
https://www.theguardian.com/news/series/paradise-papers
“It’s been clear for a very long time that the very wealthy have bought and paid for our government and governments worldwide. They have corrupted everything, Every institution. They have succeeded in pushing us back to the bad old days of long ago. Back to the time when the aristocracy could treat the peasants with contempt. It is a bit of an eye opener to discover just how widespread this is among the “beautiful people”.
This despicable system survives and thrives because the parasites that benefit from it have employed one of the oldest and best known strategies. Right out of Machiavelli’s The Prince they have crushed us with the simple idea that a house divided cannot stand. They have divided us with the endless partisan bickering that pits progressive against conservative.
They have divided us into team Democrat and team Republican. They abandon the principles of both parties when it suits them. They stoke hatred for each other in the name of parties that stand for nothing. We can open our eyes and stop being their dupes or we can unite and fight to take back our freedom our standard of living and our children’s future.”
“Slavery, indentured servitude, feudalism, landed aristocracy, etc. have been part of civilization since the beginning of recorded history. The rise of the dominant middle class in western society since WWII is in fact a historical anomaly, and is currently undergoing a “correction” led by the 1%. The system is in fact intentionally rigged, from Byzantine tax laws, debt hysteria driven austerity, privatization of public assets, and the junk economics being taught at our universities, to bring us back to a more “natural” neo-feudalistic society. It takes only two things to keep people in chains, the ignorance of the oppressed and the treachery of their leaders.”
@WaitASecond
What you are referring to is socialism (for the rich) rather than capitalism. A true capitalistic society would have not bailed out so many failed financial institutions nor supported corporations with cheap and easy debt. A true capitalistic system rewards the successful companies and allows the weak ones to fail. Prices of goods (i.e. real estate) and services would be based on true demand rather than how much debt speculators and investors can pile on.
@Seen it All Before and @Wait a second,
I hope this comment will posts. I tried 2 days ago and it didn’t posts.
Buffet is not a communist in a true sense of the word otherwise nobody stops him from sharing his wealth with the poor. One thing most people don’t understand when they hear talk about more taxes for the rich is that it doesn’t mean more taxes for billionaires or those who make the laws. For them there are always loopholes.
What taxes for the rich mean is taxing more the top 10% but excluding the 0.0001% who hate competition. Taxing more is for small businesses who employ most people and are creating most jobs, for doctors and 2 income professional household – the people who actually do something of value for this society. The 0.0001% want everyone EQUALLY poor like in communism. That way they don’t have the means to organize and keep resistance. The bulk of these taxes benefit the billionaires and their businesses directly or indirectly. They want more taxes so they can become wealthier but there is nothing to tax at the bottom, therefore they target the top 10%.
Yes, you are right that they want a new form of feudalism; I call it communism because that is how life was under communism – few people above the law who controlled everything. That is what the billionaires want and it is not altruism. If you want to call it feudalism, fascism or communism it makes zero difference – you will feel the same.
Everything is about wealth transfer from the productive class to the super rich billionaires and I don’t like that. Also, I am not for transferring wealth from the rich to the poor by force. I would be happy if the rich and everyone else and all corporations would pay 10% tax with zero loopholes and no government support, but they don’t. That is the sad reality. We can talk forever about the tax if it should be 20% or 35% or whatever if that is only on the paper. What counts is how much really they pay in practice. Most of those in the top 10% excluding the 0.0001% billionaires pay 35%. I doubt the billionaires pay 10%. If you consider ALL taxes a person pays we have a very regressive taxation in terms of percentages; that is the sad reality.
The billionaires want globalism because that is a world wide form of feudalism/fascism/communism with no escape for the 10% at the top. That way they can plunder at will. It is all about control the same like the Patriot Act (it doesn’t have anything to do safety or fairness). Because all liberal/progressives are globalist, they support the Democrats. A good percentage of republicans are also globalists and are pursuing the same policies like the democrats (RINOs). I like them as much as I like the democrats because that is what they are.
A communist/fascist/globalist is someone who likes to control and live like a parasite on the productive class. By that definition, yes, Buffet is a “commie”. Like many you have this wired notion that communists like to share what is theirs with others. Nothing is further from the truth, or nobody stops them from sharing now. There so many non-profit organizations who would benefit from that more than the government with higher taxes. That is not the reason. ALL communists/fascists/globalists are the same and they want TOTAL control of lives, resources and wealth. If that is what you want, you’ll get there.
