A More Interventionalist Role
-by the Mysterious Flying Miser
From Architecture Design:
“Low-income people are being marginalized by the federal government’s ‘monolithic housing estates’ and badly planned cities, says Mission Australia. The federal government is ‘incapable’ of providing affordable housing and coherent city planning, Mission Australia’s CEO, Toby Hall, said. ‘We’ve succeeded in building communities where disadvantaged and low-income people are clustered in areas where social and economic participation and growth is stagnant. As a result, in our urban areas, affordable housing options are too often located on the fringes of our major cities – away from jobs, transport, and other essential services,’ he said.
“‘The Rudd government should play a more interventionist role in the urban planning of our major cities to improve access to affordable housing’, Mission Australia said. ‘We need to see targeted investment in inner-city housing on the grounds that it is well located. But, at the same time, we need to learn from the past and not create monolithic housing estates; nor, by our investment, hurry-on the gentrification of inner city areas where affordable housing remains and price low-income people out,’ Hall said.
“‘Australia has become a society where too often affordable housing is poorly built and only available in areas away from jobs, childcare and transport – where your heating and cooling costs are so high you can’t invest in your children’s education, sport or health; and where you need a car because there’s no public transport. That sort of society is ripe for social unrest and economic decline,’ said Hall.
Also from Architecture Design:
“The housing shortage in the Northern Territory is now so desperate that families are being forced to live in tents. The territory’s buoyant economy has drawn people from interstate to flood to the area. Tradespeople and construction workers often have no problems finding work, but finding a property is a different story. House prices have rocketed, with the median in Darwin now reaching $450,000, and there is huge demand for rental properties. Welfare groups are saying that they are giving out tents in desperation and have people living in unsecure accommodation, including sheds and parks.”
I found this on Business News, Americas;
“Ecuador’s housing deficit currently stands at 1.2 million, and it is growing at the rate of 7.4% a year. In an effort to resolve this crisis, Quito’s Chamber of Construction has initiated a national crusade, to be lead by the private sector, with the hopes that it can increase the percentage of the construction sector budget aimed at housing, currently only 0.032%.
“The chamber hopes to persuade private banks to adopt innovative financing methods that would give poor sectors of the Ecuadorian population better access to funds. It also hopes to persuade construction firms to use new technology and materials to help lower the price of house construction.”
From the Financial Times:
“Alberto Silva da Cruz, a 28-year-old security guard, and his wife Genilsa, a 32-year-old cleaner, have just joined a queue about 200 metres long outside an annual housing fair held by Caixa Econômica Federal, Brazil’s government-owned savings and mortgage bank. It is not yet 9 AM, more than an hour before opening time, by which point the queue will double in size as more couples and young families line up for the chance to buy their first homes under a new government incentive scheme called Minha Casa, Minha Vida (My Home, My Life) that will pour R$60bn ($31bn, €22bn, £19bn) into Brazil’s housing market.
“‘Without Minha Casa, Minha Vida, we wouldn’t be here,’ Genilsa says. ‘Interest rates were too high and the installments were too big. But now we think we can do it.’”
“Brazil’s government has announced a series of ‘anticyclical’ measures to boost growth since the onset of the global economic crisis. Some are no more than pay rises for public sector workers, which will remain once the crisis has gone, storing up fiscal trouble for the future. But Minha Casa, Minha Vida appears to be the real thing. At a time when Brazil’s construction industry was heading into decline after several years of strong growth, Minha Casa, Minha Vida has appeared as a lifeline.
‘‘This will provide about 70 per cent of our business this year,’ says Milton Goldfarb, president of a construction company that bears his surname. He plans to build 12,000-14,000 homes under the scheme this year alone. Given that the industry accounts for 5 per cent of Brazil’s gross domestic product, the program should give a valuable boost to employment and earnings. ‘This is a revolution,’ he says. ‘Brazil has never had a policy so clearly designed to provide housing for the poor and the lower middle classes.’
“For those at the bottom of the income scale, the program offers eye-popping subsidies. It allows people earning up to three times the national minimum wage of R$465 a month to buy flats or houses worth up to R$52,000. Subsidies vary according to earnings. For those earning one minimum wage, for example, the scheme will contribute R$46,000 – leaving the buyer to provide just R$6,000, which they will borrow from the Caixa and repay in 240 instalments of R$46.50 a month.
“Higher up the income scale, buyers will get smaller subsidies but also subsidized finance. The Caixa’s website offers a simulator to show people how much they would pay depending on their earnings and the cost of their new home. As the housing fair started, it was performing 154,000 simulations every day.
“Alberto and Genilsa Silva da Cruz visited a Caixa branch before the fair. They were told that on his proven income of R$1,500 a month they would be able to buy a flat for R$80,000 and pay R$414 a month – something they would gladly do to get out of their R$250-a-month rented house. That means they can expect to afford at most a two-bedroom apartment which, with three children aged six months to 10 years, will be a squeeze. ‘But there’s no point in dreaming too high,’ Genilsa says, as the queue starts to move into the housing fair. ‘And this is already a wonderful deal.’”
I think we have empty homes for all these folks in Florida, Arizona, Nevada, and California. No jobs, but empty homes.
‘We’ve succeeded in building communities where disadvantaged and low-income people are clustered in areas where social and economic participation and growth is stagnant.
No, what you have done is succeeded in putting unproductive citizens in communities where social and economic paticipation and growth has to be created by the residents instead of the residents waiting for the govt to provide it, kinda like the housing in the community.
Why cant liberals see this?
Yeah, people complaining that their neighborhood doesn’t have basic businesses, stores, etc. has always rung hollow with me. If no such things exist, then that’s called opportunity.
Alpha:
Its call being an Urban or Suburban Pioneer ..the first to suffer life’s lack of services all for a chance to buy an overpriced home.
Opportunity IF , big IF, you could just get past one of those 2nd or 3rd job and long commute via public transp just to get a few $ ahead. Not that it can’t be done, it is just like pushing a monolithic big old rock up a hill against a stiff wind and the road is slippery wet.
I agree, you can’t just snap your fingers and do it. But marginal neighborhoods tend to have very low rents on stores and the like and the locals don’t have expectations of a chic bistro/boutique/etc. They’re just happy to have a place that sells hot dogs. They don’t care if your wallpaper is out of date.
AND on top of my other post.
Sloth it isn’t like the American person/school child is taught to THINK and to think about how to be an entrepreneur, are they?
Hell, teach them to stay in a box. Don’t teach them that there are other ways out there. A few get it, but the majority “tend” to follow the way they were TOLD to follow.
