Current economic system & Housing

spadoosh

GreatApe wrote: »

2008-2018
+500 MILLION net additional homes built
Three cheers for the worlds current economic system!

Car production is also an interesting indication of how wide and far wealth is spread as the upper middle class typically buy new cars. Car production was 58 million in the year 2000 now it is close to 100 million this year. If a new car buyer typically keeps a car for 3 years that means the world has added >360 million persons (>120 million cars over 3 year period @ 3 persons per car/family) to the upper middle class rank in less than 20 years!

The idea the left paint that the current economic system is fully and only for the rich is simply false. The current system has already over just a 18 year period created >360 million upper middle class people. This is even very conservative as I know a lot of quite wealthy people who have never bought a new car in their life.

The system is working it is working very very well
500 million additional homes were not built for the 1% and the next 500 million homes which will be built over the next decade are not for the 1%. Clearly wealth is spread far and wide. Its often just the measure of wealth we use are a bit !!!!. Look jeff bezos is too rich because his companies shares trade at x.... lets just ignore the 500 million families who didn't have homes a decade ago who now do.....clearly what shows the worlds system is broken is what some shares on the NASDAQ trade at not the number of homes or cars that the system builds for the masses.....

Global debt in 2008 was about $177 trillion.

Global debt in 2017/18 is about $237 trillion.

So roughly $60 trillion of additional debt.


That works out at about $120,000 per house thats been built.

This is why the systems is broken, no ones (read very few peoples) wealth has increased, just their levels of debt.

GreatApe

BikingBud wrote: »

How about breaking those figures out into something meaningful.

Oh the figures are extremely meaningful you just dont like them so you are trying to obscure.
Where are the homes being built? Everywhere in all nations all the way from France in Europe adding about 4 million a decade to Turkey which will add ~8 million over the next decade to china which will add ~100 million over the next decade. Before you say ah ha look china they are communists!! Their economy is more capitalist than communist now and their build rate looks big because they are a populous nation on a per capita basis they are roughly at the same rate as Turkey also a developing nation but one that is clearly free market and mostly right wing. But once more you are trying to obscure the debate it doesn't matter all that much where homes are being built at what rate or what design we can make the overall argument that the worlds primary economic system is free market capitalism and look at worldwide production of capital and where it is going. What you find is over the next 20 years a huge amount of capital is going to be built out and its mostly not going to the 1% but to the 90%

Where in the world and the respective ratios in those countries?

A new car buyer keeps it for 3 years? You making things up on the spot?

What would you suggest? 2 years and 10 months? 3 years and 1 week an 4 hours? How does that change anything in this debate and argument? Which is that cars are not cheap and if worldwide car production has boomed so have the middle classes of the world. This is an objective truth you even know is true but yet you try to do your best to deny it

Cars built doesn't necessarily mean owners as people are suckered by the rental of cars and the never never. They are never the owners merely the registered keepers and liable for all the costs. So the organisations ie the leaseholders cannot be any class that you may wish to pin upon them.

This is such a stupid argument

Don't you see that your claim boils down to something like 'finance is magic it allows the world to produce and consume more than it otherwise could' which is true and I agree but the bit where you fall down is to then imply finance is somehow a temporary phenomenon where the world is going to wake up one morning and make finance illegal and thus production and consumption is going to crash. Clearly you do not believe that finance is temporary in which case why use arguments of finance as if it is temporary?

And I will go back to simply saying ignore money it is mostly a transmission mechanism a way to do accounting just look at the world more basically we are a planet with about 4 billion workers working away and producing goods and services.

The central argument against the current economic system by the left is that these 4 billion workers under the current economic system are not able to produce capital and thus improve their lives and get more wealthy (and thus improve other things like heath etc). The argument is we should abandon free market capatilism and put in place another system which will allow production of capital and thus improved lives

When you take a step back you see how stupid this argument is

For a start the world is building out its capital and this is so easy to prove by looking at the #1 infrastructure project on earth which is housing. How good is the current system at building housing for the planet? Well what does 1 billion homes over the next 20 years sound like? Success or failure?

The second bit of the left argument is they have some system which works better and not just a little better but massively better because it isn't worth burning down the current system if what you think might work is only 5% better. What is the new system that is going to produce more than 1 billion homes in 20 years?

Did you ever study mathematics? Averages? Mean? Median?

The problem is yes I have and most of you haven't so what I see you clearly can not see.

BikingBud

Lets try this shall we :

Earth to GreatApe

The country wishing to build the hydro electric dam has spent money it does not have. The limited money it does have may have been spent better in many different ways to enhance the needs of the population, medical, roads, education etc.

