|
Well, to some degree, people probably do want to live in big, new houses. There's also probably some "real" underlying demand for an education, outside of people needing it (or believing that they need it) to get a good job. But the point is, regardless of how much people "actually" want them, it is in fact technologically and ecologically possible to provide most people in the U.S. with these goods. (The evidence is that a lot of people do in fact have these things, even if on paper they are underwater on a mortgage or saddled with a big student loan.) The bad policy is that by subsidizing and insuring these loans / mortgages far too cheaply, the government is driving up demand, and as a result people buy a bigger house than they need, or get an education that isn't useful for getting a high-paying job. If the government stops subsidizing mortgages and student loans with bailouts, insurance, laws preventing default, etc. the result will probably be 1) the cost of a college education goes down and also that less people actually go to college
2) people don't buy as many homes and buy smaller houses than they otherwise would have If you then want more people to have houses, education, healthcare, food, etc., whether or not they are able / willing to sell enough of their labor to pay for these things themselves, the next step is to solve wealth inequality. We could probably fix wealth inequality with good monetary policy (e.g. NGDP targeting) and "taxing the rich" in a sane way, e.g. with land value taxes, luxury consumption, VAT taxes, etc. After that, you're probably done, but for the remaining poor, the government can just give them cash, e.g. basic income, instead of trying to subsidize a million different services like healthcare and education and homes, in which case the subsidies end up in the pockets of doctors and administrators and landlords. |