Do You Understand What is Going on These Days? I Don't



About the year 2009 our country had a housing crisis. Mortgage companies were elbowing in front of each other persuading poor people to buy homes. Housing prices were going up so even poor people thought they should get in on it. Those offering mortgages were being paid big bonuses for each one they "sold." It all came crashing down. For a while there were miles of empty houses, especially in Florida.

Today something is pending that looks even worse. Some data shows as many as one in four renters is behind in their rent. There is no reason to believe this will improve for quite a while. More likely even more will fall behind. Maybe there are some big preparations going on somewhere for this but I have not read about them. 

The is a moratorium on evictions for some kinds of properties. This is unsustainable.  Many landlords need rental income to make mortgage payments. A landlord must evict someone not paying rent because an empty apartment is cheaper to maintain than an occupied one. Banks holding mortgages will go broke if lenders cannot make payments. If banks foreclose the apartment buildings may well be worth less than their loan. Both landlords and banks will want evictions to proceed. 

The link points out that the nation's entire housing system was held together with cheap tape before the pandemic. Renters were paying about 40% of their income for rent. A while back the rule was 25%.

I haven't kept up with this but have wondered how "technology" has changed monthly household expense. A good cell contract is $70 or more per month. There are countless expensive apps. Some of this expense is necessary to look for or hold a job.

If the link is correct a big problem, a crisis, will show up this fall. There is but one solution to armies of people being evicted. That is federal money to pay all this rent. 

This can be done with government debt. What we need, however, is higher taxes on people with higher than average incomes or wealth. Not happening.

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