The Shift to a Rental Economy

Young adults are increasingly recognizing that owning a home is nearly unattainable. Many are choosing to rent furniture annually, opting for stylish living arrangements instead of buying second-hand from platforms like Craigslist or IKEA.

This makes sense for young people whose living situations frequently change—whether due to shared housing arrangements, departing from difficult roommates, job relocations, or personal relationships.

In California, the homeownership rate stands at just 54%, significantly lower than the national average of 64%, which is also on the decline. The high cost of real estate serves as a barrier to homeownership.

While a house typically appreciates over time, it requires a long-term commitment alongside maintenance and additional costs. In times of inflation, it might seem like a worthy investment; however, economic downturns can turn that investment into a burden.

Reflect back to the individuals who walked away from their homes during the Great Recession.

Consider the scenario where, after graduating, you find yourself paying $2000 monthly for rent. In 40 years, that rent could escalate to $6500 a month—adding up to approximately $2 million before retirement, with possibly another million or two accrued in the following years.

Alternatively, a modest home outside of high-cost areas may cost around $1 million, potentially climbing to $1.3 million with current interest rates, still a better option than continuous renting.

In contrast, a car is a depreciating asset. After signing the purchase papers, its value plummets by 30%. Leasing has become commonplace, with lenders offering long-term loans, entrapping individuals in a cycle similar to perpetual renting.

Investing in an electric vehicle with advanced features means additional costs for usage, such as Tesla's monthly fees for self-driving capabilities.

Apple is also spearheading a shift toward a rental model for products you traditionally would own. Their new plan allows users to pay monthly for a new iPhone each year. While currently a purchase, it could easily transition to a rental system, stripping ownership away from consumers.

The implications for Apple are clear—they eliminate middlemen and gain control over user data, potentially circumventing regulations.

This trend of non-ownership extends beyond consumers. Companies like Monsanto prevent farmers from using seeds harvested from their own crops, and John Deere restricts farmers to using only their technicians and parts, supported by federal laws against tampering with security measures.

Understanding Debt

It’s not money that is the root of evil, but debt. After all, money itself is a form of debt.

From birth, we are bound by debts to various entities—God, country, and humanity—illustrating the interconnectedness of sin and debt across many languages.

Interest-bearing loans trace back over 5,500 years, predating written history and the Old Testament, a time when temples held more power than kings.

On average, household debt reaches $104,000. While the figures may seem high, they reflect class distinctions, not the total debt.

• Credit card: $6,501
• Personal loan: $11,692
• Auto loan: $23,792
• Student loan: $38,792
• Home Equity Line of Credit: $42,139
• Mortgage: $244,498

The weight of debt is overwhelming, with many young couples two to three years post-graduation facing debts exceeding $100,000, which understandably discourages them from seeking homeownership.

Student debt, in particular, is infuriating. While I graduated with $3,000 in debt—equivalent to about six months' salary—it’s now not uncommon for graduates to carry debts equivalent to a full year’s income, particularly for those struggling to find well-paying jobs. The notion that "I paid my debts, so you should too" is fundamentally flawed; we owe future generations better educational opportunities.

At the very least, student loans should not carry higher interest rates than long-term treasury bills. Currently, undergraduate loans are 0.75% higher, while postgraduate loans exceed that by 2.3%.

David Graeber, in Debt: The First 5000 Years, illustrates how excessive debt has historically led to the downfall of empires, often prompting debt forgiveness during crises. A student loan jubilee is now more crucial than ever.

As individuals grapple with debt payments, homeownership and 401(k) plans appear to be the only pathways to secure retirement in a faltering economy.

The rental economy is being imposed upon us, with large corporations purchasing properties at inflated prices and converting them into rental units. This trend extends beyond housing to farmland and other appreciating assets.

The rentier class, alongside corporations and banks, continues to extract wealth from the public. Once they have acquired these assets, they are unlikely to relinquish them. Unlike individuals, corporations don’t expire or leave heirs, ensuring their continued dominance.

