Jump to content
House Price Crash Forum
Sign in to follow this  
D.C.

Why Are Americans In So Much Debt?

Recommended Posts

While opinions are always nice, doing lots of research on massive datasets is usually more reliable.

From a couple of years ago, Elizabeth Warren (yes, the same one) talks about the inevitable collapse of the US middle class.

Skip the first 6 minutes of the vid (fluff) but the rest is gold.

Americans should watch this before mouthing off about healthcare, expensive houses and car ownership, it is crippling their country.

Share this post


Link to post
Share on other sites
Watch it ;)

The borrowing now vs 1970 isn't going on consumption.

Cant you just precis for those of us who cant be arsed to lose 10 minutes of our life (or however long it is)?

Share this post


Link to post
Share on other sites
Watch it ;)

The borrowing now vs 1970 isn't going on consumption.

Thank you for posting this DC

That's the point - we are now spending LESS on 'tat' and more on houses

Edited by Stars

Share this post


Link to post
Share on other sites
Watch it ;)

The borrowing now vs 1970 isn't going on consumption.

I bet, without watching, its caused by very high salaries in healthcare, high earnings in the healthcare insurance business,big pharma and interest on tons of real estate that allows more borrowing on cars and more real estate.

cant be on education...most dont even know where Eyeraque is.

Share this post


Link to post
Share on other sites
Cant you just precis for those of us who cant be arsed to lose 10 minutes of our life (or however long it is)?

1970:

one income houshold

11% savings rate

2005:

two income household

-0.8% savings rate

Why?

In 2005 the US spends far less on food, clothing, appliances etc etc etc

But the big non discretionary things, a house, healthcare have skyrocketed.

Two incomes also means you need two cars or you can't get to work.

The effect is if you compare inflation adjusted disposable income, an American family was better off with a single wage in 1970.

Oh, per person wages have also dropped.

Bloody feminists... ;)

Share this post


Link to post
Share on other sites
1970:

one income houshold

11% savings rate

2005:

two income household

-0.8% savings rate

Why?

In 2005 the US spends far less on food, clothing, appliances etc etc etc

But the big non discretionary things, a house, healthcare have skyrocketed.

Two incomes also means you need two cars or you can't get to work.

The effect is if you compare inflation adjusted disposable income, an American family was better off with a single wage in 1970.

Oh, per person wages have also dropped.

Bloody feminists... ;)

John Michael Greer (The Archdruid http://thearchdruidreport.blogspot.com/200...etirement.html) actually questioned this analysis by proposing that if Americans were prepared to live in the same sized homes they lived in in 1970, have only one car, and have one partner at home in the domestic economy (i.e. not employing childcare, doing their own cooking, clothmending, maintenance etc.) then the standard of living would have stayed pretty much the same.

In his opinion, it's the social habits that have increased the debt, rather than a declining standard of living.

Share this post


Link to post
Share on other sites

Interesting post D.C

One other high expenditure is Child care and the cost of children.

Sterilisation by stealth.

Share this post


Link to post
Share on other sites
John Michael Greer (The Archdruid http://thearchdruidreport.blogspot.com/200...etirement.html) actually questioned this analysis by proposing that if Americans were prepared to live in the same sized homes they lived in in 1970, have only one car, and have one partner at home in the domestic economy (i.e. not employing childcare, doing their own cooking, clothmending, maintenance etc.) then the standard of living would have stayed pretty much the same.

In his opinion, it's the social habits that have increased the debt, rather than a declining standard of living.

Well, the house size hasn't gone up. Joe the plumbers are not living in mansions.

The two cars are needed, not optional. You can't have two incomes in the states without two cars.

The option of having a single income is discussed and it is bad, the fixed costs (house, healthcare) don't change much...

Share this post


Link to post
Share on other sites
Well, the house size hasn't gone up. Joe the plumbers are not living in mansions.

The two cars are needed, not optional. You can't have two incomes in the states without two cars.

The option of having a single income is discussed and it is bad, the fixed costs (house, healthcare) don't change much...

Well, I think the house sizes have definitely gone up (I think the "McMansions" were averaging about 4000 sq.ft) and the two cars are only needed dependant on two people working and the fact of suburban sprawl (i.e. the local Wal Mart being 8 miles away) so these are also behavioural.

That said, Greer doesn't give any detailed maths (just conjecture) so his case isn't conclusive - just worth consideration.

