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Real Wealth is Decreasing

phattonez

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I found this nifty chart showing household wealth by year and income group. Take a look.

your-guide-to-class-warfare-in-2015-213-body-image-1423865082.jpg


For almost all households, real wealth levels are about the same as they were in the early 1980s. But here's the downside: the cost of living is far higher than it was in the 1980s. Home prices have grown much faster than inflation, and that's the biggest expense for households (and also, ironically, the biggest source of wealth for most non-wealthy households).

What does this mean? Households are actually poorer today than they were in the 1980s, possibly even further back if you include the real cost of living.

Why is it that I'm called a Communist for pointing this out? Clearly something is broken. Ignoring this won't fix it. So what's your solution?

Sent from my HTC phone. Instaurare omnia in Christo.
 

Crovax

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I found this nifty chart showing household wealth by year and income group. Take a look.

your-guide-to-class-warfare-in-2015-213-body-image-1423865082.jpg


For almost all households, real wealth levels are about the same as they were in the early 1980s. But here's the downside: the cost of living is far higher than it was in the 1980s. Home prices have grown much faster than inflation, and that's the biggest expense for households (and also, ironically, the biggest source of wealth for most non-wealthy households).

What does this mean? Households are actually poorer today than they were in the 1980s, possibly even further back if you include the real cost of living.

Why is it that I'm called a Communist for pointing this out? Clearly something is broken. Ignoring this won't fix it. So what's your solution?

Sent from my HTC phone. Instaurare omnia in Christo.

A lot of prices have gone down though on electronics and consumer goods

The smallest tv you could buy in 1980 cost $400, now you can buy a small one for $75.

A basic laptop in 1992 cost $2400 now you can get one for $200
 

Hawkeye10

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I found this nifty chart showing household wealth by year and income group. Take a look.

your-guide-to-class-warfare-in-2015-213-body-image-1423865082.jpg


For almost all households, real wealth levels are about the same as they were in the early 1980s. But here's the downside: the cost of living is far higher than it was in the 1980s. Home prices have grown much faster than inflation, and that's the biggest expense for households (and also, ironically, the biggest source of wealth for most non-wealthy households).

What does this mean? Households are actually poorer today than they were in the 1980s, possibly even further back if you include the real cost of living.

Why is it that I'm called a Communist for pointing this out? Clearly something is broken. Ignoring this won't fix it. So what's your solution?

Sent from my HTC phone. Instaurare omnia in Christo.

OH NO that just cant be!.....the reason so much of the nation is pissed off enough to vote for Trump is racism, we have been assured...there are studies!



Truth: The citizens are pissed off with great cause.
 
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phattonez

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A lot of prices have gone down though on electronics and consumer goods

The smallest tv you could buy in 1980 cost $400, now you can buy a small one for $75.

A basic laptop in 1992 cost $2400 now you can get one for $200
I may not be able to put a roof over my head for a good price, but at least my toys are cheap!

Sent from my HTC phone. Instaurare omnia in Christo.
 

Crovax

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I may not be able to put a roof over my head for a good price, but at least my toys are cheap!

Sent from my HTC phone. Instaurare omnia in Christo.

I think you misunderstood. Houses are more expensive because toys are cheaper. People are going to put everything they can afford into a house to have the biggest living space possible.

Average sq ft of a house in 1973: 1660

Average sq ft of a house in 2015: 2687
 

phattonez

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I think you misunderstood. Houses are more expensive because toys are cheaper. People are going to put everything they can afford into a house to have the biggest living space possible.

Average sq ft of a house in 1973: 1660

Average sq ft of a house in 2015: 2687
No. Case-Shiller takes into account stuff like home size and amenities. CPI adjusted home prices are still far higher than they used to be. This isn't up for debate.

fredgraph.png




Sent from my HTC phone. Instaurare omnia in Christo.
 

Kushinator

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No. Case-Shiller takes into account stuff like home size and amenities. CPI adjusted home prices are still far higher than they used to be. This isn't up for debate.

fredgraph.png

You can't adjust an index with another index... that's not how it works. You need real dollar amounts to adjust with CPI.

This is an acceptable example:

fredgraph.png
 

phattonez

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You can't adjust an index with another index... that's not how it works. You need real dollar amounts to adjust with CPI.

