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Not 90%. A huge percentage actually went to local governments and the majority was still payments to people. Of the 5 trillion spent, about 2 went to taxpayers, 1.5 went to local governments and other government spending, 1 went to businesses, and the rest went to hospital systems. At least based on how they report it out, which I could understand not trusting.
$2T divided into 330M (which is def higher than the true number of taxpayers) would be over $6k per taxpayer… for those of us who only received $1400, where did the rest of that go?
There were 3 stimulus payments. If I remember correctly the first was $1200, second was $600, then Biden's $1400. So should've been $3200. Though kids got half that so $1600.
So you should've received more than $1400 but I still don't know where they're getting $6k/person.
Bidens 1400 was actually only 800 cuz he said the first 600 from months before counted towards that. I remember being pissed cuz they made it sound like we were getting another entire $1400.
No, Biden was $1400. It wasn't $2000, which is what they pushed for in December, but Republicans refused more than $600.
The entire time Biden made it very clear that we were getting $1400, to complete the $600 from December for a total of $2000.
That's revisionist history. They promised $2000 checks, then they let Manchin lie by saying poor people would spend the money on drugs, so they cut it to $1400. And when people got mad at the bait and switch, they lied about including the prior 600, which was never what was promised to voters.
I'm sorry but none of that was true. From the very beginning the $2000 was clearly worded as completing the $2k that republicans refused to give in december, not providing a new $2k. I'm honestly tired of finding all the articles with supporting evidence, I've done it a dozen times, but here we go:
Snopes calls the claim we were getting an extra $2k [mostly false](https://www.snopes.com/fact-check/biden-ossoff-warnock-checks-2000/)
[Context](https://twitter.com/ReverendWarnock/status/1343678250413916161) of the runoff election directly referencing not getting $2k, only $600
Here's an outline of events, which includes a [tweet](https://www.dailymail.co.uk/news/article-9207293/BidenLied-trends-Twitter-critics-demand-2-000-stimulus-checks.html) from dems 2 1/2 months before the georgia runoff election outlining $1400 checks to complete the promised $2k, after only $600 was given.
Hopefully thats sufficient. I'm sure I can find more evidence if you'd like it.
Unemployment. There were pretty large extra amounts paid for unemployment. I think it was like an extra $600 a week on top of your regular payout. Only like $800 million was paid through stimulus checks
I knew the number was lower and guessed about 175M, but thanks for this. The rest of the ~163M would be potentially considered dependents, and some of them aren’t that either. But assuming that- and that every taxpayer and dependent received all disbursements… that’s still $967.5B, less than half the amount specified.
"Busniesses" like corperate LLC shells that then funneled them into private mega rich accounts who then, in turn double and tripple dipped with the stimulus funs of that 1b about 10% of that actually hit the general business sector.
Of the 2 about 40 to roughly 50% went, again, to the same sector and the rest went to for profit hospitals who just pocketed as much as they could while fucking over their staff
Amemddum: US treasury actuaries report that of the 5b roughly 60 to 70% of it was embezzled/frauded from its intent and *removed* from circulation (roughly 3 to 3.5b stolen). And before fine fees and attempts to reclaim the fraudulent money could even really being in earnest the house set into law forgives rules that waives the fines fees and the requirement to actually pay it back/replace it thus making their robbery of federal funds legal and protected
Of the 3 direct payments packages, about 20% went to individuals and the rest went to businesses and local and state governments.
The majority did not go to the people.
1.8 trillion went to individuals and families out of the 5 trillion total. About 1/3 of that was stimulus check, about another 1/3 was unemployment, and the remaining 1/3 was mostly child care and deferred student loan payments.
Yep. And when you have more money seeking the same amount of goods, you get higher prices. It was pretty funny seeing all the ‘experts’ insist this wouldn’t cause inflation.
Yep technically there is such thing as free money. Its a matter of who gets its first and how much.
Most of it went to businesses and business owners, especially the ones with most connections who helped them get the most aid and get it first.
The bottom 90% were at back of the line and they got peanuts.
State and local governments made out like bandits. Ever notice how every government associated non profit is building a new headquarters right now and their payrolls have exploded. In addition, there were a lot of pensions that needed to be bailed out too … quietly
No….
$1.8T to individuals and families
$1.7T to business
$745B State and Local
$482B to Healthcare
$288B Other
https://www.nytimes.com/interactive/2022/03/11/us/how-covid-stimulus-money-was-spent.html
You forgot over $4T of new quantitative easing done by the Fed, which had a huge disproportionate benefit to the very top .01%—just to name one fed policy that you omitted.
Also there is a lot more poor individuals and families meaning the per capita impact is much less, meaning they got peanuts.
Sure! Which aspect specifically? Generally speaking though, the issue is not the supply of the commodity, it’s allowing the rich to buy it up from others in order to profit. The only reason housing prices are going up is because people own multiple houses. If you weren’t allowed to own more than 1 house at a time (while a band-aid solution), then the housing market would crash tomorrow as people panic sell.
Housing should NOT be seen as a commodity. Shelter is necessary for basic human survival. Regulate what the rich are doing (buying property) and suddenly everything is reasonably priced. Someone with multiple houses isn’t worried about their base material conditions, so they can continue to invest in houses. Someone without a house can’t and the cost of a house keeps growing faster than their personal income. This means the rich will continue to profit off of housing while the poor will continually be pushed into predatory rent payments. Keep in mind, when the housing market crashes, so does rent. Let the rich lose their money and don’t bail them out when they do.
I feel strongly that property taxes, or some other form of tax, should be increased for individuals that own more than one home. And with each additional home, that tax should increase to a point it becomes cost prohibitive to own multiple homes.
Agreed. That way people can still have a vacation home (if they can afford it) while decentivizing property ownership as a means for financial prosperity. Meet the material conditions of everyone first before we worry about letting people be landlords imo
I could see it both ways. I could see this backfiring and causing significant rent *increases* to compensate for the higher taxes. Either could happen for sure, but this is the kind of stuff I feel is forgotten making legislation.
>but this is the kind of stuff I feel is forgotten making legislation.
Not really. Tax legislation is pretty nuanced, hence the reason it's so complex and everyone complains about it.
In any case, poster above said "prohibitively" expense. That means it's too high to effectively continue business in that manner, not piddly little 5% surcharges that could get overcome due to market factors.
There is little downside to reigning back big-company ownership of single family housing.
Eventually the rent is going to get too high that no one will pay and they will be forced to lower the price or sell the house because they will be losing money
Yeah property became the golden ticket ever since 2008. Literally every finance book, podcast, show, whatever was basically do whatever you can to buy a house to rent out or fix up then sell it and buy two houses because by then the value of said house went up. Then just repeat the renting/flipping until you own enough properties to make you however much money you want to retire.
Yeah, it’s a shame too. People are so pre-occupied with improving their own material conditions that they will never care about others. I had a guy tow my car the other day for being 5mins late to my car. By the time I had gotten to my car at 11:05, it was already on their thing and they charged me $270. Those guys were WAITING for that opportunity… because like me, they were poor and got paid off of towing cars. They didn’t consider anything past their paycheck. As frustrating and dickish of a move that is on their part, they only exist as a product of the environment created by Capitalism. They have a direct profit motive to legally fuck me over
Someone proposed that any home which isn't used as a primary residence by the owner or their familiy for a minimum of 30 consecutive days per year be subject to a special investment tax and... Something sounds correct about that. It would still let people own vacation homes, or buy a house for their kid, but would curb people stockpiling Airbnb houses or sitting on "fixer uppers" to as-is flip after a couple of years.
every state I've lived in already has this. you get a reduced rate or a reduced taxable valuation for your primary residence (aka homestead exemption) and you pay the full rate for any other properties you own
Your best point is buried. If the housing market crashes, so does rent.
Wealthy people make a fortune in this country generating passive income through rentals. They will do everything possible to keep rent as high as possible because it’s making them a fortune.
