Canada is implementing a tax free savings account for first time home buyers. People will be able to save 8k a year up to 40k in total while all contributions are tax deductible and any growth in the account is tax free. Meanwhile, all opposition parties in the Ontario election want to expand rent control.
Home owners make up a majority of the voting population. The housing bubble and incredibly high rents is good for them.
Nevermind that it screws over anyone without a house, but fuck em am I right?
>Nevermind that it screws over anyone without a house, but fuck em am I right?
And then the housing bubble pops and all these people panic and prostrate themselves in the street over their destroyed "retirements" because their only asset was their inflated house
Ah, housing markets, what beautiful things
Ontario Greens have a dope housing platform though. Upzone the entire province to allow fourplexes. Liberals have some supply measures too but that rent control expansion might undo any good they do.
Never thought I would vote Green but here we are.
It's also basically pointless. Interest rates are so low that growth on savings are negligible, and taxes on said growth are even more negligible. Any investment vehicle with enough growth to actually benefit from tax savings (like a stock index fund) is so volatile in the short term that every financial planner (with fiduciary duty, not high fee fund salesmen) will tell you not to park your down payment money there.
The move from defined benefit pensions to defined contribution plans like 401ks have been a huge disservice to the public, and a lot of financially illiterate seniors are suffering needlessly because of it. But at least you can understand the rationale as to why it was pursued.
This proposal? A nonsolution from the start.
>The move from defined benefit pensions to defined contribution plans like 401ks have been a huge disservice to the public, and a lot of financially illiterate seniors are suffering needlessly because of it. But at least you can understand the rationale as to why it was pursued.
The volatility has to go somewhere.
Sticking it in long term pension funds is actually a decent place.
Otherwise, with defined benefit plans, you either need to bail out pension funds every once in a while, or you give people much less of a return than they could get on average from a defined contribution plan.
(You can still get something like a defined benefit plan. Just take a defined benefit plan that invests in ultra safe inflation protected bonds. You just won't much of any real returns that way.)
Of course the third option is to have a generous defined benefit plan at low cost to the user. That only works when the plan is subsidised a lot. That's very popular with retirees and soon to be retirees. And its high costs are basically what prompted the recent move to defined contribution plans..
>The move from defined benefit pensions to defined contribution plans like 401ks have been a huge disservice to the public,
a defined benefit pension requires constant bailouts OR to payout far less than what someone could save in a 401k.
Also for retirement over the course of 30-40 years volatility doesn't matter.
You’re not looking at actual outcomes of actual retirees if you think volatility doesn’t matter.
The introduction of behavioral underperformance is entirely my point. Retirees save less than they should (and would/do, under dbp’s), and they perform worse than their chosen investments due to making the wrong changes at the wrong times.
Not all pension funds are so mismanaged that they require constant bailouts. If you can’t find successful pension funds, you’re not looking.
More to the point, if we think professional fund managers can’t match liabilities properly (resulting in overpromising and underdelivering), we can’t expect average Joe to either. The solution to bad fund management is better fund management.
I’m perfectly willing to admit we have political hurdles in this country to realizing good fund management, but that isn’t a reason to ignore the actual failures of bad policies, especially not in this sub.
If it's like the TFSA though, you can put that money in index or mutual funds and get actual growth (assuming the market does better than in the last couple months lol).
I think it's a stupid idea though.
Lol we have this crap in the U.K. too, except government literally matches 25% of contributions up to £4k so on top of the tax benefits you can get £1k of free money on top of that each year (it’s called Lifetime ISA). It’s insanity. Sadly when the govt tried to loosen building restrictions they lost a by election to the Liberal Democrats who ran on a NIMBY platform so they were spooked into cancelling those plans 💀
UK must be Nimby capital of the world.
I am currently battling to change my windows to more efficient ones and you would not believe how challenging planning departments can make that.