If they can sell the product, ie the electric, then maybe the country's GDP may increase and they can pay off the loan effectively. Otherwise they may be mired in debt for years. A difficult one and much more complex than your simplified comments.

Similarly paying a mortgage on an overpriced asset may give a feel good factor but if you cannot put shoes on the kids or food in their belly what true value are you holding dear in assessing wealth?

Still not answered the questions from Post 2!

GreatApe

spadoosh wrote: »

Global debt in 2008 was about $177 trillion.

Global debt in 2017/18 is about $237 trillion.

So roughly $60 trillion of additional debt.

That works out at about $120,000 per house thats been built.

This is why the systems is broken, no ones (read very few peoples) wealth has increased, just their levels of debt.

Why do I waste my time with you people?

Lets say you were an alien looking down studying humans

In 2007 you notice they have x billion homes
In 2027 you note they have x + 1 billion homes
How much capital have they produced? 1 billion homes

You could try assign a dollar value to it but that is neither here nor there they have produced 1 billion additional homes that is 1 billion additional families in a good new home rather than in mostly much less good conditions they were in before.

As for 'the debt' it is all canceled out it does not matter much apart from accounting
Why do you lot find this difficult? If the government issues a £1 billion gilt it owes £1 billion but whoever purchased it now has a £1 billion asset. The banking system is the same debt grows and shrinks along side credit side of the ledger. You do not have just debt going up without credit/savings on the other side also increasing.

spadoosh

GreatApe wrote: »

Oh the figures are extremely meaningful you just dont like them so you are trying to obscure.
Where are the homes being built? Everywhere in all nations all the way from France in Europe adding about 4 million a decade to Turkey which will add ~8 million over the next decade to china which will add ~100 million over the next decade. Before you say ah ha look china they are communists!! Their economy is more capitalist than communist now and their build rate looks big because they are a populous nation on a per capita basis they are roughly at the same rate as Turkey also a developing nation but one that is clearly free market and mostly right wing. But once more you are trying to obscure the debate it doesn't matter all that much where homes are being built at what rate or what design we can make the overall argument that the worlds primary economic system is free market capitalism and look at worldwide production of capital and where it is going. What you find is over the next 20 years a huge amount of capital is going to be built out and its mostly not going to the 1% but to the 90%





What would you suggest? 2 years and 10 months? 3 years and 1 week an 4 hours? How does that change anything in this debate and argument? Which is that cars are not cheap and if worldwide car production has boomed so have the middle classes of the world. This is an objective truth you even know is true but yet you try to do your best to deny it



This is such a stupid argument

Don't you see that your claim boils down to something like 'finance is magic it allows the world to produce and consume more than it otherwise could' which is true and I agree but the bit where you fall down is to then imply finance is somehow a temporary phenomenon where the world is going to wake up one morning and make finance illegal and thus production and consumption is going to crash. Clearly you do not believe that finance is temporary in which case why use arguments of finance as if it is temporary?

And I will go back to simply saying ignore money it is mostly a transmission mechanism a way to do accounting just look at the world more basically we are a planet with about 4 billion workers working away and producing goods and services.

The central argument against the current economic system by the left is that these 4 billion workers under the current economic system are not able to produce capital and thus improve their lives and get more wealthy (and thus improve other things like heath etc). The argument is we should abandon free market capatilism and put in place another system which will allow production of capital and thus improved lives

When you take a step back you see how stupid this argument is

For a start the world is building out its capital and this is so easy to prove by looking at the #1 infrastructure project on earth which is housing. How good is the current system at building housing for the planet? Well what does 1 billion homes over the next 20 years sound like? Success or failure?

The second bit of the left argument is they have some system which works better and not just a little better but massively better because it isn't worth burning down the current system if what you think might work is only 5% better. What is the new system that is going to produce more than 1 billion homes in 20 years?




The problem is yes I have and most of you haven't so what I see you clearly can not see.

For someone who is purtaining to know economics you seem to not know it very well.

What youre saying works perfectlly well on your manufactured supply and demand graph.

Any and all economists work using those graphs, any and all economist know the reality of any given situation is usually far removed from those graphs.

If the aliens looked down at us in 1918, theydve seena bit of a mess, in the 20's theydve looked down and said theyre doing better and in the 30's theydve said theyve gone and messed it up again and then in the 40's messed it up even more.

This is down to the human factor. Capitalism and free markets are perfect systems. Perfect systems are alien to us and we reject them largely because we are unable to make them work well enough for us. So we say were free market but then have tariffs, we say were capitalist but then have bail outs.