The Role of Banking

Banks and financial institutions do provide some social value by offering loans and credit cards, yet these systems often lead us into a debt trap, laden with exorbitant fees.

While banking operations are heavily regulated, the loan and brokerage sectors operate with minimal oversight. As long as financial statements appear favorable, anything is permissible.

Leading up to the 2008 banking crisis, $600 trillion in derivatives circulated within the economy. A derivative is a financial instrument whose value is derived from another asset, such as a collection of mortgages repackaged and sold as financial products. Wells Fargo faced significant fraud allegations when they lost track of the connection between these derivatives and the original mortgages.

Today, that figure has rebounded to approximately $600 trillion.

These are the same entities imposing 30% interest rates on credit cards and financing predatory real estate practices that contribute to the rental crisis.

High-Tech's Menace

Among the various interlinked powers, the high-tech industry stands out as particularly perilous. Their services often appear free, but they come at a cost—your data.

Platforms like Google, Facebook, and X gather extensive information about users, leveraging that data for targeted advertising and limiting what content users can access.

Google holds a near-monopoly on search, capturing between 86% to 95% of the market, with Microsoft barely holding onto 7% in the US and virtually non-existent in mobile.

The control over information rests with a single entity, dictated by algorithms. Many businesses have suffered due to shifts in these algorithms, with traffic to numerous blogs plummeting following updates from Google.

As Google influences what users see online, the search results increasingly prioritize paid advertisements over genuine queries.

Google’s reach extends beyond search—it owns Gmail, YouTube, and cloud services, and plays a major role in software and AI development. Accusations have surfaced regarding Google acquiring software firms only to suppress competition.

This tech giant poses a significant threat to democratic principles, generating 300 times the revenue per employee compared to non-tech companies, siphoning funds that could otherwise support broader societal needs.

The Government's Role

At the center of this situation are the corporate enablers within the government.

Congress, the Supreme Court, state legislatures, and regulatory bodies have become exceedingly corrupt. Many congressional members rely on campaign donations to remain in power, some of whom engage in vote-selling practices, often disguised as political contributions. In numerous cases, legislation is drafted by lobbyists or corporate think tanks rather than by elected representatives.

The Supreme Court, once the pinnacle of the judiciary, has devolved into a collection of politically motivated figures. Currently, it is dominated by a religious faction—six justices are Catholic, a faith opposed to women’s reproductive rights—despite only 20% of Americans identifying as Catholic. Such a religious influence is inappropriate for a secular institution.

Looking Ahead: A Reflection

The rise of neo-feudalism creates an environment where individuals are bound not to land, but to an unending cycle of debt. Real wages have remained stagnant since the 1970s, making housing unattainable for many, particularly young families.

Despite economic growth, the resulting wealth has disproportionately benefited the elite, leaving the middle class with an ever-diminishing share. When everything is rented, ownership becomes a relic of the past; retirement morphs from a goal of financial independence to one of ongoing rent obligations.

Historically, oppressive debt has ignited revolutions, leading to regime changes. Rulers who have survived such crises often enacted debt forgiveness initiatives.

The movement for student loan forgiveness marks the beginning of a potential debt revolt in the US. Graduates struggle to find well-paying positions after years of education and accumulating debt. In contrast, when I graduated in 1966, a degree was a ticket to employment.

The counterbalance to this situation is effective governance, which we currently lack. Conservatives often seek security, embracing authoritarianism, while liberals prioritize freedom and reason, accepting uncertainty as a necessary trade-off.

However, the liberal agenda is often muddled, with competing priorities diluting focus. Whether advocating for Palestinian self-determination, immigrant rights, or LGBTQ+ rights, the conservative pushback threatens all these causes.

A Call for Engagement

I welcome your feedback, especially if you disagree with my viewpoints. Your comments inspire new ideas for future articles, and I strive to respond to everyone.

I encourage you to read the comments left by my readers, as many contribute valuable insights that enhance my narratives.

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