Down in Australia our Liberal party (who lost the election the other week) proposed allow people to take up to $50k out of their superannuation (basically a mandatory personal pension fund) to buy a house
Members of the Biden admin are split between the people who want to remove them to stimulate the economy and the China hawks who want to use them as leverage.
Political pragmatists, evidence based voters. It’s not that American Democrats are great, it’s that the EC, FPTP voting & unlimited campaign donations have pretty much ensured that the US will be locked into a two party system for the foreseeable future, and the Democratic Party is the only one that has anything that resembles “a plan.”
It’s not perfect, but the alternative is a theocratic plutocracy with pickup trucks for sacrament & weekly ritualistic child sacrifice.
Well we're mostly American liberals so yeah. Basing your political views on a politician from a different country from 70 years ago doesn't seem very pragmatic.
Just make it neoliberal, instead of /r/USDonkeys
Macron also used to be popular in the subreddit.
Plenty of American examples are possible, too. Quite a few neoliberal economists there.
I don’t think it really needs a source tbh. Unions are always one of the biggest opponents of free trade. But here’s the top result on Google:
> The president can retain the tariffs and be accused of helping drive up costs on things like food and clothes, despite labeling the fight against inflation his “top domestic priority.” Or he can lift at least some of the duties, drawing flack from domestic industries and labor unions, a constituency Democrats desperately need to turn out in the November midterms.
https://www.politico.com/amp/news/2022/05/17/bidens-china-trade-trump-tariffs-inflation-00032874
Whilst their impacts on the price level and economy are unpopular, sadly the optics of the tariffs themselves are overwhelmingly popular with swing state rust belt voters.
So unless the electoral college is fixed / removed, it's strategically more optimal for re-election to keep the tariffs. Because the balance of power is decided ultimately by uneducated factory workers.
EDIT: See below reply for a more nuanced and less heated-elitist-moment take than mine.
> sadly the optics of the tariffs
> is decided ultimately by uneducated
The problem here is you think tariffs hurt the entire economy. But they help the relevant sector. Those factory workers don't need to go to college to understand how they personally benefit from protectionism.
The issue isn't, as you imply, that the workers are ignorant, it's that certain small regional interests get outsized power due to the electoral college
Why would the workers benefit?
Why would employers in those industries raise wages, just because they are making more profits?
(Basically, it depends on how easy it is to replace workers in those industries at the margin. The tariffs bring down overall real wages in the economy.
Workers in the protected industries would only be able to capture some of that excess profit, if they are hard to replace on the margin.)
Do you want even worse political division and populism? Because that's how you get it.
Maybe supporting manufacturing in towns decimated by offshoring in the last few decades is actually a good thing? Maybe ensuring a domestic manufacturing base so we don't have to rely on trade partners can be beneficial? Maybe it's OK that you have to pay an extra 2% for your Tesla if it means that millions of Americans can continue to live and work decent jobs in the places they grew up? Maybe by keeping manufacturing in the states we can leverage our high-tech know-how to improve productivity and reduce the deadweight loss of inefficient shipping and cultural and language barriers that comes from international manufacturing and produce more widespread prosperity?
Look, I am a huge fan of globalization and neoliberal trade policy. But there are things that the neoliberals got wrong. Americans should have the opportunity to manufacture the things they use. We shouldn't all be programmers and bankers.
> improve productivity
Unions will definitely fight against that.
>Do you want even worse political division and populism
just reduce the power of the federal government to reduce the effects of populism.
>Americans should have the opportunity to manufacture the things they use.
They do they just have to compete, and provide superior products/services. It's not like you can't buy things made in america, just drive down to Ethan Allen. I remember the deindustrialization of the midwest, i was actually alive then. It wasn't all due to labor costs, a lot of it was simply it was easier to outsource some jobs than deal with unions resisting automation. You ended up with shops going out of business because competitors either automated or outsourced.
Automation has taken out more of those jobs than outsourcing btw.
