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Average household net worth declined 36% over 10 years.... (1 Viewer)

That's a bad looking stat.

The stock market run up probably doesn't effect the average household that much because they don't have that much invested? Total guess.

I'm doing alright but live in area with great economy and was able to buy house 15 years ago.

 
Housing prices have recovered, the economy created more jobs in the first half of the year than it had in seven years, and household debt to income ratios are there lowest in 30 years. Energy production is way up, manufacturing costs down as they rise sharply in Asia, and consumer spending is healthy again.

Things are looking good. :thumbup:

 
Housing prices have recovered, the economy created more jobs in the first half of the year than it had in seven years, and household debt to income ratios are there lowest in 30 years. Energy production is way up, manufacturing costs down as they rise sharply in Asia, and consumer spending is healthy again.

Things are looking good. :thumbup:
Really? My house has not recovered. I bought at 385K in 2007, which was the peak, it went down to 320K and now is at about 350K.

I think the reason spending is up is because people are spending almost all of their disposable income. I also think people are borrowing a buttload of money that they do not have. For example, a new vehicle that is a car worth spending money on is at least 35K. That is alot of scratch for a car. Many people are finding a way to finance these cars, but it is costing them.

 
the last 2 posts seem to see things a bit different.
I'm not going to try and predict the future. I'm talking about the past. We are still discussing the strength of the recovery six years later.Maybe we make big GDP and job growth strides in 2015. We can always hope.

 
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Housing prices have recovered, the economy created more jobs in the first half of the year than it had in seven years, and household debt to income ratios are there lowest in 30 years. Energy production is way up, manufacturing costs down as they rise sharply in Asia, and consumer spending is healthy again.

Things are looking good. :thumbup:
Really? My house has not recovered. I bought at 385K in 2007, which was the peak, it went down to 320K and now is at about 350K.

I think the reason spending is up is because people are spending almost all of their disposable income. I also think people are borrowing a buttload of money that they do not have. For example, a new vehicle that is a car worth spending money on is at least 35K. That is alot of scratch for a car. Many people are finding a way to finance these cars, but it is costing them.
Housing prices have risen in each of the top 20 metro areas over the past 18 months. Not sure where you live and there isn't much you can do if you bought at the peak. I bought in 2011, my house is worth 15%-20% more than what I bought it for.

You seem to be guessing on the second part of your statement, like I said debt to income ratios are their lowest in 30 years. Median household income is down from it's highs, but total household income is up. That means the income gap is widening, as the middle class disintegrates.

 
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I think the reason spending is up is because people are spending almost all of their disposable income.
But if things were as bad as you claim, then people wouldn't have that much disposable income to spend.
I think that is the point. Just to get by (and by get by, I mean the "average" middle class family) doesn't have money to save. Now, you can argue that they should be saving off the top (they should) and what's left is actually disposable. You can argue that our society values are skewed towards consumption right now (they are) and the corporations and government both have incentive to keep it that way (they do).

There was a study recently that said to have the "average American middle class lifestyle", i.e. similar to the good old days, a family would need $130K/year. Now I know here we all are well above that, but the median income is still around $50K - it has not been shifting upwards at the same rate as inflation. I do question that $130K figure, but I also question that a family of 4 would thrive and not have to be pretty frugal on $50K.

 
I think the reason spending is up is because people are spending almost all of their disposable income.
But if things were as bad as you claim, then people wouldn't have that much disposable income to spend.
I think that is the point. Just to get by (and by get by, I mean the "average" middle class family) doesn't have money to save. Now, you can argue that they should be saving off the top (they should) and what's left is actually disposable. You can argue that our society values are skewed towards consumption right now (they are) and the corporations and government both have incentive to keep it that way (they do).

There was a study recently that said to have the "average American middle class lifestyle", i.e. similar to the good old days, a family would need $130K/year. Now I know here we all are well above that, but the median income is still around $50K - it has not been shifting upwards at the same rate as inflation. I do question that $130K figure, but I also question that a family of 4 would thrive and not have to be pretty frugal on $50K.
Is this really true, though?

