[lbo-talk] A Bane Amid The Housing Boom: Rising Foreclosures

Leigh Meyers leighcmeyers at gmail.com
Wed Jun 1 21:49:59 PDT 2005


---- Original Message ---- From: Doug Henwood To: lbo-talk at lbo-talk.org Sent: Wednesday, June 01, 2005 9:26 PM Subject: Re: [lbo-talk] A Bane Amid The Housing Boom: Rising Foreclosures


> Jordan Hayes wrote:
>
>> For many people, not having a
>> mortgage means no savings at all.
>
> A mortgage is a debt, not a form of savings. And a house is not a
> form of capital - it has no yield in the form of interest or profit.
> At best, it offers the possibility of a speculative profit - which
> can only be meaningfully realized if you trade down to a smaller
> house or a cheaper market.
>
> I feel like I've stepped through the looking glass.
>
> Doug

People are "banking"(gambling, really) on the increase in home value as a form of "interest income"/savings. For the ...lower middle class, that's where most of the paycheck goes. It's a long term gamble on your continued employability within a pay range... currently not the safest bet available. And you are right, economics as practiced in the US *is* through the looking glass.

Here's a glance through the 'glass per adbusters:

Every time someone goes to prison... the GDP goes up. Every time a forest is clearcut... the GDP goes up. Every time a cancer is diagnosed... the GDP goes up. [more...] Is this any way to measure progress?

http://adbusters.org/metas/eco/truecosteconomics/scrap_the_gdp.html www.truecosteconomics.org

Leigh



More information about the lbo-talk mailing list