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The Rational National | CNN segment highlights eviction crisis

The Rational National | CNN segment highlights eviction crisis

(11:52) CNN puts a face to the eviction crisis that could hit 30 - 40 million Americans by the end of 2020.
The Rational National YT channel Sep 4, 2020

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Guest: (14 days ago)

It is sad to see people get evicted but that’s not the only side of the story.  Consider the side of the landlord as well.  Many landlords have mortgages and need to pay taxes and insurance.  If they are not getting revenue from tenants, they have no way to make those payments to the bank, the government, and the insurance companies.  

 

Some states have enacted policy of no evictions.  When that policy expires, many months of rent will become due immediately and those who lost their jobs during the pandemic will not have 3 months or more of rent available even if they regained their employment.  This means they will be evicted anyway — just postponed.

 

The landlord not making the mortgage payments will cause a repossession of the property by the bank potentially causing loss of all equity gained throughout the years.  The government has no plans to compensate the landlords for their losses by making those mortgage payments for them.  The credit rating of the landlord will go down the shitter when months of payments are missed making it impossible for them to buy a house in the future.

 

Making it hard to evict tenants are forcing some landlords to sit on their empty properties and refusing to lease them resulting in housing shortages which ultimately causes price increases.

 

Where I live, the government executive has prevented all evictions where the tenant’s income has been affected by the pandemic.  You can still file an eviction through the courts but if the tenant responds with proof their income has been impacted by the pandemic, the court will not approve the eviction.  This does not mean the landlord’s mortgage payment is not due and does not mean the house will not be repossessed by the bank.  That’s where the problem is.

Original comment

It is sad to see people get evicted but that’s not the only side of the story.  Consider the side of the landlord as well.  Many landlords have mortgages and need to pay taxes and insurance.  If they are not getting revenue from tenants, they have no way to make those payments to the bank, the government, and the insurance companies.  

 

Some states have enacted policy of no evictions.  When that policy expires, many months of rent will become due immediately and those who lost their jobs during the pandemic will not have 3 months or more of rent available even if they regained their employment.  This means they will be evicted anyway — just postponed.

 

The landlord not making the mortgage payments will cause a repossession of the property by the bank potentially causing loss of all equity gained throughout the years.  The government has no plans to compensate the landlords for their losses by making those mortgage payments for them.  The credit rating of the landlord will go down the shitter when months of payments are missed making it impossible for them to buy a house in the future.

 

Making it hard to evict tenants are forcing some landlords to sit on their empty properties and refusing to lease them resulting in housing shortages which ultimately causes price increases.

 

Where I live, the government executive has prevented all evictions where the tenant’s income has been affected by the pandemic.  You can still file an eviction through the courts but if the tenant responds with proof their income has been impacted by the pandemic, the court will not approve the eviction.  This does not mean the landlord’s mortgage payment is not due and does not mean the house will not be repossessed by the bank.  That’s where the problem is.

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WalterEgo WalterEgo (14 days ago)

Evicting these people makes no sense. Who is going to move in? The propertiies will stay empty and landlords won't be able to make their mortgage payments. Much better for the government to pay the rents so the chain of renter-landlord-bank is not broken. The money can be paid back later - there's plenty of money around, the stock market is soaring.

Original comment

Evicting these people makes no sense. Who is going to move in? The propertiies will stay empty and landlords won't be able to make their mortgage payments. Much better for the government to pay the rents so the chain of renter-landlord-bank is not broken. The money can be paid back later - there's plenty of money around, the stock market is soaring.

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Guest: (14 days ago)

No plans for the USA government to pay the rent when the tenant is unable due to the pandemic.  Therefore it is better to leave the property empty than take a chance on a tenant that you will be unable to get rid of.  When you say that the money can be paid back later, most people live month-to-month and don’t have enough savings to pay for a $400 emergency.  How do you expect them to save up thousands of past due rent in the future when they get their jobs back?  