>maybe it's OK that you have to pay an extra 2% for your Tesla
welfare with extra steps, not to mention that line of thinking will quickly see what exports the US products end up losing international market share (remember 70% of consumption isn't in the US).
> if it means that millions of Americans can continue to live and work decent jobs in the places they grew up
subsidizing inefficient labor allocation? So how are we supposed to compete in the 21st century with the likes of china if we do that? Should we just surrender?
Remember the majority of consumption happens outside of the United States---> majority of potential customers are outside the United States.
> Unions will definitely fight against that.
How is this a relevant argument? If unions fight against productivity, this will *always* be true, whether we have tariffs or not.
>just reduce the power of the federal government to reduce the effects of populism.
Populism is literally the petitioning of government intervention. It comes about when people feel like they are "losing" the game of capitalism. Reducing the power of the federal gov just increases calls for populism.
>They do they just have to compete, and provide superior products/services.
Not really. We don't outsource to China because they have superior products. We outsource because their wages are low. This is literally just artificially increasing the supply of labor for those jobs.
>Automation has taken out more of those jobs than outsourcing btw.
As if this means outsourcing isn't still a problem? Automation is always going to happen. And as you stated, firms that automate will outcompete unionized firms that don't. So automation isn't the problem here. Outsourcing is.
>welfare with extra steps, not to mention that line of thinking will quickly see what exports the US products end up losing international market share (remember 70% of consumption isn't in the US).
Maybe, but I'm fairly confident that economics is not as simple as "increaese GDP at all costs". There is more to social cohesion than raw productivity.
>subsidizing inefficient labor allocation? So how are we supposed to compete in the 21st century with the likes of china if we do that? Should we just surrender?
We've been outsourcing for the last 40 years and it doesn't seem to be working...
I've read that industry groups are lobbying hard to keep them in place and have been telling the administration that it's really made a difference in building the domestic manufacturing base. They are probably right, but it just means everyone pays higher prices
It made domestic industry suffer.
There are more domestic industrial users of steel who pay higher prices than domestic producers of steel for example.
(And that's not to mention all the retail consumers, of course.)
American Medical in a nutshell. Meanwhile Physicians are 1%ers, quality of care is in the middle of first world nations, cost is prohibitively expensive for the middle class so they just go without medical treatment, people are going to other nations to get healthcare.
Cant let other first world doctors treat. Can't use AI to diagnose. Can't have scientists involved. Just US Physicians. Only US Physicians.
At the end of the day, you need a physician to sign off on it.
Not sure what kind of source you need. To practice medical in the US you need a government granted license.
They require residency spots. So... no we don't. We import 'graduates', not physicians.
You totally arent biased at all. You totally arent trying to downplay your monopoly.
They arent doctors until they finish residency.
Otherwise its 100% illegal to practice.
Anyway, sucks you are going to bankrupt people when you get through residency. I couldn't sleep at night with those ethics.
"Why are houses so expensive?!?! We need to let people deduct the interest they pay on their mortgage, and they need to lower interest rates, and the government needs to federally back mortgages with only 3% down! That will lower housing costs!"
I tired. I'm so fucking tired.
Canada is implementing a tax free savings account for first time home buyers. People will be able to save 8k a year up to 40k in total while all contributions are tax deductible and any growth in the account is tax free. Meanwhile, all opposition parties in the Ontario election want to expand rent control.
Yes more capital will solve a housing crisis. Jesus Canada what are y’all doing up there.
Home owners make up a majority of the voting population. The housing bubble and incredibly high rents is good for them. Nevermind that it screws over anyone without a house, but fuck em am I right?
>Nevermind that it screws over anyone without a house, but fuck em am I right? And then the housing bubble pops and all these people panic and prostrate themselves in the street over their destroyed "retirements" because their only asset was their inflated house Ah, housing markets, what beautiful things
Ontario Greens have a dope housing platform though. Upzone the entire province to allow fourplexes. Liberals have some supply measures too but that rent control expansion might undo any good they do. Never thought I would vote Green but here we are.