 
I think the reason spending is up is because people are spending almost all of their disposable income.
But if things were as bad as you claim, then people wouldn't have that much disposable income to spend.
I think that is the point. Just to get by (and by get by, I mean the "average" middle class family) doesn't have money to save. Now, you can argue that they should be saving off the top (they should) and what's left is actually disposable. You can argue that our society values are skewed towards consumption right now (they are) and the corporations and government both have incentive to keep it that way (they do).

There was a study recently that said to have the "average American middle class lifestyle", i.e. similar to the good old days, a family would need $130K/year. Now I know here we all are well above that, but the median income is still around $50K - it has not been shifting upwards at the same rate as inflation. I do question that $130K figure, but I also question that a family of 4 would thrive and not have to be pretty frugal on $50K.
Is this really true, though?
No, but it's common FFA schtick. You know, we are all well off, rolling in Benjamin's, and have super-model wives. Anything negative we post is about the neighbor, but not in our subdivision, the one down the street & across town where people are slumming it.

 
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Using 2003 to 2013 is a stupid timeframe because the economy crashed right in the middle. Its more informative to remove the crash entirely and look at 2009 or 2010 to the present. Just my opinion.

 
Housing prices have recovered, the economy created more jobs in the first half of the year than it had in seven years, and household debt to income ratios are there lowest in 30 years. Energy production is way up, manufacturing costs down as they rise sharply in Asia, and consumer spending is healthy again.

Things are looking good. :thumbup:
Really? My house has not recovered. I bought at 385K in 2007, which was the peak, it went down to 320K and now is at about 350K.

I think the reason spending is up is because people are spending almost all of their disposable income. I also think people are borrowing a buttload of money that they do not have. For example, a new vehicle that is a car worth spending money on is at least 35K. That is alot of scratch for a car. Many people are finding a way to finance these cars, but it is costing them.
Housing prices have risen in each of the top 20 metro areas over the past 18 months. Not sure where you live and there isn't much you can do if you bought at the peak. I bought in 2011, my house is worth 15%-20% more than what I bought it for. You seem to be guessing on the second part of your statement, like I said debt to income ratios are their lowest in 30 years. Median household income is down from it's highs, but total household income is up. That means the income gap is widening, as the middle class disintegrates.
The rich, and the Chinese, were buying expensive homes with cash in metro areas, each for different reasons. The rest of housing stinks. It should stink, why should housing go up 10% a year anyways. Houses are maintenance and tax headaches. People should go back to the way things were, I.e., live in shacks, spend more time outside, maybe come home to sleep if you got all the cows rounded up before dark.

 
Housing prices have recovered, the economy created more jobs in the first half of the year than it had in seven years, and household debt to income ratios are there lowest in 30 years. Energy production is way up, manufacturing costs down as they rise sharply in Asia, and consumer spending is healthy again.

Things are looking good. :thumbup:
Really? My house has not recovered. I bought at 385K in 2007, which was the peak, it went down to 320K and now is at about 350K.

I think the reason spending is up is because people are spending almost all of their disposable income. I also think people are borrowing a buttload of money that they do not have. For example, a new vehicle that is a car worth spending money on is at least 35K. That is alot of scratch for a car. Many people are finding a way to finance these cars, but it is costing them.
Housing prices have risen in each of the top 20 metro areas over the past 18 months. Not sure where you live and there isn't much you can do if you bought at the peak. I bought in 2011, my house is worth 15%-20% more than what I bought it for. You seem to be guessing on the second part of your statement, like I said debt to income ratios are their lowest in 30 years. Median household income is down from it's highs, but total household income is up. That means the income gap is widening, as the middle class disintegrates.
The rich, and the Chinese, were buying expensive homes with cash in metro areas, each for different reasons. The rest of housing stinks. It should stink, why should housing go up 10% a year anyways. Houses are maintenance and tax headaches. People should go back to the way things were, I.e., live in shacks, spend more time outside, maybe come home to sleep if you got all the cows rounded up before dark.
The Chinese are coming! The Chinese are coming!!
 
Housing prices have recovered, the economy created more jobs in the first half of the year than it had in seven years, and household debt to income ratios are there lowest in 30 years. Energy production is way up, manufacturing costs down as they rise sharply in Asia, and consumer spending is healthy again.

Things are looking good. :thumbup:
Really? My house has not recovered. I bought at 385K in 2007, which was the peak, it went down to 320K and now is at about 350K.

