If 21st-century Republicans have an idol, a graven image we collectively worship, it is Gross Domestic Product. All discussion about the flourishing of our nation is reduced to GDP, and its increase is seen as an ironclad refutation of anyone who questions whether America is, in fact, flourishing. But GDP, as today calculated, is largely fake, disconnected from the actual production of value. Worse, flourishing-as-quantity is a destructive way to view our society. It was once commonplace that the value of very many things, a mother’s love or a scarlet sunset, was immense, but unmeasurable. We have forgotten this, to our detriment. To truly make America great again, a crucial first step is dethroning GDP as a measure of our greatness.
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Six percent of GDP, for example, is nonexistent rent payments imputed as made by homeowners living in their own houses, which means GDP rises as housing prices rise, even though no value is being created at any point.
ReplyDeleteThis article has a lot to unpack and I'm not going to try but the above statement is kinda weird, .. If you don't actually own your home then you are paying rent. It might be disguised as a mortgage but it's still rent with the benefits of having to maintain it and pay property taxes on it...
JD
You have to pay property taxes or the "king" will take it away from you. Rent or own, the property taxes have to be paid.
DeleteYes that's true but I laugh when people don't or refuse to realize that paying a mortgage is just glorified rent
DeleteJD
Paying a mortgage is not glorified rent. Paying a mortgage builds equity, paying rent does not. Pay a mortgage for the term of the loan, you have 100% equity, pay rent for the same period, you have 0% equity. Calling them the same thing is a fundamental misunderstanding of economics.
DeleteThere is no equity to the payer until it's paid in full.. Until then the payer is simply responsible for all the expenses it occurs.. If you get evicted for non-payment there's no equity check coming to you from the lead holder..
DeleteJD
The person paying the mortgage can always sell the place and there is a really good chance it will be worth more when it's sold.
DeleteDoesn't work like that with rent...
This ia also incorrect. You can't be evicted by the bank if you are current on the loan. If you decide you don't want the house, sell it, keep the existing equity. Even if the house is repoed, the bank must return equity realized from the sale in excess of that owed. If you rent, a landlord can refuse to renew your rental contract for any reason. Rent has maint costs built in, so if you are a life long renter you pay maint costs plus anyway.
DeleteKeep dreaming..
DeleteRob, are you actually accounting for all the expenses you've put into the cost when figuring your profit/loss margins or doing like most and saying basically I paid X for iand now I sold it for X + 1/2% ?? If you really do the math you can break even IF you're lucky, most don't.
Anonymous @ 2:48.. Go read what I said, your first line tells me you didn't.. No reason to read the rest of your paragraph..
JD