All I want is small federal government (decentralized government), low taxes, immigration laws to be implemented and no empire building – basically what the swiss people want and get. For me that is a true democracy and individual freedom. Just pure democracy can degenerate really fast in mob rule where the rich and the poor use the force of the government to steal from the producers – that is what we have now.
I hope I was more clear now since everyone thinks only in terms of official narrative of red vs. blue, left or right. Brought to their national conclusion, they behave the same – totalitarianism.
The subject is wealth inequality. Regardless of your political color you have to admit that under 8 years of Obama, the wealth inequality increased the most and fastest.
Of course I am not as simple minded like Richard Star to blame it all on republicans or democrats. The cause was the FED via QE, ZIRP and NIRP. In the last 8 years no tax law was passed by republicans; so how exactly the republicans contributed to increase in wealth inequality????!!!!……but that is liberal logic for you!
Communism is great for reducing inequality. Everyone is equally poor and miserable.
Both parties seem to favor the very rich. They really only differ on social issues. Still it is worth voting either because of the social issues or because one party might offer some short-term gains to an individual voter–like cutting his taxes in the short-term or granting citizenship to his friends or family.
Can one of the communists here ‘splain to me how making Bill Gales poor leads to you becoming rich?
Gracias.
Not a communist but apparently some rich people want to pay more taxes because they understand trickle down economics does not work. Income inequality is at an all time high and that’s a problem.
https://www.google.com/amp/www.latimes.com/opinion/op-ed/la-oe-steyer-im-a-billionaire-please-raise-my-taxes-20171005-story,amp.html
I read there is a petition signed by 400 millionaire/billionaires asking for higher taxes.
I remember having a conversation regarding this issue with my friend’s father who comes from an uber wealthy family (but very down to earth). I was shocked by his response when he said “we (the wealthy) just need to pay more taxes, that’s itâ€.
I don’t think Gates paying more taxes will make me or anyone rich. That’s not the point. But reinvesting money into the American people is not a bad idea. History shows that eventually people will revolt if income disparity becomes too great.
SoCalGuy,
I agree with most of you say. One thing most people don’t understand when they hear talk about more taxes for the rich is that it doesn’t mean more taxes for billionaires or those who make the laws. For them there are always loopholes.
What taxes for the rich mean is taxing more the top 10% but excluding the 0.0001% who hate competition. Taxing more is for small businesses who employ most people and are creating most jobs, for doctors and 2 income professional household – the people who actually do something of value for this society. The 0.0001% want everyone EQUALLY poor like in communism. That way they don’t have the means to organize and keep resistance.
Yes, you are right that they want a new form of feudalism; I call it communism because that is how life was under communism – few people above the law who controlled everything. That is what the billionaires want and it is not altruism. If you want to call it feudalism, fascism or communism it makes zero difference – you will feel the same.
Billionaires pay little to no taxes; i think that is jut lip service.
@Flyover
Very well put. The elite .0001% write the laws and own the politicians. No way they would they want anything that threatens their domination of the economic and political systems. The economic policies enacted since the financial crisis were devised to preserve their wealth — nothing more and nothing else. This trickle down effect generated fairly weak economic growth. But none of it promoted long term and sustainable growth.
The tax bill will probably split the difference. House wants $500K senate wants $1M, we’ll get $750K. And it will be fun watching Democrats tell someone in Ohio with a $250K house that limiting the tax deduction to $750K is somehow anti-middle class.
Mr. Landlord, you are asking the wrong question. The real question is why someone living in low cost of living state gets a standard deduction, which much greater than his real deductions, while someone living in a high cost of living state can’t claim the real deductions which he has. The Republican tax plan, as far as individual tax payers goes, is really a wealth transfer from high cost of living states to low cost of living states.
This fight over the middle class tax cut crumbs is simply a distraction from the major features of the tax plan which benefit the top 1% and corporations. While the middle class in different states fight among themselves, the rich enjoy major tax cuts and it is all paid for with more and more debt.
Still, it is amazing that the Republicans are willing to sacrifice their own suburban middle class voters in blue states to benefit the very rich. This might come back to haunt them in the next election.
Gary,
You’re looking at it the wrong way. A standard deduction that is the same for everyone is equitable.
