[peterangular]

I see the "we got more things and they got more expensive" point brought up constantly and it still doesn't change my opinion (same as above commenter):

> Fifty years ago that average person would have been able to support a family, buy a house, and not live under the constant threat of bankruptcy from a surprise medical bill.

I want to circle back to this. I read your comment assuming you are arguing that now things are "more" (cost++) this ideal is now less obtainable or unobtainable.

Do you think that the average person (median wage earner) should be able to support themselves in this way? Should we let go of this ideal as "old fashioned"?

[b112]

Should we let go of this ideal as "old fashioned"?

No, although "old fashioned* was a very brief, 30 to 50 year period in US history.

Instead, I think that buying massive mansions (as per how people in the 50s may think of it), could be part of the problem.

Buying huge houses, means more people need mortgages. That saving for a down payment means less. That means higher monthly payments.

Outside of huge cities, a 1500 sq foot house and land just isn't that expensive. The problem is due to more than one source, it's also about trying to have a house, in some of the most expensive areas for real estate on the planet.

And other factors, cell phone, cable, internet, tablet, laptop, gaming system, monthly fees can run hundreds in some households, with hardware costs amortized, even a thousand per month for a family!

Do you think people in the 50s had all that? Even middle class families often didn't have a TV!

Do you know how many people I've seen with maxxed out credit cards, yet they have all those toys above?

How'd they get those toys?

Many people didn't even have medical insurance in the 50s. Why? I provided one possible reason prior.

But I agree, then isn't now. I don't know what to do about medical care, but I do know my grandparents couldn't believe all the things my parents were buying, when I was a kid.

I wonder what they'd say, every time I use credit to buy coffee, dinner, an electronic gizmo, or a paid service.

I wonder what they'd say, when they also saw me paying 2x, or 3x for it, after years of paying credit card compound interest?

More than anything, credit is the big problem.

[peterangular]

I mean I've read this comment about 3-4 times now and I get that you start with "No" in regards to my original comment... but I was super weirded out on the overall direction. I'm talking about median wages and you immediately jump into talking about "mansions"...? As-if the majority of folks today having troubles finding an affordable place are looking for "mansions".........?

> Instead, I think that buying massive mansions (as per how people in the 50s may think of it), could be part of the problem.

You draw this comparison of what people in the 50's would think of our world today when in all reality the cost of everything has skyrocketed since the 50's. The dual-earner expectation is a new thing since then, the post-WW2 credit boom happened, the expectations of higher education to enter careers is different, housing markets are night and day, etc... Anyone who's looking at this modern world through the lens of the 50's ideals must realize that this is an incredibly skewed/distorted way to think about today. Or at least I would hope they realize this.

> And other factors, cell phone, cable, internet, tablet, laptop, gaming system, monthly fees can run hundreds in some households, with hardware costs amortized, even a thousand per month for a family!

> How'd they get those toys?

Much of that isn't a toy in this day in age... I would argue that cell phone and internet are utilities NOT toys. I would argue that a laptop/tablet/phone is a requirement to stay relevant in even entry level positions... and sure - I can understand not subsidizing TV and video games as they're pure entertainment. But, I would very much argue that folks who are worried about improving conditions for wage earners are not advocating for everyone to get a free Xbox and 42" LCD.

> But I agree, then isn't now.

I'm at odds with this too - when you spend so much time drawing comparisons between the 50's and today I am left to wonder, "where does this person draw the line of 'then' and 'now'? Do they believe in 50's ideals being exercised today? And if so, which ones?"

All of these comparisons you've drawn make me feel like I'm suppose to feel guilt for having purchased things with credit as well... admittedly things like TV's, etc. I've never paid "2-3x" for something as I've never fell for that trap... but I have purchased expensive things like computers and used my credit to spread that hurt out over a year...

And... oh god... if I get a house how do I live with myself knowing it's a mansion or not...? I guess I should stay within the arbitrary <= 1499 sqft limit and move away from any population centers or I may accidentally end up with a mansion in the eyes of someone from the 50's!

> I wonder what they'd say [...]

My grandparents and parents are not involved in my finances. They're all dead now, but they lived a life so very different than mine that I really don't care what they'd say... my answer to that is "So what?"

> More than anything, credit is the big problem.

Credit/debt is the basis of any capitalistic society - it's literally in the blueprints. If you truly believe this I would argue you have a fundamental issue with capitalism as well.

Also, hard disagree which is why I asked you the original question. Wage stagnation and commodification of everything we need to live is the "more than anything" problem.

I do not disagree that credit is a problem. But it is not the "more than anything" problem. Actual livable wages for everyone willing to work is the "more than anything" problem.

[b112]

I mean I've read this comment about 3-4 times now and I get that you start with "No" in regards to my original comment... but I was super weirded out on the overall direction. I'm talking about median wages and you immediately jump into talking about "mansions"...? As-if the majority of folks today having troubles finding an affordable place are looking for mansions".........?

There are multiple metrics here, but many people talk about the price of home ownership, as in a house.

And in that context, yes -- people are buying mansions. Even at 3000sq foot house is 'large' by 50s or 60s standards. Only high-end middle class would ever contemplate such a monster, in the 50s. The average middle class buyer would opt for a "normal" sized house, 1500sq.

Yet many people today buy massive houses.

Look here:

https://www.aei.org/carpe-diem/todays-new-homes-are-1000-squ...

Notice this trend is from 1973 onward. It didn't start there, meaning, houses were even smaller in the 50s.

This does matter, for it does indeed effect price. Build costs, outside of Seattle, New York, San Francisco, LA, are what costs typically, not land price. A bigger house means more maintenance costs, too.

What has enabled this? Massive, low interest mortgages for anyone, qualified or not.