WHY can’t you see that people who have 1,2,3 jobs work and live in these areas? Or other areas.
It has nothing to do with liberal. When was the last time you rode a bus and viewed all people from lower walks of life working and having to spend hours on public transp to get to a job and then home?
Before you get home, read NIckel & Dimed.
+1.
(And don’t forget about the lack of investment dollars available in such neighborhoods, either out-of-pocket or from lenders. That doesn’t help matters, either.)
It has everything to do with “liberal.” Conservatives argue that “Nickeled and Dimed” fails longitudinal tests: statistically, few people stay in those minimum-wage jobs for very long. (Not saying NOBODY does.) Barbara Ehrenreich is anti-capitalist from way back.
You know, there was a time right here in America when people used to line up for the chance to buy houses they couldn’t afford and didn’t suit their needs for a much higher cost than renting, all made possisble by creative financing with artificially low interest rates and deposits.
But I’m sure South America is different here.
One worker earns R465 a month and the govt finances R46,500 for that worker’s house. If the govt taxes the worker at 10% then the house can be paid for in 1000 months. Seems OK to me as long as the house lasts 1000 months and the worker works for 80 some years. I guess the govt could always raise taxes if they are too low.
“income of R$1,500 a month they would be able to buy a flat for R$80,000……. ‘And this is already a wonderful deal”
I wonder how easy it will be for them to walk away from the government owned bank when this mortgage crushes them.
The worker would be better off renting for 1/2 as much money, then buying a place with cash later on (after the inevitable house-price crash, that is).
The worker would be better off renting for 1/2 as much money, then buying a place with cash later on (after the inevitable house-price crash, that is). Big V
Big V:
With all due respect, I believe you are wrong on every point you’ve made here (renting, buying for cash, inevitable crash)–that is if you are talking about the Brazil article.
One cannot automatically extrapolate the American situation and assume Brazil will follow the same line. Its when we are so sure we know something that we can get in trouble. I’m an American who did not get caught up in the bubble when I lived in N. California because I recognized it, but Brazil (where I now reside) is a different animal.
I could list many reasons for this but one reason is that about 70% or more of all housing in Brazil is owned 100% free and clear. Real financing has just been introduced in the past 5 years and has been all but impossible to obtain. I could go on.
Correction: 70% of all housing is not owned free and clear in Brazil but rather about 70% of all homeowners own their house free and clear. And I really believe this figure is much higher because only about 5% of all my friends who “own” have a mortgage. I know about 25 friends and their families who own their properties free and clear. I know one person with a recent mortgage and one more who is looking to buy with a mortgage.
Ah, people buying “free and clear”.
There are 2 reasons for this:
1. Americans coming and buying “cheap” with their fancy American dollars.
2. Brazil has a much smaller middle class than the US. Most people are either rich or poor. The poor can’t afford to buy property, while the rich buy with cash.
Here are the problems:
#1 is going by the wayside (ala US crash).
#2: The recent introduction of mortgages to the poor in Brazil is no different than the recent introduction of mortgages to the poor in the US. In both cases, loans are being given to people who do not earn enough money to repay those loans. Because these buyers were introduced into the market, demand rose and pushed up prices. Now, because prices are so high, these same people could otherwise rent much nicer accomodations for less money. The only reason they want to buy is because they expect further appreciation on the property. That is speculation and these are the conditions that cause bubbles, whether you are in Brazil or anywhere else.
Sorry but both points are mostly wrong again to such an extent that I wonder if you are proposing serious arguments because none of your points indicate any firsthand knowledge of the Brazilian market whatsoever. It is a very American tendency of which I am also guilty of to assume every fact or trend American is the same worldwide but it is not always so and this tendency is why many in the world think we Americans suffer from a touch of hubris.
My response to your points:
1. Americans do not affect the Brazil real estate market anymore than the French affect our USA market. I’ve been involved with Brazil for 23 years and live here now and there are very few Americans living here and buying property compared to other South Americans and Europeans. To the extent that these groups affect the property market it is only on the high end of resort town which the Brazil article does not refer to.
And you are wrong about the poor not owning property outright. In every major city in Brazil there are slums where “homesteaded ownership” is grandfathered in an unofficial but very real manner to millions of poor Brazilians. Millions of poor “own” their property and can rent it out or sell it through community entities and if someone begs to differ they will be killed by the friendly “neighborhood watch.”
As far as buying cheap with fancy American dollars you are wrong here too. The Brazilian Real appreciated more against the dollar in the past 4 years than almost every major currency in the world. I know because it affected my business. Brazil is not cheap. Good neighborhoods in Rio are very expensive and you need cash.
And the recent introduction of mortgages to the poor in Brazil is way different than the USA version. There are no lier loans here, no neg ams alt A’s etc. The article talks about a subsidy a huge subsidy. Was this missed? I would really look into it if I were poor because rents rise here much faster than in the USA. And who told you prices were “so high” in Brazil because of the poor speculating on houses? Where did you get this information? Do you know of any poor Brazilians speculating on houses? I don’t. The rich maybe but not the poor. They are trying to put a roof over their heads and eat rice and beans.
The house prices listed in the article do not seem out of line compared to the building costs here. They build mostly out of masonry and reinforced concrete. A middle class house here can last 150 years if maintained. It’s not a K&B crapbox. I know how much it costs to build here and those prices stated in the article leave only a fair amount of profit. The land is donated. So where is the speculation? It might come but its not here yet.
And look at these figures from the article “They were told that on his proven income of R$1,500 a month they would be able to buy a flat for R$80,000 and pay R$414 a month” That’s 28% of his take home pay for housing. I would take that deal. BTW that house costs 45K US. Some of the houses in the article cost 25K dollars. That’s not a lot even for here. And yes prices might rise a bit from this program but the good will out weigh the bad in human terms.
And as far as USA going by the wayside affecting the Brazilian property market, I thought It would but I don’t see it. Rio properties have risen about 7% the past year from a non bubble bases IMHO. Brazil has also weathered the storm better than any Anglo or Euro country that I know of.
No one knows everything about everything even though we as Americans sometimes think we do.
What’s your business?
Hi RioAmericanGirl:
From what I read in the article, the new government loans are being given out to both rich and poor people, but the programs are different for the two different groups. Hence, foreign influence in high-end markets is absolutely a factor here. If even the “rich” require government help to compete in the housing market, then you have what appears to be some sort of a blip.
