US economy thread (4 Viewers)

[Sparky Polastri]

but I feel like if you were making $45k in 2018 chances are you don't feel great about the economy right now.

Certainly not trying to defend the current economy, but, do you think those making 45k in ‘18 felt good about the economy in 2018? I’d hazard no.

If you were the sole breadwinner certainly not. If you were a couple both making roughly that, maybe? I was more trying to pinpoint the section of the employment curve that's been hit the most by the events of the last few years.

middle and upper middle classes were impacted the most. wealth inequality was massively increased between 2018 and 2021 and the gap is going to get bigger if those policies get extended.

 

[Nugget]

24% of US sales were vehicles manufactured in Canada/Mexico. With parts content, the average increase in cost across the inudstry would average our to $3-4K additional cost for every new vehicle sold.

ETA: At a proposed 25% tariff.

 

[MAC_32]

but I feel like if you were making $45k in 2018 chances are you don't feel great about the economy right now.

Certainly not trying to defend the current economy, but, do you think those making 45k in ‘18 felt good about the economy in 2018? I’d hazard no.

If you were the sole breadwinner certainly not. If you were a couple both making roughly that, maybe? I was more trying to pinpoint the section of the employment curve that's been hit the most by the events of the last few years.

I can speak from personal experience about this cause that's about where we were. Did we feel good about how the economy worked for us in 2018? No, but we made it work. We were barely making a dent in retirement / 529 / savings, but we were putting a couple hundred away per month, managed both a car payment and paying down an 18 month 0% interest purchase, and a long weekend vacation. To be fair, this was with a mortgage on a 2008 house though.

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

 

[Dr_Zaius]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Yeah we had 3 kids under 4 ~20 years ago so my wife made the decision to stay home and we lived off of my decent but non-luxurious salary. Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

 

[Terminalxylem]

Anecdotally, my small business had it's best year ever last year, rev and profit. For this year we are kinda hunkering down to start the year. Healthcare costs just went up close to 20% and I don't see this admin doing anything to address that. Honestly, that is one of our biggest margin eaters that will never go down. At somepoint it will be unsustainable for a company our size. Couple that with uncertainty on taxes, tariffs, interest rates and the employment market going forward it's tough for us to have a concrete business plan right now. In wait and see mode.

De-coupling health insurance from employment would help smaller businesses for sure, and likely larger organizations as well.

That's true, and probably the only way for things to truly change. If everyone had to buy their own health insurance it would certainly make more people aware how nuts it is and make them pissed off. Just to cover the health and dental of my own family of 4 costs us around $26,000 a year in premiums. That is basically for a high deductible, catastrophic plan. Total out of pocket for healthcare is closer to $30k a year for my family rn. Just a painful check to write each month.

Yep. It would definitely be interesting to see how individuals would respond to self insuring. My guess is it would compound problems we already have with ER use, deferred care, and healthcare debt.

 

[Nugget]

24% of US sales were vehicles manufactured in Canada/Mexico. With parts content, the average increase in cost across the inudstry would average our to $3-4K additional cost for every new vehicle sold.

ETA: At a proposed 25% tariff.

Delay in auto tariffs until April 2. Japan and Korean imorts could also be impacted. https://www.reuters.com/world/japan/japans-exports-rise-4th-month-us-auto-tariffs-feared-2025-02-19/

 

[djmich]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

 

[culdeus]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

 

[MTskibum]

Anecdotally, my small business had it's best year ever last year, rev and profit. For this year we are kinda hunkering down to start the year. Healthcare costs just went up close to 20% and I don't see this admin doing anything to address that. Honestly, that is one of our biggest margin eaters that will never go down. At somepoint it will be unsustainable for a company our size. Couple that with uncertainty on taxes, tariffs, interest rates and the employment market going forward it's tough for us to have a concrete business plan right now. In wait and see mode.

De-coupling health insurance from employment would help smaller businesses for sure, and likely larger organizations as well.

