
Originally Posted by
Melonie
“The definition of insanity is doing the same thing over and over and
expecting different results. ” - Benjamin Franklin
In other words, as long as US consumers / gov't keeps spending more money than is being 'created' in terms of real productivity, as opposed to spending money 'created' out of nothingness by the FED or spending money borrowed from foreigners, America will continue to become poorer as a whole.
And on another 'tack', as long as gov't intervenes in the free market, price signals will be distorted causing supply / demand to be distorted as well. Arguably, the US gov't has intervened in the housing market in a huge fashion, from offering home mortgage interest tax deductions to homeowners, to establishing zoning requirements for new home construction (i.e. minimum size building lots, single family homes only vs duplex / multi), to requiring that gov't employees must live (thus buy a house) within certain geographic boundaries etc. These gov't rules / laws helped to create housing shortages in certain areas (i.e. near fast growing cities), which in turn caused the price of houses in those areas to skyrocket in the first place...
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