And what has that done to housing pricing? Pushed it up. Low cost mortgages cause an increase in housing costs, because people can suddenly afford more. An example (approx)?

330k mortgage @ 3%, approx 10% down? Monthly payment = 1500/month.

330k mortgage @ 10%, approx 10% down? Monthly payment = 2900/month.

Look at it this way:

600k mortgage @ 3%, approx 10% down? Monthly payment = 2950/month.

So a person today can literally afford a house twice the price, just by the interest rate changing from 10% to 3%.

Why is it important?

Well, bidding wars happen all the time for housing. If people can afford more, they'll bid more. Now, change doesn't happen overnight, but it certainly does! And that means that over time, pricing increases faster than inflation, for, people can afford more for the same payment.

In a seller's market, which happens every few years, up the price goes!

https://tradingeconomics.com/united-states/interest-rate

Click on 'MAX'.

Now look at 1980. Holy! Yes, 20%. And I assure you, it was actually a little higher in some locales.

330k mortgage @ 20%, approx 10% down? Monthly payment = 5200/month.

My point in all of this is how dramatically interest rates change affordability of housing. And how it has allowed "McMansions" to appear, massive houses dramatically larger than things 50, 70 years ago.

Back to this:

As-if the majority of folks today having troubles finding an affordable place are looking for mansions".........?

The problem is, even 'smaller' houses are 'large' by prior standards. This is why I have been discussing 1500sq ft homes, and how they are very affordable outside of massive, high density cities.

People don't have issues with housing/rental costs in rural Kansas, or in smaller cities. Not like the Valley, or Seattle, which is what the majority of people here are complaining about.

OK.. on to the next point.

You draw this comparison of what people in the 50's would think of our world today when in all reality the cost of everything has skyrocketed since the 50's. The dual-earner expectation is a new thing since then, the post-WW2 credit boom happened, the expectations of higher education to enter careers is different, housing markets are night and day, etc... Anyone who's looking at this modern world through the lens of the 50's ideals must realize that this is an incredibly skewed/distorted way to think about today. Or at least I would hope they realize this.

The cost of many things has skyrocketed, but other things has plummeted.

With respect to dual income earners, that one is simple. Over time (and 70 years is a long time), inflation and wage pressures match expectations. For example, double everyone's salary, and within a decade (theory states) that pricing will adjust to available buying power. Just as with my housing example, low interest rates enable higher housing prices.

And more available cash in everyone's hands enables an increase in commodity and pricing of goods.

(BTW, virtually every article you read on housing pricing plus low cost mortgages backs up my logic, with articles also discussing what would happen to the housing market if interest rates even just doubled -- yes, a crash. This logic holds with all pricing.)

My point?

Create two income earners in households and slowly over time? That extra cash just becomes normal, and pricing of things reflects that.

But back to pricing skyrocketing?

Not gas prices:

https://inflationdata.com/articles/inflation-adjusted-prices...

Or electricity:

https://www.in2013dollars.com/Electricity/price-inflation/50... (Between 1950 and 2021: Electricity experienced an average inflation rate of 2.99% per year. This rate of change indicates significant inflation. In other words, electricity costing $100 in the year 1950 would cost $810.18 in 2021 for an equivalent purchase. Compared to the overall inflation rate of 3.45% during this same period, inflation for electricity was lower.)

It doesn't end there. Food pricing is lower. Household incomes are higher.

All of these comparisons you've drawn make me feel like I'm suppose to feel guilt for having purchased things with credit as well... admittedly things like TV's, etc. I've never paid "2-3x" for something as I've never fell for that trap... but I have purchased expensive things like computers and used my credit to spread that hurt out over a year...

This isn't about guilt, just reality. And maybe you're not in that trap, but endless consumers are, and they are paying 2x or 3x the cost of everything they own, as a result!

Credit/debt is the basis of any capitalistic society - it's literally in the blueprints. If you truly believe this I would argue you have a fundamental issue with capitalism as well.

No, heh, no it is not, at least not in the context we're discussing. Capitalism didn't start in the last 20 years.

For example, getting a mortgage used to be highly regulated, with stringent checks on ability to pay. If the housing crisis taught us anything, that's not true now, and even after 2010? Things are incredibly lax compared to the 50s.

Look at credit card approvals? Most people didn't even have credit cards in the 50s. Or revolving lines of credit.

Credit has nothing to do with capitalism. Nothing. Capitalism is about a lot of things, but not that.

Or, did capitalism not exist in the 50s?!

What's changed is that credit is freely available now, far more than ever before. And this causes "false wage increase" syndrome, for lack of a better term.

Back to this:

I do not disagree that credit is a problem. But it is not the "more than anything" problem. Actual livable wages for veryone willing to work is the "more than anything" problem.

and from your original (for context):

> Fifty years ago that average person would have been able to support a family, buy a house, and not live under the constant threat of bankruptcy from a surprise medical bill.

Thing is, that's not true for everyone. If we're talking about "people who would buy homes in the 70s, or 50s", then what I'm talking about is valid for that income earning class of wage earners.

And wages for that income class, are up! The problem for "middle class" america is "too much credit" and "paying absurd amounts for that credit".

Not sure we're going to agree here though.

[peterangular]

You're putting words in my mouth with stuff like:

> No, heh, no it is not, at least not in the context we're discussing. Capitalism didn't start in the last 20 years.

I did not make the claim that Capitalism started in the last 20 years - I made the claim that debt/credit is at the basis of a capitalistic society which is econ 101.

> Not sure we're going to agree here though.

We very much will not, and I don't appreciate how you literally were putting words in my mouth to back your claim. Good day.

[b112]

This is a very ... disappointing end to this conversation.

My point was, not that you said "the last 20 years", but instead, I am saying that credit as a basis of US style capitalism, has existed for 20 years.

And I go on above, to explain why.