I get the impression youre pretty right wing (not meant in any way as a derogatory comment at all but you follow typical right wing beliefs). If you look at the american constitution its similar. Its a perfect system. My favourtie argument with anyone who believes in that system and believes its workable is simply, how many nuclear weapons do you have? The answer is always none. Theybelieve inthe right to bear arms and believ int he right to fight against government tyranny but they dont believe int he right for an individual to defend them self with nuclear weapons.

Its the same with communism. A perfect system, it works if you give every one equally. But then you have someone who tells everyone how much they should be getting, and you diverge from true communism and you get the fallible human interpretations of such systems.

spadoosh

GreatApe wrote: »

Why do I waste my time with you people?

Lets say you were an alien looking down studying humans

In 2007 you notice they have x billion homes
In 2027 you note they have x + 1 billion homes
How much capital have they produced? 1 billion homes

You could try assign a dollar value to it but that is neither here nor there they have produced 1 billion additional homes that is 1 billion additional families in a good new home rather than in mostly much less good conditions they were in before.

As for 'the debt' it is all canceled out it does not matter much apart from accounting
Why do you lot find this difficult? If the government issues a £1 billion gilt it owes £1 billion but whoever purchased it now has a £1 billion asset. The banking system is the same debt grows and shrinks along side credit side of the ledger. You do not have just debt going up without credit/savings on the other side also increasing.

If its so easy to explain why are boom and bust inevitable?

You keep talking about aliens. There might be a billion homes being built but theres variables with that.....

In 2008 we had 6.7 billion people. In 2018 we have 7.7 billion people. So weve built 500 million homes for 1 billion people, thats good. How many of the homes where replacements?


With all due respect you seem to be suggesting that everyone else is pretty wrong and absolutely refusing the possibility you might be. Or simply the fact that peoples perceptions can be different.

You aslo talk about debt being cancelled out, meh it nots really, thats why the wealth divide is increasing. That debt increases the cost, thus reducing wealth.

You seem to be the only capitalist that disregards currency. It actually sounds like a very leftist viewpoint?

GreatApe

BikingBud wrote: »

Lets try this shall we :

Earth to GreatApe

The country wishing to build the hydro electric dam has spent money it does not have. The limited money it does have may have been spent better in many different ways to enhance the needs of the population, medical, roads, education etc.

If they can sell the product, ie the electric, then maybe the country's GDP may increase and they can pay off the loan effectively. Otherwise they may be mired in debt for years. A difficult one and much more complex than your simplified comments.

Similarly paying a mortgage on an overpriced asset may give a feel good factor but if you cannot put shoes on the kids or food in their belly what true value are you holding dear in assessing wealth?

Still not answered the questions from Post 2!

Money is just a mechanism to allocate human labor
Debt/Credit is just a mechanism to borrow/lend human labor

The country wishing to build the hydro electric dam has spent money it does not have

Lets put that in fundamental terms. The country (or company or individual it doesn't matter) wishing to build a hydro electric dam needs to borrow ~20,000 man years of human labor

Ok so what?

The limited money it does have may have been spent better in many different ways to enhance the needs of the population, medical, roads, education etc.

But you just changed the topic, you went from talking about debt/borrowing as being bad and now you are trying to argue what we should spend the borrowed money on. Keep on topic

If they can sell the product, ie the electric, then maybe the country's GDP may increase and they can pay off the loan effectively. Otherwise they may be mired in debt for years. A difficult one and much more complex than your simplified comments.

Lets break this down too to its fundamentals. The country (or company or individual it doesn't matter) might find that the 20,000 man years he borrowed does not produce more than 20,000 man years of return.

Ok so what? You have highlighted that some borrowing might go bad. That SOME borrowing might go bad is an argument for ALL borrowing? Clearly stupid. And I assume you are not foolish enough to be suggesting nearly ALL borrowing is going to go bad! So you still have not made any good arguments for why debt is bad. Do you want to actually address that point rather than talk carp?

Similarly paying a mortgage on an overpriced asset may give a feel good factor but if you cannot put shoes on the kids or food in their belly what true value are you holding dear in assessing wealth?

You are again trying to paint a very specific case of a bad decision. That some borrowing is bad in your world means the who system of finance is bad? How stupid do you have to be to put forward that as an argument?

Clearly I accept some borrowing will go bad, that is why we have a finance system. We do not approve all loans. Some loans will go bad others wont but on the whole finance is a net good for the world. The hard lefties then go on to say but look at 2008 the whole system broke down due to bad allocation of funds in housing.