Now, I never said there aren’t any poor Brazilians who own property outright. What I said is that most can’t afford to buy property with cash. We learned that from the interviewees in the article above. This unaffordability may be related to the rise in property values to which you alluded. Hence, if said owner of property wants to sell it, then the buyer will need a loan, which will likely be a “creative” one.
Yes, the US dollar is worth less than it used to be, but it’s been a lot more valuable than the real for a long time, so yes, Americans buying in Brazil have absolutely been using “fancy” American dollars. The pricing structure there seems very cheap to us, but not so cheap to wage earners in Brazil. A low-end house in Brazil will cost less than a low-end house in the US, and high-end house in Brazil will also cost less than a high-end house in the US.
As far as good neighborhoods being “very expensive”, have they gotten more expensive recently? And why do you need cash? The government has a special loan for rich people, mentioned in the article above.
Here’s where the speculation comes in: The buyers of the house are getting a bad deal on the price. They could rent for the rest of their lives and pay less in rent than they would have paid in principal alone on their mortgage. If all they were trying to do was “put a roof over their head”, then they would be content because they already have one. The only logical reason for these buyers to be so excited about buying a house that costs MORE than a comparable rental is an expectation of appreciation.
It’s hard to say whether or not 28% of one’s take-home pay is a lot for a house in Brazil, since I don’t know what all people need to spend their money on. I don’t know if food and clothes and what not are really expensive compared to incomes there. I do know that this couple was paying 1/2 as much to rent their old house, and the guy said straight up the only way he could afford this house was with government help. That tells me the PRICE is too high. There’s only so much you can do to improve “affordability” through artificially low interest and low down payments. These government-made tweaks to laon terms only make it possible for people to pay more, which pushes prices up. It’s absurd (and arrogant) to believe that this simple chain of events won’t happen in your special country. Of course it will. Any time governments encourage malinvestment into one sector of the economy, a bubble will form. If this house were a good investment to this couple, then they would buy it themselves instead of being prodded into it by a third party (the Brazilian PTB).
And, of course, you have to end with the “no one knows everything” phrase. That’s no different from the “no one has a crystal ball” phrase. If I (as an American) can’t know what will happen to the RE market in Brazil based off of available information, then you (as a Brazilian) can’t know either. And if you can’t know what will happen with the market, then you might as well just rent because it’s WAY cheaper than buying.
I’m sorry to have to be the one to tell you that Brazil is not any more special than all the other special places with creative financing and newly-found appreciation in house prices.
But, it’s supposed to be different here !
Big V, Why must you paint with such a wide brush? Is everything black or white? Are all countries and cultures and housing situations the same? Do you know everything about everything? Have you lived in Brazil? I do.
You are wrong again paragraph by paragraph but judging by your responses and lack of knowledge on the Brazilian housing situation, I don’t think you’ll listen too much of anything I say anyway.
Paragraph 1: Wrong: Foreigners are not allowed to get the same loans as Brazilians and at the terms offered to foreigners they would not want those loans anyway. Thus: Foreigners are not affecting the local market due to creative financing.
2. Wrong: Prices are not affordable because the real cost of building a house even with free land is too much for a poor person to afford. It’s not because financing has driven the cost up. However if they buy with the subsidies their home owning costs will be less than renting because rents here rise very fast.
3. Our US dollars are “fancy”? And powerful? Jeans, shoes, purses, condoms, boats, cars and Whisky cost a lot more here in dollars than they do in America. A high end house in Leblon, Rio will cost as much as a high end house in LA. High end here is high. How fancy are our dollars? Do you know? No you don’t. I do.
4. Mid and Expensive properties here have increased about 5% this year about the rate of inflation. Where’s the bubble? The program in the article mentions a program for “poor and lower middle class” not rich so you point is wrong.
5. How are they getting a bad price on their house if they are paying less than the building cost with free land? Did you read the article or just making up arguments to fit your pre- conceived erroneous notions? And the rents in Brazil rise every year, believe me.
6. Actually the prices are not “too high” because that is the building cost and the land is free. The problem is that the poor’s pay is too low thus they are being subsidized to a great extent which I see no problem with in light of the USA’s and Brazil’s subsidizing of the Banks and he rich. You keep ignoring most of this program is a subsidy. Did you read the program? Did you go to the calculator? Also their rents are half the price now but you don’t know the history of rent increases in Brazil which go up substantially every year. At current rate, in 5-10 years their rent will be well above their subsidized mortgage payment. This WILL save them money. AND I’ll bet their current rental is a real POS–way-way worse than their new house. This subsidy might raise prices slightly but i think the good outweighs the bad. The world is not black and white, it’s not all “your are with us or against us”. Life is full of compromises and trade offs. I think this is a good trade off.
7. Wrong again. Brazilian housing prices (poor to upper middle class) have pretty much followed the rate of inflation here the past 20 years or so. Other than the resort towns Brazil did not experience a huge bubble like we did in the USA.
And you missed my point about not knowing everything. I am an American, born in the USA–a big fan of Mark Twain and when I don’t know what I’m talking about I keep my mouth closed and let people think I’m a fool rather than open my mouth and remove all doubt….
Hi Rio:
I can see you’re getting very emotional, taking this housing issue very personally, and resorting to the same hysterics I got from NYChk regarding the Moscow bubble, just like all the other members of the “It’s different here” crowd. I’ll just let you witness the crisis as it unfolds in Brazil, but don’t say I didn’t warn you.
Government subsidies lead to higher prices, thereby necessitating more government subsidies, leading to higher prices.
If the average person in any particular neighborhood can’t afford the average house (but they can afford the average rent), then prices are too high.
Big V,
I’m sure your are right in your mind as per usual but in all the years I ever read this blog have you ever conceded a valid point to anyone even when you were intellectually bested and conceptually over your head? Do you not know that NYChk and many others beat you badly many times by debate standards? But I must admit that sometimes shrill, pit-bull like deliveries of fallacy are amusing in their predictability.
Some people value facts and truths over dogma and tired discredited rhetoric. Some people open their minds and don’t assume they know everything. I don’t know if there is a bubble here or not. I just said it is different here because it is. That doesn’t mean it wont crash. It just means we don’t have the same situation here. 90% of my friends own their house outright. Is that not “different”? It might crash but it is “different”.
Thanks for your warning about a crash but I don’t think you are sincere in your concern with me. However, my house is almost finished and we paid cash on land that we have owned for years. If the house looses 60% I am even but will have years of free rent too. I think I’ll struggle out of my situation OK. And BTW, I escaped the fallout of the US bubble because I knew it was a bubble. I’m going to end this debate because you never debate but rather only pronounce. Besides it’s Rio Saturday night at 11pm. Time to take a shower and go go see my friends. With Brazil up 3-1 over Argentina in futbol they should be in a good mood! Boa Noite..
