Subsizing Debt

[Michael]

Seems that two of the biggest problems in the US economy is A) the massive amounts of debt, and B) sprawling suburbs.

It is to be noted that both of these are heavily subsidized by federal tax subsidies in the form of tax deductability of 'mortgage interest' paid as well as the tax deductability of 'corporate interest' payments. Both of these tax deductions act as subsidies and stimulus for more and larger debt loads.

And the US economy is never going to become strong again so long as it is weighed down by debt and is massively vulnerable to oil price increases (due to the sprawling suburbs problem).

Unless the US addresses these two subsidies, I think it is virtually guaranteed that the US is going to face another real estate asset bubble - and that the US will continue to subsidize the building of ever more sprawling suburbs in the process.

Single-family stand alone houses on a quarter-acre lot are the single most expensive and least efficient form of housing known - yet it is the ONLY type of housing that is subsidized by the Government in the USA. This policy is harmful to the economy and harmful to the environment.

[Lily]

I'd love to find a community where housing was clustered among businesses, where I could walk to buy my groceries, walk to a pharmacy, walk to a store that sold hardware, walk to neighborhood restaurants. I really love that aspect of New York, London, Paris. But to find that outside of large cities is nearly impossible anymore. If I lived in London, for example, I don't know that I'd even own a car.

I once lived in a small waterfront community where I could get much of what I needed by walking or riding my bike. Then a major grocery chain opened a store a couple of miles down the road, on a major 6-lane artery. Wal-Mart opened a store a few months later. Our small grocer closed within a year; other small retailers soon followed suit. There were no sidewalks beyond our little town, so... These days, the town has become somewhat of a quasi-bohemian tourist destination, replete with B&Bs, trendy cafes, jazz-on-the-square and art galleries. Rents and home prices have skyrocketed. Many of the older apartment buildings have been razed and new McMansions have taken their place. "Progress" declares the Chamber of Commerce. I don't even recognize the place anymore.

[Michael]

I'd love to find a community where housing was clustered among businesses, where I could walk to buy my groceries, walk to a pharmacy, walk to a store that sold hardware, walk to neighborhood restaurants. I really love that aspect of New York, London, Paris. But to find that outside of large cities is nearly impossible anymore. If I lived in London, for example, I don't know that I'd even own a car.

I once lived in a small waterfront community where I could get much of what I needed by walking or riding my bike. Then a major grocery chain opened a store a couple of miles down the road, on a major 6-lane artery. Wal-Mart opened a store a few months later. Our small grocer closed within a year; other small retailers soon followed suit. There were no sidewalks beyond our little town, so... These days, the town has become somewhat of a quasi-bohemian tourist destination, replete with B&Bs, trendy cafes, jazz-on-the-square and art galleries. Rents and home prices have skyrocketed. Many of the older apartment buildings have been razed and new McMansions have taken their place. "Progress" declares the Chamber of Commerce. I don't even recognize the place anymore.

The key point I'm making is that USA is not a massive sprawling suburb filled with tax subsidized highways and dead towns because the markets and/or consumers have demanded this.

No, the USA is a massive sprawling suburb filled with tax subsidized highways, Walmarts, McMansions and dead towns because US tax subsidies are designed to produce precisely this result.