If you want to live somewhere with a 12% income tax and $20K property tax, have at it. Just don’t ask me to subsidize 1/4 of it. Right now, high cost states are subsidized by low cost states. The tax plan simply removes this subsidy.
And once again you forget that the rates are going to be lower as well, which will offset the loss of your precious deductions.
Also Gary,
What suburban upper middle class voters in blue states? If you haven’t noticed, those voters are almost all Democrats now. Suburban upper middle class Republican voters live in Dallas, Houston, Atlanta, Tampa, Raleigh. They don’t live in LA, SF, or NYC. There will be very few Republican voters hurt by this plan. If anyone is hurt by it, it will be leftist scum in the Bay Area and NYC. The same leftist scum who always whine about taxes not being high enough. Well there you go….you finally got your wish.
As to the 1%, you do realize that the evil racist awful rich white guy millionaire isn’t getting a tax cut right? The top rate stays where it is under the house plan. But why left facts get in the way of a good socialist rant? LOL.
The reason is because you’re receiving proportionally more benefit (i.e. opportunity) from living in a high cost of living state. Agreed that this plan is the harbinger of a wealth transfer out of high cost of living states. The real question is, are you going to get out while the getting is good, or are you going to continue to complain in place as it gets worse? This party is just getting started!
Exactly Gary…
The billionaires don’t need to pay less taxes. Nor do corporations who are pocketing the money while wages are stagnant.
Tax cuts for the rich, no more AMT, no inheritance tax. The is yuuuuuuuge for the 1%.
Agreed. It’s not the rest of the country’s responsibility to subsidize areas that have absurd housing prices. If your community chooses to allow “average” million dollar homes then you don’t get a helping hand to legitimize it.
The Republicans are brainwashing those in red states into supporting this plan. The GOP is praying on your jealousy over those who live in blue states who already pay much more than their fair share in income taxes and have to suffer under a very high cost of living over which they have no control.
The GOP proposed tax plan gives huge tax breaks to corporations and eliminates the estate tax and ATM taxes so that the ultra-rich can lord over the rest of us in perpetuity. The vast majority of Americans will get absolutely nothing—except reduced Social Security and Medicare coverage and reduced services, because there simply won’t be enough tax revenue to fully fund those programs with ballooning deficits.
High cost states also hinder federal efforts to enforce immigration laws.
California welcomes illegals, ordering city and state officials to not cooperated with ICE.
If so called “sanctuary” cities and states want to subsidize illegals — with free schooling, emergency room health care, and other entitlements — why should they be subsidized by states that obey immigration laws?
I agree with Gary. By reducing or eliminating certain deductions like property taxes and mortgage interest the GOP tax plan is specifically targeting certain states with negative effects. And these states happen to be blue with high costs of living. Is this coincidence or by design?
Now the Senate wants to include eliminating the Obamacare mandate in the proposed tax plan. Elimination of the mandate will be catastrophic to Obamacare. But this should kill any momentum this tax bill had and tie this so-called tax reform up in the house and senate till it dies the slow painful death it deserves.
Gary, why do you complain so much about higher taxes? I thought all liberals like higher taxes. That is the reason blue states have higher taxes – because the liberals love them.
Flyover it’s interesting how the same people who like to say they are proud to pay their taxes seem to be having a hard time with the opportunity to pay more! Then again I’m pretty sure none of them have been adding a tip to their bill each April 15th.
Here is how absurd the leftist MSM is:
https://www.nbcnews.com/politics/congress/they-ve-got-issues-here-s-who-mad-about-gop-n819116
These are quotes from the same artciles:
“Issue: Too many goodies for the rich, many of the biggest benefits go to corporations, large business owners and ultra-wealthy heirs.”
“Issue: Not enough goodies for the rich”
Same article, LOL. So the tax plan is a giveaway to the rich but doesn’t have enough goodies for the rich.
This is “journalism” in 2017. Sigh….
WaitaSecond,
I did not proved Richard’s point at all. He is a true collectivist (socialist/communist). He is for redistribution of wealth. What we have in this country and socialist countries in Europe is not capitalism. Capitalism implies free markets. We don’t have free markets since 1913 when the FED and IRS were created. Since then, the whole economic and political system is by the banks and for the banks and everything is manipulated with no price discovery. The communist Central Committee here is called Central Bank, basically a very small group of people controlling everything.