Um, NyChk lost a ton of money on her Moscow RE, which wouldn’t have happened had she listened to me. So if you think I was “intellectually bested”, then you need to brush up on your critical thinking skills.
Oh, and do me a favor. If you’re going to resort to name-calling, then make up your own names instead of parroting silly Russian girls with bad investment histories.
RioAmerican,
Sorry I was too lazy to go through ALL your posts. The main thing I noticed was the govt lending 12x annual income as the price of a house. We’re not supposed to engage in name-calling on this blog, but IMO you’re nuts.
“If the average person in any particular neighborhood can’t afford the average house (but they can afford the average rent), then prices are too high.”
+1 A subtle truism.
“NyChk lost a ton of money on her Moscow RE”
Desist, you dolt! LOL… I made a ton of money on my Moscow RE, and not by design, either, which makes this even funnier.
To set the record straight - I never “invested” in Moscow RE. I was born there, I had property there, and I decided to keep some property there.
Why? Because I own those apartments free and clear and the cost of carry is nothing. Why not sell? Because, what would I do with the proceeds? That property provides 1) USD diversification hedge, 2) rental income, and 3) free medical care just in case.
What’s that last point, you ask? If you own property in Moscow you get the right to free medical care - from tests to hospital stay to surgery to dental care - and you can get this medical care from the top research medical institutes, if you wish -> that’s quite an incentive to keep some property there, don’t y’all agree?
As to the burning question in Big V’s mind - how much money did I “lose” on my “condos” (they are NOT condos, sheesh…)?
One aparetment was given to us for free in those dark horrible pre-market economy times Big V’s so fond of remembering (yes, honey, it’s hard to believe, but those things did happen, a nice apartment received as a gift from the government). Another appreciated over 10x (yep, Big V, that’s TEN TIMES) since I bought it many years ago.
So no, I did not “lose a ton of money”. I never set out to make a ton of money, either, my reasons have been and remain “diversification and safety net”.
P.S. Big V, please do yourself a favor and stop spreading lies and misinterpreting everything I (or other posters) say. You already made yourself into a total joke. Time to cut your losses, and keep silent - maybe that way you can fool people into thinking you are smart. Every time you open your mouth, you just remove any doubt to the opposite.
Az_lender, Caution: Math Ahead….
You said you were too lazy to read my posts but you call me “nuts”? Because I tried to explain the Brazilian system and this particular program? I would not have expected that from you. If you read my posts objectively you might see that I made “boots on the ground” valid points. I live in Brazil and have 23 years business experience with Brazil. I also read the article.
I wish you would’ve comprehended the article before you called me names. You said “the (Brazilian) government (is) lending 12X annual income as the price of the house”.. but you (and other posters) are much mistaken. Here’s why:
The government is loaning R6,000 to a person who makes R5,580 per year. And the Government is GIVING the person the other R46,000 free an clear. Therefore the government is lending a little more than 1X the person’s yearly income. IT’S NOT 12Xs……… it’s 1X. The mortgage is R46.50 (25 US dollars) per month for 20 years or about 10% of the person’s monthly income. How many of your clients would default with terms like these? None probably and they would be “nuts” not to take this offer.
Now if you want to attack the policy on it’s merits in terms of subsidies and whatnot that’s another subject entirely but you point about lending 12X yearly income is wrong but understandable because I think you probably just skimmed over the article quickly.
Hey NYChk:
I knew you would deny losing money on those properties. You tried to deny even owning them, after all. That one condo (apartment, whatever) you bought may have appreciated 10x, but then it lost all that excess value during the crash. And you didn’t buy it at the right time to not lose money, so stop fronting. You’re not even that old. I already figured out that you lie like a fly, so everything you have to say about your “no brainer” investment at this point is neither here nor there. In any case, at the very best, you should have sold these apartments when I told you to.
If I had the chance NYchk did — to hedge against a dollar decline/diversify out of US assets AND get a positive cash flow out of it, I’d jump on that in a hot second — especially if one of the apartments was free.
Let’s stop the nasty in-fighting, guys. Attacking the poster instead of the topic takes away from an otherwise intelligent and useful debate.
It was a good exchange of ideas until both of you started taking it personally.
In my opinion an important point has been missed…
“Government is GIVING the person the other R46,000 free an clear”
WRONG - the government is giving the person/entity selling the “home” $46,000 free and clear -thus artificially inflating the property values… The government must always continue this or prices fall to where they should have been in the first place.
Respectfully (and not personally!!)
I read the first few exchanges between Rio and Big V.
I have to agree with Rio with this one (no offense, Big V). Rio is basically describing the situation in India - minus the part about land being free (land is awfully expensive too in India) - I totally see the part about high end being high end (yes, multi million dollar apartments are quite normal in desirable parts of town), most properties being fully owned (changing, but largely true), and the rather minor effect of foreign money (again, yes there is some effect but not across the spectrum - surprisingly affects more the middle class prices than the high end).
FL Rocks,
You said: “WRONG - the government is giving the person/entity selling the “home” $46,000 free and clear -thus artificially inflating the property values… The government must always continue this or prices fall to where they should have been in the first place.”
Your right, I know who’s getting the money. It was just quicker to write it my way and I figured people would know what I was talking about.
But I don’t think this program is “artificially inflating the property values because WITHOUT THIS PROGRAM THE UNITS WOULD NOT HAVE BEEN BUILT. And the land is free and those prices 25-45K US are the building costs. (I’m building a house in Rio, I’m surprised those prices are so low because the construction here is masonry and steel reinforced concrete, its heavy duty)
We’ve trained our minds to think all home prices everywhere are too high so a hard thing for us HousingBubble people to realize is that the prices quoted above are NOT “too high.” How could they be too high if the land is free and the prices represent the building costs plus maybe 10%? In this case in Brazil, the prices are the fair price with the absence of any speculation whatsoever.
The problem is that the poor don’t make enough money to buy and NEVER will. That is the reason for the subsidy. I’m sure these new units represent a HUGE step up from their current hxxxhole rentals. I’ve talked to renting maids, laborers etc. Their rental living situations are dangerous, tenuous, overcrowded, unhealthy, distant, dismal and not pretty… I like this program. The poor here need a break. Most work hard, and are honest and cheerful in the face of oppression and obstacles most American’s will never know.
