[zemvpferreira]

That's a big claim you're making. Can't economic growth (AKA inflation) come about from rising asset prices such as houses?

It seems to me that conflating humanity's progress and economic growth is exactly where our problems start.

[thu2111]

This is a pretty common confusion. Economic growth is a growth in what economists call "wealth" (the goods and services around us that add up to our modern lifestyle). The closest approximate metric for this is real-terms GDP, i.e. the value of all goods and services sold added up and then adjusted for inflation. It's not about raw prices, which are distorted by government money creation (these days normally called quantitative easing but it goes via many names).

Progress and wealth creation actually occur when prices fall, not when they rise, even though it may not feel like it if you happen to be the owner of a fixed asset whose price is falling i.e. a house. In a static system if money is printed via the issuance of loans, and that causes house prices to rise whilst the prices of everything else remain stable, then all that's doing is reallocating wealth from non-home owners to homeowners and banks. But it's not actually increasing wealth.

For wealth to increase everyone would need to find it easier to buy things, and the only way to do that is for things to become cheaper in real terms. For instance the smartphone industry has created enormous wealth in the past 20 years. Smartphones got massively cheaper so everyone can have one, and they got massively better. This is what economists mean by wealth creation.

[raducu]

How is a rise in house prices helping the nobler parts of the economy? People spend considerable more of their income on mortgages or rents, leaving a lot less for other less fixed and shorter lived assets. I'd be 1000% satisfied with a 50' house and valuation, leaving me to spend my money on travel, charity, high-tech or just work less, do stuff that really interests me; or spend a lot more on education. How is the education bubble helping the progress of humanity?

I'd be extremely happy with the education + costs of 50 years ago, or just online education -- I'm not talking about content, but delivery and costs.

It boggles my mind that people don't see it for what it is -- the feudal lords are back and they take a lot more of your production just so you stay alive.

They are not helping humanity(except for some benevolent ones) progress, they 99% help themselves.

[zemvpferreira]

Sorry if the language wasn’t clear but that is the point I was trying to make: when we use economic growth as a measure of improving quality of life for people, it ceases to be a good measure.