Re: Rentvesting kills the economy

Rentvesting kills the economy because it doesn't evenly distribute wealth and that's your point OP, but have you considered that maybe entrepreneurship is a way better investment than investing in real estate, but it is difficult to find investors and when you do, the banks use taxes to take a fair share.

If governments would invest more in entrepreneurs growing, in research and development, in agriculture and food production, a lot of the issues revolving around of poor economy would be unimportant because the economy would have enough jobs, housing would be cheaper as well as labour and wealth would be distributed evenly from diverse sources.

In order for the government to invest, it must have free money. The government (state) has no money other than taxes; the state does not engage in business. Of course, the state can print new money, but this will further damage the economy.
Therefore, the state can only promote business development through various support methods, without investment, such as tax cuts or the creation of tax-free zones.
Therefore, we ourselves must look for ways to improve our standard of living, rather than wait for handouts from the state.

The argument about rentvesting killing the economy comes from the idea that wealth becomes locked in property instead of circulating through productive sectors. but when you look deeper entrepreneurship often gives far better returns for the whole economy. the problem is that starting a business is risky and finding investors is hard and banks take a big share through taxes and interest. if governments supported entrepreneurs research agriculture and real production more aggressively the entire economic structure would become healthier. more jobs more innovation and lower housing pressure because wealth would flow from many sources not just property.

But for a government to invest heavily it needs free money and most governments do not have that. the only money they have is what they collect from taxes. the state does not run businesses so it has no natural income. printing new money creates inflation and causes even more damage. so the only realistic path is for governments to support business in indirect ways like tax cuts incentives and special zones where companies can grow without heavy regulation.

I agree that for the economy to function properly, money needs to circulate and the “consumption” model needs to be implemented.
And “freezing” money in real estate can seem like a really negative factor. On the other hand:
- it stimulates the real estate market, which means jobs in related industries, taxes, etc.
- if we are talking about residential real estate, it creates comfortable living conditions, which will make the city attractive to new people who can improve the economy of the settlement
- if we are talking about non-residential real estate, it provides opportunities to launch new production, create jobs, and generate taxes.
A really bad option is to put money in a safe and keep it there without moving it. I use a reinvestment model to some extent. This year, I managed to buy non-residential real estate in a large residential complex, and now it is being rented out.
Part of the space is occupied by a pharmacy, and the other half by a small private grocery store. This way, I receive rent, and the asset itself remains at my disposal, remaining highly liquid and benefiting other people. Although I could have bought gold bars with this money and just kept them at home