Every time when you have redistribution in this country is not from billionaires to the poor. That never happens. It is always from mom and pop businesses, doctors and small entrepreneurs to the very rich and crumbs to the poor (from the top 10% to the 0.0001%). These policies will create a small group of super wealthy and the rest EQUALLY poor with no incentive to increase the economic pie.
The democrats and RINOs support this redistribution, collectivism and globalism. The conservatives are against all 3. You can never have a robust middle class supporting these 3. All 3 contribute to a race to the bottom for the middle class.
Take globalism for example. That implies open borders and you can never have a robust middle class with open borders, millions of illegals working just for food. You can not have socialism and open borders and the democrats know this. They advocate for open borders and not to implement existing immigration laws.
Take redistribution for example. Do you REALLY believe that Soros, Bezos and Buffet (main contributors to the democratic party) want the billionaires to be taxed heavily to share with the middle class???!!!!…All their actions prove that they always want to increase the taxes on the middle class so they can be subsidized one way or another and get richer. They know that there is nothing you can take from the poor except their lives.
More than 3/4 in congress are either democrats or democrats with an R after their names (RINOs). All are globalists.
Read my other posts to get a better understanding of my point. Richard’s point is that just because you avoid globalist Bush, McCain or Romney and vote for globalist Hillary or globalist/communist Berney you are are in a better place. My point is that if you vote for Hitler or Stalin, for fascism or communism, does not make any difference – ZERO. You are still a poor slave with no rights and freedom. Only a constitutional republic, small federal government and more power to the states can preserve those. Read what the founding father advocated. We are supposed to have the Treasury notes (currency) not Federal Reserve Notes (private cartel issuing our money).
Decentralization is the key. Study Switzerland in depth and you will see what they practice. I did and travelled there many times and talked to people who live there. Their prosperity is not due to socialism. Most of them are conservatives. They want a Switzerland for swiss. It has the lowest taxes in EU and is the least socialist. That wealth did not developed in a vacuum. They are against a super state (EU) with a far away center of political power in Brussels. They don’t like EU and the centralization of power. They want the whole power at the Canton level.
Switzerland is very capitalistic- more so than the U.S.
The Swiss have historically been neutral. By joining the EU they are forced into their politics. By remaining more independent/neutral they don’t have to spend a large chunk of their money on pointless wars like the Republicans like to do. Gotta keep their constituents happy at Halliburton I guess.
You gloss over the fact of what the Swiss do get.
Universal health care for everyone. 3 months sick leave and an additional 3 months at 50% pay.
3-5 weeks vacation per year
Maternity leave
They also have a lot of unions who have good relationships with the corporations so they pay decent wages. I belong to a union but we had to fight and threaten strikes just to get a raise. They don’t strike in Switzerland. It’s too expensive and both sides lose.
Education is virtually free or low cost. They have the lowest youth unemployment rate in the EU. Bachelors or masters degrees about 1600 euro a year (medicine is the only exception at $16k). PhD for 200 euro a year.
But you are right- decentralization is the key. Happy, productive, educated people have nothing to do with it. It seems like they get a lot of things like Bernie was preaching about but everyone screams communism. Here you are praising a country who has those very things that generate prosperity.
Well said, SoCalGuy.
Just because there is Universal Healthcare, affordable college, vacation, livable wages just as Bernie promised, it doesn’t mean that it is communism. It just means that life isn’t a game of Monopoly where one person wins with all of the money. Some socialism has to be mixed in to leash in true capitalism.
The Swiss no longer want to be part of the EU.
You can not have what the Swiss have without mass decentralization – that is what the conservatives in this country cry out loud since the founding fathers.
You can not have what the Swiss have without their immigration policy and enforced 100% of the time. You can not offer what the Swiss offer to all people coming here illegally or mass legal immigration. Bernie supports mass immigration legal and illegal. All Californians support mass immigration; that is why CA is the only sanctuary state.
Until the Democrats adopt Trump’s position on immigration you can not even dream what the Swiss and Israelis have. It is a mathematical impossibility regardless of your opinions, dreams and ideology. Both countries have almost no immigration for a very good reason – to support their own citizens.
Yes, we also have to stop all the empire building. Ron Paul, a true conservative was speaking against these for a long time and for what? All RINOs and democrats hate him. Yes, he was also right on the FED like he is right in almost everything he says. The Democrats and RINOs? ALL loonies!…
Switzerland is not part of the EU.