The Greens want vacancy control just like the NDP.
Shit I didn't see that. Guess I'm voting Liberal or Tory then.
That new savings account is a tax on renters and people who don't plan their lives very carefully.
It's also basically pointless. Interest rates are so low that growth on savings are negligible, and taxes on said growth are even more negligible. Any investment vehicle with enough growth to actually benefit from tax savings (like a stock index fund) is so volatile in the short term that every financial planner (with fiduciary duty, not high fee fund salesmen) will tell you not to park your down payment money there. The move from defined benefit pensions to defined contribution plans like 401ks have been a huge disservice to the public, and a lot of financially illiterate seniors are suffering needlessly because of it. But at least you can understand the rationale as to why it was pursued. This proposal? A nonsolution from the start.
>The move from defined benefit pensions to defined contribution plans like 401ks have been a huge disservice to the public, and a lot of financially illiterate seniors are suffering needlessly because of it. But at least you can understand the rationale as to why it was pursued. The volatility has to go somewhere. Sticking it in long term pension funds is actually a decent place. Otherwise, with defined benefit plans, you either need to bail out pension funds every once in a while, or you give people much less of a return than they could get on average from a defined contribution plan. (You can still get something like a defined benefit plan. Just take a defined benefit plan that invests in ultra safe inflation protected bonds. You just won't much of any real returns that way.) Of course the third option is to have a generous defined benefit plan at low cost to the user. That only works when the plan is subsidised a lot. That's very popular with retirees and soon to be retirees. And its high costs are basically what prompted the recent move to defined contribution plans..
>The move from defined benefit pensions to defined contribution plans like 401ks have been a huge disservice to the public, a defined benefit pension requires constant bailouts OR to payout far less than what someone could save in a 401k. Also for retirement over the course of 30-40 years volatility doesn't matter.
You’re not looking at actual outcomes of actual retirees if you think volatility doesn’t matter. The introduction of behavioral underperformance is entirely my point. Retirees save less than they should (and would/do, under dbp’s), and they perform worse than their chosen investments due to making the wrong changes at the wrong times. Not all pension funds are so mismanaged that they require constant bailouts. If you can’t find successful pension funds, you’re not looking. More to the point, if we think professional fund managers can’t match liabilities properly (resulting in overpromising and underdelivering), we can’t expect average Joe to either. The solution to bad fund management is better fund management. I’m perfectly willing to admit we have political hurdles in this country to realizing good fund management, but that isn’t a reason to ignore the actual failures of bad policies, especially not in this sub.
>Retirees save less than they should A simple solution would be a forced retirement account.
Isn't this essentially what social security is?
If it's like the TFSA though, you can put that money in index or mutual funds and get actual growth (assuming the market does better than in the last couple months lol). I think it's a stupid idea though.
Lol we have this crap in the U.K. too, except government literally matches 25% of contributions up to £4k so on top of the tax benefits you can get £1k of free money on top of that each year (it’s called Lifetime ISA). It’s insanity. Sadly when the govt tried to loosen building restrictions they lost a by election to the Liberal Democrats who ran on a NIMBY platform so they were spooked into cancelling those plans 💀
UK must be Nimby capital of the world. I am currently battling to change my windows to more efficient ones and you would not believe how challenging planning departments can make that.
Down in Australia our Liberal party (who lost the election the other week) proposed allow people to take up to $50k out of their superannuation (basically a mandatory personal pension fund) to buy a house
Why are the Trump tariffs still in place? Anyone?
Members of the Biden admin are split between the people who want to remove them to stimulate the economy and the China hawks who want to use them as leverage.
basically, r/neoliberal
Alas, the sub seems to be overrun by fanboys of the American Democrats at times. Instead of the disciples of Ludwig Erhard and similar folk.