When the stock market goes up, that is independent of the economy.  Here’s how the market works:  WidgetsRus goes public and sells a million shares at 1,000 each.  They just got an infusion of a billion dollars.  Stock price goes up to 2,000 the next day.  WidgetsRus still only has a billion dollars of investment.  The only people who benefited from the increase of value are the people who bought the initial IPO and SOLD it to some loser that thinks the company is actually worth that much.  A piece of paper is transferred from one person to the other and $2,000 is transferred.  One person gains $2,000 and one person loses $2,000.  No new money or value was created.

Before the crash in June, valuations of companies were around 16 times earnings and today people are making irrational decisions about prices and creating an unsustainable bubble with valuations of 55+ times earnings.  There is a “much-needed correction” coming.

Knowing that Apple, Microsoft, Google, and Amazon stock prices are at record highs does not help the economy and people who are working pay for their housing, transportation, food, clothing, energy, and water bills. 

Original comment

No plans for the USA government to pay the rent when the tenant is unable due to the pandemic.  Therefore it is better to leave the property empty than take a chance on a tenant that you will be unable to get rid of.  When you say that the money can be paid back later, most people live month-to-month and don’t have enough savings to pay for a $400 emergency.  How do you expect them to save up thousands of past due rent in the future when they get their jobs back?  

When the stock market goes up, that is independent of the economy.  Here’s how the market works:  WidgetsRus goes public and sells a million shares at 1,000 each.  They just got an infusion of a billion dollars.  Stock price goes up to 2,000 the next day.  WidgetsRus still only has a billion dollars of investment.  The only people who benefited from the increase of value are the people who bought the initial IPO and SOLD it to some loser that thinks the company is actually worth that much.  A piece of paper is transferred from one person to the other and $2,000 is transferred.  One person gains $2,000 and one person loses $2,000.  No new money or value was created.

Before the crash in June, valuations of companies were around 16 times earnings and today people are making irrational decisions about prices and creating an unsustainable bubble with valuations of 55+ times earnings.  There is a “much-needed correction” coming.

Knowing that Apple, Microsoft, Google, and Amazon stock prices are at record highs does not help the economy and people who are working pay for their housing, transportation, food, clothing, energy, and water bills. 

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WalterEgo WalterEgo (13 days ago)

Evicting these people only makes the problem worse and solves nothing. Landlords still miss their mortgage payments. Empty properties have an ongoing cost for security and maintenance which will overburden landlords not receiving any rental income. Landlords will be next on the streets and the poor banks won't get their money.

There's plenty of money around - repaying the money can come from a % of share dividends, or a one-off wealth tax, or a cut in the military budget, or a robot tax ... I'm sure you can think of other ways.

Or it may not be necessary to even pay it back. After all, the government printing money to pay someone's rent is just a different way of injecting new money into the economy.

It would be better to pump in new money at the bottom - give money to people directly - like UBI, rather than pump new money in at the top with quantitive easing and hope banks will lend more.

Introduce UBI, invest in new jobs transforming the country for a green future (like the Green New Deal), cancel student debt (so that students spend the money they save straight into the economy) and the US economy will boom.

But first you have to get rid of Trump.

Original comment

Evicting these people only makes the problem worse and solves nothing. Landlords still miss their mortgage payments. Empty properties have an ongoing cost for security and maintenance which will overburden landlords not receiving any rental income. Landlords will be next on the streets and the poor banks won't get their money.

There's plenty of money around - repaying the money can come from a % of share dividends, or a one-off wealth tax, or a cut in the military budget, or a robot tax ... I'm sure you can think of other ways.

Or it may not be necessary to even pay it back. After all, the government printing money to pay someone's rent is just a different way of injecting new money into the economy.

It would be better to pump in new money at the bottom - give money to people directly - like UBI, rather than pump new money in at the top with quantitive easing and hope banks will lend more.

Introduce UBI, invest in new jobs transforming the country for a green future (like the Green New Deal), cancel student debt (so that students spend the money they save straight into the economy) and the US economy will boom.

But first you have to get rid of Trump.

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Guest: (12 days ago)

LMAO that old "print money" solution.  

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LMAO that old "print money" solution.  

