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Phil Anderson

Phil Anderson

The New Road to Serfdom

In this article, Michael Hudson stated that many Americans have gone so deeply into debt so willingly. This got to the point where debt has come to equal with wealth, and even freedom, in the odd logic of the real estate bubble. Economic rent has become a double-edged solution where some particular real estate bubble has been carefully ruling home buyers with easy money as the bait. This trapped home buyers with fewer choices and far from what has been promised of “economic freedom”. Home buyers will spend their lifetime working to pay off the debt that absorbs every spare penny.

Here are 20 key points of the upcoming real estate collapse:

  1. Mortgages account for most of the net growth in debt since 2000
  2. A $1,000 monthly payment can carry different levels of debt
  3. Interest rates have been falling since 1981
  4. Corporations hide their real estate profits behind depreciation
  5. The tax burden has shifted from property to labor and consumption
  6. Real estate prices have far outpaced national income
  7. Capital gains are taxed at a lower rate than ever
  8. Housing prices have far outpaced consumer prices, even as monthly payments remain affordable
  9. Mortgage debt is rising as a proportion of the GDP
  10. The production/consumption economy
  11. The Keynesian economy
  12. The FIRE economy
  13. The miracle of compound interest
  14. The rentier economy
  15. Rich people are getting a bigger share of overall economic rent
  16. The miracle of compound interest will inevitably confront the s-curve of reality
  17. In Japan, real estate prices fell as quickly as they rose
  18. Interest rates are on the rise
  19. The annual sale if existing homes has more than doubled since 1989
  20. Negative equity traps debtors

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the real estate cycle

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the real estate cycle

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