Quote:
Originally Posted by GGG
In my opinion housing affordability is based on supply as the demand will always be as much as people can borrow. Higher interest rates don’t change housing affordability as the payment remains constant as value fluctuates with interest rates. So it’s just a transfer of wealth from existing owner to bank.
But there would certainly be unexpected consequences from tax increases. I think the interest rate increases affect certain people much more severely then a general tax increase to reduce money supply. But the tax increase would affect more people less severely.
|
A problem I see with raising taxes is that a lot of businesses, particularly small businesses, are already hurting. Another issue is that tax hikes often get passed to the consumer. So you can actually make inflation worse by increasing taxes.
Then again, I guess raising interest rates affects any business already in debt.
Unfortunately, once again, I don't think there's any pain free way out of this.