This is an acceptable example:

fredgraph.png
I used Case-Shiller because always the first response is that houses are bigger and better today. I don't know of any other way to deal with that issue other than using the Case-Shiller index.

But it is nice to see real dollar amounts and data going further back in time. The economy really is broken for working Americans.

Sent from my HTC phone. Instaurare omnia in Christo.
 

SCrider

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I may not be able to put a roof over my head for a good price, but at least my toys are cheap!

Sent from my HTC phone. Instaurare omnia in Christo.

That keeps the idiots in line.
 

Masterhawk

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I found this nifty chart showing household wealth by year and income group. Take a look.

your-guide-to-class-warfare-in-2015-213-body-image-1423865082.jpg


For almost all households, real wealth levels are about the same as they were in the early 1980s. But here's the downside: the cost of living is far higher than it was in the 1980s. Home prices have grown much faster than inflation, and that's the biggest expense for households (and also, ironically, the biggest source of wealth for most non-wealthy households).

What does this mean? Households are actually poorer today than they were in the 1980s, possibly even further back if you include the real cost of living.

Why is it that I'm called a Communist for pointing this out? Clearly something is broken. Ignoring this won't fix it. So what's your solution?

Sent from my HTC phone. Instaurare omnia in Christo.

I wouldn't call you a communist for pointing it out. Part of the blame for the increase in housing prices is zoning laws which make it more difficult for housing supply to keep up with demand.

I just looked up 3d printing homes and the low cost seems very promising.
 

Bullseye

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I found this nifty chart showing household wealth by year and income group. Take a look.

your-guide-to-class-warfare-in-2015-213-body-image-1423865082.jpg


For almost all households, real wealth levels are about the same as they were in the early 1980s. But here's the downside: the cost of living is far higher than it was in the 1980s. Home prices have grown much faster than inflation, and that's the biggest expense for households (and also, ironically, the biggest source of wealth for most non-wealthy households).

What does this mean? Households are actually poorer today than they were in the 1980s, possibly even further back if you include the real cost of living.

Why is it that I'm called a Communist for pointing this out? Clearly something is broken. Ignoring this won't fix it. So what's your solution?

Sent from my HTC phone. Instaurare omnia in Christo.
I think your chart is showing the result of the great recession and aftermath.
 

phattonez

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I wouldn't call you a communist for pointing it out. Part of the blame for the increase in housing prices is zoning laws which make it more difficult for housing supply to keep up with demand.

I just looked up 3d printing homes and the low cost seems very promising.

See Hong Kong. It has about the highest density in the world, but also among the highest housing prices in the world. Clearly this is something that goes beyond supply and demand. There is something else going on, another factor that's determining housing prices.
 

phattonez

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I think your chart is showing the result of the great recession and aftermath.

I take a different interpretation. Wealth levels are incredibly sensitive to asset prices. That is, what we see between 2000 and 2008 is mostly the result of rising house prices. When those fell, then the supposed wealth of most Americans fell as well. It wasn't real. So we have to ask why real wealth stopped growing in the 1980s for most Americans, while those of the rich haven't stopped growing since the 1970s.
 

Bullseye

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I take a different interpretation. Wealth levels are incredibly sensitive to asset prices. That is, what we see between 2000 and 2008 is mostly the result of rising house prices. When those fell, then the supposed wealth of most Americans fell as well. It wasn't real. So we have to ask why real wealth stopped growing in the 1980s for most Americans, while those of the rich haven't stopped growing since the 1970s.
But wasn't the "real wealth" of the '80s just another real estate surge, since for most people there home is their principal asset? Oh, and the wealth remained although its VALUE rises and falls. No part of my house fell off during the recession nor did I add any rooms during R.E. market surges.
 

phattonez

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But wasn't the "real wealth" of the '80s just another real estate surge, since for most people there home is their principal asset?

Real home prices weren't massively overvalued relative to incomes in the 1980s. They were in the 2000s.

Oh, and the wealth remained although its VALUE rises and falls. No part of my house fell off during the recession nor did I add any rooms during R.E. market surges.

The monetary value of the wealth changed. I'm glad you agree that money isn't real wealth, which is why I said that the wealth of the 2000s wasn't real.
 

Bullseye

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Real home prices weren't massively overvalued relative to incomes in the 1980s. They were in the 2000s.



