Age of Easy Money
This was an excellent documentary. So I decided to find charts that show how this happened.
What seems obvious is that the sledge-hammer monetary policy has taken the place of surgical fiscal policy. The inability to create real political change has forced the Fed to act, but this is a badly flawed alternative. Fed policy is simply wealthy bankers finding solutions for the problems of other wealthy bankers.
This shows up in a dramaic increase in inequality.
The top 10% of households by wealth had $6.8 million on average. As a group, they held 69% of total household wealth.
The bottom 50% of households by wealth had $48,000 on average. As a group, they held only 2.4% of total household wealth.
Nowhere does this show up more dramatically than in homeownership.
The U.S. homeownership rate hit its lowest level in five decades in 2020, falling by 2 percentage points in 10 years’ time, according to Census Bureau data released Thursday.
Slightly more than 80 million out of 126.8 million occupied housing units across the country were inhabited by homeowners in 2020, putting the nation’s homeownership rate at 63.1 percent.
This is the lowest homeownership rate since 1970.
Comments
Supporting a home is becoming ghastly expensive
So, I would guess I'm considered to be of the "boomer" generation, born in 1955.
Doesn't really matter which generation I'm considered as being in. We worked our
tails off to pay off the mortgage early, saving tens of thousands on interest charges.
After fixing and maintaining this old house, all the various appliances are now dying
with no reasonable repairs available (see planned obsolescence). So replacement
is the only viable option. I can not imagine what a young person would have to pay
now to buy a home. 30 years ago, $100K seemed like too much, but we made the jump.
Now the tax assessor says it is worth $600K. Maybe so, maybe not. Doesn't matter.
The value of the dollar has plummeted, wages are not keeping pace with inflation.
An option would be to cash-out and move into a sailboat or motor home, I suppose?
It is a mixed-up crazy world. And sad to see the degradation time has wrought on
this structure. What is a poor boy to do? Work until death. Run faster to stay in the
same place with an aging body is getting pretty old. The physical suffering has to
get in line with the mental, emotional and economic hardships. And I am one of the
'lucky' ones. Sheesh.
thanks for your essay
I hear you, Captain.
Same age within a year or two. We bought into the American dream, owned a series of houses that culminated in buying the farm (financially), started businesses, lost it all in the last great business downturn, rented a place that burned down, and now own almost nothing. We’re now within 10 grand of being completely out of debt (after emptying my 401k trying to save the ranch, going in the hole to the friggin’ feds for my troubles), and we’re now down to what would basically fit in a 40-foot sailboat.
We lived for 3 months after the fire in a 900sqft apartment up in the middle of Denver, and can do that standing on our heads. So we’re looking to go expat, since we wouldn’t even fill a container now. Will it be afloat, or a seaside apt with a really good set of storm shutters and a diesel gennie on the roof? Dunno.
I can tell you that I’d rather drink molten lead than get sucked into the US system of real estate roulette again. We should have left the keys in the mailbox and walked away two years earlier… That will never happen again on my watch. And I don’t know if we’ll actually survive long enough to put any plan into motion.
But I for one wouldn’t mind rowing the dinghy to shore from where we’re hanging on the hook, or a mooring- for more Adult Beverage, and the odd protein and veg. And propane. And diesel. And pumps. And sandpaper and resin and varnish and those damned gaskets and diaphragms for the watermaker and more pumps and the weird tool for to reset the thing that goes “bloop” when the anchor drags. And fresh charts, plus more on a thumb drive for the plotter. And more paracord for a clothesline and to repair the dodger. And a new Q flag. And more pumps.
Hmmm…. Realistically, I’ll die at my desk. But sometimes, when it is really quiet and there’s nobody else around…. I do think of pumps………
Twice bitten, permanently shy.
Don't know how your Spanish
and Guarani is, but if you're thinking expat on limited means, I'd take a look at Paraguay.
Fairly stable and sane government, pretty benign climate, all their electricity from hydro, some of the lowest bars money-wise to get permanent residency (you have to deposit something like $5K US per person and can apply without ever having actually gone there), etc.
Paraguay was one of the countries Japan was encouraging emigration to back in the 1920's or so, here is a channel in Japanese by a young family (I think they had relatives there already) who are recent immigrants...
(In Japanese, but you can get the general drift)