[opportune]

What’s most concerning is that this might be a negative spiral. I think one reason young people these days get so squeezed financially is that proportionately more retirees/near retirees in the population means that, structurally, economic output needs to be taxed or otherwise transferred (from rents, dividends, capital gains) from those who are working to those who are retired. If this squeezing causes people to reduce their birthdates, it continues the age pyramid inversion and necessitates even more squeezing later on.

Suggesting we treat housing as a good (which should be easily accessible and inexpensive) rather than an investment would surely help and isn’t controversial here. But it does pose a systemic problem as many current and upcoming retirements at present hinge on housing prices, which is how we got into this mess.

Perhaps a more controversial suggestion: fund retirements based on taxes or other forms of “cash flow” rather than through investments. Tax policy has directly incentivized investment as a way of funding retirement. At a societal level increasing the capital base probably makes us more efficient but we are shifting so much more economic output/returns from labor to capital that you can easily be much, much wealthier in retirement than as a worker. And people wouldn’t need to save and invest so much if they knew they’d get a reasonable pension.

As good as it is for people in their 50s and beyond, I think turning everybody into an investor has created inherent age-based inequality which becomes especially impactful in the prices of housing (and probably other markets that are expected to retain value, even if not investments, like art).

[slaw]

One of the solutions is to tax wealth more and labor less.