Flyover, you and I actually believe in the same things, but you realize it. You said:
“Every time when you have redistribution in this country is not from billionaires to the poor. That never happens. It is always from mom and pop businesses, doctors and small entrepreneurs to the very rich and crumbs to the poor (from the top 10% to the 0.0001%). These policies will create a small group of super wealthy and the rest EQUALLY poor with no incentive to increase the economic pie.”
“The democrats and RINOs support this redistribution, collectivism and globalism. The conservatives are against all 3.”
The Republican tax plan is all about redistribution of wealth and globalism. It amounts to taking money from the middle class, upper middle class and lower upper class and giving it to the rich and lower middle class. It is all about transferring money to the very rich and crumbs to the poor (from the top 10% to the 0.0001%).” That is why I am against it. Personally, I will only pay a little more money in income taxes–I am against it because it is crazy and unfair and will likely cause a recession or depression.
The tax plan removes almost all tax deductions and even creates new taxes like taxing employer benefits like retail employee discounts and college employee’s free tuition.
Flyover, I really should proof read my messages. I made a few errors in the above. In the 1st sentence I meant to say, “… but you don’t realize it.”
And in the 2nd to last sentence I meant to say, ” Don’t they [corporations] want income redistribution?”
The Republican Party is really not in favor of the things you believe in. Their policies “will create a small group of super wealthy and the rest EQUALLY poor with no incentive to increase the economic pie.” There really are no more real fiscal conservatives in the Republican Party. Note that all the self-proclaimed fiscal conservatives are a voting for a major increase in the Federal deficit with this tax plan. There are no budget cuts whatsoever proposed in this tax plan. The so called tax cuts are really about the Federal government giving money to the corporations and super rich in the form of tax cuts. It is like a big tax refund to them.
Flyover, you and I actually believe in the same things, but you realize it. You said:
“Every time when you have redistribution in this country is not from billionaires to the poor. That never happens. It is always from mom and pop businesses, doctors and small entrepreneurs to the very rich and crumbs to the poor (from the top 10% to the 0.0001%). These policies will create a small group of super wealthy and the rest EQUALLY poor with no incentive to increase the economic pie.”
“The democrats and RINOs support this redistribution, collectivism and globalism. The conservatives are against all 3.”
The Republican tax plan is all about redistribution of wealth and globalism. It amounts to taking money from the middle class, upper middle class and lower upper class and giving it to the rich and lower middle class. It is all about transferring money to the very rich and crumbs to the poor (from the top 10% to the 0.0001%).” That is why I am against it. Personally, I will only pay a little more money in income taxes–I am against it because it is crazy and unfair and will likely cause a recession or depression.
The tax plan removes almost all tax deductions and even creates new taxes like taxing employer benefits like retail employee discounts and college employee’s free tuition. Also, the “so-called” middle class tax cuts end in 5 years will the corporate tax cuts are permanent.
Don’t you think that corporations are globalists who want open borders and K-1 visas? Don’t they want income distribution? There is no real difference between the two parties.
The Great American Lie is that any social democracy is the same as communism. People who spread this lie refuse to educate themselves about the differences between communism and social democracies. Bernie Sanders was cheated out of the race by Hillary. Our hope is that young people continue to be open minded, are eager to learn about social democracies and join our movement. If we all unite we can turn this country around towards the people!
Communism: Govt controls 100% of your life
Social Democracy: Govt control 99% of your life.
You’re right….YUUUGE difference.
Dude, just get off your lazy ass and do something with your life instead of waiting for the govt to steal from me to give to you.
You seem to be completely clueless/ignorant when it comes to social democracies. As soon as you see/hear the word social you immediately confuse it with communism.
Social Democracies ensure that people have a fair chance and that the rich don’t control everything. It ensures people don’t have to go bankrupt when going to the doctor and it ensures that people (no matter how poor they are) can send their kids to a good college without going into debt.
Poor Richie thinks that making rich people poor will make his sorry welfare collecting ass rich.
Hint: it won’t. Losers like you will always be losers in any type of system.
I’d normally click the Like or Love button, but on this forum, I can only say “Great job Richard Starr! You are on a roll.”
