[unrev-II] Breaking the Vicious Economic Cycle

From: Eric Armstrong (eric.armstrong@eng.sun.com)
Date: Wed Jun 21 2000 - 14:53:41 PDT

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    In my own life, I have observed the major economic
    "motivator" is the need to put a roof over my head.

    I can always get a cheaper car, or fix the one I
    have. I can less or eat better. But something like
    50% of my takehome income goes to rent, and that's
    a big chunk.

    Consider if good housing was *not* expensive. Suppose,
    like in the old days, you lived on the family farm.
    You probably wouldn't *need* to work 40-60 hours a
    week to make ends meet. You could get by on part time
    work, or less. (In Maine, one friend reports that
    "getting by" is a way of life -- with seemingly no
    income at all, people somehow manage to "get by" from
    month to month...)

    Now, if you wanted more toys, or fancy dinners, or
    you were motivated by a particular project, you might
    well choose to work more. But you wouldn't be *forced*
    to do so by the economic gun pointed at your head.

    As a collary observation, I observe that rents keep
    going up at the same rate as wages. So every raise
    makes you feel better for a little while, but then
    along comes the rise in rents to chew it up. Largely
    responding to the raise in rents, I suspect, every
    *other* price goes up as well. So pretty soon you find
    yourself where you were before -- and you find yourself
    running ever harder and faster on that treadmill, just
    to keep up.

    As you get older, the picture gets even more bleak. As
    a youth, you can look forward to ever increasing income
    as your skills and experience grow. But at some point,
    you top out. Then, all you can look forward to is
    steady income, while economic forces push prices ever
    higher. As you near retirement, you will suddenly be
    faced with *reduced* income. At that point, what was
    previously an "effective" reduction in your economic
    position becomes accelerated to the point that it is
    inescapable. At that point, you will be losing ground
    fast -- unless you happen to have amassed a wad of
    capital -- something which the economic treadmill makes
    rather difficult.

    So, how can this situation be improved? How can you help
    to stop the treadmill so that people can live more
    humane, fun lives, where fun is found in productivity
    and helping others, as well as in playful pursuits, but
    where the hours you spend doing that are not so forced and
    stressed as to eliminate all joy from the activity.

    I see one possible way it *could* happen. But it won't
    help you, or me. There is no way for us to get off the
    treadmill. But there *is* a way we can help ensure that
    succeeding generations don't have to stay on it.

    That possiblity, the way I see it, entails adding certain
    encumberances to one's real estate, when it is passed on
    in one's will. I don't know if it is legally possible but,
    if it is, property in the form of real estate could be
    passed on so that:
      * It cannot be sold for more than the cost of
        back taxes, associated fees, and moving costs.

      * It cannot be rented for more than the cost of
        taxes and maintenance expense.

    Now, the real trick is adding those encumberances to the
    deed *in perpetuity*. Regardless of who owns the house,
    it can be lived in -- essentially for free -- or rented
    without the possibility of deriving income from it.

    One would still be free to pass on cash and other assets
    to one's heirs. Real property could be passed on, as
    well -- but only with those restrictions.

    If that idea gathers steam, the result over time would be
    a stiff left jab to the economic forces that produce
    ever-lengthening work weeks. It might also turn out
    horribly, given the unpredicable, surprising reactions
    that result from complex systems.

    But I expect it is an experiment that may be worth trying,
    if only because the downward pressure on the economy that
    would result may well help stem the tide of consumerism
    that threatens to engulf the world's resources before
    this century is half over.

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