Comments 6

الحجة ضد دعم ديون الإسكان

May 29, 2017 Jeffrey Frankel

سنغافورة ــ في نهاية الربع الأول من هذا العام، وفقا لتقديرات بنك الاحتياطي الفيدرالي في نيويورك، تجاوزت الديون الاستهلاكية الأميركية للمرة الأولى ذروتها السابقة (بالدولار) والتي بلغتها في الربع الثالث من عام 2008، في وقت اندلاع الأزمة المالية العالمية تماما. ورغم أن قروض السيارات والديون الطلابية كانت في ارتفاع سريع بشكل خاص، فإن ديون الإسكان تظل تمثل أكثر من ثلثي المجموع الذي بلغ 12.7 تريليون دولار.

كحصة من الدخل، لا تمثل الديون الأسرية ذلك التهديد الذي كانت تمثله قبل عشر سنوات للاقتصاد الوطني. ولكن الإحصاءات الجديدة تذكرنا بأن الأسر الأميركية لا تدخر بالقدر الكافي.

قد يعزو بعض المراقبين ميل الأميركيين إلى الإنفاق ــ في حين يميل الآسيويون على سبيل المثال إلى الادخار ــ إلى عوامل ثقافية. ولكن هناك عنصر مهم أيضا يرتبط بالسياسات. إن سياسة الحكومة الأميركية مصممة كما لو أنها تشجع الأميركيين على تحمل أكبر قدر ممكن من ديون الإسكان.

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Jeffrey Frankel

Writing for PS since 2000
147 Commentaries

Jeffrey Frankel, a professor at Harvard University's Kennedy School of Government, previously served as a member of President Bill Clinton’s Council of Economic Advisers. He is a research associate at the US National Bureau of Economic Research, where he is a member of the Business Cycle Dating Committee, the official US arbiter of recession and recovery.

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0 Comments on this paragraph, 11 in all 11 Comments on this article

M M May 31, 2017

Before talking about housing debt or housing bubble one must debate the wisdom (or the lack of it) behind concentrating all the assets (wealth) in the hands of the few. The "Too Big" to fail recipe that BO was supposed to resolve is still in the system like cancer.
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Jose araujo May 30, 2017

When are we going to realize that it makes no sense for a house to cost 10 years, or more, of a family work.

Protection of real estate industry should end. It makes no sense to make land such a scarce resource when there is so much of it.

There is no need for subsidizing house debt, we just need to deregulate land use and increase regulation on construction.
- Steve Hurst May 30, 2017
  
  Jose
  
  Land is a scare resource because
  A/ they dont make it anymore
  B/ What there is is controlled and speculated on
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Jose araujo May 30, 2017

Now, I've allways respected Jeffrey, but I think he has been bitten by Zombies...

Increase savings when we have a consumer crisis, when we have more money than you can think off, when interest rates are equal to zero..

Are you freking mad?
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Donald Davret May 29, 2017

I agree with the thrust of this article, although for different reasons. I think the deduction is needlessly inflating the cost of housing, which generates "policy solutions" to the problem that the tax policy fosters.

As I once mentioned, perhaps we wouldn't need affordable housing initiatives if we didn't make housing so unaffordable in the first place. The Mortgage Interest Deduction reportedly costs 7 times more than the SNAP program.

However: if we should take the step of eliminating the deduction, it must be done gradually. Otherwise, we'll generate another real estate meltdown like the one we had after TEFRA 1986 was passed. The top tax rate went from 50% to 28%, and overnight, the value of the mortgage deduction shrank, and real estate "marked to market" immediately. Highly disruptive, and quite painful.

https://www.linkedin.com/pulse/rethinking-value-mortgage-interest-deduction-donald-davret
- Donald Davret May 31, 2017
  
  @ Steve Hurst
  
  I can't speak to the situation in the UK. I can only speak to the housing calculus in my own country, which I know something about.
  
  When the mortgage interest deduction was almost effectively halved under the Tax Reform Act of 1986, real estate prices crashed. I'm not advocating the deduction's instant removal because that would be too destabilizing to the housing market. But a gradual reduction in that entitlement will keep a lid on price rises, and fatten revenues to the Treasury, which we need.
  