I think the reason spending is up is because people are spending almost all of their disposable income. I also think people are borrowing a buttload of money that they do not have. For example, a new vehicle that is a car worth spending money on is at least 35K. That is alot of scratch for a car. Many people are finding a way to finance these cars, but it is costing them.
Housing prices have risen in each of the top 20 metro areas over the past 18 months. Not sure where you live and there isn't much you can do if you bought at the peak. I bought in 2011, my house is worth 15%-20% more than what I bought it for. You seem to be guessing on the second part of your statement, like I said debt to income ratios are their lowest in 30 years. Median household income is down from it's highs, but total household income is up. That means the income gap is widening, as the middle class disintegrates.
The rich, and the Chinese, were buying expensive homes with cash in metro areas, each for different reasons. The rest of housing stinks. It should stink, why should housing go up 10% a year anyways. Houses are maintenance and tax headaches. People should go back to the way things were, I.e., live in shacks, spend more time outside, maybe come home to sleep if you got all the cows rounded up before dark.
The Chinese are coming! The Chinese are coming!!
They have come on pretty strong in the RE market. Lots of investment properties in big metro areas.

 
I am only taking home around 60K a year with little hope to clear any more than that in the near future.
And you bought a house for $385k? :shock:

Your wife has a good income then?
I have a pretty unique situation. Large amount of inherited money, then went into education, which does not pay well relative to the work. Ex-wife had a good income, about 150K when we divorced, although that is as a lawyer working in house at a super large Fortune 500 company.

I am not starting this thread to piss and moan about my situation. I am pretty good because I own my home free and clear, but it sucks for many people around me who look like they have very little chance to climb the ladder. I saw those numbers and they were sort of shocking to me. A 36% decline in household net over a 10 year period is a crap-ton. At the very least, everyones' worth should be going up around 2 - 4 % a year, no?

 
I am only taking home around 60K a year with little hope to clear any more than that in the near future.
And you bought a house for $385k? :shock: Your wife has a good income then?
I have a pretty unique situation. Large amount of inherited money, then went into education, which does not pay well relative to the work. Ex-wife had a good income, about 150K when we divorced, although that is as a lawyer working in house at a super large Fortune 500 company.

I am not starting this thread to piss and moan about my situation. I am pretty good because I own my home free and clear, but it sucks for many people around me who look like they have very little chance to climb the ladder. I saw those numbers and they were sort of shocking to me. A 36% decline in household net over a 10 year period is a crap-ton. At the very least, everyones' worth should be going up around 2 - 4 % a year, no?
No. Not when the largest part of your net worth is your equity portion in a leveraged asset. Let's say you bought a 200k house in 04 and put 40k down.

2007 - worth 350k (equity of 190k assuming no HELOC and accounting for no principal reduction).

2013 - worth 175,000 (equity of 15k same assumptions as above)

Let's say the 40k was 50% of your net worth in 2004.

2007 - nearly 300% increase from 04 (from 80k to 230k) *assuming no other change in net worth assets

2013 - nearly 30% decrease from 04 (from 80k to 45k)* greater than 75% reduction from 04*

 
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Using 2003 to 2013 is a stupid timeframe because the economy crashed right in the middle. Its more informative to remove the crash entirely and look at 2009 or 2010 to the present. Just my opinion.
#### happens. We use decades to measure progress all the time. A crash occurred in the last decade. It affected everyone. Do you also like to throw out a RBs 200 yard game when evaluating his season?

 
I am only taking home around 60K a year with little hope to clear any more than that in the near future.
And you bought a house for $385k? :shock: Your wife has a good income then?
I have a pretty unique situation. Large amount of inherited money, then went into education, which does not pay well relative to the work. Ex-wife had a good income, about 150K when we divorced, although that is as a lawyer working in house at a super large Fortune 500 company.

I am not starting this thread to piss and moan about my situation. I am pretty good because I own my home free and clear, but it sucks for many people around me who look like they have very little chance to climb the ladder. I saw those numbers and they were sort of shocking to me. A 36% decline in household net over a 10 year period is a crap-ton. At the very least, everyones' worth should be going up around 2 - 4 % a year, no?
No. Not when the largest part of your net worth is your equity portion in a leveraged asset.Let's say you bought a 200k house in 04 and put 40k down.