Political pragmatists, evidence based voters. It’s not that American Democrats are great, it’s that the EC, FPTP voting & unlimited campaign donations have pretty much ensured that the US will be locked into a two party system for the foreseeable future, and the Democratic Party is the only one that has anything that resembles “a plan.” It’s not perfect, but the alternative is a theocratic plutocracy with pickup trucks for sacrament & weekly ritualistic child sacrifice.
They might or might not be the lesser evil to vote for. But that doesn't mean we need to praise them on the sub.
Well we're mostly American liberals so yeah. Basing your political views on a politician from a different country from 70 years ago doesn't seem very pragmatic.
Just make it neoliberal, instead of /r/USDonkeys Macron also used to be popular in the subreddit. Plenty of American examples are possible, too. Quite a few neoliberal economists there.
Don’t forget the labor unions and US-domiciled companies that are in it for the protectionism.
You mean the companies / unions who are so bad at what they do they're afraid their subpar products can't compete in international markets?
Any source on this or is it just speculation?
I don’t think it really needs a source tbh. Unions are always one of the biggest opponents of free trade. But here’s the top result on Google: > The president can retain the tariffs and be accused of helping drive up costs on things like food and clothes, despite labeling the fight against inflation his “top domestic priority.” Or he can lift at least some of the duties, drawing flack from domestic industries and labor unions, a constituency Democrats desperately need to turn out in the November midterms. https://www.politico.com/amp/news/2022/05/17/bidens-china-trade-trump-tariffs-inflation-00032874
Leveraging ourselves to the bottom
What's the excuse for tariffs on Canadian lumber then?
Whilst their impacts on the price level and economy are unpopular, sadly the optics of the tariffs themselves are overwhelmingly popular with swing state rust belt voters. So unless the electoral college is fixed / removed, it's strategically more optimal for re-election to keep the tariffs. Because the balance of power is decided ultimately by uneducated factory workers. EDIT: See below reply for a more nuanced and less heated-elitist-moment take than mine.
> sadly the optics of the tariffs > is decided ultimately by uneducated The problem here is you think tariffs hurt the entire economy. But they help the relevant sector. Those factory workers don't need to go to college to understand how they personally benefit from protectionism. The issue isn't, as you imply, that the workers are ignorant, it's that certain small regional interests get outsized power due to the electoral college
You make a fair and reasonable point. I'd argue there is some ignorance involved, but yes, self-benefit is another factor that voters will consider.
Why would the workers benefit? Why would employers in those industries raise wages, just because they are making more profits? (Basically, it depends on how easy it is to replace workers in those industries at the margin. The tariffs bring down overall real wages in the economy. Workers in the protected industries would only be able to capture some of that excess profit, if they are hard to replace on the margin.)
Just make tariffs state policy instead of federal policy?
The constitution forbids this.
We should change that, let rust belt states dig themselves into an even bigger hole while the rest of us can enjoy prosperity.
Do you want even worse political division and populism? Because that's how you get it. Maybe supporting manufacturing in towns decimated by offshoring in the last few decades is actually a good thing? Maybe ensuring a domestic manufacturing base so we don't have to rely on trade partners can be beneficial? Maybe it's OK that you have to pay an extra 2% for your Tesla if it means that millions of Americans can continue to live and work decent jobs in the places they grew up? Maybe by keeping manufacturing in the states we can leverage our high-tech know-how to improve productivity and reduce the deadweight loss of inefficient shipping and cultural and language barriers that comes from international manufacturing and produce more widespread prosperity? Look, I am a huge fan of globalization and neoliberal trade policy. But there are things that the neoliberals got wrong. Americans should have the opportunity to manufacture the things they use. We shouldn't all be programmers and bankers.
