And yet home ownership rate is higher today than it was at any time between (1965-1997) with an upward trend. If housing was so easily affordable back "then", why didn't everybody buy a house?
Note that's the somewhat unintuitive "proportion of households that is owner-occupied". Kids moving back in with their parents after college, for instance, would still count as owner occupied.
From [1] we can see that home ownership had a run-up to 2008 as interest rates dropped and credit loosened, especially for younger people. When credit tightened home ownership took a major dive.
People are looking at modern times as if they're worse, when they're almost strictly better than everything that came before us. Far less of the world lives in poverty. People in developed nations have more access to information, entertainment, lifestyle choices, etc.
Big media sells fear. Social media amplifies rage. They both create a miasma of doom that isn't reflective of the upward trajectory we've been on and continue to ride.
The Boomer era economics were not the norm and comparing ourselves to them is a great deception. Postwar America was growing and factory to the entire world. That was unsustainable and the differential between the US and the rest of the world (especially developing economies in Asia) has diminished. We can't compare Boomer McMansions and low cost of infrastructure and development to our modern state in any sort of fairness. Our wages grew too much, and that's a good thing! (Automation will bring us right back to this recipe anyway, and we're getting there.)
Compare America today against the broader world history and you'll see that we're wealthy, growing, and improving by almost all measures.
These types of arguments basically always reek of bootlicking to me. It's always a vague "things were better" when the material reality of the situation is everyone feels insanely economically insecure and feels a massive amount of anxiety. We're watching the aggregation of wealth by massive corporation and the loss of "good jobs", while wealth concentrates in the hands of those who already possess it.
I refuse to believe a future where me and all my community have a home and stable lives is unattainable, and anyone who tries to rationalize why we should be happy with scraps deserves their fate of a pitiful of indenture to Amazon
There isn't a way to transmute "stuff consumed" into enjoyment/utility/value. We can sort of guess that people who were near starvation but are now eating regularly are somehow doing better, but we are so incredibly far from that world that it's worth asking ourselves whether it is really the same thing at all to say people with more TVs in their homes are better off.
You're right about doomscrolling though. But there again, people are doing it more. It adds to GDP. Are people better off?
Sometimes social media can make things falsely exaggerated. But often, it just seems that way, when really it's just that more people are saying something in a more visible way. That's amplification, but not in the "false" sense.
It feels like social security should be split into two things: disability for workers pre-retirement, and a Trust fund for retired workers. They are using the first as a justification to plunder the second.
If it was just a retirement trust fund it would be ludicrous for the government to handle it in the way they do.
> It feels like social security should be split into two things: disability for workers pre-retirement, and a Trust fund for retired workers.
It...is: the Old Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund are separate funds that pay for different programs administered by Social Security.
> They are using the first as a justification to plunder the second
No, “they” (who?) aren’t.
> If it was just a retirement trust fund it would be ludicrous for the government to handle it in the way they do.
The OASI trust fund is, essentially, just a retirement trust fund, but it doesn’t seem like you have a clue how SS is run.
Thats true I definitely don’t know all the details of SS, just that it makes up an obscene amount of my yearly taxes (13%). So would you pay into the trust if it was optional? Why can’t I defer my SS payments by paying an equal amount into my 401k? If the purpose is to prevent society having to support elderly workers who failed to save anything that would also tick the box, but then the govt wouldn’t get to touch the money.
> So would you pay into the trust if it was optional?
Maybe not, but then again, I've been working most of my adult life for an employer of the kind that can be exempt (but which is opted-in) from SS.
> Why can’t I defer my SS payments by paying an equal amount into my 401k?
You can't opt out of the defined-benefit safety-net retirement backstop by putting more money into a no-guaranteed-benefit personally-directed retirement plan because... of the whole point of having a backstop.
> If the purpose is to prevent society having to support elderly workers who failed to save anything that would also tick the box
Maybe we have different outlooks then. I would view my personal savings, assets and 401k as a sane guaranteed retirement plan, and having 0 savings but trusting the government to take care of me as a not-guaranteed plan.
Not only is money I am taxed for social security gonna get way shittier returns than a 401k, I am hesitant to believe social security will look the same way it does today when I am retirement age in ~35 years.