2007 - worth 350k (equity of 190k assuming no HELOC and accounting for no principal reduction).

2013 - worth 175,000 (equity of 15k same assumptions as above)

Let's say the 40k was 50% of your net worth in 2004.

2007 - nearly 300% increase from 04 (from 80k to 230k) *assuming no other change in net worth assets

2013 - nearly 30% decrease from 04 (from 80k to 45k)* greater than 75% reduction from 04*
The problem with this story is that most of us live in areas where prices have been more stable that what you describe. Buy at 200K in '04 and then it is worth 350K three years later? I am sure there are places in Cali/Fla/Arizona that had that happen , but that wasn't happening everywhere.

Plus how does somebody go from putting down 40K to having 230K of equity in 3 years? Everything you pay upfront on a mortgage is interest.

 
I am only taking home around 60K a year with little hope to clear any more than that in the near future.
And you bought a house for $385k? :shock: Your wife has a good income then?
I have a pretty unique situation. Large amount of inherited money, then went into education, which does not pay well relative to the work. Ex-wife had a good income, about 150K when we divorced, although that is as a lawyer working in house at a super large Fortune 500 company.

I am not starting this thread to piss and moan about my situation. I am pretty good because I own my home free and clear, but it sucks for many people around me who look like they have very little chance to climb the ladder. I saw those numbers and they were sort of shocking to me. A 36% decline in household net over a 10 year period is a crap-ton. At the very least, everyones' worth should be going up around 2 - 4 % a year, no?
No. Not when the largest part of your net worth is your equity portion in a leveraged asset.Let's say you bought a 200k house in 04 and put 40k down.

2007 - worth 350k (equity of 190k assuming no HELOC and accounting for no principal reduction).

2013 - worth 175,000 (equity of 15k same assumptions as above)

Let's say the 40k was 50% of your net worth in 2004.

2007 - nearly 300% increase from 04 (from 80k to 230k) *assuming no other change in net worth assets

2013 - nearly 30% decrease from 04 (from 80k to 45k)* greater than 75% reduction from 04*
The problem with this story is that most of us live in areas where prices have been more stable that what you describe. Buy at 200K in '04 and then it is worth 350K three years later? I am sure there are places in Cali/Fla/Arizona that had that happen , but that wasn't happening everywhere.Plus how does somebody go from putting down 40K to having 230K of equity in 3 years? Everything you pay upfront on a mortgage is interest.
Equity of 190 + 40k in net worth not in home.
 
If you were in charge of everything, how would you fix it?
I'd expand the public sector. Lots more government jobs at all levels, plus a guaranteed govt. job at minimum wage for anybody who wanted to work. That solves the unemployment problem and helps tighten up the labor market.

Change taxation, a lot. Eliminate corporate taxes, eliminate taxes on anyone earning less than, say, $50,000, raise taxes on the superrich. Tariffs punishing the use of offshoring and cheap labor.

Paid for, mostly, with deficit spending.

 
If you were in charge of everything, how would you fix it?
I'd expand the public sector. Lots more government jobs at all levels, plus a guaranteed govt. job at minimum wage for anybody who wanted to work. That solves the unemployment problem and helps tighten up the labor market.

Change taxation, a lot. Eliminate corporate taxes, eliminate taxes on anyone earning less than, say, $50,000, raise taxes on the superrich. Tariffs punishing the use of offshoring and cheap labor.

Paid for, mostly, with deficit spending.
Unemployment at a 4 or 5 percent level is healthy for capitalism, it creates competition and ensures a tangible advantage in most sectors.

As a federal government employee, I think there is waste in the system and I think there is a lot less waste in federal than there is in state public sectors. Menial labor jobs are contracted, low paying positions involve mostly data entry and repetitive tasks that do not require education or much training. There is competition for these jobs now, there would be little reason IMO to create more of them just for the sake of reducing unemployment as a whole. If a government job created does not produce it is a waste of taxpayer dollars, and the benefit structure is way too costly to hire people at the lowest levels just to do it.

