Because in ArgentinaAccording to Indec (2018), out of a total of 13.3 million households, about 4 million live in shantytowns or settlements that lack essential services (drinking water, sewer, natural gas, storm drainage)? Why are several million perpetual tenants? Why are we from the countries with the least mortgage credit, when 100 years ago we were an example?
Metas Siglo XXI Foundation (FM), chaired by the lawyer and economist Guillermo Laura, studies goals and proposes how to achieve them. On housing, he presented an intelligent solution, with a paradigm shift: the State, which accumulates failures by building houses from costly bureaucratic agencies, should only intervene to guarantee mortgage loans with subsidized rates and even without interest. The private sector has the capacity to build and the State to leverage the purchasing power of the poorest. With loans of 30 or 50 years, as in developed countries, the monthly payment to repay them will be comparable to that of a rental. For FM, the housing problem is financial: mortgage credit was destroyed by our chronic inflation; in 2016 it was reduced to 0.5% of GDP when in the 90s it was 5%; in the United States it is 76.5% of GDP (153 times more), in Great Britain 85%, Denmark 101.4%, Holland 107.1%.
The economist Roberto Cachanosky measured our inflation from 1935 – when the Central Bank was created – to 2018. In 84 years, the annual average was 53.3% and accumulated inflation was 257,000 billion percent. With 18-digit inflation, Argentina has no currency. For FM this is the main cause of the housing deficit, since inflation threatens credit. For this reason, he studied another goal, which he published in the book The virtual currency (2012), currency called the Purchasing Value Unit (UVA).
For FM the currency must be an invariable unit of measure, like the standard meter; ontologically stable, that is, indexed. If the currency does not lose purchasing power, there is no inflation. The UVA is inspired by the Development Unit (UF) that Chile established in 1967. As it is indexed by inflation, it is not different from the price index. In 53 years (1967-2020) the UF had perpetual stability, when dollar inflation was 783%. With the UF, bankarization in Chile reached 112% of its GDP (in Argentina it is 14%), which is why it had loans for housing, being the first country in the region to eliminate slums. Uruguay also created the Indexed Unit (UI) currency, for which – according to FM – a company has just obtained US $ 100 million, at 20 years and 3% annual interest.
The UVA coin proposed by FM will be legal tender and mandatory use in relevant monetary operations, which will be banked under warning of nullity of payment. Bank deposits will grow, exceeding –according to FM– ten times the monetary base as in Chile, reaching 2.6 trillion UVA, equivalent to US $ 1.3 trillion. With this currency, salaries and pensions will be indexed, as in the United States, which introduced said indexation in 1985 and only had three strikes in 35 years.
As the capital market grows, FM maintains that there will be enough mortgage credit, being able to build, in just 4 years, 2 million homes, with two bedrooms, bathroom, kitchen-dining room and essential services. The middle class will have 30-year loans, with an interest rate of 3% per year. Very low-income families will have it for 50 years, with interest partially or totally subsidized by the State. The fees in $ UVA will be paid with salaries also nominated in $ UVA.
A) Yes, families living in shantytowns and slums will have homes adequate, comfortable. The lands they occupied will be transformed into public parks, where FM proposes that educational establishments and areas for practicing sports be built.
At the beginning of the 19th century, or 200 years ago, English economists such as George Poulett Scrope, William Jevons and Alfred Marshall argued that the price index had to be monetized. In the 20th century, the American Irving Fisher and the Argentine Alejandro Bunge had the same vision. The 1976 Nobel Prize in Economics, Milton Friedman, contributed in the same way. With such outstanding and repeated studies, Fundación Metas today proposes the virtual currency UVA to recreate the mortgage loan that will allow everyone to access a decent home.
Executive Director of the Sales Foundation