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Guest: (4 days ago)

WalterEgo tends to suggest this any time someone is hard up!  Funny.  Magic money tree.  

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WalterEgo tends to suggest this any time someone is hard up!  Funny.  Magic money tree.  

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WalterEgo WalterEgo (4 days ago)

Actually, there is a magic money tree. How do you think hyper inflation happens?

Original comment

Actually, there is a magic money tree. How do you think hyper inflation happens?

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WalterEgo WalterEgo (11 days ago)

Money is "printed" all the time. Every time someone gets a mortgage, that's new money (money that didn't exist before) injected into the economy. It's called fractional reserve banking. It's how commercial banks "print" money. Look it up. It really opened my eyes when I found out.

Original comment

Money is "printed" all the time. Every time someone gets a mortgage, that's new money (money that didn't exist before) injected into the economy. It's called fractional reserve banking. It's how commercial banks "print" money. Look it up. It really opened my eyes when I found out.

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Guest: (11 days ago)

FRB is not printing money as such. It is limited by the reserves a bank has so it doesnt actually increase the amount of money.  Google it and open your eyes.

Original comment

FRB is not printing money as such. It is limited by the reserves a bank has so it doesnt actually increase the amount of money.  Google it and open your eyes.

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WalterEgo WalterEgo (4 days ago)

In the context of what we are talking about, "printing" money means changing numbers in a database. It is not literally printing dollar bills. I thought that was common knowledge.

FRB is limited by reserves, but "printing" money overall (including QE from central banks and any other ways I'm unaware of) is limitless.

There is no shortage of fiat money. Otherwise, how do you think hyper-inflation happens?

Original comment

In the context of what we are talking about, "printing" money means changing numbers in a database. It is not literally printing dollar bills. I thought that was common knowledge.

FRB is limited by reserves, but "printing" money overall (including QE from central banks and any other ways I'm unaware of) is limitless.

There is no shortage of fiat money. Otherwise, how do you think hyper-inflation happens?

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Guest: (4 days ago)

FRB is not printing or creating money, neither with a print press nor on a database.  It is the re-allocation of existing reserves currently held in a central bank.  QE has lots of limitations such as the availability of financial assets to buy, famously highlighted in the ECB's QE programme.  I thought that was common knowledge.
 

Original comment

FRB is not printing or creating money, neither with a print press nor on a database.  It is the re-allocation of existing reserves currently held in a central bank.  QE has lots of limitations such as the availability of financial assets to buy, famously highlighted in the ECB's QE programme.  I thought that was common knowledge.
 

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WalterEgo WalterEgo (4 days ago)

FRB is not "the re-allocation of existing reserves currently held in a central bank" . According to Wikipedia, it's  "...the most common form of banking practised by commercial banks worldwide,..."  LINK

This is a good video that explains how FRB creates new money. It's only 1 minute long.  LINK

Point is, fiat money is limitless and could be used to pay rents rather than evicting people and making the problem worse.

Original comment

FRB is not "the re-allocation of existing reserves currently held in a central bank" . According to Wikipedia, it's  "...the most common form of banking practised by commercial banks worldwide,..."  LINK

This is a good video that explains how FRB creates new money. It's only 1 minute long.  LINK

Point is, fiat money is limitless and could be used to pay rents rather than evicting people and making the problem worse.

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Guest: (4 days ago)

You should have kept reading. The next sentence from Wikipedia: "Bank reserves are held as cash in the bank or as balances in the bank's account at a central bank. The country's central bank determines the minimum amount that banks must hold in liquid assets, called the "reserve requirement" or "reserve ratio". Banks usually hold more than this minimum amount, keeping excess reserves."

So as I said, FRB is not limitless, and yes, it depends on allocating existing cash reserves.  It is heavily limited beyond that.

Original comment

You should have kept reading. The next sentence from Wikipedia: "Bank reserves are held as cash in the bank or as balances in the bank's account at a central bank. The country's central bank determines the minimum amount that banks must hold in liquid assets, called the "reserve requirement" or "reserve ratio". Banks usually hold more than this minimum amount, keeping excess reserves."