That too is a myth. The world is still short of housing you can not easily miss allocate funds into housing. Just look at ireland. In 2008-2012 everyone even the bulls on this forum were talking about irelands housing bubble and all the miss allocated funds. I was one of the few saying hold on ireland could not have had a housing bubble or missallocated resources into housing becuase Ireland still has a shortage of homes. Fast forward to 2018 and guess what all the papers are talking about? Irelands housing shortage! Like I keep saying during the recession even if there is an excess allocated to housing it is a very minor inefficiency that will work itself out quickly due to population growth and the desire of the existing population to live less dense.


Anyway we are jumping all over the place. Your core argument is what exactly.
I am stating a fact which is that 1 billion homes will be built from 2008-2028 and your counter argument is ...well that doesn't count as wealth because you know a number of a computer screen.

GreatApe

spadoosh wrote: »

If its so easy to explain why are boom and bust inevitable

Because there are more people like you than there are people like me.

You keep talking about aliens. There might be a billion homes being built but theres variables with that.....

In 2008 we had 6.7 billion people. In 2018 we have 7.7 billion people. So weve built 500 million homes for 1 billion people, thats good. How many of the homes where replacements?

My figure is for NET homes not gross.
Also the way I arrived at 500 million homes a decade was to look at about a dozen countries build rates per capita and extrapolate to the world. You might think a dozen countries is not enough but most the larger nations are in there. I also multiplied for 6 billion people not 7.5 billion.

If you want a more accurate figure you should split into developed and developing and extrapolate to the full 7.5 billion people on earth. If we did that we would find the rate is probably closer to 65 million annually not 50 million

Anyway the point is clearly housing is going in a great direction.
If we could agree that the current system is creating a huge amount of capital the next part of the debate is much more interesting. What happens to capital and capitalism in 20 and 40 years time as this huge stock of capital is built out?

With all due respect you seem to be suggesting that everyone else is pretty wrong and absolutely refusing the possibility you might be. Or simply the fact that peoples perceptions can be different.

Most people are wrong.
This guy explains it better than I could
https://www.ted.com/talks/steven_pinker_is_the_world_getting_better_or_worse_a_look_at_the_numbers

You seem to be the only capitalist that disregards currency. It actually sounds like a very leftist viewpoint?

You dont disregard it but its helpful to disregard it for people who dont know how money really works.

GreatApe

Is the world getting better or worse?

https://www.ted.com/talks/steven_pinker_is_the_world_getting_better_or_worse_a_look_at_the_numbers

spadoosh

GreatApe wrote: »

Because there are more people like you than there are people like me.



My figure is for NET homes not gross.
Also the way I arrived at 500 million homes a decade was to look at about a dozen countries build rates per capita and extrapolate to the world. You might think a dozen countries is not enough but most the larger nations are in there. I also multiplied for 6 billion people not 7.5 billion.

If you want a more accurate figure you should split into developed and developing and extrapolate to the full 7.5 billion people on earth. If we did that we would find the rate is probably closer to 65 million annually not 50 million

Anyway the point is clearly housing is going in a great direction.
If we could agree that the current system is creating a huge amount of capital the next part of the debate is much more interesting. What happens to capital and capitalism in 20 and 40 years time as this huge stock of capital is built out?



Most people are wrong.
This guy explains it better than I could
https://www.ted.com/talks/steven_pinker_is_the_world_getting_better_or_worse_a_look_at_the_numbers



You dont disregard it but its helpful to disregard it for people who dont know how money really works.

You dont know who youre talking to so think your making certain assumptions about that.

Youre using a utopian system with people. It will not be perfect. It will never be perfect and its impossible for it to be so.

Consider the laws on conservation of energy, its a perfect system. To represent such a sytem we use a newtons cradle. Ultimately the newtons cradle stops swinging which kind of contradicts conservation of energy. The reason for this is you get deviations, air resistance, flexibility in the balls, energy being transferred to the frame. All tiny losses but the results is that they perfect system ultimately fails because its not perfect, and we cant make it perfect.

Better and worse are subjective things. For me personally, my life is probably better than it ever has been, im probably less wealthy now than a few years ago but children tend to do that for you. And i appreciate that id rather live now than say 1940's but then i do believe i wouldve be eminently more wealthy had i been an adult in the 80's. Growth was huge leading to substantially more opportunity. Due to pretty stagnant growth in my adult years opportunities are (seem) less prevalent.

Itll be intersting to see how tha capital being divvied out plays out. I suspect the flaws in the capitalist and free market system will prevail and it will be taxed accordingly. Maybe we're not so different? Its just you think utopia is attainable, i believe history shows it is not.