That's true, and probably the only way for things to truly change. If everyone had to buy their own health insurance it would certainly make more people aware how nuts it is and make them pissed off. Just to cover the health and dental of my own family of 4 costs us around $26,000 a year in premiums. That is basically for a high deductible, catastrophic plan. Total out of pocket for healthcare is closer to $30k a year for my family rn. Just a painful check to write each month.

I have a contractor working for me that pays 25k a year for insurance and his wife got diagnosed with cataracts in early 40's. They found it cheaper to fly to a different country to get he surgery rather than use the insurance that they are paying 25k a year for. That is even after the plane tickets, etc.

What the fock is the purpose of insurance if you can't even use it.

 

[djmich]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

 

[Dr_Zaius]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I just did the calculation on our home, and it has averaged about 4.1% a year over our ownership, which doesn't sound huge but when you compound that over 20+ years vs. a nominal inflation of 2.3% or so it makes a big difference.

Health insurance takes a bite even if you're healthy. For a family plan my monthly contribution when I started out was $25. Now it's over $800, and that's just for the insurance and doesn't included copays and out of pocket costs.

State, municipal, and local tax rates have also gone up over 30% in that time.

We also put aside what money we could for the kids college educations, which I presumably don't need to tell anyone here about that cost trajectory.

The only things that really come to mind that have notably gotten cheaper over that time period are electronics and air travel. Cars seem about neutral to me if you don't need the trendy models.

 

[Max Power]

Credit card debt hit a record $1.21 trillion — here's why 'no one should be surprised,' expert says

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending.

www.nbcnews.com

Collectively, Americans now owe a record $1.21 trillion on their credit cards, according to a new quarterly report on household debt from the Federal Reserve Bank of New York.

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending, and are now 7.3% higher than a year ago.

At the same time, credit card delinquency rates “remained elevated,” the New York Fed researchers found — with 7.18% of balances transitioning to delinquency over the last year. That uptick could indicate “borrowers are having some difficulty repaying,” the researchers said on a press call Wednesday.

“Stubborn inflation has shrunk a lot of Americans’ financial margin for error from slim to about none, forcing people to lean more heavily on credit card debt,” Schulz said.

Credit card debt has remained stable over the last two decades. However, in the years since the pandemic, households largely spent down their excess savings, which sparked a rebound in credit card balances. Consumer spending continues to remain strong, despite high borrowing costs.

“There’s very little reason to believe that we won’t continue to see new credit card debt records being set going forward,” Schulz said.

 

[Nugget]

Credit card debt hit a record $1.21 trillion — here's why 'no one should be surprised,' expert says

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending.

www.nbcnews.com

Collectively, Americans now owe a record $1.21 trillion on their credit cards, according to a new quarterly report on household debt from the Federal Reserve Bank of New York.

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending, and are now 7.3% higher than a year ago.

At the same time, credit card delinquency rates “remained elevated,” the New York Fed researchers found — with 7.18% of balances transitioning to delinquency over the last year. That uptick could indicate “borrowers are having some difficulty repaying,” the researchers said on a press call Wednesday.

“Stubborn inflation has shrunk a lot of Americans’ financial margin for error from slim to about none, forcing people to lean more heavily on credit card debt,” Schulz said.

Credit card debt has remained stable over the last two decades. However, in the years since the pandemic, households largely spent down their excess savings, which sparked a rebound in credit card balances. Consumer spending continues to remain strong, despite high borrowing costs.

“There’s very little reason to believe that we won’t continue to see new credit card debt records being set going forward,” Schulz said.

With the court ruling on SAVE student loan plan, average borrower could be looking at an additional $200/month. Doesn't feel like a stretch to say that could increase CC delinquency rates.

 

[Sparky Polastri]

Sounds kinda familiar.

 

[MAC_32]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I just did the calculation on our home, and it has averaged about 4.1% a year over our ownership, which doesn't sound huge but when you compound that over 20+ years vs. a nominal inflation of 2.3% or so it makes a big difference.

Health insurance takes a bite even if you're healthy. For a family plan my monthly contribution when I started out was $25. Now it's over $800, and that's just for the insurance and doesn't included copays and out of pocket costs.

