A friend brougth this to my attention — it’s from a couple of years ago but the topic is as timely as ever. From the Ludwig von Mises Institute:
[Since the] collapse of the housing market…[m]illions have walked away from their mortgages. Those who have swear that they will never again be tricked by the great housing myth that this one asset is guaranteed to go up and up forever. The new source of value is not something attached to the biggest thing we own but rather in the most fundamental unit of all: ourselves, and what we can do. This change represents a dramatic change not just for one generation but for an entire ethos that has defined what it means to be an American for about a century.
To walk away might at first seem like a postmodern activity, one that disconnects us with history and community. We might just as easily see it as a recapturing and redefining of an older tradition that shaped the American ethos from the colonial period through the latter part of the 19th century: the pioneer spirit. Our ancestors moved freely, across great distances, beginning with oceans and then continuing across great masses of land, from New England to the West, all in search of economic opportunity and the fulfillment of a different American dream defined by freedom itself.
This change begins with a single realization: I’m paying more for my house than my house is worth. What, precisely, is the downside of walking away, of going into a “strategic default”? I lose my house. Good. That’s better than losing money on my house.
But what are the economic and ethical implications of this? Americans haven’t faced this dilemma in at least a century. But now they are, by the millions. They are awakening to the reality that the house is no different from any other physical possession. It has no magical properties and it embodies no high ideals. It is just sticks and bricks.
But what about the idea that our home is our castle? My thesis is that the essence of freedom is to come to understand that the real castle is to be found within.