Originally posted by Great King RatYou've got to have a place to live.
Actually, I'm disagreeing with myself because I too have a mortgage. That's the way society works and while you don't have to have a mortgage, for most people it's part of the natural course of their lives. Because let's face it: what other choices do you have if you want to own a house? And yes, I agree, a mortgage can save you money.
But it's at ...[text shortened]... .
Dunno. This economic crisis too will blow over and we'll all continue the way we always do.
If you don't own a piece of property you are going to have to pay. You can either pay rent or pay on a mortgage. It is a necessity. I fail to see how this is equivalent to government spending on luxuries or if you don't like that term, non-necessities.
Originally posted by normbenignWell, this obviously isn't much of a problem, since Norway is doing pretty well.
The "problem" of Norway, is really that of a controlled central bank artificially keeping interest rates so low as to encourage malinvestment, and taking on unnecessary debt.
If market rates prevailed, it would force Norway to make positive steps, like reducing taxation, eliminating debt service. The artificially, below market rates offer no resistance against unrestrained spending.
Since the market is a human construct, all interest rates are essentially "artificial".
Originally posted by EladarDo you also need a car? Furniture? Washing machine? Who gets to decide what are necessities and what are luxuries?
You've got to have a place to live.
If you don't own a piece of property you are going to have to pay. You can either pay rent or pay on a mortgage. It is a necessity. I fail to see how this is equivalent to government spending on luxuries or if you don't like that term, non-necessities.
But generally I agree, the US should cut funding for the military by about 90%.
Originally posted by EladarIndeed you can pay rent or mortgage. One is paying on a month by month basis and if you can no longer pay you "only" lose your place to live and you have to bunk with friends or family. The other is a huge financial contract on a 10 to 30 year basis eventhough you don't really know what your situation will be like in the future. Will you still have job? Will you get divorced or widowed? Will you get quadruplets when your aim was to have one or two kids? If you can't pay your mortgage it will often have much longer lasting effects in terms of remaining debt than "simply" losing your place to live.
You've got to have a place to live.
If you don't own a piece of property you are going to have to pay. You can either pay rent or pay on a mortgage. It is a necessity. I fail to see how this is equivalent to government spending on luxuries or if you don't like that term, non-necessities.
Originally posted by Great King RatThese are all true, but after 30 years of mortgage payments you have something to show for it. After 30 years of paying rent you own nothing. Yes, you take chances in life.
Indeed you can pay rent or mortgage. One is paying on a month by month basis and if you can no longer pay you "only" lose your place to live and you have to bunk with friends or family. The other is a huge financial contract on a 10 to 30 year basis eventhough you don't really know what your situation will be like in the future. Will you still have jo ...[text shortened]... much longer lasting effects in terms of remaining debt than "simply" losing your place to live.
Now how does this have anything to do with necessity vs luxury?
Originally posted by twhiteheadA car is a luxury, there are other forms of transportation.
Do you also need a car? Furniture? Washing machine? Who gets to decide what are necessities and what are luxuries?
But generally I agree, the US should cut funding for the military by about 90%.
Washing machines? Luxury you can always use a laundry mat.
Necessity is something you need: Food, housing and such.
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Originally posted by EladarOK, so do you buy the cheapest possible house? Or something more expensive? Would something more expensive be a luxury?
A car is a luxury, there are other forms of transportation.
Washing machines? Luxury you can always use a laundry mat.
Necessity is something you need: Food, housing and such.
Where I live a commercial laundromat costs more in the long term than a washing machine.
Originally posted by twhiteheadIn the long run renting is more expensive than buying. That's the way it is for most things.
OK, so do you buy the cheapest possible house? Or something more expensive? Would something more expensive be a luxury?
Where I live a commercial laundromat costs more in the long term than a washing machine.
Yes, you can live in a cheaper house or a more expensive one, but that does not negate the fact that housing is a necessity.
The same arguments can be made about food and how you can buy cheap food or expensive food and volume of food.
This does not change the fact that food and housing are actual necessities.
Originally posted by EladarHaving something "to show for it" is by no means a necessity. When you rent you also have a house to live in but you don't have the unnecessary risk of a mortgage. You brought up necessary vs. luxury. By your own logic, you should rent instead of buy.
These are all true, but after 30 years of mortgage payments you have something to show for it. After 30 years of paying rent you own nothing. Yes, you take chances in life.
Now how does this have anything to do with necessity vs luxury?
Originally posted by EladarFood, I agree, is necessary. Housing most definitely is not. At least no more necessary than washing your clothes. In fact, if you meet someone who doesn't wash their clothes chances are he/she doesn't have a house either.
This does not change the fact that food and housing are actual necessities.
My maid lives in a shack that I would hesitate to call a house. And she keeps her clothes nice and clean.
Originally posted by TeinosukeFor the moment, but the US was doing pretty well under Eisenhower with the WWII debt nearly retired, and Ike refusing to propose lower taxes until it was.
Well, this obviously isn't much of a problem, since Norway is doing pretty well.
Since the market is a human construct, all interest rates are essentially "artificial".
In the decades thereafter, the combination of the Fed, and a reckless spending government has ruined the USA and it future.
"Since the market is a human construct, all interest rates are essentially "artificial"?"
Not it the construct of a free market. Interest rates will fluctuate with supply and demand like other prices so long as artificial pressures are not involved. Prices too low result in supply contraction, nobody wants to loan money due to a lack of reward. Prices too high, result in lack of demand, borrowers don't want to pay the price. Solution, a central bank pumps funds into an economy by buying government debt. Sets interest rates so low as to make people borrow instead of save, and borrow recklessly. This in America has lead to one bubble after another, and one crisis after another.
Norway will have its own down the road at some time when ignoring market forces catches up with them.