The total US housing stock grew by 1.507 million housing units (new construction minus demolitions) over the past 12 months…
Over the past five years, the total US housing stock grew by 7.51 million housing units (new construction minus demolitions). At the average household size, this addition provides housing for 17.3 million more people.Over the past five years, the total US housing stock grew by 7.51 million housing units (new construction minus demolitions). At the average household size, this addition provides housing for 17.3 million more people…
over this five-year period, the housing stock has grown substantially faster than the population,…
There were 15.64 million vacant housing units in Q2. Of them, 12.22 million were “year-round vacant,”…
No, I am suggesting that the increasing economic reality is that people are unable to save. This is not a moralistic bad choice on their part.
People can’t save because of inflation, stagnant wages over decades, and growing government debt caused from reduced taxation on the very wealthy.
Whether government is spending wisely or not has been an issue forever, and all agree there is wasteful spending. Peculiarly, the wealthy benefit there, too, as they direct the spending their way; through the military industrial, pharmaceutical, AI, ad nauseum complex.
The table is tilted dramatically toward the very wealthy. It needs to shift back to a more level playing field. If it doesn’t, the tide will rise until the middle- and upper-middle classes foot more of the bill. That, or we’ll have dramatically reduced services for all (Grover Norquist’s dream), except the military/industrial ad nauseum complex.
No, it’s an income allocation observation.
When income is generated by labor and capital, how does that income get allocated to labor and capital?
If it shifts too far towards capital, labor struggles to get ahead and capital just plows more wealth into more capital (assets). And asset inflation results.
The above is an observation supported by what we observe over history and recent history as well.
That observation per se is not a political topic, just a fact.
Are people unable to save because someone else is wealthy or because gov’ts are devaluing currency and destroying purchasing power? California’s budget has doubled in the past 10 years as its population has declined. Is that the fault of the wealthy or poor tax revenue management?
We have one of the most progressively tiered tax codes. Regardless, tax reductions do not cause widespread long lasting inflation, nor does it cause wage stagnation. You’re muddling together items that have no cause and effect relationship.
The vast majority of Federal spending is to maintain the military and then on social safety net programs intended to benefit the poor and lower classes.
Capital is nothing more than stored labor. There is no broad and systemic inflation except through the printing of money by govts. No individual or group of individuals can have a similar impact on inflation of assets in the broad sense. Further, it ignores the deployment of capital to develop technological innovations. One of the areas where the private sector is actually working to offset govt induced inflation.
So?
Most capital is owned by the wealthy.
(which just shows that most of labor’s outputs end up with the wealthy)
What?
Robots (or something not an individual person) aren’t buying assets.
Individuals are the ultimate beneficial owners of most assets.
And most of that money printing ends up where? The wealthy.
There’s no one out there driving asset inflation other than the people who buy and own assets, also known as the wealthy - again, it’s axiomatic.
Not exactly sure what you are trying to say.
What part of the wealthy buying assets and driving asset inflation because they have more and more assets, do you disagree with?
It’s just an observation.
These are not outlandish statements.
What specific assets are being inflated because of wealth that would otherwise be affordable to the poor and the middle class? It really is an absolutely absurd position to suggest that the stagnation of certain wages or the corresponding increase in the cost of living is because of a surplus of wealth being deployed into assets driving up prices.
The systemic long term increase in cost of public education, healthcare, food, housing, fuel, and all sorts of basic needs, along with housing, automobiles are being driven up by the collective deployment of capital by less than 1000 billionaires that live in the US?
I’m sorry, not only is that not axiomatic, except with regards to very small markets where a few buyers can disrupt pricing, it’s completely false. Even if there was any pressure on broad asset prices, it would be so small that it would be immeasurable, particularly when compared to the inflationary impact of govt spending. Why do you think poor countries that print money have hyperinflation? Do you really think it’s because of an outsized growth of billionaires? They print money and then to a point where the public trust in it is completely eroded.
Never said that.
Never said that.
Could be, but never said that.
Where do you think a large chunk of that money ends up after it goes into the economy, particularly healthcare and defense?
Same as the rest of the economy: it mostly goes into the hands of the capital holders, who are largely the wealthy.
Follow the money: economy > wealthy capital holders > assets.
It’s not complicated.
Open question:
Who else could drive up asset prices, especially financial assets, other than the people who buy and own most assets, the wealthy?
Who is that other group?
Neither. Their wages aren’t keeping up.
I didn’t say that. I said people are unable to save for three reasons. Let me clarify: stagnant wages, inflation, and increased government debt (which alone is caused by reduced taxation of the very wealthy, resulting in fewer services and a less robust economy)
The progressively tiered tax codes you mention have reduced drastically. From Wikipedia:
“In the mid-twentieth century, marginal tax rates (the rate applied to the last bit of income) in the United States and United Kingdom exceeded 90%. As recently as the late 1970s, the top marginal tax rate in the U.S. was 70%. In the words of Piketty and Saez, “… the progressivity of the U.S. federal tax system at the top of the income distribution has declined dramatically since the 1960s”.[2]They continue, “… the most dramatic changes in federal tax system progressivity almost always take place within the top 1 percent of income earners, with relatively small changes occurring below the top percentile.”
