Jason seems to be doing the rounds on the center-left-reasonable-white-guy tour* (which i currently have as Barro, Yglassius, Noah Smith, Derek Thompson, probably missing a few others) but does not appear to be coming out with a new book or anything. Is this just coincidence?
*no offence intended--I'm pretty squarely in this demographic
I think one reason home owners with a fixed mortgage aren’t feeling like they are benefitting from inflation is due to rising costs of taxes due to property value increases. It doesn’t feel like benefiting on that fixed mortgage when you’re monthly costs are still going up.
This varies from jurisdiction to jurisdiction. In some places, like California, the annual tax bill increase is capped; in others, like Massachusetts, the total growth of the property tax levy is capped, so substantial value increases have to be offset by cuts in the property tax rate. In both cases, the caps are not indexed to inflation, so higher inflation should actually *reduce* the real burden of property tax. Even in states without cap regimes, the property tax levy should track the size of the municipal budget, so the rate shouldn't stay fixed in the face of a large increase in the size of the tax base; it should go down. And generous federal support from the coronavirus relief package has put state and local budgets in unusually good shape, with low pressure for tax increases. But certainly, there will be some cases in some places of people who get substantial property tax bill increases.
I live in KS so can only speak to my experience but we are now paying almost $200 a month more just since last August. I know a lot of my friends in the area are in the same boat, but it’s hard to complain since theoretically higher house values mean we have more money, even if when we sell the home we will have to buy another house at the increased cost so only the banks and tax man win. Haha. Thanks for replying!
The mortgage comment in the podcast misses a step. My mortgage payment is fixed, but I only get a better deal if my wages go up to keep up with inflation, then I'm paying a fixed debt with "cheaper" or more plentiful dollars than I had when I signed the mortgage contract. If, as is actually the case, I would lose out by refinancing my house against the increased value because the interest rate would get worse and my wages went up 3% as opposed to the 7.5% of inflation, I am spending the same amount on housing while having lost 4.5% of my purchasing power, meaning that my total cost of living has gone up and my savings rate has gone down. Add into this the fact that lumber is once again 50~75% above the price at the beginning of the pandemic and really only fell back to 30% above pre-pandemic levels when we stopped talking about it last year, and this is true of most home maintenance expenses, and home owners are not necessarily winning due to inflation. The only win I've gotten is that the "value" of my house went up according to Zillow, but that's meaningless outside of refinancing or going to sell, at which point I now have to buy another house with equally inflated value, effectively holding me at parity with the past-me that bought the place, less the maintenance costs.
No, the mortgage comment is correct. Inflation does flow into nominal wage increases; even if the wage increase does not fully offset overall inflation, it does more than offset the inflationary increase in your mortgage payment (which is $0).
Not when the pay increase is the same one the company has given for the last 20 years. Usually they do 3%, this year they did 3%. It was in fact not impacted by inflation in any discernible way. The comparison you could make would be with what I'd pay if I was renting, which is typically influenced by average price per sqft, but none of the people I know in the region who rent rather than own saw increases, and I'm under the impression that data for the country largely lines up with that.
Love your show! Enjoyed it on KCRW and continue to enjoy.
Question: This is a general question, but it is related to your show too, as I have heard it said a few times on Very Serious.
Your Democratic / progressive guests will often comment that the "Filibuster" is not in the US Constitution, which is 100% true. Right? But political parties are not mentioned in the US Constitution either? lol. As an NPP, active voter and listener, I must laugh, but why doesn't mainstream media or Very Serious "call out" the talking heads, when they imply Democrats and Republican Parties are an essential part our US Constitution. The Whig Party?, Federalist Party?etc. How many political parties have there been?
"Representative" "democracy" "citizen" "rights" "press" "freedom" etc. are all mentioned in our constitutional framework, but not "Dem" or "Rep" parties. But they do get deeply Self Righteous about their constitutional importance........ which is totally non-existent. Is it a "social construct" in their own heads?
Therefore, what is the difference between "Party representation" vs "Representative Government" ? Can they be the same? Thx
I always appreciate seeing Jason's takes on Twitter, particularly over the last year or so. Excited to hear the conversation on today's podcast.