So as I said, FRB is not limitless, and yes, it depends on allocating existing cash reserves.  It is heavily limited beyond that.

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WalterEgo WalterEgo (4 days ago)

I didn't say FRB is limitless. I said it's limited by reserves (savings). You're getting sloppy again.

Fiat money is limitless. So the government can always pay the rent and prevent a homelessness crisis.

I also said that government paying the rent is just a different way of injecting new money into the economy. Just as getting a mortgage, or a bank loan, or UBI, or cancelling student debt ... they are also other ways of injecting new money into the economy. Do you agree with that?

Original comment

I didn't say FRB is limitless. I said it's limited by reserves (savings). You're getting sloppy again.

Fiat money is limitless. So the government can always pay the rent and prevent a homelessness crisis.

I also said that government paying the rent is just a different way of injecting new money into the economy. Just as getting a mortgage, or a bank loan, or UBI, or cancelling student debt ... they are also other ways of injecting new money into the economy. Do you agree with that?

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Guest: (3 days ago)

What?  Where did I say that you said FRB is limitless?  It's not about you!  Are you a child?!  I was just making a point, namely that FRB is not creating unlimited money and neither is QE.  Not everthing is a threat to your ego.  If you could listen instead of trying to score points, you'd understand much more.

Honestly your ideas on economics are childish in the extreme.  Lovely to think that creating free money is a magic panacea but most of us grow out of that.  I have seen people more knowledgeable than me try to teach you with no luck.  

I can't really be bothered with this, but fiat money depends on responsible fiscal policy for reasons that I can't teach you in a comment on Boreme.  Neither the USA nor the UK is anything close.  Fiat money is not unlimited in any pragmatic sense because its value is dependent on the government and that carries a world of issues.  If a government decides to create fiat money to solve minor financial pressures, they deserve the disrespect and devaluation they will get.
 

Original comment

What?  Where did I say that you said FRB is limitless?  It's not about you!  Are you a child?!  I was just making a point, namely that FRB is not creating unlimited money and neither is QE.  Not everthing is a threat to your ego.  If you could listen instead of trying to score points, you'd understand much more.

Honestly your ideas on economics are childish in the extreme.  Lovely to think that creating free money is a magic panacea but most of us grow out of that.  I have seen people more knowledgeable than me try to teach you with no luck.  

I can't really be bothered with this, but fiat money depends on responsible fiscal policy for reasons that I can't teach you in a comment on Boreme.  Neither the USA nor the UK is anything close.  Fiat money is not unlimited in any pragmatic sense because its value is dependent on the government and that carries a world of issues.  If a government decides to create fiat money to solve minor financial pressures, they deserve the disrespect and devaluation they will get.
 

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WalterEgo WalterEgo (3 days ago)
Latest comment:

This is what you said: "FRB is not printing money as such. It is limited by the reserves a bank has so it doesnt actually increase the amount of money." That is half wrong. FRB is limited by the reserves a bank holds, but it does create new money. If you get a bank loan, that money did not exist before - ie. it didn't come from another account -  it appeared out of nowhere as a number in a database. Every $1,000 deposited in a bank account has the potential of creating about $10,000 of new money. Just watch that 1 minute video above - it explains it much better than I could.

The problem with having your head glued to a textbook is that it can be difficult to see the bigger picture. Fiat money is limitless, but just printing money willy-nilly can be very problematic, which is why governments don't just print money willy-nilly. 

But there are times when printing money makes a lot of sense - like to fund FDR's New Deal that pulled America out of the Great Depression, or like paying rents to prevent 40 million people face eviction with all the knock-on effects that will entail.  LINK Or is that just a "minor financial pressure".

The point I was making about FRB, is that in a normal healthy growing economy, money is effectively "printed" all the time and no one bats an eye lid. If you think that FRB does not create new money, then tell me where most new money comes from in a normal healthy growing economy. And why that 1 minute video above is wrong.

So the idea of printing money should not have the stigma that it does - because used wisely and creatively, it's an incredibly powerful tool. 

