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World Economic Forum: "You will own nothing and you will be happy" (lemmy.ml)

submitted 2 months ago* (last edited 2 months ago) by Confidant6198@lemmy.ml to c/personalfinance@lemmy.ml

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[–] TheOubliette@lemmy.ml 1 points 2 months ago (1 children)

This is from 2018. It is basically the "huffing your own farts" version of bringing back the company town but this time it's neoliberal.

It's still relevant, though, because the economic forces that be were already doing this and have gained ground. For example, the transition from being able to own a home vs. renting your entire life. Included in that is the fact that people who "own" their home are often incorrect about this. In reality, the home was purchased in a loan and you are now paying a bank economic rent (interest) for the privilege. Over time we see the shifts: more people have to rent, they have to rent for longer, and loan terms and worse and worse.

[–] Taleya@aussie.zone 0 points 2 months ago (1 children)

What is incorrect are claims the bank owns the house.

The bank does not. A mortgage is a debt on the property, or if you like, a debt with the house as collateral. While this gives the bank certain rights while the mortgage is still extant (if sold they will be repaid, etc, if the debt is not paid the house is taken In recompense), they do. Not. Own. The. House. They have zero ownership. The house belongs to those on the title.

I really hate the 'banks owns the house' mentality, it's not true and this weird transferral of power to 'another landlord' is putting the collar around your own neck and ceding power for no reason

[–] TheOubliette@lemmy.ml 0 points 2 months ago (1 children)

Like I said, the house is bought on debt issued by a bank. You are not actually a full owner in that you are no longer paying rent for housing. You are paying economic rent in the form of interest to the bank in order to buy the house. The usual term of this agreement is 30 years in the US. The only way to avoid this is to already be so rich that you can buy with cash, which excludes nearly everyone under the age of 50.

Fiscal propaganda usually holds that you are gaining equity, so there's no rent. They even substitute hand-wavy estimates when accounting for housing costs in economic statistics rather than measure what is paid over sticker price. But you will pay a large quantity of money to the bank for the privilege of buying the house and until you have paid off the loan, you are constantly at risk of foreclosure should you be unable to make payments. Just like... rent.

So there is rent in the form of economic rent (debt interest) and there is the rent-like behavior of needing to make regular payments or lose your housing.

Many people are surprised to learn how financially trapped they are by their attempt to gain housing security. This is because they do not expect the financial system to continue to exert quite as much control and for so long, nor for the real price tag to, with compound interest, be often double or triple the sticker price. And that certainly makes many feel, validly, like they don't really own the home.

[–] Taleya@aussie.zone 1 points 2 months ago* (last edited 2 months ago) (1 children)

...no. I mean, you can have your feels on home ownership being a fiduciary trap, but don't try to present them as fact.

[–] TheOubliette@lemmy.ml 0 points 2 months ago (1 children)

Feel free to point out what I've said that is actually incorrect.

[–] Taleya@aussie.zone 1 points 2 months ago

repaying a loan is not 'rent-like behaviour', applying a brush that broad would paint any regular payment as 'rent-like behaviour', which is preposterous.
'Economic rent' is a meaningless phrase, especially in this context. Rent is a concept of lease without ownership. We are literally talking about owning property. There is no rent. There is debt and burden, sure, but there is no rent.
Equity is not a lie. It's the very simple concept of a property's worth after deduction of amounts owing. Now the nuances and application has gotten insanely out of control in miltiple countries (I'm Australian, ask me about our multigenerational housing inequities!) But the basic idea of inflation increasing cost/value is generally sound.

A rental property and a ppr are nowhere near each other, not financially, socially or emotionally. They cannot be equated, no matter how much you torture the syntax. Each has their place for personal preference, but they are not the same

[–] shortwavesurfer@monero.town 1 points 2 months ago

You will eat zee bugs