401k's do not have any guarantee, even in theory. You absolute should have some retirement plan outside of social security (which is, after all, just a backstop for that failing.)
> I am hesitant to believe social security will look the same way it does today when I am retirement age in ~35 years.
Well, I’m old enough that I've been hearing that refrain for more than 35 years, and have seen the math on the necessary changes to bring revenue and benefits in to line even if no action is taken before trustnfund exhaustion, and I haven't seen any sign that the radical damages some people try to use the threat of trust fund depletion to gain support for will become politically viable, so I am relatively confident that SS will remain in a recognizable form well into the future.
> There's no reason SS is age based and not means based
Political support for Social Security has always been based on the proposition that it is universal and that the benefit reflects contribution. While not required by law -- Social Security taxes are an ordinary income tax per the US Supreme Court -- this has been the explicit contract the government has made and reaffirmed repeatedly with the people for generations. It is an embedded part of the institution of Social Security.
Fundamentally changing the rules at this point would be viewed as a serious violation of trust between the people and the government, at a time when that trust is already at historic lows. Pragmatic politicians also understand that this would greatly erode support for Social Security taxes, since willingness to pay that 12.4% income surtax is strongly connected to the conception that this money will be returned to them in old age. Most politicians have the survival instinct to not even suggest this is not the case, legal technicalities aside.
That’s not the contract though. I and many others here have been paying in for years with the expectation that I can withdraw at 65.
Honestly we should allow people to opt out entirely if they can demonstrate that they are adequately funding their own retirement/disability on their own plan.
Social Security as it exists now is a Ponzi scheme.
Social security is quasi-mandatory minimal insurance against you failing your personal retirement investments (quasi-mandatory because their are a narrow set of employers not required to participate, so you can opt-out by choosing to work for one of them.)
What contract? I'm in my early 30s and when I look at social security, healthcare costs, and housing costs I see the results of older generations shirking their load at the cost of future generations
Does anyone under 40 right now seriously expect to be able to collect social security at retirement age? It just seems like a cruel joke at this point.
Learn more about social security. The worst case scenario is that you'd get roughly 74% of your promised benefit. If Congress intervenes, the outlook will improve. All the arguments are about how much of that shortfall to make up, and how to do it. Aside from some GOP outliers, the broad consensus is that it will continue to exist.
That's really the that for people who will be collecting in 8-10 years. For the under 40 crowd, they don't need it for 25 years and who knows how the demographics will play out then.
Imagine paying in from age 15 to age 55 and then being told that in 10 years you’re going to 74% of what you’ve been paying for for 40 years. You’re 4/5ths of the way there before the bait and switch.
I get the bait and switch feeling, I really do. But in reality that "paying in" is just a tax I've paid, and it's not unusual to get less than I was promised for a tax I've paid. Certainly I desire efficiency for my tax payments, but getting bent out of shape when that doesn't happen is just no way to live.
>But in reality that "paying in" is just a tax I've paid, and it's not unusual to get less than I was promised for a tax I've paid.
Yeah, don't get me wrong. Taxes are taxes, and you just have to pay it. I have no problem with paying a tax to support elderly and disabled folks right now. But the thought of it still being solvent 30 years from now with the direction our country is heading is totally absurd. I fully expect the entire system to be gutted for our generation the moment a full Republican majority takes control.
But that's the thing, there is no such thing as "solvent"; there is no "account" to be solvent or insolvent. It would be like talking about whether the military is "solvent"; it's just not a thing. The only question is whether spending on a line item in the budget - whether that's the military or social security or whatever else - is or isn't appropriated by Congress.
Or if you insist on thinking in these "solvency" terms, then note that social security has never been "solvent". From day one, people who never "payed in" to the "account" received payments "from" it. That was possible for the same reason it is possible today for social security to pay out more than it brings in: it isn't its own account, its just one line item of spending coming out of the US treasury.
And there just is no political mechanism by which social security payments will fail to be appropriated. If some coalition gains enough control to pass and sign the legislation necessary to eliminate social security, they will be blamed for it by the electorate and will lose power for a generation. No political party wants to sign its own death warrant.
This all does assume the continued existence of the federal government as currently constituted, which is not a guarantee. So if what you're really saying is that you think the US system will collapse at some point before you retire, then that is actually more plausible, I think, than social security being eliminated by legislation under the current system.
