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Just yesterday, I wrote an article ab out the continual push to force people into [life as a renter](https://peakd.com/hive-180505/@tarazkp/cost-of-owning-nothing) and this morning I woke up and read that Trump is planning on extending the loan time on housing from 25 to 50 years to combat affordability, by making repayments lower. Sounds great right? 


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![image.png](https://files.peakd.com/file/peakd-hive/tarazkp/23xpF8q4jLmJyrAfJbFf3733RLYBn4mgkJtujzyxQmgeNihfTciSeXbhrgnYt3njA2epf.png)


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Sweden has *105-year* loans and do you know what has happened since they were introduced? You guessed it, the price of homes *increased significantly.* As did rents. Because when people don't have to pay back as much per month, *they take bigger loans,* and can therefore spend more on a house, *pushing up prices.* What this effectively did was increase the value of houses to the point that they became unaffordable again, despite the long loan period. 

If any government really wanted to affect the affordability of housing, it isn't by increasing the loan period, it is by *decreasing the loan period.* An increasing period just says that whatever measures they have taken to combat inflation in the economy, *has failed.* If the average person would be able to say, own their home in 15 years instead of 25 years, it would be an indicator of successful measures taken on affordability, because it would mean that the gap would be decreasing between real wages and the value. Instead, it is going the other way.

> Economic policy fail. 

*Do not buy into this shit.* It is an attempt to stimulate consumption by giving people more disposable income, which it will, but will also end up with people *owning less.* Instead of using that extra money to invest (which some will also), most will use it to just buy more crap that will very quickly become valueless. This ends up putting more money in the pockets of the wealthy, who will then invest that money in various ways that will push cost of living up again for everyone. Ultimately, it will lead to the majority of people being in a worse position than they are now, with less possibility to do anything about it. 

What a longer loan period also means is that it is possible for more people *to invest* into property, which again pushes prices up and pushes those rental prices up also. While in the short-term there is a large amount of money flow into the economy from the surplus "savings", this means inflation will also increase which sucks more money out of the pocket of ordinary people, offsetting the length of the loan reduction. People will own less, and end up in the same debt-stressed position, with an even longer obligation. 

> People are not going to listen.

The reason is, that the majority of us think far too short in terms of our own financial wellbeing, and those who think long *know it.* It means that they can build an economy that is made to punish the short-term players and pad their pockets and build an unassailable economic position of both wealth and control over everyone else. Extending the loan period is just another way to extend the *value milking process* of rentseekers, and the future us will look back and realise it, as will our children, who will inherit nothing more than debt, or a rental agreement so they can stay in their childhood home, that their parents never had a chance to own.

The "affordability crises" that we are seeing now is due to the mismanagement of policy in all aspects of the economy, from the way corporations are incentivised, the way wages are paid and calculated, tax considerations and inequalities, debt management from financial institutions and retirement funds. Plus, a thousand other factors that keep increasing the wealth gap. Because the wider that wealth gap becomes, the more the average person is impacted by affordability. 

And it is closing gap that needs to be addressed, but the incentives and policies are all aligned to keep it widening, because that is what the system is designed to do, and those making the policy are very much benefiting from the system they have designed. The average person is not benefiting though, because the are the ones being milked in order for that tiny fragment of society to exponentially increase their wealth.

> Handouts are not the answer.

Again, a handout is just going to be given in order to stimulate the economy, which is exactly what happened five years ago and was a major factor in driving up inflation. Rather than improving affordability, it made everything more expensive, and allowed the companies to maintain or increase their profits, despite supposed supply chain cost increases. And once the prices go up, they never come down again, so while the handouts ended, people's real salaries have shrunk in relation to the price increases, and people can afford less. 

> Can't afford it? Give them more loan time!

*It's another trap.*

And we keep falling into them.


Taraz
[ Gen1: Hive ]


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