  As far as your comments on labor, as I mentioned, many left the trades when housing collapsed, and they generally don't come back after finding another career. Eventually, the market will repair itself, but this is where we are now.
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- Steve Hurst May 30, 2017
  
  Donald
  
  Boomers will die given time, and you will still have high house prices, guaranteed. House prices are protected to protect the banks @risk ledger. Default does not have to happen to move loans to @risk. I have no sympathy with an construction industry which hires and fires at will and ships in migrant labour instead of training its own for its convenience. The material cost of building a house runs at circa 2.2K sq mtr - after that it is land cost which is where the money is to be made. HMG cannot in reality afford to upset the supply demand point as low prices would crash the banks, that is why there is the help to buy. Banks have milked the housing sector jacking up LTV, Earning multiples, then BTL etc etc each in turn to keep the merry go round going round. The whole thing is a charade. The entire sector is a collusion between NIMBY voter blocks, planning offices, Banks, Land banks (speculators), and Guvnt. It is very easy to sort but will not be because it upsets too many people. The root of this mess is with the Thatcher guvnt and I suggest anybody looks to see just how many property developers were in that guvnt. Housing turnover is related to deaths and deaths are steady as a percentage. After that relatively small movements in sales give you a market freeze or a boom. HMG has buildings full of people looking at the housing sector and banks have even more. I suspect there is real terror at what would happen if interest rates took off as millions of householders would be bust and the banks would follow rapidly. ZIRP is a direct wealth transfer to householders and is a deliberate policy. That is your housing subsidy and it is not going away in a hurry in the Western world. It is also dead money and one of the reasons the economy has problems, misallocation of investment. BTW training a workforce could have easily have been done in the interval and it hasnt occurred. None of this is rocket science. If this was a war and housing was needed as a strategic supply do you think anybody would mess around like this, I dont. BTW There is nothing to stop house building being either mechanised or prefab manufactured in factories
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- Donald Davret May 30, 2017
  
  @ Steve Hurst There are many factors driving the cost of housing, and land may be one of them, but I don't believe it's one of the most critical at this juncture. Part of the problem is that the boomers are not moving, and the supply of EXISTING homes is low, fueling prices. As far as NEW housing is concerned, labor costs are a big issue, since so many left the trades after the housing bust. Every conference call I'm on for a builder mentions this factor. Plus a lot of their workers were immigrant labor.
  
  The way to give prices a haircut, I believe, is to stop subsidizing borrowing. That should blunt the rising costs of housing.
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- Steve Hurst May 29, 2017
  
  Donald, with over priced housing the significant cost is the land not the actual building which is why so much bare land is held speculatively. There is an obvious and easy fix and the fact it is not taken is an indication they do not want cheap housing as it would disrupt the market and damage the banks at risk ledger. There is no point in pretending they want a solution (which is what so many say) when they dont.
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Steve Hurst May 29, 2017

Yup - the Grapes of Wrath showed labour mobility sure can be encouraged

But other than that you are spot on the money JF. Housing is a manipulated market and housing is unsustainably overpriced in many Western democracies and it is not accidental. 'Protecting' house prices is protecting banks at risk ledgers, simple as that
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Joe Beckmann May 29, 2017

The case against the income tax deduction ignores the impact available through Limited Equity ownership opportunities, and the case for ownership does not dictate "greed is good." It also ignores the general profile that older housing is usually less expensive than new construction. And it profoundly ignores the regressive impact of rent as the primary means of supporting housing.
Central to economic mobility is purchase of assets that go beyond their short term use, in other words, to convert purchases into investments. There are a number of ways to do this, from loan guarantees (for tuition or for housing or for a car), to specific kinds of investment incentives, like that mortgage interest deduction. While it's not at all probable that Trump would agree with a cap on that deduction, it is quite feasible that such deductions could have even greater impact on median income new homeowners, who now face the dual debt of college and housing. The progressive "agenda" should account for such conditions, since they are increasingly pervasive, and guarantee a permanent under class.
Furthermore, in the other direction, there is no necessary reason to ignore current inflationary housing patterns in key cities - from San Francisco to Boston to New York and Chicago - as both a crisis in building or maintaining community and a resource to create community capital that exceeds the cost of purchase.
Limited equity condominium ownership in a rapidly inflationary market guarantees both that stability - by harnessing the gentrification - and the long term growth in community capital. That growth can - as it does in many nations outside the US - guarantee additional ownership options over time, and requires less and less external subsidy. A Land Trust owns half of Vienna, and others stabilize neighborhoods in many American cities. Were that Trust to act as primarily as a mortgage guarantee fund for long term community residents - and city employees - it could stabilize neighborhoods and incentivize long term, valuable community employment.
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الحجة ضد دعم ديون الإسكان

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