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Devin Lavelle
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That's a true statement, but not really a response to what I'm saying. It's true that many would be willing to pay, the US government could certainly turn to new immigrants as more of a profit center. I'm not sure it would be fair (neither you nor I were asked to reimburse the government for infrastructure built before we became taxpayers), I'm also not sure that it would be profitable in the long run, since it would disincentivize many from coming, thus slowing economic growth and associated future tax revenues.
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The discussion of infrastructure focused capital is interesting, but I'd argue the current state of affairs highlights realities that could draw us to the opposite conclusion. In most of the developed world, we have inadequate, aging infrastructure that is already inadequate to fully meet our needs. This is the nature of the beast with major fixed capital of these sorts, because they cannot be built, replaced or even really maintained incrementally. In the US the bulk of our infastructure was largely paid for during a time of dramatic growth in the economy and the workforce driven by post WWII circumstances (diminished foreign competition, soldiers returning to the workforce, desegregation, new technologies). As that boom has faded into an increasingly distant memory, we have failed to replace the revenue with a stagnant and aging domestic population. While we can hope for technology and favorable trade situations to drive future largess, the only reliable source of a growing economy, and associated surplus revenues for investment, is a growing workforce -- and the only source of that (that does not require 20+ years of investment and infrastructure to prepare for the market) is immigration.
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An interesting and well written article, but I think it misses the mark a bit. There was no "what is the EU?" moment with Donald Trump voters. They know what they're getting and they (more or less) want what they're getting. I think the real issue is the way we select nominees, which means that Donald Trump is the nominee because he received the vote from 4% of the nation (http://www.nytimes.com/interactive/2016/08/01/us/elections/nine-percent-of-america-selected-trump-and-clinton.html?_r=0). Those 4% appear to like him quite a bit. The 5% who voted for Hillary Clinton appear to like her quite a bit as well.
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Sure thing. ;) And fwiw, I agree with the underlying point that housing is not likely to increase in a sustained, uncontrolled way nationally (in a few specific markets, perhaps) that the panicked potential home buyers might fear.
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Nothing in that article runs counter to my statement. Comparing real housing prices from 1890 to 1990 doesn't show a lot of increase, it's true. Those point in time estimates don't tell us anything about the trend, though. If you look at the period starting between 1880 and 1910 and ending between 1920 and 1940, you see a market in decline. If you look at any 30 year period subsequent to that, you see prices increasing.
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I'm in California, so driving is the typical option here, unless you're headed to San Francisco, proper. The 50 mile trip on the MTA from Purdy's, NY to Grand Central will run you $32.50 round trip, $2.50 more than I was estimating for that 50 mile drive.
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"Nonetheless, this has historically not been the case." Your data does not bear this out. If you look at the full range of data, you'll see that the index was fairly rapidly decreasing from the advent of the automobile through WWII, bottoming out at 68.5 in 1942. Since then it has increased relatively consistently, if not steadily. That's a 70+ year trend
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That doesn't contradict my statement. Most of the increase in prices is not real -- it's just inflation. Based on the numbers you posted, prices today are about 50% higher than they were 40 years ago, in real terms, while in nominal terms it's more like 10x. But, as we know, land is the only thing God isn't making more of. It makes sense that desirable land should become more expensive, in real terms, relative to things that are not so constrained.
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Also, it's important to remember that commuting 50 miles each way will cost you about $7,500/yr, which is the equivalent of adding about $140k to your mortgage -- without generating any capital.
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I think there are two big issues here. 1. Most of the press we consume comes from cities like New York, San Francisco, Los Angeles, London, etc, where housing is increasingly less affordable than overall averages suggest, even in the suburbs. 2. Most of us aren't very good at translating to real dollars. We see that a house that cost $50k 40 years ago is going for $500k today and think that's an outrageous increase. We forget that most of that increase is based on the decline of the dollar's value over time.
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Feb 2, 2016