Share this post


Link to post
Share on other sites

While opinions are always nice, doing lots of research on massive datasets is usually more reliable.

From a couple of years ago, Elizabeth Warren (yes, the same one) talks about the inevitable collapse of the US middle class.

Skip the first 6 minutes of the vid (fluff) but the rest is gold.

Americans should watch this before mouthing off about healthcare, expensive houses and car ownership, it is crippling their country.

Woman's liberation is at the root of middle class collapse. I blame Jane Fonda.

Share this post


Link to post
Share on other sites
This video was posted on here a long, long time ago. Looks like HPC are going round in circles...

I must have been doing something more constructive that day.

Share this post


Link to post
Share on other sites
Woman's liberation is at the root of middle class collapse. I blame Jane Fonda.

This Jane Fonda ?

barbarella.jpg

She could fire my arrow any day.

Share this post


Link to post
Share on other sites
Well, I think the house sizes have definitely gone up (I think the "McMansions" were averaging about 4000 sq.ft) and the two cars are only needed dependant on two people working and the fact of suburban sprawl (i.e. the local Wal Mart being 8 miles away) so these are also behavioural.

That said, Greer doesn't give any detailed maths (just conjecture) so his case isn't conclusive - just worth consideration.

McMansions were not getting purchased by 'Median Man', they were purchased by 'Top Quintile Man & Wife'.

'Median Man' also lives in the suburban sprawl and so needs a car. 'Wife of Median Man' also lives in the suburban sprawl and also needs a car to get to work and do the shopping. That is sort of the point...

Share this post


Link to post
Share on other sites

What does it matter. If you freely choose not to take on debt the government effectively force it on you anyway. And that goes for both of our 'democratic' parties. Im coming round to the opinion that its the Chinese's fault for keeping fowarding us money.

Share this post


Link to post
Share on other sites
This video was posted on here a long, long time ago. Looks like HPC are going round in circles...

I posted it ages ago and then lost the link to it. The topic does get debated frequently and having just rediscovered it thought I would post it.

Worth circling a few more times because it has implications.

For example if the US consumer is supposed to be the engine of world growth, from those figures the engine has been running out of fuel for a generation. The problem is much more difficult to fix without re-engineering US society.

Share this post


Link to post
Share on other sites
I posted it ages ago and then lost the link to it. The topic does get debated frequently and having just rediscovered it thought I would post it.

Worth circling a few more times because it has implications.

For example if the US consumer is supposed to be the engine of world growth, from those figures the engine has been running out of fuel for a generation. The problem is much more difficult to fix without re-engineering US society.

Something from one of the US economists on the BBC this morning: The US is rather like where the UK was in 1968.

I think they mean: stagflation and real structural problems lasting 1-2 decades.

The US economy should really have died a while ago. The mistake was thinking they were 60 years behind us on the assumption that things like a national health service are only just being considered.

US hegemony was at best an aberration based on huge productivity during the latter years of WWII. The US GDP shot up and dropped like a stone afterwards, but stayed sticky well above the GDP per capita rates in Europe.

In the last 30 years they've pushed the money supply to maintain nominal GDP per capita above their European counterparts. They're about to go through the collapse we did from 73-85. In reality, they are probably 30 years behind us at best and their living standards are about to collapse along with their social fabric.

I still reckon the implications for the dollar are a halving and since the pound has broken at least a 4 1/2 decade decline against the dollar, you could see a peak of 3 USD to the pound at some point in the next 10-15 years. Plenty of fun in between mind you.

Edited by AvidFan

Share this post


Link to post
Share on other sites

I should add that the similarity is even more striking if you consider oil. While we “had†oil in the 1970s, we didn’t have any revenue from it and high oil prices killed the UK economy. The revenue flowing in the 1980s helped quite a lot. The US now only produces 20% of the oil it consumes – yet there is oil washed up on the beaches in California and they for some reason wish to save Alaska from the oil companies. When push comes to shove and the US is on its knees, they’ll forget all that and dig up everything to try and reclaim their lost decades of prosperity. Or perhaps they’ll manage to buy 4 million barrels a day from Canada and another 4 million from Iraq. Or who knows, maybe they’ll invade Iran, Venezuela and now perhaps even Libya.

Going forward, the UK is barely oil independent – producing around 1.7 – 1.8 mullion barrels a day at best. The UK will make the transition to an economy that doesn’t run with half as much oil in the next 20 years while the US will have to face that further down the road.

Edited by AvidFan

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   295 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.