What also adds to too high housing prices is that mortgages are deductible from income tax here. This drove up housing prices artificially but netto nobody is better off. Just a waste of administrative overhead. But peoples lives and expense patterns are configured around the status quo so politically it is a toughy to change things here. I decade or so ago in Sweden they just radically removed mortgages being deducible from income tax, but within two years the market reconfigured and everybody was better off than before.noddy wrote:the dutchies had 2 destructive bubbles im aware of that are used as reference points in my country.
the first is the tulip bubble, a lovely example of irrational exuberance (or whatever they are calling it) on something that in hindsite seems absurd,... should the government go into debt to protect the people that blew their lifes work on flower bulbs ?
no, let em eat bulbs.
the second is the natural gas bubble in the 60's that is far more insidious and relevant to me and is were one single industry becomes such a massive source of easy money and employment that the rest of society is hollowed out and destroyed and even worse, the cost of living in housing and whatnot goes up because of that industries success.
Interestingly enough most resistance against change here comes from well to do people who tend to vote "liberal" and make good money. Liberal here would mean like voting right wing or libertarian/anti government in the US : less regulation, free/liberal market mechanisms, maximum capitalism. But they don't mind a socialist heritage to stay if it would hurt them a lot if it were removed.
Can't agree more Noddy. But as said, I think it is the nature of the beast called gvt to overspend and go into debt. And banks love debt. This symbiotic entanglement of banks pushing people to borrow too much and gvts going into debt very easily.. made me wonder of not by constitution the debt "ceiling" should not be put at ZERO. Or is that a too socialist way of thinking... to interfere with the free forces of nature. Curious what you think about that.my personal view is that government debt is a bad response to the above and tries to prop up an unrealistic and unsustainable costing structure - its far better to allow things to crash back down and get cheap so the rest of society can rebuild itself again than it is to just pile on the debt pretending its still boom time and maintaining the "hollow" economy.