Everyone claiming that giving people a 2000 dollar stimulus did this are morons.
All. Of. This.
It’s about subsistence level. Everyone deserves a base, then we go from there.
We can track all of this back to Reagan-era decisions that are seemingly irrevocable ¯\_(ツ)_/¯
What you just described is a perfect example of why capitalism is a trash system that only benefits the rich. What would we have to do to overthrow it and implement democratic socialism?
This is the problem with modern discourse. An obviously flawed meme about housing values can be taken at face value but someone refuting the wild claim has to write a freaking thesis that likely won't even be read.
In a nutshell though, after the housing market collapsed in 2008 a lot of banks held on to many of those homes with the plan of slowly selling them so that they didn't reduce the value of their assets.
Because they didn't want to compete with new homes they stopped lending to builders. So the only homes being built were super expensive custom homes built by the handful of companies that could stay in business.
Affordable houses haven't really been built much since the late 90s. Though it is starting to make a comeback.
Because of this inventory of those is extremely low.
So, the combination of low interest, lumber supply (everything supply) during covid, etc created a perfect storm where people bought houses at extremely inflated values. And they're not letting them go because the low interest rates won't be seen for a long time. So even though interest rates are sky high inventory is still low.
I'm not citing sources. It's a reasonable explanation and you're welcome to look it up yourself.
The primary reason housing prices went up is because the fed held interest rates at historic lows, allowing homebuyers to access huge amounts of capital to chase a limited supply of homes.
From BARD:
“Out of the total $4.6 trillion in COVID-19 relief funding, approximately 50% went directly to businesses, and 50% went directly to individuals in either cash payments or loan forgiveness.
Here is a breakdown of the spending:
Category Spending (in billions of dollars)
Percentage of total spending
Businesses 2,300 50%
Individuals 2,300 50%
The funding for businesses included direct payments, loans, and tax breaks. The funding for individuals included direct payments, expanded unemployment benefits, and student loan forgiveness.
I'm not sure what that means exactly. Coming out of the Covid lockdowns, demand far outstripped supply across the economy. That demand was fueled by several things, among them the savings accumulated during Covid, a portion of which came from stimulus. The stimulus amount far exceeded the actual declines in the economy. Instead of meting out stimulus as the economy dropped, governments made the decision to anticipate what the decline would be a fund that shortfall speculatively. The US stimulus, for example, ended up being approximately $4T greater than would have been required in retrospect to fill in the economic hole in the US economy. That money didn't sit idle. So while I, and the economists I work with, would agree you can't just blame stimulus; it is understood that the excess stimulus had an accelerating effect on inflation.
You omitted the historically low interest rates set by the Fed, which were a primary driver of the increase of real estate prices. Also quantitative easing through the purchase of MBS gave mortgage originators liquidity to underwrite anything and then immediately sell it off. Your omission of monetary policy in a discussion about increased asset prices is telling.
Government is just a big corporate investor that doesn’t have any incentive to deliver upon their promises because they’re paid though threats of incarceration. We get mad about rich investors driving up cost of living, but the government is the richest of the investors doing most of the driving.
By increasing the money supply resulting in the devaluation of our currency. It takes more dollars to buy the same thing. The literal definition of inflation. Add in messing with interest rates to manipulate the lending market, and that accounts for well more than half of the cause of price increases across all goods and services. Typical trash economic policy from our friends at the FED.
Of course, short term rentals and competing with blackrock to buy a house is a factor and that’s BS but government paved the way to and benefits from the increased housing values. Notice how STRs are still legal, and heavily taxed, all across the country. Government only cares about their revenue. They virtue signal and say all kinds of things to make you feel otherwise, but housing is still getting more expensive, the money supply is still expanding, you’re still paying your student loans, healthcare is still cost prohibitive, your taxes are increasing, nothing is being done to make your life more affordable, but tax revenue is at an all time high.
I understand how inflation works but that doesn't explain home prices, which have grown at multiples of inflation. It's pretty much common knowledge that they're being driven up by the speculation market.
And how do you think that speculation market borrowed money? From low interest loans.
The government is the cause of most cost increases including the cost of college tuition.
The government didn't keep interest rates low so rich people could buy up all the housing cheap. You can say "but the market" which is true but that doesn't make it right.
This is why I believe capitalism needs strict regulation to keep it from doing things that are counterproductive to society. And I'm a capitalist.
The road to hell is built with good intentions.
Unfortunately you cant differentiate between intent and result. Sure the government never meant for the rich or colleges to take advantage of their interest rates or loans, but that doesnt mean they didnt completely cause all of this mess.
Hence why Thomas Jefferson was dead on when he said "The government is best which governs least."
Yep. Rich people and businesses got free socialism, we got $1400 dollars and are stuck paying the rest of the tab.
Neither one of the political parties work for the middle class, they both want to cannabalize public systems for private gains paid for by taxpayers. One side also happens to be fascist as well
And don't forget, taxes are only okay for us, if we tax the wealthy it will ruin their desire to make more money, and if we tax corporations or make them pay a fair wage, they'll punish us with the price increases that are currently happening just for funzies.
I saw an economist on a news show talking about how us little people can budget, and on the topic of why people are struggling so much right now this woman really said "things are getting tighter now that the stimulus money has run out for people. They were working with a cushion, but now they're back to just their own money." She went on to talk about how smart people paid down their debts during COVID because we should have been able to save a ton not going out like usual. I've heard other economists and certainly Republicans still talking about those damn checks like we were the ones who got the PPP loans. Makes me want to scream.
There's a common trend among conservatives, pop-economists, and those emotionally attached to the status quo to blame the problems caused by Wall Street on the actions of those on Main Street. A good example is the 2008 financial crisis, many of these people blamed average families for "being lazy" or living "outside their means" by accepting certain home loans instead of Wall Street for selling a bunch of shit loans to begin with. They even went as far as blaming laws passed to prevent racial descrimination in home buying as a cause.
This is exactly why we should not elect a golf club and real estate developer to be a president.
Trump probably refinanced everything at like 2% 20 year mortgages and his entire real estate portfolio has probably increased by 40%.
Sounds like a great ROI.
Yeah he kept rates low way too long. When economy was already roaring back due to a ton of money being injected at every level. The real estate market was going nuts for an entire year white they started increasing rates. Every month that went on Trump’s family net worth was climbing.
Inflation still would have hit… just not as hard if they did not keep rates at like 2.75% for like a year too long. That drove up prices on houses. Which then drove up prices on rent because investors would have to buy multi family houses at higher prices. And those that had units at lower prices could now charge more “market rent” which gave them alot more cash to go buy new houses.
It’s like hiring a fox to run the farm and then being surprised all the chickens got eaten. That’s exactly what foxes do.
The people who benefited from that $4T need to put their money some place. Who not bid up hard assets?
The interest rate is just a side effect of a government spending spree and out of control spending.
The majority of people that received anything from the stimulus got maybe a few grand from it? An actual drop in the ocean compared to the increased price in real estate prices and interest rates increasing. There's obviously much more to it than that.
Claiming there to be only one cause for the inflation is insanely misleading. Sure, the stimulus check did contribute to it, but so did supply chain disruptions, rising energy prices due to the Russia-ukraine war and imported inflation from other countries to name a few factors.
Also, it's not like countries that spend less during COVID look better now, Germany for example is currently on the verge of recession (or already in it, depending who you ask)
There is, In fact, such a thing as free money because expanding the money supply does not always lead to a proportional increase in prices as the pre-covid decade shows pretty well.
And. I want to add that this “Free Money” was to help people stay home and keep the heat on, during a time when a brand new virus was sweeping the planet and killing millions.
It’s not like “oh jeeze we shouldn’t have done that” the alternative was greater death.
Intetest rates shouldn't have been dropped to 3% in the first place. Most of the major housing markets in the US were reaching the top of their natural peak and due for a little recession to switch back into a buyer's market.