As for who’s muddling, well, it isn’t me.
Be specific, what assets are being driven up in value by the wealthy that would otherwise be available to the poor and middle class for purchase? The value of financial assets are generally tied to one of two things or both.
- The scarcity of the asset is such that it will appreciate in value
- The future earnings produced by the asset are likely to increase, which increases the sum total of those earnings reduced to present value.
I’m happy to have a discussion but this doesn’t make any sense. Tax revenue has more than doubled over the last 25 years. There are just under 1000 billionaires with a collective net worth of 9 trillion. We have a 33 trillion dollar deficit. The math is pretty simple and it won’t be solved by higher tax rates. If your argument is that tax cuts funded by borrowing cause inflation, I don’t disagree. It is the borrowing of money though that directly increases inflation. All you have to do is look to the Biden administration. You had higher tax rates and higher govt spending and massive increase inflation.
I’m speaking of all assets, not conditioning them on “otherwise be available to the poor and middle class for purchase?”
Stocks, bonds, real estate (including single family homes and apartments), businesses or all sizes, crypto (not an asset in my book, but in some others), precious metals, etc
The part in quotes is almost meaningless because the poor and middle class barely own and buy assets.
I’m making a general point about a major source of asset inflation, nothing more.
People are unable to save, invest, and buy homes
for three main reasons:
- stagnant wages, for decades,
- inflation,
- and a growing government debt, which makes a less stable and robust economy for all but the very wealthy.
Growing government debt is because of decades of tax breaks for the very wealthy and reckless expenditures, often benefitting the very wealthy.
Seems to make sense to me, but maybe I’m missing something.
What % of the population is unable or unwilling? The average lottery winner files for bankruptcy inside of 5 years. I’m not saying that to be insensitive. I’m asking how much personal responsibility would one bear for their own economic outcomes?
The govt tax revenues continue to grow every year and yet govt is unable to spend within that budget. The billionaire class could give up everything and the govt would still be in the hole 24 trillion. It would continue to print money, causing asset prices to inflate for no other reason than the increased circulation of money.
At what point is this a spending and not a revenue issue?
Seattle was more affordable before Bill Gates moved Microsoft from Albuquerque, NM to Bellevue, WA, and then other tech firms joined him in the Seattle area . If you have a lot of high wage workers moving to an area, it bids up the cost of housing and cost of living. See the “Resource curse” in economics.
{{ Bruce Bueno de Mesquita, who developed selectorate theory, explains that when an autocratic country has lots of natural resources, the ruler’s optimal strategy for political survival is to use that revenue to buy the loyalty of critical support groups and oppress the rest of the population by denying them civil liberties and underfunding education and infrastructure. }}
That’s more or less been the US model since its founding, with a white male oligarchy and a large suppressed population of black people that we maintain to this day.
intercst
It has nothing to do with broad based systemic inflation across the country.
The US is an idea. It is the culmination of thinking that may go back more than a 1000 years that evolved into manifest self destiny. Imperfect, it continues to expand that idea. As a result, beyond its economic standing, this nation is one of the most diverse and probably least discriminatory of any modern nation.
You’re bitter I think in your outlook. More importantly, you lack an understanding and appreciation of history and the context of those various eras. 1/2 the world was enslaved at one point or another.
there are 7 ethnic groups that rank higher than caucasians in terms of wealth and income in the US. The characteristics of those groups are why whites, blacks and Hispanics rank below them in terms of prosperity. Nothing more and nothing less.
For what it’s worth… I have about 60 pages of a lengthy back-and-forth with Mr AI at Google. The upshot was the next generational economic tanking will begin on or about 2035. Enjoy the “it’s different this time” sunset and euphoric melt-up the next few years.
Sure it does. The top 10% of the income/wealth pyramid accounts for 50% of consumer spending today. Three decades ago the upper 10% accounted for only 36%. That’s the natural result of the big difference in taxation, and the lack of antitrust regulation to maintain competitive markets. Crony capitalism and the bipartisan culture of corruption in Washington means the rich get richer, while the working and middle-class fall further behind.
I’ve seen the real-life benefits of this since I quit working back in 1994 and traded pulling the cart for riding in it with the rest of the leisure class living off investment income or the holy grail of tax-free inherited wealth. Wage & salary income is for suckers.
Give them what they voted for – good and hard.
intercst
It sounds like to me you have spent the last 30 years avoiding work and purpose. I find no value in the accumulation of wealth for the sake of it or in order to do nothing. Your posts reflect a pessimism and are an example that money does not buy happiness. I suspect your financial freedom is simply enough not to work but not enough to accomplish anything with it.
On the contrary, I simply read and understood the tax code and used my engineering skills to do the arithmetic. Engineers prize cost efficiency.
If I can create a middle -class income by doing a few hours of tax planning and portfolio rebalancing the last week of the year, there’s no way you’re going to see me sitting in an office for 40 plus hours a week under an employer’s supervision.
Life is too short.
intercst