But personally I also think it's very unlikely that the US system will collapse before I retire. It's just more likely than the wholesale elimination of social security :)
Well Social Security full mane is Old-Age, Survivors, and Disability Insurance.
Imagine paying for car insurance and never seeing a dime back.
Some people win, mostly lower income widows that didn't pay in much. And then lived long past retirement. And then you have some single guy that dies in his early 60s.
Honestly, the other possibility is that Congress finally gets off their butts and squares it up again. And then the "losers" are the GenX folks that have been delaying retirement to budget for the 74%. I don't really like the thought of having to work five more years than I really have to, just from the uncertainty around whether Congress will fix it or not.
I too was told in my youth that social security would be bankrupt long before I would ever retire, probably by the same people that told you that. Consider making a quantitative rather than an emotional argument, and let's see the assumptions on which that argument relies.
That statement has been a meme for over 40 years, because it is planted as part of a campaign to sow doubt about Social Security and give cover to those who want to destroy it. The Heritage Foundation/Club For Growth playbook on killing Social Security consists of vaguely questioning the far future of the program, inflating the superficial problems by integrating the worst-case shortfalls over many decades, and systematically underestimating economic growth.
User jeffbee sums it up better than I do in a sibling comment, but yeah, I've been hearing that since I was at least as young as you are or younger. My conclusion, just as sibling comment, is that it's FUD. No politician would come right out and say that the next generation to retire won't get Social Security; they might as well go buy the tar and a bag of feathers themselves. But they're happy to have someone question the viability of the system. Don't fall for it, as your question would have been a letter-to-the-editor in a newspaper 50 years ago, and here we are still cutting SS checks.
I understand the doom and gloom mindset, it feels good to air some frustrations.
But you need to eradicate that mindset entirely. You should expect to collect social security. Period. And when this right comes under threat, you should fiercely defend it. Protest, unionize, become politically active. And as a starter, start showing up when there's something to vote on.
This lame attitude of "everything's shit and going to get worse, ah well" is absolutely ideal for those in power to strip you bare. Don't make it so easy for them.
Yes, because once I stop believing then the FUD raised around social security will have worked and I don't want that to happen. It would imply the people who generate such FUD have a stronger ability to hyperstitize[1].
1. There does not appear to be a verb form of hyperstition
I'm almost as close now to the age when I can start drawing social security as I am to the age when I started saying things like your comment :)
I've only become less convinced over time of the likelihood that SS payments will stop at some point. There are various kinds of restructuring I could envision, but I really don't see any mechanism by which SS payments entirely stop without replacement. We would let the real value of the payments inflate away way before we'd legislate them away. There's just no political mechanism by which that legislation could be passed.
Keep in mind aging millenials will be a pretty enormous voting block and, given birth rates, we won't have the same large younger generation to balance us that we were to the Baby Boomers.
I remember my teachers saying the same back in the 80's (in between threats of nuclear annihilation, global population bomb, acid rain, hole in the ozone and global cooling).
They're all retired and collecting social security now.
The "trust fund" is simply a paper artifice to support the idea that it's a system you pay into like a private pension. This dates to the original conception of the system, which couldn't be passed into law if it looked like "socialism".
In reality it sits on the balance sheet just like everything else in the general fund. It "lends" money to the treasury by buying government debt (those SS payments funded all the highways and other infrastructure in the late 40s, 50s, and 60s0.
SS can't go bankrupt any more than the rest of the government could.
Despite young people voting for the least worst liar, somehow only the older wealth hoarders can afford to campaign for public office. Mystery of mysteries!
It's crazy how we make 10x more money for our companies than our grandparents or parents did but are unable to afford basic lives (wife, house, kids). My dad did it delivering pepsi products.
MBAs made profit growth more important than consistent profits. Witness how dividends used to be a sign of a dependable company but now they're for suckers. Everything else broken in the economy is a consequence of this philosophy.
If you're not gaining market share from competitors in existing markets, or developing new markets from scratch, then you are not 'winning' under western hyper capitalism.
If you're not growing, your dollar is losing value and competitors are poised to be eating your lunch.