The issue is not how much money is available - because there actually is a magic money tree - but what use money is put to. I find it bizarre that it seems easy to fund a war, or a billionaire's tax break, but when it comes to preventing 40 million people face eviction, there's a problem. That's not a childish thought, it's the very essence.

Original comment
Latest comment:

This is what you said: "FRB is not printing money as such. It is limited by the reserves a bank has so it doesnt actually increase the amount of money." That is half wrong. FRB is limited by the reserves a bank holds, but it does create new money. If you get a bank loan, that money did not exist before - ie. it didn't come from another account -  it appeared out of nowhere as a number in a database. Every $1,000 deposited in a bank account has the potential of creating about $10,000 of new money. Just watch that 1 minute video above - it explains it much better than I could.

The problem with having your head glued to a textbook is that it can be difficult to see the bigger picture. Fiat money is limitless, but just printing money willy-nilly can be very problematic, which is why governments don't just print money willy-nilly. 

But there are times when printing money makes a lot of sense - like to fund FDR's New Deal that pulled America out of the Great Depression, or like paying rents to prevent 40 million people face eviction with all the knock-on effects that will entail.  LINK Or is that just a "minor financial pressure".

The point I was making about FRB, is that in a normal healthy growing economy, money is effectively "printed" all the time and no one bats an eye lid. If you think that FRB does not create new money, then tell me where most new money comes from in a normal healthy growing economy. And why that 1 minute video above is wrong.

So the idea of printing money should not have the stigma that it does - because used wisely and creatively, it's an incredibly powerful tool. 

The issue is not how much money is available - because there actually is a magic money tree - but what use money is put to. I find it bizarre that it seems easy to fund a war, or a billionaire's tax break, but when it comes to preventing 40 million people face eviction, there's a problem. That's not a childish thought, it's the very essence.

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Guest: (14 days ago)

Most countries in Europe do not have this problem in any way the same extent. Because if you do not have enough money you get social help. This helps the landlords it helps the renters and it alows for the social stability. It also reduces crime then in turn saves costs for the country. European countries do not do this out of love they now it works.

Original comment

Most countries in Europe do not have this problem in any way the same extent. Because if you do not have enough money you get social help. This helps the landlords it helps the renters and it alows for the social stability. It also reduces crime then in turn saves costs for the country. European countries do not do this out of love they now it works.

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Guest: (13 days ago)

The USA also has social help for people that don’t have a lot of money.  

Section 8 housing - Subsidized housing, housing vouchers, and public housing programs,

SNAP (Supplemental Nutrition Assistance Program), 

Medicaid and CHIP (Children’s Health Insurance Program), provides free or low-cost healthcare benefits,

LIHEAP (Low Income Home Energy Assistance Program), 

TANF (Temporary Assistance for Needy Families) and Welfare,

SSI (Supplemental Security Income) provides cash to low-income seniors and low-income people with disabilities,

CARES (Coronavirus Aid, Relief, and Economic Security) offers help to individuals and businesses affected by the pandemic

I’m sure there are more programs to help but I cannot be bothered to research them right now.

Original comment

The USA also has social help for people that don’t have a lot of money.  

Section 8 housing - Subsidized housing, housing vouchers, and public housing programs,

SNAP (Supplemental Nutrition Assistance Program), 

Medicaid and CHIP (Children’s Health Insurance Program), provides free or low-cost healthcare benefits,

LIHEAP (Low Income Home Energy Assistance Program), 

TANF (Temporary Assistance for Needy Families) and Welfare,

SSI (Supplemental Security Income) provides cash to low-income seniors and low-income people with disabilities,

CARES (Coronavirus Aid, Relief, and Economic Security) offers help to individuals and businesses affected by the pandemic

I’m sure there are more programs to help but I cannot be bothered to research them right now.

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WalterEgo WalterEgo (13 days ago)

Scrap all those programs and replace with UBI - a beautifully simple 21st centrury solution that will come about through necessity.

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Scrap all those programs and replace with UBI - a beautifully simple 21st centrury solution that will come about through necessity.

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Guest: (12 days ago)

And they work like a charm.

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And they work like a charm.

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