I would be fine in creating public sector intern jobs to clean highways, waterways, and repair school yard play equipment. Stuff like that. Jobs that college kids can do to earn some extra money while learning the value of service to something bigger than themselves. But handing government jobs to under-qualified and transient types is burdensome and hollow. The service sector has plenty of opportunities for these people, McDonalds always has jobs open for those seeking minimum wage work.

 
If you were in charge of everything, how would you fix it?
I'd expand the public sector. Lots more government jobs at all levels, plus a guaranteed govt. job at minimum wage for anybody who wanted to work. That solves the unemployment problem and helps tighten up the labor market.

Change taxation, a lot. Eliminate corporate taxes, eliminate taxes on anyone earning less than, say, $50,000, raise taxes on the superrich. Tariffs punishing the use of offshoring and cheap labor.

Paid for, mostly, with deficit spending.
In your scenario, I guess a prospect negotiating salary would rather negotiate for $48,000 then $60,000.

How much tax should wealthy pay? The term 1% is ridiculous, it is the top .01% of that bucket taking home gigantic sums of money. Someone earning $500k in NYC (which is comfortable but far from sailing yachts) is coming home after tax (which is the bulk of the deduction ), 401k, insurance, etc. with about 55-60% of their salary, how much more should this person pay?

 
A small minority are getting richer, and a large majority are getting poorer.

If anyone wants to see a situation different than that, there's plenty of stats to confirm their bias.

 
If you were in charge of everything, how would you fix it?
I'd expand the public sector. Lots more government jobs at all levels, plus a guaranteed govt. job at minimum wage for anybody who wanted to work. That solves the unemployment problem and helps tighten up the labor market.

Change taxation, a lot. Eliminate corporate taxes, eliminate taxes on anyone earning less than, say, $50,000, raise taxes on the superrich. Tariffs punishing the use of offshoring and cheap labor.

Paid for, mostly, with deficit spending.
Unemployment at a 4 or 5 percent level is healthy for capitalism, it creates competition and ensures a tangible advantage in most sectors.

As a federal government employee, I think there is waste in the system and I think there is a lot less waste in federal than there is in state public sectors. Menial labor jobs are contracted, low paying positions involve mostly data entry and repetitive tasks that do not require education or much training. There is competition for these jobs now, there would be little reason IMO to create more of them just for the sake of reducing unemployment as a whole. If a government job created does not produce it is a waste of taxpayer dollars, and the benefit structure is way too costly to hire people at the lowest levels just to do it.

I would be fine in creating public sector intern jobs to clean highways, waterways, and repair school yard play equipment. Stuff like that. Jobs that college kids can do to earn some extra money while learning the value of service to something bigger than themselves. But handing government jobs to under-qualified and transient types is burdensome and hollow. The service sector has plenty of opportunities for these people, McDonalds always has jobs open for those seeking minimum wage work.
Why is 4-5% unemployment "healthy"? All it does is lower the cost of labor, and that's not exactly our economy's problem. Besides, when you have a minimum wage, the labor market isn't setting the wage floor.

Government jobs, IMO, should be "useful but not 'productive,'" meaning they should not compete with the private sector. I'm not terribly worried about efficiency, either, because the purpose of a guaranteed job at the lower end is mostly to distribute money. We have various forms of welfare to do that now, and we don't ask for anything in return. But most of those jobs wouldn't fall into that workfare category, anyway.

The key to all of this is understanding that deficit spending isn't harmful in and of itself. Waste really isn't really an issue, nor is taxation. We have tons of unused resources at our disposal that aren't being used, labor being the most important. No need to be super-efficient with labor - the whole idea is to spend until 100% of that resource is being used. Full employment alone solves most of our economic problems.

 
If you were in charge of everything, how would you fix it?
There's nothing to fix. A few years ago, a lot of people's net worth was artificially inflated by a housing bubble. Prices have since reverted to more sane levels. That undoubtedly wiped a lot of net worth off the books, but rightly so.

 
Why is 4-5% unemployment "healthy"?
Because healthy, well-functioning labor markets have a certain amount of natural churn. People get fired for cause and don't immediately find a job. Somebody voluntarily quits their current job without a backup. A firm closes and dismisses its workers. Those sorts of things count in the unemployment statistics, and they're not problems that need fixing.

 

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