In my view, no debt is positive. It sucks your net worth, it gives you a subordinate position to predatory lenders, it endangers your future. That said, it’s impossible to acquire property without debt. That, because of the tax write-off, is probably the only worthwhile debt to incur. But even as we speak, the real estate market is being gamed, particularly in the southwest. It’s being gamed by banks that are renting foreclosed properties at greatly exaggerated values, thereby driving up home values artificially. Same thing is happening in Florida. In other words, we’re getting a replay of what happened in 2008. The real economy, meanwhile, has never really recovered. To wit, view the poverty statistics in the United States, here.
Without a middle class, real estate ultimately is a poor investment as well. Very, very few geographic locations in the US are solid investments, although I still feel this area is a good bet, along with San Francisco, Seattle, and Washington DC. The rest I don’t see ever recovering. Anybody taking out a mortgage anyplace else is really playing Russian Roulette with their future, and the banks know exactly which chambers have the bullets.
And what about social mobility and the middle class? You must first understand the relationship between poverty and wealth. Poor black kids in Bed-Stey are a necessary component of this system. And rather than attempt to integrate them into the larger economic system, as Obama’s rhetoric would have you believe, what is really happening is total marginalization, to the point where their live’s options are none. That’s where the privatized prison system comes in. It’s the only avenue wherein these peoples’ lives can generate a profit for somebody else. And that, in the end, is the name of the game.