Is all socialism bad?

[Supreme]

Going twice

[kthx]

Ill post more on this after the weekends over, too many thoughts on Football atm.

[Vatican Assassin]

The fact is, we're moving in the other direction more and more of leaving people completely to their own devices in all the developed world (witness all the talk of austerity). While this is fine for the rich because they will always be able to afford everything, for everyone else this is going to be an increasing problem as they will have more and more barriers to them maximizing their potential. And then all of society will suffer because many talented and brilliant people will not be able to contribute to society.

The good intention of giving so many student loans to middle and lower class students has had devastating consequences. The price of tuition in public colleges is skyrocketing and one major cause is guaranteed student loans. When colleges KNOW that students will be able to get a loan, whether they can afford to pay it back or not, they will raise prices. They have no reason not to. The reason prices stay low on any product or service is because of competition and affordability. A socialized public school system has eliminated these two factors and prices have escalated without restraint. Since the government owns the state colleges, there is no competition for public schools, and because student loans are guaranteed, there is no lack of immediately available funds from low-income students. The end result is a one trillion dollar debt bubble for student loans from the government which graduating students cannot pay back. This bubble is about to burst. This is the case when the government gets involved in any industry, such as housing.

The government guarantees mortgages in Fanny May and Freddie Mac, prices go up because affordability is no longer holding them down, but people are willing to risk it. Now Freddie and fanny are asking for 10 billion more dollars on top of everything they have already received because guaranteeing high-priced goods to people who cannot really afford them in the long run will always create bubbles which in turn will bust and adversely affect the over-all economy.

This is how government health care will unfold. Despite all good intentions there is no other possible outcome. Since there is only one health coverage carrier for low-income families--the government--there will be no competition between insurance companies. The government will guarantee health coverage to people who could not otherwise afford it. Hospitals will know that under Obama care everyone will be able to afford more and more procedures. So why not raise prices on them? It will be against the law for you to be uninsured under Obama care. Imagine if you are a company selling a product or service, and it is against the law for people to not buy your product, and the customer does not care how much it costs because it is paid for by the government. Hospitals would be crazy to not raise prices, there is no reason not to. Just as there is no reason for colleges to not raise tuition, just as there is no reason for real estate barons to not raise home prices. Socialism raises prices, plain and simple.

[Epinephrine]

The good intention of giving so many student loans to middle and lower class students has had devastating consequences. The price of tuition in public colleges is skyrocketing and one major cause is guaranteed student loans. When colleges KNOW that students will be able to get a loan, whether they can afford to pay it back or not, they will raise prices. They have no reason not to. The reason prices stay low on any product or service is because of competition and affordability. A socialized public school system has eliminated these two factors and prices have escalated without restraint. Since the government owns the state colleges, there is no competition for public schools, and because student loans are guaranteed, there is no lack of immediately available funds from low-income students. The end result is a one trillion dollar debt bubble for student loans from the government which graduating students cannot pay back. This bubble is about to burst. This is the case when the government gets involved in any industry, such as housing.

The government guarantees mortgages in Fanny May and Freddie Mac, prices go up because affordability is no longer holding them down, but people are willing to risk it. Now Freddie and fanny are asking for 10 billion more dollars on top of everything they have already received because guaranteeing high-priced goods to people who cannot really afford them in the long run will always create bubbles which in turn will bust and adversely affect the over-all economy.

This is how government health care will unfold. Despite all good intentions there is no other possible outcome. Since there is only one health coverage carrier for low-income families--the government--there will be no competition between insurance companies. The government will guarantee health coverage to people who could not otherwise afford it. Hospitals will know that under Obama care everyone will be able to afford more and more procedures. So why not raise prices on them? It will be against the law for you to be uninsured under Obama care. Imagine if you are a company selling a product or service, and it is against the law for people to not buy your product, and the customer does not care how much it costs because it is paid for by the government. Hospitals would be crazy to not raise prices, there is no reason not to. Just as there is no reason for colleges to not raise tuition, just as there is no reason for real estate barons to not raise home prices. Socialism raises prices, plain and simple.