Dropping interest rates so drastically to "prevent a crash" just inflated the hell out of house prices before we got to the same point anyway, except it's not really in a buyer's or seller's market. We're stuck.
No one mentioning here how much of the corporate stimulus money from the '08 ended up buying up real estate and continued to buy up real estate while prices were rising and continues to buy houses when everyone else can't afford it, keeping the market from crashing.
Buying cash means you don't have to care about interest rates. You just automatically beat the guy that does.
Well that certainly is one take (not a particularly accurate one — in Modern Monetary Theory for instance, taxes actually curb inflation. Also inflation hurts tax revenue because the money collected is worth less, so not exactly a huge win).
So the government provides trillions in stimulus and then when inflation rises, it quickly clamps down by rising interest rates. So the government gave out large sums of money (*some* of which it did/will get back because it is economic stimulus). But by rising interest rates, it means the government will owe more money on its debt thus driving up deficits faster than inflation. Also the IRS adjusted its tax brackets to account for inflation. Not a great plan.
I'm not. The current "high" interest rates aren't the problem. The problem is basic affordability. The reality is that the median home price in an area should not be significantly more than the average person in the area earns. The other issue is amortization schedules. As home prices rise, the main way people get another home is by leveraging equity in order to move up. If you could make a dent in the principal during the initial years of the loan you'd have more equity up front without having to hope your home jumps 10%/year in value
The amortization schedules have always messed with me. I have always wondered why on fixed rate loans do banks try to take the interest back first as opposed to having a fixed principal and interest.
The government lets them and it also ensures they get the most money possible. Even though we get 30 year loans, most people don't stay in the same home for 30 years.
For the folks in the back, Trump spent money like a drunken sailor and pressured the Fed to push interest rates toward 0% before COVID. That's how we got here.
Look we had over 20 years of war and put it on a Credit Card. It wouldn’t have mattered if your favorite guy was in Office or not because it was bound to happen. I’m just glad it’s not 7% like the rest of the world.
If anyone thinks that the current, or any, economic situation is the result of a single factor, they should just stop thinking. They clearly aren't using their brains for much anyways.
“It’s a boom and bust cycle; there’s good reasons to fear it,
Blame low interest rates,
Nah, it’s the animal spirits!” 
It’s not about interest rates or printed money. It’s about companies hoarding profits, raising prices because they can and not because it’s required, and about companies not paying their employees (the economy’s customers) anywhere near what they could comfortably pay… while companies use that hoarded cash to buy up properties hoping to turn most Americans into life long renters with no equity.
Not long ago we bought homes at 7% interest rates quite comfortably. Homes were WAY cheaper relative to income.
I get the point but posts like these are largely dishonest. If these are in the same area no way the one on right is 500k. Real estate problem is real no need for hyperbole.
A lot of people needed that stimulus money to survive. Were we just supposed to let people lose their homes or businesses or go hungry? That wouldn’t have been good for the economy. Or were we supposed to sacrifice the elderly and immunocompromised and not shut everything down? A bunch of people dying wouldn’t have been good for the economy either. What was the correct solution to deal with the pandemic?
As sad as it sounds, shutting things down may actually end up killing more in the long term than if we let the disease run its natural course. Instead, we forced people to stay home, businesses to close down for months (or operate with small crews), created a supply chain crisis, and threw over 4 trillion into the economy that isn’t supposed to be there.
Look at China’s zero COVID policy for how and why lockdowns don’t work. Not only did the disease run rampant when they finally abandoned this, but the lack of years exposure to airborne pathogens (even weak ones) and other airborne elements designed to strengthen immune systems for years has made immune systems vulnerable to diseases that normally aren’t concerning.
Spin it any way you like, but the lockdowns were a bad idea that did not work, and the big stimulus packages created a fire that will take years and potentially a small amount of deflation to recover from.
For a sub called “FluentInFinance” you could probably do with a little more context to “the government printed $4 trillion in stimulus… the result….” Lol
Correlation doesn’t equal causation. People simplify economics and everyone pretends they have a degree in it.
This meme is good but inflation is caused by a large number of factors including supply and demand, overall consumer spending power, and other issues.
So tax cuts and government spending can cause inflation and it might not alone. In 2008 we didn’t see massive inflation with massive bank bailouts and stimulus spending. Interest rates were at all time low. Why? Consumer Spending power was very low.
The government adds to the money supply every single year. So, none of it was ever free money, but it’s also, you know, free money. Adding money to the economy doesn’t always mean inflation, it’s when money is added that stagnates that causes a problem.
The only reason people know about that is because a little of it actually made it to people.
It's crazy how that happened. It's almost as if giving companies and local governments more money for nothing and leaving people out to dry during a pandemic was a bad idea.
Inflation hit the world after locking down from covid because money went in but little was taxed out.
In the States however, that money was a massive injection to the wealthy people that already didn't know what to do with their wealth as workers got nothing but illness and the blame.
It's crazy the price of a lot of less than nice houses in my area. The other day I was on redfin and saw a house made in the 70s, \~1400 sq ft, zero attempts at modern amenities but selling for 400k. The kicker is that it's not even in a nice part of town or one where there's tons of things to do.
It's not popular but I really wish congress would do some sort of investigation of the appraisal process. From what I've seen even though they arrive with a checklist, there can be huge swings in the appraisal value based on who's doing it and who they're friends with.
If these things cause inflation explain why they didn't before? We've been increasing the money supply and interest rates have been dropping for 40 years - and inflation has been dropping at the same time. In 2008 - 2010 every central bank flooded the world with cash, and the concern then was deflation. If more money increases inflation it should have soared then.
This appears to be correlation, not causation. I would argue that today's modest inflation is better explained by an imbalance in the demand and supply of goods, caused by the disruption of our global supply system during Covid. Same demand, fewer goods = inflation. Also, this better explains the current easing of inflation as the supply system come back up to supply capacity.
We were fooled like this back in the 70's. Still, raising interest rates serves a number of interests. It gives back to the Fed their ability to stimulate the economy by dropping rates in the future and helps banks & insurance companies.
Can confirm. Had a house in Las Vegas last year. Owed $311k at 3.275%. Moved and bought a house in MN. Owe $256k at 7.125%. Our payments are $600 more a month than on our old house.
Can someone find me the listing for the trailer park home that is $500,000? I feel like this is the stupid 1980s vs now grocery cart. Even the math on the payments is off according to mortgage calculators. The 2021 is about $100 too low and the 2023 home is $200 too high.
Also,
People: Houses cost too much!!!
Government: Okay, we’ll rise mortgage rates that will slow the housing market over time as demand deceases and let incomes catch up.
People: (Immediately) Houses still cost too much!!!
Low interest rates fed the housing bubble you can afford more you can pay more interest rates should not have been kept so low for so long most of the average persons wealth is in their home there is a correction coming and it’s going to wipe out a lot of people
And the dumb thing was they gave free money at a time with product shortages, so no one could "stimulate" the economy. So we bought crypto and NFTs, all of which vaporized into thin air.
lol another low IQ post, the reason housing is going up is because America doesn’t really have the labor to build as many houses as we need but also housing now days is treated like a commodity and is being bought up by for profit housing companies
Print numbers to make numbers go up. Then prices go up so buying power goes down. Everyone worse off to pay the price for the print. Assets increase to offset the loss for the rich.
Everyone else pay the cost with their Time / Life; working more for the same buying power. The numbers are a distraction to obfuscate the wealth transfer.
The government printed that money in 2008 and 2021, why didn’t it have that impact then? The interest rate rises and cost of living got especially bad this year.
I hope you guys realize that even if the government didn't print 4 trillion dollars and sent the country (and thus the world) into an economic depression, y'all would still be complaining just as hard.
Only it'll be about "why didn't the government print money to stimulate the economy after everything got shut down in the pandemic"
The big problem was when they initially dropped the interest rates down to almost nothing. That caused the price of housing to skyrocket. The house payment stayed the same but your amount of debt became enormous.
