In a country with some of the world’s most expensive real estate, Prime Minister Justin Trudeau’s government wants housing to become more affordable.
In a country with some of the world’s most expensive real estate, Prime Minister Justin Trudeau’s government wants housing to become more affordable.
It really isn’t in this case, unfortunately.
Lets says I I have a farm that produces all the food people need, but because I own the only farm, I can set the price for food to whatever I want.
Helping me build ten more farms doesn’t solve the problem. The problem is that I’m in a position to decide the price. Helping someone else build more farms, might work, but I already make so much I could probably buy them the moment they’re done. And even if I don’t, we don’t actually need more farms. The one I have could already feed everyone.
Building more farms at that point, would be a irresponsible waste of this already overloaded planets resources.
The real solution is dividing up ownership of the already sufficient existing resources. This will crash prices, but that will only hurt those who already have what they need, not those currently unable to get it.
But since you are now operating more farms than needed you’ve ended up with a flood of product. It costs extreme amounts of money to operate a farm, so you are going to be forced to liquidate that product to pay your bills. The consumer won’t pay top dollar for food they don’t need, so you are going to be forced to sell it for pennies on the dollar. And now food is cheap.
And millions were wasted in hardware, work hours, ecologic capacity, industrial machinery, construction…
How is this a viable solution on a planet in the process of self-destructing due to the industrial-scale inefficiency of human economics?
And if I’m even slightly smart I’ll pocket the support given to me to increase production, not actually use it.
And how is subsidizing someone else to build new farms to compete with me, not still just taking a portion of what I have, and giving it to someone else, but with extra steps that wastes time and resources?
It is a social good to have an overproduction of food to ensure that there is still sufficient food available when things go wrong. A single farm is incentivized to leave people to starve, so it is a given that expansion would be needed when moving away from that single farm in an effort to better serve the population.
The necessity of surplus capacity is not mutually exclusive with ecologically efficient solutions to economic problems.
Which is what we are discussing here.
You are attempting to forward an argument that would apply to supply issues, as if my scenario of a single farm were more than just an anecdotal example illustrating one single point of interest. (The economics of the housing market)
My entire point is that there should be multiple providers (owners) that do not collude. The number of farms used in my example is coincidental. You are basically reciting my own argument back to me.
Nothing you say can change the fact that when the capacity to meet and even exceed demand already exists, solving economic problems through excessive new supply, is inordinately wasteful.
Canada does have an unusually small number of houses, relative to its population size, as compared to most other countries. It may be true that we still have a sufficient number of houses to house everyone, but not unlike farming, houses can burn down, get hit by tornadoes, etc. and having an oversupply can also be a social good to ensure that people can still find a roof over their head when things go wrong.