Er... you've just proved why mixing government guarantees with a vaguely 'market system' is a bad idea. An actual public healthcare system doesn't involve insurance companies, the GOVERNMENT is the only insurance company. And an actual public education system doesn't involve any market prices because the government pays most of the bills.

Either way, there must be a middle ground that works. If government completely gets out of this, then what will happen will be like in the past or in 3rd world countries, where only the rich can afford education and health care. Everyone else is left out, and society as a whole loses out.

You talk about the US housing bubble, but the problem with that wasn't necessarily because the government guaranteed stuff. It was stupid laws. In the USA you're allowed to more or less walk away from mortgages. In Canada you're not, you'll be personally held liable for everything you have. So then people don't take as many stupid risks, and we did not experience the same bubble you guys did.

[Supreme]

I found that epi & summa are way better debaters then me so i'll leave the real reaction up to them however i'd like to point at Scandinavia where such systems are already in effect. I dont see many bubbles bursting over there..in fact they're pretty wealthy.

[Vatican Assassin]

Er... you've just proved why mixing government guarantees with a vaguely 'market system' is a bad idea. An actual public healthcare system doesn't involve insurance companies, the GOVERNMENT is the only insurance company. And an actual public education system doesn't involve any market prices because the government pays most of the bills.

It is a bad idea, that's what I was trying to prove, and yes, there are no insurance companies or market prices in public education, that was also my point. As far as housing goes, the only reason people made such stupid risks was because of government backed mortgages. No private company would make such bad loans because they would know they wouldn't get them paid back and they would have to cover the costs. But government mortgage companies know that they will always be bailed out by taxpayers so they do not have the same problems with unpaid loans. The government guarantees Freddie and Freddie that no matter how high-risk the loan is, grant it, and you are guaranteed payment eventually in the form of a bail-out. If the government gets out of school loans, low-cost state school tuition price will drop because no one will be able to afford to go there and they will not fill classrooms. Supply and demand does not help prices remain low when government inflates demand.

[Ephemeral]

First, I think that insurance is a farce, just another ‘service’ that artificially implies value and has no production value. I also think it has lead to the downfall of society in many ways. The insurance industry is nothing more than gambling. In fact, insurance is a modern ‘invention’ coming from people sitting in English pubs betting on which ships would make it back into port. This is how Lloyds of London, the world’s first insurance company, was started. But the negative impact has been substantial.
Ever consider how your grandparents and their parents handled their personal disasters? They relied upon family, friends and local communities to pull together and rebuild their house if it burned down. In many ways living without insurance meant that you could not be an ‘island’, you had to contribute to others if you had any hope of others contributing to you in your time of need. In today’s world, I am surprised that this guy didn’t sue the firemen for not paying his bill. And we can’t overlook the media’s role in this social decline either.

Second, I find it difficult to group US public schools and US universities together. Currently, the United Sated is the ‘go to’ place for any advanced degree. Non-US citizens are streaming into the US universities in huge numbers, leaving very few (if any) spots open for US citizens. This obviously implies that the world believes the US university system has very high value. At some point the US will figure this out that this is one of the largest exports it has.

Third and from an anthropological point to view, humans make these systems, the systems don’t make humans what they are. Humans have had tens of thousands of years to make social systems that make us better people. Evolution guarantees that any system that did this would have succeeded. None have and humans continue to find new ways to be greedy and be assholes to each other. Very few societies have even figured out how to live sustainable lives.
eph

[PaulOakenfold]

First, I think that insurance is a farce, just another ‘service’ that artificially implies value and has no production value.
eph

Insurance in general or a specific type of insurance? Insurance benefits those looking to protect their business, assets and future prospects. I don't think that should then lead into insurance on lifespan. I can bet on someone's life with the click of a button because of insurance... that's not right, but it's doable.

[Cops]

Er... you've just proved why mixing government guarantees with a vaguely 'market system' is a bad idea. An actual public healthcare system doesn't involve insurance companies, the GOVERNMENT is the only insurance company. And an actual public education system doesn't involve any market prices because the government pays most of the bills.

Either way, there must be a middle ground that works. If government completely gets out of this, then what will happen will be like in the past or in 3rd world countries, where only the rich can afford education and health care. Everyone else is left out, and society as a whole loses out.