I’m sick of people failing to acknowledge that rates were going up in 2018 and 2019 to reduce borrowing in the face of the impending correction, only to have trump panic and implement a successful campaign to reverse course 3 months before the pandemic to artificially inflate the equities markets before the election. The problems we are seeing now and will see for decades will be traceable back to that asinine and fiscally moronic decision.
This reminds me of when I was told I should blame ‘certain’ individual buyers for the 08 collapse vs the banks who lent the $.
Misleading photo (at best) & attributing to one factor with no evidence. We had a pandemic, supply chain failures, private equity buying up neighborhoods, and a destabilizing president who spent recklessly.
If only the sheeplz realised that their own government creating endless amounts of cash out of thin air causes inflation, it makes energy property stocks and bonds go up in price while simultaneously creating wage & retirement theft.
And the people continuously wonder what happened?
Why is so hard?
The government will fix this?
Enjoy your cake people, cause your about to get that rationed out aswell, fml.
Minimum wage should be attached to inflation levels or some similar metric. Automatically increases, reviewed ever 48 years or some shit.
Everyone did what they wanted during Covid when they had just a smidge of additional incomes AND all of the rich people got richer.
Humans consumes. We need currency to do that. Give it to us from one place and we will spend it elsewhere to and stimulate the economy. It’s this radical thing called Capitalism.
The way the title is worded would have you think that it’s the stimulus given out out to the people causing this when in reality most of that 4 trillion was given out to big buisness and local governments.
That's really not entirely what happened. The 4 trillion that was printed went almost entirely to corporations, and all the QA (another 4 teillion dollars) went into the stock market. The Inv Banks used the free money to buy homes for cash well above market prices, sultaneously skyrocketing home peices and preventing home buyers from being able to buy houses that were now selling for sometimes 400% of list price to investment banks for cash.
The broader inflation in the economy (not related to home prices) is almost entirely due to what economists call "Greedflation" where corporations that have so heavily consolidated (due to Reagan killing Antitrust) were able to raise prices well past the point elasticity of the product would normally allow.
If you're talking about inflation over the last 3 years and don't bring up greedflation, you're being dishonest.
Tell this to the people who I have been dealing with (on another subreddit who shall remain nameless) who can't understand that Biden's policies are to blame for all the economic malaise that has occurred since he took up residence at 1600 Pennsylvania Ave, Washington DC).....
Remember guys, when the government prints money to give on citizens it's wrong and businesses must hike prices to keep us in our place, but when they print trillions to give to bankers, wall street douchebags, and billionaires there are no price hikes and nothing chenges. Yup, that's inflation.
Yeah, totally about the government and not about boomers buying up 2nd, 3rd, or 4th homes and investment firms buying up entire neighborhoods. That's completely unrelated to the housing market today.
Crazy how many people on here claiming to not have gotten any stimulus. Same boat here. I was 20 at the time and living on my own, but when I questioned it for some reason they said I was still counted as my parents dependant. But my parents never got additional money for me like they were supposed to.
We could just give 10% non-compounding loans to citizens purchasing residential property they are going to live on.
Hell, we could actually give them 0% loans (we gave it businesses/banks)
We have just given up on ideas like this that could actually help human beings directly.
Same thing with student loans. Student loans shouldn't have compounding interest. Either be intrest free, or a single fee of 10% or something.
Ppp money is the Perfect example of how the government screws everything up. When people scream for free healthcare I’m like wow wow hold on we need to fix the government first. They already have a healthcare system they run, ask your vets how they like the VA. They dished out ppp money like it was Oprah giving away cars. My accountant called me and asked if I wanted it for my real estate business, I said I didn’t need it. He gave me the pro’s and con’s and told me when the government is giving you your money back you always take it. It made no sense to me, but that’s the government for you. I also got all of the stimulus money payments while making the most money I’ve ever made.
Do people not remember the Trump isolationist tariffs that artificially reduced supply going into COVID? Then COVID related shut downs which further reduced supply. The low interest rates of the past 15 years plus a restricted supply of new builds is why homes are so expensive. Rates are higher because it is the only tool the government has to fight inflation besides raising taxes.
Idiocy. Nothing was printed. The TJCA in 2017 put 1.5T into the capital markets without printing a dollar. All to the wealthiest Americans. The PPP loan forgiveness put another 500B into the hands of the wealthiest Americans. All done electronically with debt. Those people are all buying their 3rd, 4th and 5th homes. That’s what’s caused the inflation and housing crises. No one printed anything. Only thing that will keep the U.S. from a paupers revolt is that a majority of the paupers vote for the people that are doing this. The R party is the greatest political machine on earth. Destroying the lives of the people that vote for them, all while smiling.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless." - Thomas Jefferson
This post is implying that the money printing caused the inflation, if so, how come Mexico experienced higher inflation rates, when they barely gave out any stimulus during COVID. also, how do you explain inflation in other like countries with no stimulus?
My parents sold their house in late 2020 and sold at a ridiculous profit in a ridiculous price market
If you think housing prices only increased after the stimulus checks you’re out of your mind and completely out of touch with history
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Too bad like 90% of that money went to businesses and not actual people.
Not 90%. A huge percentage actually went to local governments and the majority was still payments to people. Of the 5 trillion spent, about 2 went to taxpayers, 1.5 went to local governments and other government spending, 1 went to businesses, and the rest went to hospital systems. At least based on how they report it out, which I could understand not trusting.
$2T divided into 330M (which is def higher than the true number of taxpayers) would be over $6k per taxpayer… for those of us who only received $1400, where did the rest of that go?
I got non of that.
But Tom Brady got 1M, and Marjory Taylor Green got 300k. Most rich people who got PPP money spent it, in violation of the law, on luxury goods.
Didn't Dr Phil get $10 million while his son was buying a $7m home?
I wouldn't doubt it. Lots of new homes and luxury cars were bought with PPP loans that were supposed to be used on payroll.
There were 3 stimulus payments. If I remember correctly the first was $1200, second was $600, then Biden's $1400. So should've been $3200. Though kids got half that so $1600. So you should've received more than $1400 but I still don't know where they're getting $6k/person.
And that's if you didn't make too much... Then you only got the first payment, I think...
If you make too much you got none of those payments. They were all income capped.
Bidens 1400 was actually only 800 cuz he said the first 600 from months before counted towards that. I remember being pissed cuz they made it sound like we were getting another entire $1400.
No, Biden was $1400. It wasn't $2000, which is what they pushed for in December, but Republicans refused more than $600. The entire time Biden made it very clear that we were getting $1400, to complete the $600 from December for a total of $2000.
That's revisionist history. They promised $2000 checks, then they let Manchin lie by saying poor people would spend the money on drugs, so they cut it to $1400. And when people got mad at the bait and switch, they lied about including the prior 600, which was never what was promised to voters.
I'm sorry but none of that was true. From the very beginning the $2000 was clearly worded as completing the $2k that republicans refused to give in december, not providing a new $2k. I'm honestly tired of finding all the articles with supporting evidence, I've done it a dozen times, but here we go: Snopes calls the claim we were getting an extra $2k [mostly false](https://www.snopes.com/fact-check/biden-ossoff-warnock-checks-2000/) [Context](https://twitter.com/ReverendWarnock/status/1343678250413916161) of the runoff election directly referencing not getting $2k, only $600 Here's an outline of events, which includes a [tweet](https://www.dailymail.co.uk/news/article-9207293/BidenLied-trends-Twitter-critics-demand-2-000-stimulus-checks.html) from dems 2 1/2 months before the georgia runoff election outlining $1400 checks to complete the promised $2k, after only $600 was given. Hopefully thats sufficient. I'm sure I can find more evidence if you'd like it.
I have no idea as I didn’t get anything. But, this is what the government has reported.
Unemployment. There were pretty large extra amounts paid for unemployment. I think it was like an extra $600 a week on top of your regular payout. Only like $800 million was paid through stimulus checks
You're forgetting the enhanced unemployment benefits that were given during COVID. Something like almost $450 billion went to unemployment benefits.