Jason seems to be doing the rounds on the center-left-reasonable-white-guy tour* (which i currently have as Barro, Yglassius, Noah Smith, Derek Thompson, probably missing a few others) but does not appear to be coming out with a new book or anything. Is this just coincidence?
*no offence intended--I'm pretty squarely in this demographic
I think one reason home owners with a fixed mortgage aren’t feeling like they are benefitting from inflation is due to rising costs of taxes due to property value increases. It doesn’t feel like benefiting on that fixed mortgage when you’re monthly costs are still going up.
This varies from jurisdiction to jurisdiction. In some places, like California, the annual tax bill increase is capped; in others, like Massachusetts, the total growth of the property tax levy is capped, so substantial value increases have to be offset by cuts in the property tax rate. In both cases, the caps are not indexed to inflation, so higher inflation should actually *reduce* the real burden of property tax. Even in states without cap regimes, the property tax levy should track the size of the municipal budget, so the rate shouldn't stay fixed in the face of a large increase in the size of the tax base; it should go down. And generous federal support from the coronavirus relief package has put state and local budgets in unusually good shape, with low pressure for tax increases. But certainly, there will be some cases in some places of people who get substantial property tax bill increases.
I live in KS so can only speak to my experience but we are now paying almost $200 a month more just since last August. I know a lot of my friends in the area are in the same boat, but it’s hard to complain since theoretically higher house values mean we have more money, even if when we sell the home we will have to buy another house at the increased cost so only the banks and tax man win. Haha. Thanks for replying!
The mortgage comment in the podcast misses a step. My mortgage payment is fixed, but I only get a better deal if my wages go up to keep up with inflation, then I'm paying a fixed debt with "cheaper" or more plentiful dollars than I had when I signed the mortgage contract. If, as is actually the case, I would lose out by refinancing my house against the increased value because the interest rate would get worse and my wages went up 3% as opposed to the 7.5% of inflation, I am spending the same amount on housing while having lost 4.5% of my purchasing power, meaning that my total cost of living has gone up and my savings rate has gone down. Add into this the fact that lumber is once again 50~75% above the price at the beginning of the pandemic and really only fell back to 30% above pre-pandemic levels when we stopped talking about it last year, and this is true of most home maintenance expenses, and home owners are not necessarily winning due to inflation. The only win I've gotten is that the "value" of my house went up according to Zillow, but that's meaningless outside of refinancing or going to sell, at which point I now have to buy another house with equally inflated value, effectively holding me at parity with the past-me that bought the place, less the maintenance costs.
No, the mortgage comment is correct. Inflation does flow into nominal wage increases; even if the wage increase does not fully offset overall inflation, it does more than offset the inflationary increase in your mortgage payment (which is $0).
Not when the pay increase is the same one the company has given for the last 20 years. Usually they do 3%, this year they did 3%. It was in fact not impacted by inflation in any discernible way. The comparison you could make would be with what I'd pay if I was renting, which is typically influenced by average price per sqft, but none of the people I know in the region who rent rather than own saw increases, and I'm under the impression that data for the country largely lines up with that.
Love your show! Enjoyed it on KCRW and continue to enjoy.
Question: This is a general question, but it is related to your show too, as I have heard it said a few times on Very Serious.
Your Democratic / progressive guests will often comment that the "Filibuster" is not in the US Constitution, which is 100% true. Right? But political parties are not mentioned in the US Constitution either? lol. As an NPP, active voter and listener, I must laugh, but why doesn't mainstream media or Very Serious "call out" the talking heads, when they imply Democrats and Republican Parties are an essential part our US Constitution. The Whig Party?, Federalist Party?etc. How many political parties have there been?
"Representative" "democracy" "citizen" "rights" "press" "freedom" etc. are all mentioned in our constitutional framework, but not "Dem" or "Rep" parties. But they do get deeply Self Righteous about their constitutional importance........ which is totally non-existent. Is it a "social construct" in their own heads?
Therefore, what is the difference between "Party representation" vs "Representative Government" ? Can they be the same? Thx