Thursday, April 9, 2009

Real estate, mortgages, capitalism, socialism

The Wikipedia defines real estate as follows: Real estate is a legal term (in some jurisdictions, notably in the USA, United Kingdom, Canada, and Australia) that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is fixed in location.[1] Real estate law is the body of regulations and legal codes which pertain to such matters under a particular jurisdiction. Real estate is often considered synonymous with real property (also sometimes called realty), in contrast with personal property (also sometimes called chattel or personalty under chattel law or personal property law).
However, in some situations the term "real estate" refers to the land and fixtures together, as distinguished from "real property," referring to ownership rights of the land itself.[clarification needed]

The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property.
In our present economic depression, real estate has played a major part in the slump and recovery of the economy particularly in a purely capitalist state such as America. In the capitalist countries the majority of the real estate is owned by the public whereas in the socialist countries about half of the real estate is owned by the government and another half is owned by the public.

When the value of real estate declines in America, the government comes out to bail out the banks by buying back the defaulted mortgages from the banks. The government then becomes owners of the property, and this then prevents foreclosures and real estate bankruptcies. The interest rates charged by banks are much higher than those charged by the government, this makes housing more affordable and the citizens of the country can once again afford to buy homes and not lose their property. This move is currently the rescue plan of the Barack Obama administration and it seems to be working quite well. The American economy is slowing turning around with the government stimulus plans in place, and the economy is recovering slowly.

Real estates are major assets of the American family and it is the backbone of the economy of the United States even though it is not the only resource that the economy and the country rely on. The American family invests much into real estates, and when they default they practically lose most of their investment. Renting and the leasing of real estate offices and storefronts locations is a major source of income for many American families, and when businesses close down or when someone lose their home there goes a major source of income for many people.

Now let us compare this similar concept to that of the socialist state where the government builds and owns most of the real estate property. The solution that America is now attempting to adopt is a form of socialism and with the government as the owner of property housing and real estate becomes more affordable. In a free market society where anyone can charge whatever they want and de-regulation of major corporations is out of control, the spin off effect is a depression that affects multiple countries. The mortgage rates charged by the banks have been excessively high and the salaries paid to CEO’s of many major firms have been excessive.

A free market system and the rights to private ownership of real estate are admirable but when the grape goes sour, the wine becomes sour as well. If the solution is the intervention of the government, we are to learn a lesson from this present economy that the participation of the government in real estate and government regulation of the rules of transacting business and how executives are paid is necessary for the survival of a nation. When communist Russia realized that extreme communism does not work well they gave it up. The Berlin wall came down and a democratic government was put in place.

America must not be ashamed to admit that likewise extreme capitalism does not work well, that the government must get more involved in managing the property of the nation, rather then leave it totally in the hands of the public. When the government is the owner of property and leases or sells it to the general public as it is being done in most socialist states, even the taxes on their homes are minimal.

From a spiritual point of view I will compare the government of a country to the way God rules the universe. God the creator is separate from the creation and what he creates he assigns to angels to manage and rule his creation. The earth was created by God and he assigned angels and human beings to rule the earth and manage it. The angels and human beings do not own the earth or whatever God has created but it is offered to us to use them as we will.

In an ideal society the government must assume the role of God the creator and the citizens are the rulers and use what the government creates. Hence ownership is always retained by the government for no matter how long a person lives on a piece of land from generation to generation it can still end up in the hands of the government. If we adopt this approach as government as the creator and builder of the homes and businesses and sells and leases them to the general public the citizens of that country will find it a whole lot easier. I am aware of this method applied in some countries in Africa where the government is the major builder of the homes and sells them to the general public. The government takes on the project of converting villages into cities by constructing better homes, roads, water supplies, electricity and all the physical necessity the town may need then sells and leases them to the general public. One will be astonished at the marvelous work that has been done by the government of Ghana in West Africa in converting villages into cities.

The government as compared to God is to get more involved in building the infrastructure of the country but must refrain from managing the individual lives of the citizens. The real estate and infrastructure are separate from the individual, which separates the government from the citizens just as the universe is separate from human beings. We are not to confuse this concept with the idea of the government interfering with the rights of the individual for freedom of speech and their individual rights, for a home and a person are two separate entities. The ocean and the fish in the sea are separate, just as the planet earth and human beings living on the planet are separate. The task of the government must be like that of God, who is the builder of the physical structure, but the lives of the individuals and their rights are in their own hands. As described in the seven Hebrew Gods, the physical structure of the universe is built by the Elohim of the four elements, whereas the human beings were created by the Elohim of the three races. In this example, the physical universe is separately managed by different Gods and the human beings are managed by different Gods. What a God creates is what is managed by that God, the government of nations may do likewise.

By Ken Nunoo