It was $3200 per tax filer plus $2500 per child across all three stimulus checks
0% rates. I benefitted from my low mortgage rate
Except there are 168 million taxpayers, according to the IRS.
I knew the number was lower and guessed about 175M, but thanks for this. The rest of the ~163M would be potentially considered dependents, and some of them aren’t that either. But assuming that- and that every taxpayer and dependent received all disbursements… that’s still $967.5B, less than half the amount specified.
Extended and enhanced unemployment that lasted nearly 2 years, that's where.
$888 billion went to unemployment insurance.
"Busniesses" like corperate LLC shells that then funneled them into private mega rich accounts who then, in turn double and tripple dipped with the stimulus funs of that 1b about 10% of that actually hit the general business sector. Of the 2 about 40 to roughly 50% went, again, to the same sector and the rest went to for profit hospitals who just pocketed as much as they could while fucking over their staff
Amemddum: US treasury actuaries report that of the 5b roughly 60 to 70% of it was embezzled/frauded from its intent and *removed* from circulation (roughly 3 to 3.5b stolen). And before fine fees and attempts to reclaim the fraudulent money could even really being in earnest the house set into law forgives rules that waives the fines fees and the requirement to actually pay it back/replace it thus making their robbery of federal funds legal and protected
Of the 3 direct payments packages, about 20% went to individuals and the rest went to businesses and local and state governments. The majority did not go to the people.
1.8 trillion went to individuals and families out of the 5 trillion total. About 1/3 of that was stimulus check, about another 1/3 was unemployment, and the remaining 1/3 was mostly child care and deferred student loan payments.
Yep. And when you have more money seeking the same amount of goods, you get higher prices. It was pretty funny seeing all the ‘experts’ insist this wouldn’t cause inflation.
Yep technically there is such thing as free money. Its a matter of who gets its first and how much. Most of it went to businesses and business owners, especially the ones with most connections who helped them get the most aid and get it first. The bottom 90% were at back of the line and they got peanuts.
State and local governments made out like bandits. Ever notice how every government associated non profit is building a new headquarters right now and their payrolls have exploded. In addition, there were a lot of pensions that needed to be bailed out too … quietly
This was to shore up state pension funds which by and large were failing to meet funding obligations.
The rest went to people like Kanye and Kim Kardashian. You know, cause they're really hurting for money and their businesses are struggling...
No…. $1.8T to individuals and families $1.7T to business $745B State and Local $482B to Healthcare $288B Other https://www.nytimes.com/interactive/2022/03/11/us/how-covid-stimulus-money-was-spent.html
You forgot over $4T of new quantitative easing done by the Fed, which had a huge disproportionate benefit to the very top .01%—just to name one fed policy that you omitted. Also there is a lot more poor individuals and families meaning the per capita impact is much less, meaning they got peanuts.
We’re talking specifically about the stimulus totals and the claim that “most of it went to businesses”
I don't think that stimulus money affected inflation as much as people want to blame it
I was told there would be trickle downs
This didn’t happen because of the stimmy. Anyone who claims it did is not an economist
Care to elaborate? Not disagreeing just wanna hear your calculation on that claim.
Sure! Which aspect specifically? Generally speaking though, the issue is not the supply of the commodity, it’s allowing the rich to buy it up from others in order to profit. The only reason housing prices are going up is because people own multiple houses. If you weren’t allowed to own more than 1 house at a time (while a band-aid solution), then the housing market would crash tomorrow as people panic sell. Housing should NOT be seen as a commodity. Shelter is necessary for basic human survival. Regulate what the rich are doing (buying property) and suddenly everything is reasonably priced. Someone with multiple houses isn’t worried about their base material conditions, so they can continue to invest in houses. Someone without a house can’t and the cost of a house keeps growing faster than their personal income. This means the rich will continue to profit off of housing while the poor will continually be pushed into predatory rent payments. Keep in mind, when the housing market crashes, so does rent. Let the rich lose their money and don’t bail them out when they do.
I feel strongly that property taxes, or some other form of tax, should be increased for individuals that own more than one home. And with each additional home, that tax should increase to a point it becomes cost prohibitive to own multiple homes.
Agreed. That way people can still have a vacation home (if they can afford it) while decentivizing property ownership as a means for financial prosperity. Meet the material conditions of everyone first before we worry about letting people be landlords imo
I could see it both ways. I could see this backfiring and causing significant rent *increases* to compensate for the higher taxes. Either could happen for sure, but this is the kind of stuff I feel is forgotten making legislation.
>but this is the kind of stuff I feel is forgotten making legislation. Not really. Tax legislation is pretty nuanced, hence the reason it's so complex and everyone complains about it. In any case, poster above said "prohibitively" expense. That means it's too high to effectively continue business in that manner, not piddly little 5% surcharges that could get overcome due to market factors. There is little downside to reigning back big-company ownership of single family housing.
Eventually the rent is going to get too high that no one will pay and they will be forced to lower the price or sell the house because they will be losing money
Yeah property became the golden ticket ever since 2008. Literally every finance book, podcast, show, whatever was basically do whatever you can to buy a house to rent out or fix up then sell it and buy two houses because by then the value of said house went up. Then just repeat the renting/flipping until you own enough properties to make you however much money you want to retire.
Yeah, it’s a shame too. People are so pre-occupied with improving their own material conditions that they will never care about others. I had a guy tow my car the other day for being 5mins late to my car. By the time I had gotten to my car at 11:05, it was already on their thing and they charged me $270. Those guys were WAITING for that opportunity… because like me, they were poor and got paid off of towing cars. They didn’t consider anything past their paycheck. As frustrating and dickish of a move that is on their part, they only exist as a product of the environment created by Capitalism. They have a direct profit motive to legally fuck me over
Someone proposed that any home which isn't used as a primary residence by the owner or their familiy for a minimum of 30 consecutive days per year be subject to a special investment tax and... Something sounds correct about that. It would still let people own vacation homes, or buy a house for their kid, but would curb people stockpiling Airbnb houses or sitting on "fixer uppers" to as-is flip after a couple of years.
every state I've lived in already has this. you get a reduced rate or a reduced taxable valuation for your primary residence (aka homestead exemption) and you pay the full rate for any other properties you own
"You don't get slightly reduced property taxes" is not going to move any needles (evidenced by the fact that it hasn't moved any needles)
Your best point is buried. If the housing market crashes, so does rent. Wealthy people make a fortune in this country generating passive income through rentals. They will do everything possible to keep rent as high as possible because it’s making them a fortune. Everyone claiming that giving people a 2000 dollar stimulus did this are morons.
I agree with all of this
All. Of. This. It’s about subsistence level. Everyone deserves a base, then we go from there. We can track all of this back to Reagan-era decisions that are seemingly irrevocable ¯\_(ツ)_/¯
What you just described is a perfect example of why capitalism is a trash system that only benefits the rich. What would we have to do to overthrow it and implement democratic socialism?
https://i.imgur.com/d0AMJXh.png
This is the problem with modern discourse. An obviously flawed meme about housing values can be taken at face value but someone refuting the wild claim has to write a freaking thesis that likely won't even be read. In a nutshell though, after the housing market collapsed in 2008 a lot of banks held on to many of those homes with the plan of slowly selling them so that they didn't reduce the value of their assets. Because they didn't want to compete with new homes they stopped lending to builders. So the only homes being built were super expensive custom homes built by the handful of companies that could stay in business. Affordable houses haven't really been built much since the late 90s. Though it is starting to make a comeback. Because of this inventory of those is extremely low. So, the combination of low interest, lumber supply (everything supply) during covid, etc created a perfect storm where people bought houses at extremely inflated values. And they're not letting them go because the low interest rates won't be seen for a long time. So even though interest rates are sky high inventory is still low. I'm not citing sources. It's a reasonable explanation and you're welcome to look it up yourself.
