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by pydry
1518 days ago
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The government already backstops most residential mortgages through freddie/fannie. Absorbing the losses and taking in LVT instead of mortgage payments will be nothing more than an accounting difference for many mortgages (e.g. say, some pension funds). Some land owners should have to eat losses. Thats the whole point. If you live on a portfolio of land inherited through your 15th century duke great grand uncle you should be getting a job at McDonalds rather than living off the labor of others. The problem is less technical and more political. Try to deprive large scale land holders of their property and they will bankroll a fascist uprising and launch a coup while foreign leaders in hock to property owners elsewhere will back the coup and enact punishing sanctions to prevent it from being seen to work. It'll happen one day probably but the transition will be bloody and violent as it always has been when land is redistributed. |
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It’s all well and good to say some land owners will have to eat losses. Which land owners? How severe losses? The fact of the matter is that expensive housing in major cities has forced a substantial portion of the middle class to misallocate their portfolios and put far too large a percentage of their funds into real estate in order to have a primary residence. If you feel this group should eat losses without compensation you’re basically saying the government should financially doom them. More broadly it’s not uncommon to see a house in many neighborhoods become 50+% of a retirement plan. Cratering the value of homes without compensation dooms many people to less than half the standard of living they were expecting in retirement.
I agree with you that the transition you want would have to be bloody and violent. It would also have to be authoritarian. Simply put the groups you want to impose huge financial penalties on will oppose you and without them you lack the votes to pass this democratically.