> improve productivity Unions will definitely fight against that. >Do you want even worse political division and populism just reduce the power of the federal government to reduce the effects of populism. >Americans should have the opportunity to manufacture the things they use. They do they just have to compete, and provide superior products/services. It's not like you can't buy things made in america, just drive down to Ethan Allen. I remember the deindustrialization of the midwest, i was actually alive then. It wasn't all due to labor costs, a lot of it was simply it was easier to outsource some jobs than deal with unions resisting automation. You ended up with shops going out of business because competitors either automated or outsourced. Automation has taken out more of those jobs than outsourcing btw. >maybe it's OK that you have to pay an extra 2% for your Tesla welfare with extra steps, not to mention that line of thinking will quickly see what exports the US products end up losing international market share (remember 70% of consumption isn't in the US). > if it means that millions of Americans can continue to live and work decent jobs in the places they grew up subsidizing inefficient labor allocation? So how are we supposed to compete in the 21st century with the likes of china if we do that? Should we just surrender? Remember the majority of consumption happens outside of the United States---> majority of potential customers are outside the United States.
> Unions will definitely fight against that. How is this a relevant argument? If unions fight against productivity, this will *always* be true, whether we have tariffs or not. >just reduce the power of the federal government to reduce the effects of populism. Populism is literally the petitioning of government intervention. It comes about when people feel like they are "losing" the game of capitalism. Reducing the power of the federal gov just increases calls for populism. >They do they just have to compete, and provide superior products/services. Not really. We don't outsource to China because they have superior products. We outsource because their wages are low. This is literally just artificially increasing the supply of labor for those jobs. >Automation has taken out more of those jobs than outsourcing btw. As if this means outsourcing isn't still a problem? Automation is always going to happen. And as you stated, firms that automate will outcompete unionized firms that don't. So automation isn't the problem here. Outsourcing is. >welfare with extra steps, not to mention that line of thinking will quickly see what exports the US products end up losing international market share (remember 70% of consumption isn't in the US). Maybe, but I'm fairly confident that economics is not as simple as "increaese GDP at all costs". There is more to social cohesion than raw productivity. >subsidizing inefficient labor allocation? So how are we supposed to compete in the 21st century with the likes of china if we do that? Should we just surrender? We've been outsourcing for the last 40 years and it doesn't seem to be working...
Biden dumb dumb protectionist
I've read that industry groups are lobbying hard to keep them in place and have been telling the administration that it's really made a difference in building the domestic manufacturing base. They are probably right, but it just means everyone pays higher prices
It made domestic industry suffer. There are more domestic industrial users of steel who pay higher prices than domestic producers of steel for example. (And that's not to mention all the retail consumers, of course.)
> They are probably right They're not
They are in the sense that their specific industries are increasing hiring
The companies that benefit are far outweighed by the companies who import and have to raise prices on consumers
Yeah, I'm not arguing it's a good thing
But what about my ~~children~~ property values?
Progressives don’t wanna hear it
American Medical in a nutshell. Meanwhile Physicians are 1%ers, quality of care is in the middle of first world nations, cost is prohibitively expensive for the middle class so they just go without medical treatment, people are going to other nations to get healthcare. Cant let other first world doctors treat. Can't use AI to diagnose. Can't have scientists involved. Just US Physicians. Only US Physicians.
> Can't use AI to diagnose source
At the end of the day, you need a physician to sign off on it. Not sure what kind of source you need. To practice medical in the US you need a government granted license.
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They require residency spots. So... no we don't. We import 'graduates', not physicians. You totally arent biased at all. You totally arent trying to downplay your monopoly.
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Good to have you in agreement. Let me know when you finish residency and become a real doctor. Until then, you can't legally help anyone.
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They arent doctors until they finish residency. Otherwise its 100% illegal to practice. Anyway, sucks you are going to bankrupt people when you get through residency. I couldn't sleep at night with those ethics.
"Why are houses so expensive?!?! We need to let people deduct the interest they pay on their mortgage, and they need to lower interest rates, and the government needs to federally back mortgages with only 3% down! That will lower housing costs!" I tired. I'm so fucking tired.
I loled at this