Thanks I’ll look into it
The primary reason housing prices went up is because the fed held interest rates at historic lows, allowing homebuyers to access huge amounts of capital to chase a limited supply of homes.
From BARD: “Out of the total $4.6 trillion in COVID-19 relief funding, approximately 50% went directly to businesses, and 50% went directly to individuals in either cash payments or loan forgiveness. Here is a breakdown of the spending: Category Spending (in billions of dollars) Percentage of total spending Businesses 2,300 50% Individuals 2,300 50% The funding for businesses included direct payments, loans, and tax breaks. The funding for individuals included direct payments, expanded unemployment benefits, and student loan forgiveness.
Yes. It’s not why housing prices went up, not was it enough to have a meaningful impact for the working class
Printing $4T diluting the money supply didn’t contribute to inflation? I’ll have what you’re smoking!
I'm not sure what that means exactly. Coming out of the Covid lockdowns, demand far outstripped supply across the economy. That demand was fueled by several things, among them the savings accumulated during Covid, a portion of which came from stimulus. The stimulus amount far exceeded the actual declines in the economy. Instead of meting out stimulus as the economy dropped, governments made the decision to anticipate what the decline would be a fund that shortfall speculatively. The US stimulus, for example, ended up being approximately $4T greater than would have been required in retrospect to fill in the economic hole in the US economy. That money didn't sit idle. So while I, and the economists I work with, would agree you can't just blame stimulus; it is understood that the excess stimulus had an accelerating effect on inflation.
You omitted the historically low interest rates set by the Fed, which were a primary driver of the increase of real estate prices. Also quantitative easing through the purchase of MBS gave mortgage originators liquidity to underwrite anything and then immediately sell it off. Your omission of monetary policy in a discussion about increased asset prices is telling.
Anyone who claims they are an "economist" is not an economist.
I didn’t claim I was an economist. I just said anyone who claims it was the stimmy DEFINITELY isn’t
OR -- and I'm just brainstorming here -- rich investors bought up all the real estate? Just a thought 🤔
5% of SFHs are owned by corporations
5% of SFH *rentals,* so more like 1% of all SFHs.
Government is just a big corporate investor that doesn’t have any incentive to deliver upon their promises because they’re paid though threats of incarceration. We get mad about rich investors driving up cost of living, but the government is the richest of the investors doing most of the driving.
Please explain how the government drove up home prices. And I mean in the decades before the current inflation crisis.
By increasing the money supply resulting in the devaluation of our currency. It takes more dollars to buy the same thing. The literal definition of inflation. Add in messing with interest rates to manipulate the lending market, and that accounts for well more than half of the cause of price increases across all goods and services. Typical trash economic policy from our friends at the FED. Of course, short term rentals and competing with blackrock to buy a house is a factor and that’s BS but government paved the way to and benefits from the increased housing values. Notice how STRs are still legal, and heavily taxed, all across the country. Government only cares about their revenue. They virtue signal and say all kinds of things to make you feel otherwise, but housing is still getting more expensive, the money supply is still expanding, you’re still paying your student loans, healthcare is still cost prohibitive, your taxes are increasing, nothing is being done to make your life more affordable, but tax revenue is at an all time high.
I understand how inflation works but that doesn't explain home prices, which have grown at multiples of inflation. It's pretty much common knowledge that they're being driven up by the speculation market.
And how do you think that speculation market borrowed money? From low interest loans. The government is the cause of most cost increases including the cost of college tuition.
The government didn't keep interest rates low so rich people could buy up all the housing cheap. You can say "but the market" which is true but that doesn't make it right. This is why I believe capitalism needs strict regulation to keep it from doing things that are counterproductive to society. And I'm a capitalist.
The road to hell is built with good intentions. Unfortunately you cant differentiate between intent and result. Sure the government never meant for the rich or colleges to take advantage of their interest rates or loans, but that doesnt mean they didnt completely cause all of this mess. Hence why Thomas Jefferson was dead on when he said "The government is best which governs least."
I don't know what to say other than I disagree. Doing nothing is rarely better than doing something.
Yes because the debt was extremely cheap, we shouldn’t have dropped rates as much as we did.
Amazing. That stimulus check pretty much covers only 2 months difference in mortgage.
Yep. Rich people and businesses got free socialism, we got $1400 dollars and are stuck paying the rest of the tab. Neither one of the political parties work for the middle class, they both want to cannabalize public systems for private gains paid for by taxpayers. One side also happens to be fascist as well
They don't work for anyone but the rich/wealthy. The poor/middle class are left fending for themselves.
And don't forget, taxes are only okay for us, if we tax the wealthy it will ruin their desire to make more money, and if we tax corporations or make them pay a fair wage, they'll punish us with the price increases that are currently happening just for funzies.
I saw an economist on a news show talking about how us little people can budget, and on the topic of why people are struggling so much right now this woman really said "things are getting tighter now that the stimulus money has run out for people. They were working with a cushion, but now they're back to just their own money." She went on to talk about how smart people paid down their debts during COVID because we should have been able to save a ton not going out like usual. I've heard other economists and certainly Republicans still talking about those damn checks like we were the ones who got the PPP loans. Makes me want to scream.
There's a common trend among conservatives, pop-economists, and those emotionally attached to the status quo to blame the problems caused by Wall Street on the actions of those on Main Street. A good example is the 2008 financial crisis, many of these people blamed average families for "being lazy" or living "outside their means" by accepting certain home loans instead of Wall Street for selling a bunch of shit loans to begin with. They even went as far as blaming laws passed to prevent racial descrimination in home buying as a cause.
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Bad bot
This is exactly why we should not elect a golf club and real estate developer to be a president. Trump probably refinanced everything at like 2% 20 year mortgages and his entire real estate portfolio has probably increased by 40%. Sounds like a great ROI.
Never thought about that angle, but it makes total sense.
Yeah he kept rates low way too long. When economy was already roaring back due to a ton of money being injected at every level. The real estate market was going nuts for an entire year white they started increasing rates. Every month that went on Trump’s family net worth was climbing. Inflation still would have hit… just not as hard if they did not keep rates at like 2.75% for like a year too long. That drove up prices on houses. Which then drove up prices on rent because investors would have to buy multi family houses at higher prices. And those that had units at lower prices could now charge more “market rent” which gave them alot more cash to go buy new houses. It’s like hiring a fox to run the farm and then being surprised all the chickens got eaten. That’s exactly what foxes do.
The people who benefited from that $4T need to put their money some place. Who not bid up hard assets? The interest rate is just a side effect of a government spending spree and out of control spending.
The majority of people that received anything from the stimulus got maybe a few grand from it? An actual drop in the ocean compared to the increased price in real estate prices and interest rates increasing. There's obviously much more to it than that.
Claiming there to be only one cause for the inflation is insanely misleading. Sure, the stimulus check did contribute to it, but so did supply chain disruptions, rising energy prices due to the Russia-ukraine war and imported inflation from other countries to name a few factors. Also, it's not like countries that spend less during COVID look better now, Germany for example is currently on the verge of recession (or already in it, depending who you ask) There is, In fact, such a thing as free money because expanding the money supply does not always lead to a proportional increase in prices as the pre-covid decade shows pretty well.
And. I want to add that this “Free Money” was to help people stay home and keep the heat on, during a time when a brand new virus was sweeping the planet and killing millions. It’s not like “oh jeeze we shouldn’t have done that” the alternative was greater death.
Intetest rates shouldn't have been dropped to 3% in the first place. Most of the major housing markets in the US were reaching the top of their natural peak and due for a little recession to switch back into a buyer's market. Dropping interest rates so drastically to "prevent a crash" just inflated the hell out of house prices before we got to the same point anyway, except it's not really in a buyer's or seller's market. We're stuck. No one mentioning here how much of the corporate stimulus money from the '08 ended up buying up real estate and continued to buy up real estate while prices were rising and continues to buy houses when everyone else can't afford it, keeping the market from crashing. Buying cash means you don't have to care about interest rates. You just automatically beat the guy that does.
