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My parents back in the early 1980's purchased a 2100 square foot house in New York for $80k. When the sold it in 1992 they received $300k for it. In 2001 the same house was going for $600k. My parents combined income of $70k in 1980 allowed them to purchase their high ranch. In terms of today's salaries, how can couples possible buy a house? Many college graduates are only making in the upper 30's when the first enter the work force. If they are lucky they might be able to earn $50k after five years. A combined income of $100k which used to be good earning is now looked upon as lower middle class. It would take 15 years for a couple here in New York to be able to build up their incomes and purchase a home. Prices kept going up but while salaries went flat or decreased. Now that the market is collapsing, the prices of homes are starting to drop substantially. Perhaps one day my wife and I will be able to purchase a home in the area will grew up in for $200k. There are so many homes here for sale (Rockland County) because the baby boomers are now retiring but are stuck because the banks are not giving bogus mortgages. The problem is that many young people left New York in the last ten years because of the lack of economic possibilities. Because of that there are few young buyers. Young people who went to college outside New York never came back. Those that did stay in New York are working two jobs and are still underemployed.
It would take 15 years for a couple here in New York to be able to build up their incomes and purchase a home.
Yah, things are definitely tougher up north. Here it's easy to find a brand new 2300 square foot place for under $120K. It's like another world. Good homes are easily within reach of even single people here.
I wouldn't count 401K as savings..it's replacing defined pension plans.
While you do have to "save" for it, it doesn't replace a normal savings account where you can put in or take out as much as you want.
Well, once you've saved up, say, a year's worth of living expenses in a totally liquid money market with checkwriting, I would argue that savings rate SHOULD drop. Granted, I'm doing both -- pumping $1500/month into my 401K and $1000/month into a bond fund for house savings (would a bond fund also not be considered savings??). But after the house is bought and there's already ample liquid savings, I would think savings should drop to a lower level.
What we don't understand is that all this frivolous purchasing is the only growth we have had in our economy. Without Joe the deeply indebted work slave out buying Tv's, cable tv, new cars every 2 years, eating out 5 times a week, etc,etc, there is no real growth in the economy. We ceased to be a producer nation long ago. It doesn't work and is only built on debt. House of cards.
Even if we increase savings, the money is invested overseas not here. Companies with American names no longer have the interest of American people at heart. Hell, they even sell our highways and bridges to foreign companies.
What we don't understand is that all this frivolous purchasing is the only growth we have had in our economy. Without Joe the deeply indebted work slave out buying Tv's, cable tv, new cars every 2 years, eating out 5 times a week, etc,etc, there is no real growth in the economy. We ceased to be a producer nation long ago. It doesn't work and is only built on debt. House of cards.
Even if we increase savings, the money is invested overseas not here. Companies with American names no longer have the interest of American people at heart. Hell, they even sell our highways and bridges to foreign companies.
Your're right! American companies see far more possibilities in the Asian markets and are investing there, not in the United States. Thanks to Congress they don't even pay tarrifs on good coming into the country.
What we don't understand is that all this frivolous purchasing is the only growth we have had in our economy. Without Joe the deeply indebted work slave out buying Tv's, cable tv, new cars every 2 years, eating out 5 times a week, etc,etc, there is no real growth in the economy.
I don't disagree, but I ask what SHOULD growth in the economy be based on?
I guess I don't understand how people can, in basically the same sentence, denigrate the consumerist society while simultaneously denigrating the non-producer economy. So we need to move away from a service-based economy and back toward a producer/manufacturer-based economy, but we also need to stop buying so much crap and being strong consumers. But how does these concepts work together?
My job/career is service-based to the extent that I don't build or produce tangible things. So I'm hearing that the FIRE-based/service-based economy needs to go away -- I need to produce something tangible. But then I need to sell it to people who shouldn't be buying/consuming things but instead saving...
Bump, because I'd love some responses to the following:
Quote:
Originally Posted by Nepenthe
I don't disagree, but I ask what SHOULD growth in the economy be based on?
I guess I don't understand how people can, in basically the same sentence, denigrate the consumerist society while simultaneously denigrating the non-producer economy. So we need to move away from a service-based economy and back toward a producer/manufacturer-based economy, but we also need to stop buying so much crap and being strong consumers. But how does these concepts work together?
My job/career is service-based to the extent that I don't build or produce tangible things. So I'm hearing that the FIRE-based/service-based economy needs to go away -- I need to produce something tangible. But then I need to sell it to people who shouldn't be buying/consuming things but instead saving...
And in the 1950s, people didn't spend half of their grocery budget on soft drinks and snacks. When I shop with my parents I'm floored by the assortment of fizzy waters, sodas, regular water, etc., etc., etc. They buy cases of the stuff and need help out to the car with it. They think of them as being a "staple" items. People in the 1950s drank plain water, coffee, and tea, and only had an occasional soda as a special treat. This also explains the fact that two average people these days can't comfortably pass each other in a hallway.
Well, I would consider that a decline in standard of living. People in the 1950s could actually buy food that was good for them compared to the processed junk we get today.
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