You talk about the US housing bubble, but the problem with that wasn't necessarily because the government guaranteed stuff. It was stupid laws. In the USA you're allowed to more or less walk away from mortgages. In Canada you're not, you'll be personally held liable for everything you have. So then people don't take as many stupid risks, and we did not experience the same bubble you guys did.

Off topic, but do you know what's going on with the Canadian housing prices? All jokes about being a basement baller aside, a townhouse in a Toronto suburb starts at $250,000. The average salary for Canadians isn't higher than that of an American, and our unemployment rate is higher (I believe) than Americas. I figured you'd have better insight into this topic than me, and given that we are both in our 20's and possibly looking to purchase something soon I thought you'd know if this a bubble waiting to burst. I think interest rates are frozen right now, but when they go back up a lot of people could lose their shirts in the process. I just kind of feel like everyone my age isn't in a good situation, regardless of how much our income is. Young families can't realistically afford to buy a house right now, and I'm hoping that the market drys up and we see more competitive pricing. That or I'm moving to Australia.

[Money]

Off topic, but do you know what's going on with the Canadian housing prices? All jokes about being a basement baller aside, a townhouse in a Toronto suburb starts at $250,000. The average salary for Canadians isn't higher than that of an American, and our unemployment rate is higher (I believe) than Americas. I figured you'd have better insight into this topic than me, and given that we are both in our 20's and possibly looking to purchase something soon I thought you'd know if this a bubble waiting to burst. I think interest rates are frozen right now, but when they go back up a lot of people could lose their shirts in the process. I just kind of feel like everyone my age isn't in a good situation, regardless of how much our income is. Young families can't realistically afford to buy a house right now, and I'm hoping that the market drys up and we see more competitive pricing. That or I'm moving to Australia.

[Cops]

Asking for his opinion on the matter, which is more educated than mine, and certainly more educated than yours. I could buy five houses in your state for the price of one in Ontario. I know you don't give a flying fuck, which is why the question wasn't directed at you.

[Epinephrine]

Off topic, but do you know what's going on with the Canadian housing prices? All jokes about being a basement baller aside, a townhouse in a Toronto suburb starts at $250,000. The average salary for Canadians isn't higher than that of an American, and our unemployment rate is higher (I believe) than Americas. I figured you'd have better insight into this topic than me, and given that we are both in our 20's and possibly looking to purchase something soon I thought you'd know if this a bubble waiting to burst. I think interest rates are frozen right now, but when they go back up a lot of people could lose their shirts in the process. I just kind of feel like everyone my age isn't in a good situation, regardless of how much our income is. Young families can't realistically afford to buy a house right now, and I'm hoping that the market drys up and we see more competitive pricing. That or I'm moving to Australia.

Toronto housing prices are still low by international standards, although high for Canada. The best way to look at housing prices is to look at how much someone would pay for a mortgage relative to their income. Right now Vancouver is by far the worst in all of Canada (>80%), they are >75% higher than we are (we're around 40-50%).

At the lower extreme, cheap places will be as low as 25-30% which is what you typically see in the 'flyover' parts of North America (US and Canada included).

The problem with prices, is that it is a simple supply and demand type thing for housing. You simply cannot compare one city to another, due to available space and demand. In Toronto, we've more or less maxed out the available land to build single detached housing within the city. Meanwhile the suburbs adjacent to the city are also almost fully built out to the edges. Because of commuting times and raw distances, the prices nearer the core go exponentially up. There's not going to be any more houses period, so the price moves up.

The thing is, at around 40-50% of mortgage/income ratio, it is still relatively affordable to buy housing in Toronto, and comparable and even less expensive than most large cities in the world our size.

Of course the overall ratio is skewed by two factors:
1) Low interest rates. Basically rates are as low as they're going to get, it can't really get lower. Any increase in rates will have huge effects on affordability.
2) Most new housing in Toronto is condo-based. In fact Toronto has more condos under construction than any other developed city in the entire world at the moment. So basically, the idea is that you make do with less... less size that is. We're still nowhere close to living in condos the size of ones in Europe or Asia or even NYC, so as small as new condos here feel, they are still relatively large by international standards.