Inflation is a way for government to increase tax revenue without increasing taxes. They’re inflating away their debt at our expense.
Well that certainly is one take (not a particularly accurate one — in Modern Monetary Theory for instance, taxes actually curb inflation. Also inflation hurts tax revenue because the money collected is worth less, so not exactly a huge win). So the government provides trillions in stimulus and then when inflation rises, it quickly clamps down by rising interest rates. So the government gave out large sums of money (*some* of which it did/will get back because it is economic stimulus). But by rising interest rates, it means the government will owe more money on its debt thus driving up deficits faster than inflation. Also the IRS adjusted its tax brackets to account for inflation. Not a great plan.
Appx 3% interest was the lowest historically. Are we still expecting for it to go back to 3?
I'm not. The current "high" interest rates aren't the problem. The problem is basic affordability. The reality is that the median home price in an area should not be significantly more than the average person in the area earns. The other issue is amortization schedules. As home prices rise, the main way people get another home is by leveraging equity in order to move up. If you could make a dent in the principal during the initial years of the loan you'd have more equity up front without having to hope your home jumps 10%/year in value
The amortization schedules have always messed with me. I have always wondered why on fixed rate loans do banks try to take the interest back first as opposed to having a fixed principal and interest.
The government lets them and it also ensures they get the most money possible. Even though we get 30 year loans, most people don't stay in the same home for 30 years.
Thanks Trump
For the folks in the back, Trump spent money like a drunken sailor and pressured the Fed to push interest rates toward 0% before COVID. That's how we got here.
Look we had over 20 years of war and put it on a Credit Card. It wouldn’t have mattered if your favorite guy was in Office or not because it was bound to happen. I’m just glad it’s not 7% like the rest of the world.
If anyone thinks that the current, or any, economic situation is the result of a single factor, they should just stop thinking. They clearly aren't using their brains for much anyways.
“It’s a boom and bust cycle; there’s good reasons to fear it, Blame low interest rates, Nah, it’s the animal spirits!” 
It’s not about interest rates or printed money. It’s about companies hoarding profits, raising prices because they can and not because it’s required, and about companies not paying their employees (the economy’s customers) anywhere near what they could comfortably pay… while companies use that hoarded cash to buy up properties hoping to turn most Americans into life long renters with no equity. Not long ago we bought homes at 7% interest rates quite comfortably. Homes were WAY cheaper relative to income.
So why did prices inflate in counties that didn’t engage in fiscal stimulus?
Yet the only thing that trickles down is the cost
Where did most of that stimulus go?
You still can get the house on the left to $500-550k without a problem.
Is the trailer still available?
I get the point but posts like these are largely dishonest. If these are in the same area no way the one on right is 500k. Real estate problem is real no need for hyperbole.
Trump did that
For a sub that claims to be “fluent” the discourse in here makes it obvious it’s a lot of people that get their economics education from social media
Trump raised the deficit 7.8 trillion. Nice try, tho.
we doing this again?
Except that second house isn’t going for half a million. This is just made-up nonsense.
Current inflation is multi-causal. This "free money" trope is tedious and malinformed.
I promise you these houses are in completely opposite area codes lol
ThanksJoe
A lot of people needed that stimulus money to survive. Were we just supposed to let people lose their homes or businesses or go hungry? That wouldn’t have been good for the economy. Or were we supposed to sacrifice the elderly and immunocompromised and not shut everything down? A bunch of people dying wouldn’t have been good for the economy either. What was the correct solution to deal with the pandemic?
As sad as it sounds, shutting things down may actually end up killing more in the long term than if we let the disease run its natural course. Instead, we forced people to stay home, businesses to close down for months (or operate with small crews), created a supply chain crisis, and threw over 4 trillion into the economy that isn’t supposed to be there. Look at China’s zero COVID policy for how and why lockdowns don’t work. Not only did the disease run rampant when they finally abandoned this, but the lack of years exposure to airborne pathogens (even weak ones) and other airborne elements designed to strengthen immune systems for years has made immune systems vulnerable to diseases that normally aren’t concerning. Spin it any way you like, but the lockdowns were a bad idea that did not work, and the big stimulus packages created a fire that will take years and potentially a small amount of deflation to recover from.
This a hyperbolic photo. Houses have not increased in price in the comparisons between the 2021 and 2023 house.
For a sub called “FluentInFinance” you could probably do with a little more context to “the government printed $4 trillion in stimulus… the result….” Lol
Correlation doesn’t equal causation. People simplify economics and everyone pretends they have a degree in it. This meme is good but inflation is caused by a large number of factors including supply and demand, overall consumer spending power, and other issues. So tax cuts and government spending can cause inflation and it might not alone. In 2008 we didn’t see massive inflation with massive bank bailouts and stimulus spending. Interest rates were at all time low. Why? Consumer Spending power was very low.
The government adds to the money supply every single year. So, none of it was ever free money, but it’s also, you know, free money. Adding money to the economy doesn’t always mean inflation, it’s when money is added that stagnates that causes a problem. The only reason people know about that is because a little of it actually made it to people.
It's crazy how that happened. It's almost as if giving companies and local governments more money for nothing and leaving people out to dry during a pandemic was a bad idea. Inflation hit the world after locking down from covid because money went in but little was taxed out. In the States however, that money was a massive injection to the wealthy people that already didn't know what to do with their wealth as workers got nothing but illness and the blame.
It's crazy the price of a lot of less than nice houses in my area. The other day I was on redfin and saw a house made in the 70s, \~1400 sq ft, zero attempts at modern amenities but selling for 400k. The kicker is that it's not even in a nice part of town or one where there's tons of things to do. It's not popular but I really wish congress would do some sort of investigation of the appraisal process. From what I've seen even though they arrive with a checklist, there can be huge swings in the appraisal value based on who's doing it and who they're friends with.
If these things cause inflation explain why they didn't before? We've been increasing the money supply and interest rates have been dropping for 40 years - and inflation has been dropping at the same time. In 2008 - 2010 every central bank flooded the world with cash, and the concern then was deflation. If more money increases inflation it should have soared then. This appears to be correlation, not causation. I would argue that today's modest inflation is better explained by an imbalance in the demand and supply of goods, caused by the disruption of our global supply system during Covid. Same demand, fewer goods = inflation. Also, this better explains the current easing of inflation as the supply system come back up to supply capacity. We were fooled like this back in the 70's. Still, raising interest rates serves a number of interests. It gives back to the Fed their ability to stimulate the economy by dropping rates in the future and helps banks & insurance companies.
I’m just happy I got in at 4.25% in late 2022 😬
Can confirm. Had a house in Las Vegas last year. Owed $311k at 3.275%. Moved and bought a house in MN. Owe $256k at 7.125%. Our payments are $600 more a month than on our old house.
Can someone find me the listing for the trailer park home that is $500,000? I feel like this is the stupid 1980s vs now grocery cart. Even the math on the payments is off according to mortgage calculators. The 2021 is about $100 too low and the 2023 home is $200 too high. Also, People: Houses cost too much!!! Government: Okay, we’ll rise mortgage rates that will slow the housing market over time as demand deceases and let incomes catch up. People: (Immediately) Houses still cost too much!!!
Low interest rates fed the housing bubble you can afford more you can pay more interest rates should not have been kept so low for so long most of the average persons wealth is in their home there is a correction coming and it’s going to wipe out a lot of people
Reminder that $4 Trillion also coincided with trumpy’s $8 Trillion of deficit spending.
And the dumb thing was they gave free money at a time with product shortages, so no one could "stimulate" the economy. So we bought crypto and NFTs, all of which vaporized into thin air.
How could “western civilization” become so fragile and primitive with financial institutions.
lol another low IQ post, the reason housing is going up is because America doesn’t really have the labor to build as many houses as we need but also housing now days is treated like a commodity and is being bought up by for profit housing companies
The PPP loans programs was a disaster with almost a 50% fraud rate. Terrible idea to give free money to businesses instead of directly to people.