And I’m wondering if this program might not LOWER home prices and not raise them. Think about it. More unit will come on the market meaning supply will rise. And let’s say in 6 years a person needs to sell. Well if he had been subsidized 50-90% he sure won’t be underwater and will not have to have a short sale therefore he can lower the price because his money owed is so low! Life is full of examples of unintended consequences….
“at the very best, you should have sold these apartments when I told you to.”
I usually don’t take advice from a village idiot, thank you.
Barney and Chris must have taken a trip to Brazil to show them ‘how’. 9.3 times income. Here we go again. The ‘Tan’ man should go to Ipanema as well. Nothing new, move along.
According to my math they are paying less that 28% percent of their income on heavily subsidized housing for the poor and lower middle class. How is this “here we go again”? The 9.3 times income is the fair cost to build the little house. These are plumbers, masons, street vendors store clerks and poor who can’t afford that so they are getting subsidized to help them and the construction industry. Brazil housing is NOT overbuilt like my USA. This is not our American reality here.
Why are construction costs so high? Didn’t construction costs rise to the moon during the US housing boom?
maybe a little levity today for the girls:
http://www.youtube.com/watch?v=bDOYN-6gdRE
It sounds like lots of other countries’ governments failed to learn anything from America’s failed ‘affordable housing’ experiments.
should give a valuable boost to employment and earnings.
I agree with that and there is some truth to debt equals wealth. You just have to do it at the right level and at zero interest rates.
Tons of construction workers are moving to the Northern Territory for jobs, but there are no houses? Hmmmmm. Sounds like maybe the problem might be the FREAKING PRICE? Cause I know all those dudes are out there building houses, so there’s gotta be a lot of em.
Government, we need you to intervene. Can we get some tents out here to go with our house-price subsidies? Thx.
Evidence of too many professionals in an economy? The shoe maker’s kids are barefoot.
“The chamber hopes to persuade private banks to adopt innovative financing methods that would give poor sectors of the Ecuadorian population better access to funds. It also hopes to persuade construction firms to use new technology and materials to help lower the price of house construction.”
Well, there’s a nice opportunity for trade. As we knock down our excess inventory, we can ship the materials to Ecuador.
Oh, I forgot. Ecuador has strict protectionist policies.
I’m originally from the Northern Territory (living on the right coast of the US for nearly 10 years now). My folks still live in Darwin - the feedback from them and from Darwin people in general is that the only way is up. Cited reasons for boom/bubble - there is a big Australian military presence there now and a supposed land shortage (land is owned by the government and “released” for building in a drip-drip-drip fashion - but look at a map of Australia - no shortage of land).
This in a place that is hotter and more humid for longer than any place I’ve ever been. It gets flattened by cyclones every generation or so. You can’t enter any natural bodies of water for fear of monster crocodiles or box jellyfish & every other critter is poisonous and bad-tempered. Did I mention the soul-destroying wet heat?
After reading & lurking here for years now, I’m convinced that it is not “different” there. Also, the sense in Australia in general is that “we’ve dodged a bullet - Australia is not going to be like the rest of the world”.
For an upcoming trip down-under where I will get grilled on why I haven’t bought a house and why don’t I move back to paradise, any comments on why Australia is just as vulnerable to what is coming next (or more so, with the reliance on China buying what we dig up or chop down), and why Darwin is heading for a big-time real estate crash?
Hi Tandemrepeat:
The reasons in Australia are the same as the reasons everywhere else: If people don’t earn enough money to pay for their mortgage, food, transportation, clothes, kids’ educations, and everything else they need, then something has got to give.
Wage inflation is off the table for Australia, since they too have Chinese and Korean workers (I mean currencies) with which to compete. The only possible response to these outrageous prices is for younger workers to rent instead of buying in to the housing market. Since there are plenty of rental houses available (and more being built every day by construction workers, for instance, in the NT), rents will remain low, which means landlords won’t be able to cover their mortgages.
Without a lot of wealthy first-time buyers entering the market or a lot of wealthy people paying high rents, there is nothing to support high house prices. The bottom will fall out from underneath the whole thing, and the government can’t do a damned thing to stop it. All attempts by governments to prop up house prices will result in even-greater price disparities, thereby compounding the problem and amplifying the eventual bust.
People are living in tents BECAUSE the government won’t let house prices fall.
Glad to see you posting. Love to hear more about you/Australia.
You can count on it. Australia is different than here.
haha.
Sounds like a delightful place to sit out on ‘your’ patio, hot, wet, bugs.
“Did I mention the soul-destroying wet heat?”
Sounds like my impression of Florida. But at least we don’t have any housing market problems in Florida.
Dennis:
When are they going to start bulldozing the houses in FloorRiddah? That summer wet heat in a closed vacant house must be good for black mold and rodents
Don’t forget the Chinese drywall ! How could I forget ?
It was so humid here today, I had to check the gps to see where I was…not in Floor uh duh. Or even Floor Riddah!
I’ve been reading this blog off and on since LVlandlord and this blog is great. As an American living in Brazil I will tell you for sure that it is different here, way different.
Different in what aspects? In the aspect that people don’t need to earn the money with which they pay their mortgages? If Brazil intends to use the “government” to pay for peoples’ houses, then I wonder where the government is going to get the money. Certainly not from the very same people who couldn’t afford to pay for their houses to begin with!
Bottom line: If houses are too expensive, and then the government starts subsidizing them, then they will only become even more expensive. This is a recipe for disaster.
Just wait and see how this all plays out in Brazil. Yet another non-immune place.
Different in what aspects?
1. It’s different in the main aspect that people in Brazil DON’T HAVE mortgages yet. Well they do but I only know a few, maybe 5% of all the homeowners I know. And this is a new thing here. Most homeowners here own their homes 100%. It’s true! And here, either you are a surf, part of the small middle class or are RICH.
2. Where will the government get the money to subsidize housing for the poor? Brazil has a trade surplus and has for years. It has foreign currency reserves. It has some of the richest people in the world. It is a world leader in commodities export. It is energy independent. It just discovered largest oil field the world has found for the past 50 years. Brazil could generate billions if it cracked down on corruption. The money could be found if there is the will.
And maybe it’s time they found a little money to help the poor who have been shafted for centuries. I just returned from a bus trip where I saw fields of shacks made out of tin, cardboard and rags. We are not dealing with USA reality here for the poor. It IS different here.
Yes house prices might rise a little but on the whole I think this subsidy will benefit Brazilian society more than it will hurt it. It is not like the USA mortgage interest subsidy which mostly benefits the rich….