The monetary value of the wealth changed. I'm glad you agree that money isn't real wealth, which is why I said that the wealth of the 2000s wasn't real.
I didn't say money wasn't "real wealth" what I said was the VALUE of wealth MEASURED in monetary terms varies. I have no idea what your concept of "real" entails.
 

phattonez

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I didn't say money wasn't "real wealth" what I said was the VALUE of wealth MEASURED in monetary terms varies. I have no idea what your concept of "real" entails.

When as a whole renters are paying twice what they pay in rent, real wealth didn't increase two-fold. You still have the same productive capacity in an economy. All that changed is the magnitude of the wealth transfer from workers to landlords.
 

marke

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I found this nifty chart showing household wealth by year and income group. Take a look.

your-guide-to-class-warfare-in-2015-213-body-image-1423865082.jpg


For almost all households, real wealth levels are about the same as they were in the early 1980s. But here's the downside: the cost of living is far higher than it was in the 1980s. Home prices have grown much faster than inflation, and that's the biggest expense for households (and also, ironically, the biggest source of wealth for most non-wealthy households).

What does this mean? Households are actually poorer today than they were in the 1980s, possibly even further back if you include the real cost of living.

Why is it that I'm called a Communist for pointing this out? Clearly something is broken. Ignoring this won't fix it. So what's your solution?

Sent from my HTC phone. Instaurare omnia in Christo.

Real wealth is directly linked to real national debt. There is no wonder Americans are becoming poorer as the debt burden raises the need for higher taxation from all quarters of the public. A family who was taxed possibly 10% in overall taxation years ago will show significant advantages over a modern family who probably pays more than 40% in overall taxes today.
 

Bullseye

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When as a whole renters are paying twice what they pay in rent, real wealth didn't increase two-fold.
Why would it? The value of a house depends on several things - its revenue production is just one of them.

phattonez said:
You still have the same productive capacity in an economy. All that changed is the magnitude of the wealth transfer from workers to landlords.
And now you're off on another track. :roll:

PS: many landlords are workers, too.
 

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See Hong Kong. It has about the highest density in the world, but also among the highest housing prices in the world. Clearly this is something that goes beyond supply and demand. There is something else going on, another factor that's determining housing prices.

The Hong Kong government is able to keep taxes low by making money through selling land. This incentivizes the government to keep land prices high to make more revenue.
https://www.cnbc.com/2017/04/09/heres-why-hong-kong-housing-is-so-expensive.html
Hong Kong's population density in July 1 2018 was 6,732 per km2. Macau has an even higher population density of 20,164 per km2 and yet, Hong Kong is still more expensive.
 

phattonez

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The Hong Kong government is able to keep taxes low by making money through selling land. This incentivizes the government to keep land prices high to make more revenue.
https://www.cnbc.com/2017/04/09/heres-why-hong-kong-housing-is-so-expensive.html
Hong Kong's population density in July 1 2018 was 6,732 per km2. Macau has an even higher population density of 20,164 per km2 and yet, Hong Kong is still more expensive.

And that's the real factor. Exactly. It's not about supply and demand. It's about the price of land.
 

phattonez

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Why would it? The value of a house depends on several things - its revenue production is just one of them.

And now you're off on another track. :roll:

PS: many landlords are workers, too.

You're missing the point. An increasing stream of revenue not backed by increased production but what is purely a larger transfer of wealth doesn't increase wealth. It increases GDP, but it's not as if society is richer. In fact, in so far as it decreases actual production by landholders, it decreases the wealth of society.
 

Bullseye

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You're missing the point. An increasing stream of revenue not backed by increased production but what is purely a larger transfer of wealth doesn't increase wealth.
Of course it does.

phattonez said:
It increases GDP, but it's not as if society is richer. In fact, in so far as it decreases actual production by landholders, it decreases the wealth of society.
How does it reduce the production of land owners?
 

phattonez

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Of course it does.

So if in my family I give my son $10 more in allowance per week even though my income hasn't increased, my family is actually richer? Explain.

How does it reduce the production of land owners?

Because then they're less dependent on labor to earn an income. They're less likely to create real wealth via labor.
 

James972

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Households are actually poorer today than they were in the 1980s,

obviously because liberals off-shored 20 million jobs and invited in 30 million illegals to bid down wages for remaining jobs. China just moved 800 million into the middle class thanks to our liberals. Do you understand now?
 
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