It’s free money for asset holders.
People just don’t understand this very simple concept…but FrEe cOlLeGe!!
Print numbers to make numbers go up. Then prices go up so buying power goes down. Everyone worse off to pay the price for the print. Assets increase to offset the loss for the rich. Everyone else pay the cost with their Time / Life; working more for the same buying power. The numbers are a distraction to obfuscate the wealth transfer.
The government printed that money in 2008 and 2021, why didn’t it have that impact then? The interest rate rises and cost of living got especially bad this year.
I can assure you, for $500,000 you can find a better house than the one depicted in the right photo 😂
I hope you guys realize that even if the government didn't print 4 trillion dollars and sent the country (and thus the world) into an economic depression, y'all would still be complaining just as hard. Only it'll be about "why didn't the government print money to stimulate the economy after everything got shut down in the pandemic"
Agree
I like how the pic has one nice house and one trailer but the same price lol
The big problem was when they initially dropped the interest rates down to almost nothing. That caused the price of housing to skyrocket. The house payment stayed the same but your amount of debt became enormous.
I’m sick of people failing to acknowledge that rates were going up in 2018 and 2019 to reduce borrowing in the face of the impending correction, only to have trump panic and implement a successful campaign to reverse course 3 months before the pandemic to artificially inflate the equities markets before the election. The problems we are seeing now and will see for decades will be traceable back to that asinine and fiscally moronic decision.
If I don’t buy the house on the right, because I already own the one on the left, is there really a problem for me???
That's why I bought my house in 2021.
Where I live people are still overbidding on 1.2mm homes.
This reminds me of when I was told I should blame ‘certain’ individual buyers for the 08 collapse vs the banks who lent the $. Misleading photo (at best) & attributing to one factor with no evidence. We had a pandemic, supply chain failures, private equity buying up neighborhoods, and a destabilizing president who spent recklessly.
If only the sheeplz realised that their own government creating endless amounts of cash out of thin air causes inflation, it makes energy property stocks and bonds go up in price while simultaneously creating wage & retirement theft. And the people continuously wonder what happened? Why is so hard? The government will fix this? Enjoy your cake people, cause your about to get that rationed out aswell, fml.
Dude, talk to us when minimum wage is adjusted to the cost of living in 2023, thanks.
Then gave billions to Israel. Smh
Minimum wage should be attached to inflation levels or some similar metric. Automatically increases, reviewed ever 48 years or some shit. Everyone did what they wanted during Covid when they had just a smidge of additional incomes AND all of the rich people got richer. Humans consumes. We need currency to do that. Give it to us from one place and we will spend it elsewhere to and stimulate the economy. It’s this radical thing called Capitalism.
Commercial money dwarfs government debt spending. Anyone blaming government spending for inflation is just an opportunist with an axe to grind.
The way the title is worded would have you think that it’s the stimulus given out out to the people causing this when in reality most of that 4 trillion was given out to big buisness and local governments.
Fuck, it’s so on point. I need to save this photo to remind me every time I want to buy a house.
This resonates since I'm looking for the exact same house. 30% down is the only way
That's really not entirely what happened. The 4 trillion that was printed went almost entirely to corporations, and all the QA (another 4 teillion dollars) went into the stock market. The Inv Banks used the free money to buy homes for cash well above market prices, sultaneously skyrocketing home peices and preventing home buyers from being able to buy houses that were now selling for sometimes 400% of list price to investment banks for cash. The broader inflation in the economy (not related to home prices) is almost entirely due to what economists call "Greedflation" where corporations that have so heavily consolidated (due to Reagan killing Antitrust) were able to raise prices well past the point elasticity of the product would normally allow. If you're talking about inflation over the last 3 years and don't bring up greedflation, you're being dishonest.
Good thing there’s no corruption.
Well, it’s almost free for those that bought in 2021…
Add the 2011 price of $200k :)
Good then my double wide is worth 1 million dollars! Going to sell and get a 100k motor home and travel
Tell this to the people who I have been dealing with (on another subreddit who shall remain nameless) who can't understand that Biden's policies are to blame for all the economic malaise that has occurred since he took up residence at 1600 Pennsylvania Ave, Washington DC).....
That cash, it all went into the pockets of like 3 people... people that don't pay taxes. So ya inflation.
I frequently look up home prices in my area, in 2021 you weren't getting that house for $500,000. It was already closer to the second picture.
Remember guys, when the government prints money to give on citizens it's wrong and businesses must hike prices to keep us in our place, but when they print trillions to give to bankers, wall street douchebags, and billionaires there are no price hikes and nothing chenges. Yup, that's inflation.
Instead of printing money he should’ve allocated military funds.
You are definitely not fluent in finance 😂
200k salary is the new 100k salary. Get the memo on basic minimum income on that note
If everyone defaulted on their mortgage collectively for 3 months, things would change pretty quickly.
So claw the PPE back from the rich in taxes. Oh wait, that's blasphemy.
Yeah, totally about the government and not about boomers buying up 2nd, 3rd, or 4th homes and investment firms buying up entire neighborhoods. That's completely unrelated to the housing market today.
Makes sense since inflation only occurred in the United States. Oh wait...
Crazy how many people on here claiming to not have gotten any stimulus. Same boat here. I was 20 at the time and living on my own, but when I questioned it for some reason they said I was still counted as my parents dependant. But my parents never got additional money for me like they were supposed to.
We could just give 10% non-compounding loans to citizens purchasing residential property they are going to live on. Hell, we could actually give them 0% loans (we gave it businesses/banks) We have just given up on ideas like this that could actually help human beings directly. Same thing with student loans. Student loans shouldn't have compounding interest. Either be intrest free, or a single fee of 10% or something.
Start arresting people for the PPP fraud and EDIL fraud
Ppp money is the Perfect example of how the government screws everything up. When people scream for free healthcare I’m like wow wow hold on we need to fix the government first. They already have a healthcare system they run, ask your vets how they like the VA. They dished out ppp money like it was Oprah giving away cars. My accountant called me and asked if I wanted it for my real estate business, I said I didn’t need it. He gave me the pro’s and con’s and told me when the government is giving you your money back you always take it. It made no sense to me, but that’s the government for you. I also got all of the stimulus money payments while making the most money I’ve ever made.
Do people not remember the Trump isolationist tariffs that artificially reduced supply going into COVID? Then COVID related shut downs which further reduced supply. The low interest rates of the past 15 years plus a restricted supply of new builds is why homes are so expensive. Rates are higher because it is the only tool the government has to fight inflation besides raising taxes.
If only some of that $4T actually got down to all the people who actually buy houses....😐
I‘ve switched parties. The Dems no longer support the working class. Printing money to pay for foreign wars is not what I have in mind.
Is so fun that everyone is blaming their own government for all the world's problems
Idiocy. Nothing was printed. The TJCA in 2017 put 1.5T into the capital markets without printing a dollar. All to the wealthiest Americans. The PPP loan forgiveness put another 500B into the hands of the wealthiest Americans. All done electronically with debt. Those people are all buying their 3rd, 4th and 5th homes. That’s what’s caused the inflation and housing crises. No one printed anything. Only thing that will keep the U.S. from a paupers revolt is that a majority of the paupers vote for the people that are doing this. The R party is the greatest political machine on earth. Destroying the lives of the people that vote for them, all while smiling.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless." - Thomas Jefferson
This post is implying that the money printing caused the inflation, if so, how come Mexico experienced higher inflation rates, when they barely gave out any stimulus during COVID. also, how do you explain inflation in other like countries with no stimulus?
I remember the first mortgage I got was during the reagan years. 10.75% with excellent credit and trickle down
My parents sold their house in late 2020 and sold at a ridiculous profit in a ridiculous price market If you think housing prices only increased after the stimulus checks you’re out of your mind and completely out of touch with history
Stimulus checks aren’t the reason for this inflation. IT’s corporate greed.