Hi Rio:
As Big V mentioned above, it’s the introduction of (unaffordable) mortgages (#1) to the poor that is causing a problem.
As far as #2, are you suggesting that the rich in Brazil will be amenable to covering the losses on loans made to the poor? I. don’t. think. so. The US has a far more egalitarian society than does Brazil, yet it’s the middle class that’s being made to pay up and cover the losses of rich banksters and the like. The Brazilian poor will get the shaft once again. It sucks.
Hi,
Yes Big V mentioned it but she is wrong on all her points in this discussion. Please see my response to her post. Where is the problem? Did someone make it up? Did the article mention the brand new mortgages causing a problem? I have not heard anything about this problem in Brazil where I live now. I have not read one story about poor Brazilians losing their houses, bidding wars, or making money speculating on houses. The houses in the article cost 25-45K US dollars and are subsidized. I like that better than subsidized US Banks. Sorry but I don’t see the problem here yet and I recognized the California bubble in 1990 and the last one.
Your second paragraph makes good points but it is assuming things that I never said or that are not the current reality. I never said that the rich would be amenable to covering losses. They will not but they might have to anyway. For example right now there is a huge discussion on how the new oil find wealth will be spent and Lula (the President) has stated flat out that much will go to the poor. So far he is walking the walk.
Yes USA has a much more egalitarian society than Brazil BUT the trends are different. Brazil is making good progress bringing people out of poverty while the USA is going in the opposite direction.
Link: http://tinyurl.com/nhs5s2
Smart kids who pass the test get free Federal University education. The Brazilian poor mentioned in the article will not pay for their own subsidies because they make too little to pay any taxes. So the poor will not get the shaft on this one. The rich I hope will pay more, the middle class maybe but I hope not.
The top 1% pay 40.4% of the taxes. The bottom 50% pay only 3%. In fact in the United States of Amerika the bottom 50% get a check from the taxpayors (earned income), and the illegas also get $. What’s wrong with this??? Buy your ammo while you can !!!
Pismo wrong on $ for illegals.
They can’t claim any refund from their taxes. They do indeed get taxes taken from their pay, but it doesn’t get refunded.
1st they don’t make enough and really if they did try to get a refund, they would be boarding a bus south.
desertdweller - You’re wrong about the illegals. I do volunteer tax and financial work for the poor and the illegals do get child tax and earned income credit. I’ve filled out plenty of tax returns for people who can’t speak English and have a TIN instead of SS# and they get refunds. They don’t tell you they’re illegals, but anyone with a brain knows why someone would use a TIN instead of SS#. Either they’re H1B high-tech workers or illegal immigrants. All they need is a TIN and anchor babies. The IRS does not turn any info over to DHS, so how would they be deported?
Jerry,
You are correct. There are THOUSANDS more P.O. boxes along border towns here in Arizona where child credit and Earned Income Credit Treasury checks get mailed to, than there are poor moms and kids living there. Just as in every other government giveaway program, fraud, waste and abuse are the hallmarks.
John Mauldin this week: I sometimes get going in favor of one public policy or another, but it’s more important to try to figure out WHAT public policy will be, and not get in the way of the train they are sending down the track.
(Paraphrased.)
So, if a bubble is just forming in Brazil, then maybe now is a good time for RioAmericaninBrasil to buy a bunch of houses, with a plan to sell them soon. I think she needs more info to know when the wave will crest, though.
I don’t think a bubble is forming in Brazil. Where did i say that? In fact I just sold a small lot I owned in a resort town last week. Maybe it was a mistake, maybe brilliant but I needed the money to finish my house. I’m a foreigner here. I can’t get a loan. I think prices will come down here on the high end but not like California or Florida because they never had the big boom because there was no financing available.
I’m building a house in Rio on land owned for many, years. A house to live in. Rent’s here are crazy high in good areas. I have no idea if prices are going to go down or up. I just think people comparing the housing situation in Brazil to the USA is meaningless unless you know the situation here and very few Americans do.
AZ_Lender
Interesting post. I too wonder about the affect of public policy Brazil is embarking upon now, however it looks like the past 10 years it’s been pretty hands off on the housing front if data are considered.
Today’s Rio de Janeiro newspaper, O Globo has an article stating Rio’s house prices have doubled in the past 10 years.
That’s an increase a little over 7% per year.
Source: http://tinyurl.com/lj6ogh
And the official Brazil inflation rate has averaged about 7.3% the past 10 years if my math is correct.
Source: http://tinyurl.com/kug5hf
According to Case-Shiller, the average rate of housing inflation in the USA had been just above the CPI inflation rate for decades prior to the Bubble. So IF (and that’s a big if) the same criteria can be applied to determine if Brazil was in a bubble the past 10 years, the data might indicate that Brazil (or at least Rio) was NOT in a bubble the past 10 years. But this does not mean that prices can’t decline either.
It is also interesting that the Brazilian market could keep pace with inflation with the majority of purchases being all cash buyers as affordable financing is new in Brazil.
… we need to learn from the past and not create monolithic housing estates; nor, by our investment, hurry-on the gentrification of inner city areas where affordable housing remains and price low-income people out,’ Hall said.
This is an issue that has always given me pause. Why is “gentrification” a bad word? Seems to me that a burnt-out ghetto becoming gentrified is a step in the right direction. What is wrong with abused housing being taken over by people with enough money and grit to clean things up and make it a good neighborhood again?
If I were a younger man with money to invest, and lived in the SF BA, I’d invest in East Palo Alto for the long run. Good god it’s a mess now, but it’s bordered on three sides by Atherton, Menlo Park, and Palo Alto - three of the richest zip codes in America! And the fourth side is the bay. If enough investors belly up to the bar, East Palo Alto could become another Foster City/Redwood Shores community with boat docks and the like.
Caution about investing in spots like East Palo Alto (or Richmond, Oakland, Compton, south central LA, Detroit, etc):
First carefully assess the factors which account for the mess. Are ever likely to change, or do they appear to be permanently entrenched?
Often times these problems involve equilibrium traps:
Everyone can clearly see the root causes, but they are self-sustaining, and any politician brave enough to suggest tough measures required to right the situation would get his head handed to him in a basket.
Wouldn’t mind buying one of those empty brick w arehouses. Used brick is going for (even with the depression) $0.75/ea.
Dennis:
There was NO gentrification in America the last few years it was “Luxification” (new word) the difference is one,two or three steps up from a low income, abused or ghetto housing not 10 steps to total unaffordability for anyone still living there.
