222 karma · joined April 8, 2017
Interest rates are a blunt instrument and unfortunately the least able to afford them are likely to suffer most. I’d support targeted government spending to those most impacted during a high inflation recession to limit the pain. I believe the PM candidate (Truss) policy to reduce taxes is misguided.
The truth is, we are probably both going to be wrong about the best way to solve this.
In the longer term and at the macro level, renting ultimately competes with cost of mortgaging. If the cost of home ownership goes down, so should rents. Again, government backed loans could help those renters who can afford the monthly repayments but lack the upfront deposit/capital to purchase.
What is needed is lower residential house purchases prices which will flow into rental costs (eventually). In the long run, rents are always based on the underlying asset value.
The other thing that could help lower residential property prices is obviously on the supply side, which I have deliberately avoided.
The other recent phenomenon/issue is loose monetary policy. When interest rates are too low, asset values increase. We have just had a period of very low rates for an extended period of time. As interest rates rise, prices should level out or drop off.
Don’t misunderstand my position. What they did was vile beyond comprehension, but were 10 year olds fully responsible for their own behaviour at this age?
[1] https://en.wikipedia.org/wiki/Murder_of_James_Bulger [2] https://www.theguardian.com/theguardian/2010/mar/20/norway-t...
(Carn the Lions)