I found this nifty chart showing household wealth by year and income group. Take a look.
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 found this nifty chart showing household wealth by year and income group. Take a look.
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 may not be able to put a roof over my head for a good price, but at least my toys are cheap!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.
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.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.
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.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:
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 found this nifty chart showing household wealth by year and income group. Take a look.
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.I found this nifty chart showing household wealth by year and income group. Take a look.
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.
I think your chart is showing the result of the great recession and aftermath.
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.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.
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.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.
I found this nifty chart showing household wealth by year and income group. Take a look.
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.
Why would it? The value of a house depends on several things - its revenue production is just one of them.When as a whole renters are paying twice what they pay in rent, real wealth didn't increase two-fold.
And now you're off on another track. :roll: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.
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.
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.
Of course it does.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.
How does it reduce the production of land owners?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.
Of course it does.
How does it reduce the production of land owners?
Households are actually poorer today than they were in the 1980s,
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