The real lie is that no one can detect nuance. No one is really saying socialism is the same thing as communism. What they’re saying is that both have more outcomes in common than not.
Richard Star,
You can not have a social democracy (socialism) and open borders at the same time. That is a lie propagated by the democrat leaders and they know that it is a lie and they want you to believe it; you fell for it. Your democrats are wolves in sheep clothing.
Open borders leads to the disappearance of the middle class and a race to the bottom. The poor of the world are fed with taxes from the middle class not the billionaires (they stand to benefit from it). They also compete for lower and lower wages and a race to the bottom.
Your “democrat politicians” policies lead to feudalism if you admit it or not. I am not saying that RINOs are any better. The first step to find a solution is to understand the problem.
Study Israel and Switzerland policies in regard to immigration and you will understand why the middle class there is doing good.
The problem in the argument you bring about Germany is that you look in the past. In the past, Germany had similar laws in regard to immigration like Switzerland. That uniformity of culture and national resources used for germans brought national unity and prosperity. Recently, they felt under the same policies like in US and they will end like in US. I talked to people there and I know what is happening in Germany. The future of Germany will be like in US – “multiculturalism”, billionaires, and everyone else equally poor under a mountain of taxes. There is a reason for the max exodus of Germans.
You look to the past of Germany and I look to the future of Germany – that is why we can not agree.
Bernie Sanders, although a jew, is not pursuing the policies from Israel – to protect the borders, not allowing immigration and preserve national unity (all good for the middle class). He is a true globalist who will follow the globalist agenda of the same nest of vipers (CFR).
The immigrants here go to the big cities where the jobs are the same like all the millennials. Then the millennials scream against high prices for both RE and rents and vote for democrats who are all globalists and pursue the same policies of impoverishment on steroids. First they ask for higher taxes for the “rich”. Then they create massive inflation (through QE and massive deficits) and the middle class is taxed in higher bracket because now they are “rich”. With less disposable income then they try to survive with higher prices for everything. This is such an old game I’ve got tired of it.
It is sad you don’t see that you are led against your best interests unless you are a globalist.
+1
In theory, Bernie’s ideas are noble. In practice, they will lead to higher costs due to artificial demand for goods and services subsidized by the government. We have seen this from high stock prices and real estate prices.
Thanks for your comment Richard Star. Totally on point.
The movement that Bernie just started is only going to gain more steam. The establishment dems better get in line or expect to be made totally irrelevant.
Laura, you have beautiful dreams. Look at those countries who live that dream and see what they are doing.
You like Switzerland? Fight for decentralization and closed borders (almost zero immigration) and against imperial wars. Otherwise you will never get to live your dreams. Bernie Sanders can not offer what Switzerland offers to the whole earth. He would have to print so much money that your teacher salary would not be enough just to buy bread and rice. You have to understand that politicians NEVER produce wealth and food; they just transfer. If there is nothing to transfer, you’ll die like those Russians because of communist created famine.
You like what the middle class in Israel gets? You have to fight for closed borders the same way they do. Otherwise read the paragraph above again.
The difference between the middle class in US and Switzerland is that the middle class in US is brainwashed and indoctrinated and not very well educated. They want what their “Democrat” leaders tell them what to think. If they would be smart and look for their own interests they would be fighting for decentralization (small federal government), no FED and closed borders – basically they would listen Ron Paul. What Bernie is saying can not happen. He is a liar and a fraud and he knows that. The ones voting for him a gullible without critical thinking and zero understanding of economics.
Since you are socialist, please don’t use the Norway example; you might as well say that you want the Saudi Arabia economic system – tons of oil and small population – that is not the case for US.
For The First Time Ever, The “1%” Own More Than Half The World’s Wealth: The Stunning Chart
http://www.zerohedge.com/news/2017-11-14/first-time-ever-richest-1-own-more-50-worlds-wealth
Keep voting for Republicans!
“The “1%†Own More Than Half The World’s Wealth”
And I’m fine with that. I really don’t care that I don’t have a 200-foot yacht, and it doesn’t bother me that some people do. Why should it? I work hard and have enough to be comfortable. I don’t spend my time being jealous of other people’s money and trying to come up with ways to take it from them. For the poor in the U.S., it’s easy – the resources are available here to become successful. If you work for an evil company that pays minimum wage and takes advantage of you, LEAVE. If you live in an expensive area, MOVE. There is free education available online. I’ve known more than one person who started with nothing, got an apprenticeship in a trade, and now make more than I do in tech. I could give up everything today, start a new business as a plumber or electrician, and own a home in flyover country inside of three years. Or I could live in an apartment in LA with two other families and be a dishwasher for the rest of my life.