Software is the best place to see this. Develop something niche and profitable. Without growth, you're just a feature and you will be ripped off by another party or a bigger player. Slack, Clubhouse, any Mac/iOS feature, etc. etc. Hundreds of examples here.
There's also the broader economic theory. If you can only invest time and money in one place, then you have opportunity costs and need to weigh the future outcomes of your investment choices. Life is finite, and you should use it in the best way you know how. For most people, money correlates strongly with value creation and reward. The amount of revenue you drive is also indicative of the broader value you've materialized for other people.
The answer is right there in the article: offshoring.
Post-war US had close to zero economical competition for a few decades. Which is exactly the time where your grandparents and parents spent most of their adult lives in. Middle class on easy mode, a simple job supports an entire family.
What changed is that the rest of the world caught up. Middle class on easy mode was a blip, not a permanent standard. What the west lost, the developing countries gained.
There's of course secondary factors too: different demographics (more workers, less elderly), women were not in the work force making labor more scarce, work was more stable and not constantly technically disrupted, etc.
It's complicated, but the idea that uneducated labor can support a middle class family is not coming back, ever.
It's not just urban areas where housing prices have skyrocketed but suburban as well. There's no reason du & tri plexes are illegal in so many suburban areas
Okay so let’s say I accept your statement is true and also I’m making good money these days with low expenses. Where should I put my money so I can be one of these people taking advantage of the fact that we’re exploiting workers? Because I’d sure like to become part of this bourgeoise class everyone keeps talking about. Do I just put money into lots of stocks?
You probably could too if you accepted the living standards of the 1960s and lived in a low cost of living area. I know people that happily make some version of that tradeoff, though I wouldn't personally.
"Living standards" is such a weaselly term here. Yeah maybe you can afford a dishwasher and a car and nice clothes, but what about when you step outside your door? Being in a city with interesting things to do is an intangible good that many people like, compared to being in a smaller town with fewer amenities (nevermind well-paid jobs). It used to be affordable, now it's expensive. That's a regression no matter how you slice it.
Most of the wage growth in big cities goes straight into landlords' pockets. It's no way to run a civilization.
And at any rate, you can't even live the 60s life if you wanted to. It's either impossible or illegal.
I see where you're coming from, but talking to my father-in-law who grew up in Queens in the 60s and he remembers something quite different. The city was a dangerous mess and they never went to Manhattan, they essentially never left Astoria. They didn't take vacations, have A/C, his room was basically a walk in closet with a window, they ate awful food most fo the time, and went to a low cost catholic school. He has nothing romantic or nostalgic to say about it at all. My own parents at the same time were farmers, and I certainly wouldn't want to do what they had to do as children.
If you want to stuff 4 people into two bedrooms with no A/C and never take vacations you can do it today in most cities in the US for the wage you'd earn at 1 corporate job. It won't be comfortable, but that isn't new.
Came here to say the same. The cities boomers grew up with are not the cities of 2022. Most of the interesting things that exist today in cities either didn’t exist for boomers when they were our age or was incredibly scarce and only within the reach of extremely wealthy.
If you want the boomer city experience, you need to go pick a city today that compares to a NYC, LA, Miami or SF in the 1960s and 1970s. Nothing like 2022 NYC, LA, Miami or SF existed in the 1960s and 1970s.
Yeah, for sure. I think people REALLY underestimate how shitty food was in the 60s and 70s too. My mother-in-law told me she didn't really encounter food made with fresh vegetables until the late 80s, and my own father who grew up on a farm told me that he was so sick of mac and cheese and frozen fish sticks by late Winter(when they were running out of preserved food) that he would eat with his eyes closed.
> Being in a city with interesting things to do is an intangible good that many people like, compared to being in a smaller town with fewer amenities (nevermind well-paid jobs).
As someone who lives in a small town in the middle of nowhere, I'd argue that the well-paid jobs part is our biggest struggle. We might be somewhat unique compared to some other small towns, but we have a lot going on - theater, live music, civic groups, outdoor recreation, surprisingly good restaurants - there's plenty to do here, but there's also no question that our largest growing demographic group is people who made their money elsewhere. As both you and the poster below you comment though - neither the big city nor small towns offer much of a refuge for people these days; our system is squeezing every bit of "value" out of workers, to our detriment
Source: https://fred.stlouisfed.org/series/RHORUSQ156N