[Panzer04]

American fixed 30y mortgages actually make interest rate policy much less effective, in theory.

In most countries with normal mortgages, raising rates fairly immediately transmits through to the rest of the economy, because it affects the mortgage market. This isn't true in America, because everyone quite reasonably is able to get these insane mortgage products with literally no downside risk - if rates go up, you don't pay more. If they go down, you refinance at minimal cost.

Agree to disagree on the tax issue. The way you've framed it is fairly inflammatory, but happy to have a discussion about it. The reality is that as much money as rich people have, the middle class have a whole lot more. Every country with large government spending has broad, high taxes on the entire population, not just the rich.

[arrosenberg]

https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...

Since 1990 the top 1% of wealth holders have seen their share of the wealth increase significantly, almost entirely on the backs of the middle class (and to a lesser extent, the upper-middle class).

The middle/upper middle class may have more collectively than the wealthy, but this is why the middle feels materially poorer and more reactionary than they were 30 years ago. They are being outcompeted in housing (unfairly, by people with vastly more wealth) and are being overcharged and underdelivered on medical care, education and food.

The rich need to be taxed back down to a reasonable share of wealth (<20%) or the politics of the country will continue to be unstable because the masses will continue to vote for change, every election, in search of that outcome.

[fjfaase]

This is not uniquely American. Here in the Netherlands we also have fixed interest rates for long periods. Usually for 20 years.

[avmich]

So you don't buy the POV the middle class is squeezed out of existence, almost?

[Panzer04]

Not really.

I earn a reasonable income, but the reality is even though I live alone and don't really think about where I spend my money finances are good. I could quite easily save a fair bit more than I currently do if I wanted to.

My experience won't align with everyone, but it is enough for me to feel somewhat dismissive of people who say life sucks. At some point, if you aren't earning enough and/or spend too much, that's on you. Some of the people I know of who complain about finances feel they should not have to care about their spending, or have "luxuries" that are actually very expensive (going out drinking alcohol is a big one where I'm at). The reality is anything that takes human Labor in a developed economy is very expensive.

[jmyeet]

I would say 30 year fixed mortgage is one of the few things the US does right. Housing shouldn't be an investment and you shouldn't be able to hoard land to raise prices. As Xi Jinping said, houses are for living, not for speculation [1].

We have an affordability crisis. What good would increasing mortgage payments do when housing is one of the biggest single expenses? The point of raising interest rates is to take the economy off the boil, essentially by cutting down on discretionary spending. Grocery prices are up 30%+ since the pandemic. Are people eating too much? Can you eat less? Consumer demand isn't doing that. Various forms of dynamic pricing (eg surveillance pricing) are doing that. The only reason for dynamic pricing to exist is to raise prices.

Beef prices in particular are through the roof and the only reason is price collusion. Meat packers have been sued by states about it. The root cause? AI. They're using the same AI system to set prices so the AI company has access to all the pricing information. That's the 2020s version of collusion. It's the same thing with RealPage and landlords. And something's gotta give. This system is unsustainable.

[1]: https://en.wikipedia.org/wiki/Houses_are_for_living,_not_for...