Some people would rather wallow in poverty than take the initiative. There’s something about being comfortable with the situation you’re in – you’re used to it, and change is hard. Get out of that mindset or rot in it.
So, are those in the 1% in Germany or US? Should we vote the Republicans from US or the socialist from Germany? Should we vote for the socialist from N. Korea or Venezuela or Cuba?
You did not tell us. Waiting for an answer.
Or are you advertising for zerohedge??!!!…Actually if you try to think what those authors and commentators are saying you might learn something. Some have good points and most can see what a fraud Bernie and Hilary are.
Richie,
Care to tell me how your life would be better if the evil 1% died tomorrow.
Richard, unfortunately both parties play this game. The income redistribution to the rich continued unabated when Obama was President. The parties differ only on social issues. Economically, they are identical.
Richie’s communist guide to makin’ money….
Step 1: Kill the rich
Step 2: ???
Step 3: Profit
Hey it worked in the USSR and Cuba, so it will work here, right Richie?
Mr. Landlord’s guide to makin’ money
1. Buy real estate
2. Watch said real estate crash
3. Sit by idly as U.S. Treasury and/or Federal Reserve bail out asset markets
4. Pretend not to have benefitted from centrally planned (communist) policies
I’ve asked the communists here several times yet they refuse to answer…..please name the German or Canadian or French version of Microsoft, Amazon, Facebook, Salesforce, eBay, Google, Instagram
And I don’t mean a copycat version. I mean the original. Where is the Belgian Tesla? Where is the Norwegian Apple? Where is the Swedish Twitter? How much innovation came from the eastern block or Cuba or North Korea?
Of course you can’t name any of it, because they don’t exist. Every major technological breakthrough for the past 50 years has been in the US. Innovation can only work in a capitalist country. That’s why the USSR never created anything. That’s why nothing breakthrough ever comes out of France or Germany. Socialism/communism destroys the will to invent. Why bother coming up with a $1B idea if the govt will take $95% of that from you? If everyone is equal there is zero incentive to be better than anyone else.
Bernie and his imbecilic sycophants never want to address this question. Because they know, once capitalism goes away, all progress goes way. We’ll all be equal….equally poor and miserable (well except for Bernie who will make sure he is enriched as all communist leaders have been).
Landlord,
Those are fine examples of some successful companies. Gates ripped off Windows from Apple. Apple uses child labor to build phones. Facebook has something like 15% of its workers on H1B visas. For you anti globalists how are you cheering for companies sending their jobs overseas to escape labor laws or undercut American workers?
I’m not pro-Russian or a communist but some pretty important scientific breakthroughs came out of the USSR and the eastern bloc. The Russians did send the first man into space. We can’t even get into space today without hitching a ride. I know that pales in comparison to posting selfies and pictures of cats. The average American is an idiot.
No one wants communism. Germany is not communist, neither is Norway or Switzerland or Canada. Using tax money to support basic social services does make everyone a communist.
*doesnt make
Why would any country want a Tesla? Are you sure you want to keep using Tesla as one of your best-of-America-companies?
https://www.cnbc.com/2017/04/05/tesla-keeps-losing-money-so-why-is-it-worth-more-than-ford.html
in 2016:
“Tesla shipped a comparatively tiny 76,000 vehicles and recorded a loss of $675 million.”
With all that investor’s money that’s the best they can do? clap, clap, clap. very impressive.
I think Germany is just fine with a company like Porsche (2,3 Billion Euros of profit in 2015). I think every country can come up with a company who loses money (like Tesla). What do you think Landlord?
Yes, and please keep bragging about Twitter….
“Donald Trump says he would not be President without Twitter”
http://www.independent.co.uk/news/world/americas/us-politics/donald-trump-tweets-twitter-social-media-facebook-instagram-fox-business-network-would-not-be-a8013491.html
Imagine the US without Twitter. We would not have Trump as president. And we would not see Trumps 3 am Twitter rants and Twitter wars.
Thank goodness we have Twitter. #Tired_of_Winning
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