Interestingly enough, we don't really have that many international investors in our market, at least not like high profile cities like London, NYC or dare I say Vancouver where foreign investors have driven housing to completely unaffordable levels there. Most of our investment here is rental based. Small time investors hoping to rent out a condo because we currently have a historic low vacancy rate.

As far as people buying to 'flip' units, I think that is on a downtrend. Our prices are no longer going up exponentially. Sure they are going up a bit faster than inflation, but nothing crazy, and well within reason considering we're out of land and increasing our population by an average of 100,000 people a year.


So in terms of a potential 'bubble' situation, I think there is no bubble.
1) There's waaay too much new construction coming on the market that prices are being kept low by the supply.
2) While interest rates are low, they aren't likely going to trend too far up too quickly. Even if rates went up 4-5% in a few years, the mortgage carrying cost will only rise maybe 10% above inflation. This is a small but not huge correction. In this case, most owners will probably just hold onto property and so decrease supply and prices will probably only drop 5%.
3) By international standards a mortgage in Toronto is still very affordable. And if it starts getting unaffordable, people can still live in small and smaller units for some time to drive down overall prices.
4) Toronto's increasing prices are driven by solid market fundamentals. 100,000 new people to the city every year. No more easy land to develop within city limits. Increasing commuting times, which have forced people to live closer to where the jobs are thus driving up demand.
5) The biggest housing price increases already happened last decade as we went from ultra-cheap to normal prices, and increases have slowed down dramatically.

In terms of buying a place there are a few things to consider. First of all, in the current market, if you want to live anywhere near the city, you will probably save money by renting, especially if you plan to live somewhere short term. If you buy you probably can't expect to make any real profit selling (although thinking you're going to make money by selling a primary residence when you need to move to a new place after you sell a place is debatable anyway, unless you're prepared to downsize or move really far from the city). Buying really is an emotional thing. I bought my place, but I like the idea of owning something.

Secondly, interest rates are not going to go down anytime soon. If you can secure a good 5-year term on your mortgage or gamble on a variable rate, you can still skimp and double down on your principle the next few years and try and 'quickly' pay off a large chunk of your mortgage. This is a good 'investment' in a way, because rates will surely rise in the future and by paying early now you're saving a ton of interest later. You can use RRSP money to pay down your mortgage as part of the homeowner's plan. As well, since stocks have flatlined/dropped in the past year, using any 'extra' money you have to save/invest to pay off extra mortgage principle is a smart idea unless you have some awesome stock tips.

Thirdly, prices will only go up. If you really want to buy, sooner is probably better than later. I honestly do not see prices in Toronto dropping by any significant amount any time soon. They may drop 5-10% at best in the new few years, but at least you would have gotten a lot of utility of having your own place and not paying rent to someone else.

Finally, 'regular families' can no longer afford to live in the city. Basically, most people with normal jobs who want to live in a single detached house need to live in the far suburbs. The further the better as it's still somewhat affordable. You can easily get a decent house in Ajax for $250,000 for instance, which wouldn't even get you a one bedroom condo downtown.


One last thing. Our economy is doing much better than America. Our debt levels are lower. Our taxes are almost equivalent but we get free healthcare and they have to pay for it. Our unemployment rate is much lower. With our soaring dollar, we're almost equivalent in GDP per capita now compared to the USA. And with the exception of Vancouver, we don't have a housing bubble like they did because we have much stronger mortgage laws than they do.

[Money]

Asking for his opinion on the matter, which is more educated than mine, and certainly more educated than yours. I could buy five houses in your state for the price of one in Ontario. I know you don't give a flying fuck, which is why the question wasn't directed at you.

yawn, just wanted to use the pic. relax nerd, whyusomad

[Jack]

I love you all. Solutions are clear, we are the fog. The most intelligent man is the one who declares himself a fool, eliminating ones ego shall cure the world. Destroy mind, feel more. I weep as you stand upon your pillar of wit; superiority.

[Summa]

I love you all. Solutions are clear, we are the fog. The most intelligent man is the one who declares himself a fool, eliminating ones ego shall cure the world.

The man with no ego is not a man.

The man who does not have the audacity to claim he is right and another is wrong is a relativist.

The man who is a relativist believes that everything is permissible.

-The Brothers Karamazov