——————————————————–
Why is “gentrification” a bad word?
This is an issue that has always given me pause. Why is “gentrification” a bad word? Seems to me that a burnt-out ghetto becoming gentrified is a step in the right direction. What is wrong with abused housing being taken over by people with enough money and grit to clean things up and make it a good neighborhood again?
———————-
IMHO, “gentrification” is bad because it pushes out the people who already live in those areas…to make way for (usually) wealthier people. The common reasons these areas are targeted for gentrification are: proximity to jobs, shopping, cultural amenities, favorable weather/geography, etc. What this ends up doing is pushing poor people further out into the exurbs/least desirable areas where there are fewer infrastructure resources that are absolutely necessary for these poorer people to survive.
Having grown up in L.A. — an area that has seen much “gentrification” — I’ve witnessed how this trend tends to crowd out the middle class as areas become either very good or very bad…and the middle class ends up overpaying to live in what once was a regular, middle-class neighborhood that was taken over by wealthy people from different parts of the country and world. The poor are shoved into once middle-class neighborhoods that have now become ghettos due to the high concentration of poor people — and the crime that tends to come when these people form dense living groups in far-away places.
I’d much rather we, as a society, focus on the middle class, and what would most benefit them, instead of always letting the rich/powerful hoarde all the desirable resources for themselves.
Regarding gentrification - I don’t think the true “ghettos” are the first targets… I doubt if the trust-fund set is that adventurous… it’s usually the artists (seeking cheap space), musicians, gays etc that pioneer the edges, and the wanna-bes follow.
When thinking about gentrification, I think we also sometimes forget the existence of “working class” (or lower middle-class) neighborhoods that are still functional and good places to live. Not glamorous, but pleasant unpretentious “villages” in the city, filled with clerks, electricians, plumbers, etc.
They are vulnerable from both sides: If they have something the “cool crowd” begins to find desirable (charming old houses to rehab, inner city proximity to jobs) or If they are a possible destination for lower-class people dislocated from nearby neighborhoods.
I know I considered the arrival of high-end chain coffee a bad sign for my neighborhood.
ALA Harlem. Any of the bldgs in Harlem were gentrified.Now you can’t afford to rent/ own there.
Poor people do not have some sort of permanent right to keep a neighborhood from progressing.
The reason that these outrageous things happen is that so many hate the poor. They cannot see that a simple reversal of fortune could put them in the same boat. When we start looking on ourselves less as the center of the universe, and more as a society and people we will have fewer problems.
See how insane the Recession has become that China and Taiwan have joined hands against it:
http://www.associatedcontent.com/article/2121519/fashions_night_out_september_10th_2009.html?cat=69
See merchants deciding that the poor should lend them money:
http://www.associatedcontent.com/article/2127039/tight_christmas.html?cat=46
The Depression-era oldtimers had far better character.
“You’ve got to admit, its a better use of money than bailing out banks and poorly-run car companies.”
Whirlpool with 1000+jobs is going to Mexico. Screw you Obama and your health program scam!!!
Please, the outsourcing and structual dismantling of the economy has been going on for a long time. Blaming it on “O” is just plain silly. Both parties are bought off. When you jump ship from both parties, you start to be objective.
China and Taiwan have joined forces against this depression:
http://www.associatedcontent.com/article/2121519/fashions_night_out_september_10th_2009.html?cat=69
American merchants are still trying to grab every loose nickle from the poor:
http://www.associatedcontent.com/article/2127039/tight_christmas.html?cat=46
Perhaps we’ll learn that begger thy neigbor eventually means begger thyself.
What do you forecast for inflation/deflation over the next one year and next five years?
I feel as if we will continue to have deflationary pressures on the general price level for some time … although the FED is working hard to inflate the currency and other financial mediums.
I don’t hate the poor but I don’t want to live around them. Poor neighborhoods are ugly: they seldom have greenery or enough greenery, they are trash ridden with garbage of all sizes and kinds including cars, the curtains hanging on the windows inside look broken and tattered and dirty, they are unkempt and with all the mothers on section 8 and fathers lounging and kids hanging around and no one cleans up, and they tend to be crime ridden and filled with people who blast music and TV’s. Awful places.
Yeah and when an area becomes non white that area Never ever shows up on America’s most safest cities to live in
Hint: Jesse Jackson, Al Sharpton…that would be a great goal to make Gary IN, Trenton NJ, Hartford CT, compton oakland all great safe cites to move to.
Hint: Jesse Jackson, Al Sharpton…that would be a great goal to make Gary IN, Trenton NJ, Hartford CT, compton oakland all great safe cites to move to.
——————-
Gosh, dj. You sayin’ that these po’ “victims” might have to take some responsibility for their own neighborhoods…and their own children?? It’s much easier to claim “victim” status and demand more govt cheese, no?
Unfortunately, it will never happen, because there are entire industries that benefits from the “victimization” of “minority” groups.
House prices have rocketed, with the median in Darwin now reaching $450,000, and there is huge demand for rental properties. Welfare groups are saying that they are giving out tents in desperation and have people living in unsecure accommodation, including sheds and parks.”
Darwin is at 12 S latitude. It’s about 92F with high humidity every day of the year, and with frequent tropical rainstorms. A pretty miserable place to live without air conditioning.
Re: property prices is Brazil: I don’t know much about the city of Rio, so I can’t comment on that specific market, but property prices in much of Brazil have been influenced over the last couple of decades by all the Brazilian immigrants here sending money back home to construct the Brazilian version of the McMansion. I was married to a man from the state of Minas Gerais and I wintered there for many years (mid 90’s to mid 2000’s). There has definitely been a huge bubble. It’s not different there.
Thank you, oh wise and reasonable commentator. Finally, someone who can see the obvious occuring outside the borders of the United States.
Not a problem. And, of course, all these houses were paid for with cash (American dollars exchanged for Brazilian reais). There is even a mid-sized city in Minas whose name is Governador Valadares, but which is commonly referred to as Vala-”dollar”-es because so many people from the region came here and sent money back. The money from here built the city. And don’t even get me started on the price of houses in the little towns. Out of whack in terms of wages a la California. There was even a mania for beach property. Many dishwashers here own houses on the coast of Brazil as well as in their mountain towns, and of course they were all told by realtors and by “friends” who wanted to unload houses on them how much they appreciate in value and how easy they are to rent for big bucks during tourist season.
