I feel like it’s more appropriate to say that people were trained to be like that by the ruling class. Many modern marketing techniques were popularized by psychologists.
The whole industry exists to exploit psychological weaknesses, and people have been fully immersed for like 2-3 generations by now.
I would agree with that. But most people i know personally only care about the “monthly payment” and they think lowering interest rates make the monthly payment cheaper. And it does when the rates change, but it’s only temporary. The next round iof products become more expensive and the monthly payment goes back to the usual.
But i think people confuse the terms low interest rates, and lowing interest rates. Nothing destroys an economy faster than low interest.
For housing, everyone i know say buy when rates are low because the payments are less. But low interest rates only help current owners. It gives them a higher sell price and access to liquidity. Then the next round of buyers wait for rates to go down and the cycle repeats until housing becomes unaffordable. Low interest rates make it almost impossible to save for a down payment because the price is the house is so high and your are competing with buyers willing to take the 30-40 yr payments. The way to make housing affordable is to raise rates. If rates were 10% housing would crash in price and people could actually afford to save and buy a house.
I feel like it’s more appropriate to say that people were trained to be like that by the ruling class. Many modern marketing techniques were popularized by psychologists.
The whole industry exists to exploit psychological weaknesses, and people have been fully immersed for like 2-3 generations by now.
I would agree with that. But most people i know personally only care about the “monthly payment” and they think lowering interest rates make the monthly payment cheaper. And it does when the rates change, but it’s only temporary. The next round iof products become more expensive and the monthly payment goes back to the usual.
But i think people confuse the terms low interest rates, and lowing interest rates. Nothing destroys an economy faster than low interest.
For housing, everyone i know say buy when rates are low because the payments are less. But low interest rates only help current owners. It gives them a higher sell price and access to liquidity. Then the next round of buyers wait for rates to go down and the cycle repeats until housing becomes unaffordable. Low interest rates make it almost impossible to save for a down payment because the price is the house is so high and your are competing with buyers willing to take the 30-40 yr payments. The way to make housing affordable is to raise rates. If rates were 10% housing would crash in price and people could actually afford to save and buy a house.
I think that would be dis-inflationary and cause massive unemployment if the Phillips Curve still holds.
Just wait until you see what happened when the debt payments get higher than our income. It’s quickly coming.
Unemployment will be the last of our worries.