As I did agree, the resort areas (and other pockets) had been affected by foreign money. (I sold my beach property last week) However as I also posted and provided links for, Rio’s property has increased with the inflation rate the past 10 years. According to the US Case-Shiller index, this is the rate property should increase. (It should actually increase a bit more than the inflation rate)
P.S. I love Minas food….
1. Rio’s property has increased the past 10 years almost the exact rate of inflation (very unlike the USA) which might mean Rio did not have a BUBBLE.
2. There has been hardly any financing available the past 10 years at all. (Maybe 10% of homeowners have mortgages) This is a huge difference from the USA.
3. Government programs (which only affect a small number of poor and lower middle class) are brand new.
4. Brazil is under built. Many, many middle aged and young adults live with parents and would love to get out.
THIS DOESN’T MEAN PRICES CAN’T FALL, but, based on the above facts, all of which reflect the opposite situation as the USA, I will again offer my head on the chopping block and say about Rio and maybe most of Brazil:
IT IS DIFFERENT HERE.
Nao existe comida melhor que comida Mineira. Vou la este inverno.
I am saying that “the poor” will be you next. Never in my lifetime, have I seen such hostility and contempt for ordinary people. Never have I seen honest work held in such low regard.
I admit to a blue-collar bias. When I was young, American Farmers were the breadbasket of the world and American Manufacturers the factories of the world.
Although the farmers are hanging on by a thread, manufacturing, engineering, and craftsmanship are all disappearing from this country.
If you think I am wrong, read Phillips, “American Theocracy” in which he describes the damage done to the Dutch when they became over-enamored of financial games to the detriment of their real trading and merchantile base.
This year will mark the 400 anniversary of the founding of New York City by the Dutch–just in time for our own tulip mania.
Exactly.
As I’ve said in other post, although we are a 75% consumer economy, the PTB seem to think that paying the consumers enough money to spend on more than the bare min basics is unacceptable and somehow decoupled from the system.
Poor people need education and jobs that pay the bills. The rest will take care of itself.
Well, assuming they want to be educated. Go*d know’s I didn’t. I hate being educated. I still hate it even now, after being captured and educated.
However, education was just the only alternative between having a shot at a real life where I could drink orange juice more than once a year, and have lots of shoes, and hang out with people with all their teeth in their head, versus staying home to have 7 kids in a trailer park.
For some, it’s a tough choice. And I’m saying that lightly, but also not lightly.
And today’s first batch of exciting news from the PNW:
“Crab fisherman lose fight to lift catch limits”
http://tinyurl.com/mcd5kv
What’s funny is, when these pouty fishermen-whiners overfish and deplete the reproductive stock so that in a couple years time there’s no more crab appearing? (Which is what happens when you overfish? Duh…)
Then they’d be down here in court bi*t*ching and m*oaning for state monies for relief, because there’s no more crab to overfish, so now how can they possibly feed their gap-toothed offspring and carry on the family tradition?
Sigh.
You know, I’d like to love ‘salt-of-the-earth’ homeboys like these. Unfortunately, they usually turn out to be short-sighted greedsters, who would be mortgage brokers if they only knew a few more words and didn’t insist on going to work in plastic waders, and who would beat up and/or ravage good-intentioned chicks like me, if they were given half a chance.*
*which luckily they usually aren’t. Lately I only go out to ’salt-of-the-earth-land’ with a large and muscular city-boy co-worker.
Weren’t you going to suck some satanic slugs from the sludge? Whappenned? Fishermen run you off? (Crabmen?)
Some people read into posts, and with certainty proclaim the future of anonymous posters!!
Yes, the time has come that ordinary folks are scammers on section 8 housing so the bum fathers don’t have to work. None of them do. Look at the filth in the neighborhoods and lack of care, and esteem to others, to the earth and to themselves. Get get get mentality. Give nothing. They live off the taxpayer, who has become uncommon. Guess Socialism is running out of other peoples’ money!!
“Guess Socialism is running out of other peoples’ money!!”
It happens fast when you deficit spend by the trillions.
Especially when you deficit spend by the trillions for “social justice” and “cooling off the planet” while appointing egghead czars to micromanage everyone else’s life, all during an economic depression.
Once again, the catch-22. If we spend on the economy, we’re interfering in the free market. If we spend on anything else, we’re wasting money during a depression. I guess the solution is to spend nothing. The Herbert Hoover solution. Didn’t work so great the first time.
Look beyond the cliche answers the social progressives have patented to answer for the continuous failure of socialist policies. Don’t just accept some quip that was designed to satisfy school kids. Challenge the “official” explanations.
Study and read the actual facts, not the self-serving politically correct version of reality the Big Gov proponents and propagandists have formulated over the years.
The primary reason the Great Depression lasted as long as it did in America, when the rest of the world was already beginning to come out of it, was the economic restructuring led by FDR; and not anything Hoover did or didn’t do years before.
Specifically, forming corrupt partnerships between Big Business, Banks and Big Brother was what FDR did to wreck the economy then. Exactly what the Obama admin is doing today. The result in the thirties was a massive increase in unemployment and growth of intrusive government along with economic depression - exactly what Obama is delivering today.
The names and faces change. The failed policies still fail.
The Keating 5. Repeal of the Glass-Stegall Act. Repeal of consumer rights. Roll back of civil right. Roll back of workers rights. Deregulation of almost every industry. Offshoring millions of jobs.
Damn socialists.
Oh wait…
ot: NPR Big Pharma = 32 drug companies- $40M in 3 months, in health care debate. http://www.npr.org/templates/story/story.php?storyId=106899074
Bill Moyers Journal - 5*’s for excellent journalism on health care issues - objectivity by people in the trenches, both biz and medical side.
http://www.pbs.org/moyers/journal/archives/archives.php
We didn’t spend the first 120 years of USA gov’t. and it worked well. We propsered. Look at all that was built — Congress, monuments, armies, the entire nation. People actually worked. Then came the Socialist crowd and the private bankers.
You might want to research history a little more before you make such sweeping statements.
A good place to start would be that great Socialist institution, The Library of Congress.
Oh, we had an industrial revolution that changed the USA and the world, got the car, the phone, electricity, plumbing, and thousands of innovative creations built on the foundation of free enterprise, wherein creativity sparked many inventions not yet surpassed and many of which are the foundation for others. Life, liberty and the pursuit of happiness paid handsomely in many regards. Then marched in socialism, private bankers, pop psychology, pop culture replaced the classics, and the failure of people to keep what we have been so freely given is where we are at now — entitlement victim mentality.
You really don’t know any history, do you?