State, municipal, and local tax rates have also gone up over 30% in that time.

We also put aside what money we could for the kids college educations, which I presumably don't need to tell anyone here about that cost trajectory.

The only things that really come to mind that have notably gotten cheaper over that time period are electronics and air travel. Cars seem about neutral to me if you don't need the trendy models.

We got our house as a foreclosure post housing crash for $85K. When we were getting ready to sell in 2019 a real estate friend of ours said to target $130K. Before we were ready to move, covid happened, then the market went sideways. By the time we were ready to re-consider a move, we realized we only have 5 people in this house for 3 more years, and decided we want to start saving for a 2nd house, so we're staying put. But if we were to take it to market? That same friend said we'd easily get way north of $200K now.

Our house has increased in value > 60% in just 5 years.

 

[culdeus]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I just did the calculation on our home, and it has averaged about 4.1% a year over our ownership, which doesn't sound huge but when you compound that over 20+ years vs. a nominal inflation of 2.3% or so it makes a big difference.

Health insurance takes a bite even if you're healthy. For a family plan my monthly contribution when I started out was $25. Now it's over $800, and that's just for the insurance and doesn't included copays and out of pocket costs.

State, municipal, and local tax rates have also gone up over 30% in that time.

We also put aside what money we could for the kids college educations, which I presumably don't need to tell anyone here about that cost trajectory.

The only things that really come to mind that have notably gotten cheaper over that time period are electronics and air travel. Cars seem about neutral to me if you don't need the trendy models.

We got our house as a foreclosure post housing crash for $85K. When we were getting ready to sell in 2019 a real estate friend of ours said to target $130K. Before we were ready to move, covid happened, then the market went sideways. By the time we were ready to re-consider a move, we realized we only have 5 people in this house for 3 more years, and decided we want to start saving for a 2nd house, so we're staying put. But if we were to take it to market? That same friend said we'd easily get way north of $200K now.

Our house has increased in value > 60% in just 5 years.

The fact that housing increases in value is a bug not a feature for the overall economy. It puts new home buyers out of reach and into renting, this driving those costs up. Vicious cycle and all that.

 

[fantasy stud]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I just did the calculation on our home, and it has averaged about 4.1% a year over our ownership, which doesn't sound huge but when you compound that over 20+ years vs. a nominal inflation of 2.3% or so it makes a big difference.

Health insurance takes a bite even if you're healthy. For a family plan my monthly contribution when I started out was $25. Now it's over $800, and that's just for the insurance and doesn't included copays and out of pocket costs.

State, municipal, and local tax rates have also gone up over 30% in that time.

We also put aside what money we could for the kids college educations, which I presumably don't need to tell anyone here about that cost trajectory.

The only things that really come to mind that have notably gotten cheaper over that time period are electronics and air travel. Cars seem about neutral to me if you don't need the trendy models.

We got our house as a foreclosure post housing crash for $85K. When we were getting ready to sell in 2019 a real estate friend of ours said to target $130K. Before we were ready to move, covid happened, then the market went sideways. By the time we were ready to re-consider a move, we realized we only have 5 people in this house for 3 more years, and decided we want to start saving for a 2nd house, so we're staying put. But if we were to take it to market? That same friend said we'd easily get way north of $200K now.

Our house has increased in value > 60% in just 5 years.

My situation almost identical. Bought for $85k in 2003. Now around 250k.

 

[RCon]

Credit card debt hit a record $1.21 trillion — here's why 'no one should be surprised,' expert says

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending.

www.nbcnews.com

Collectively, Americans now owe a record $1.21 trillion on their credit cards, according to a new quarterly report on household debt from the Federal Reserve Bank of New York.

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending, and are now 7.3% higher than a year ago.

At the same time, credit card delinquency rates “remained elevated,” the New York Fed researchers found — with 7.18% of balances transitioning to delinquency over the last year. That uptick could indicate “borrowers are having some difficulty repaying,” the researchers said on a press call Wednesday.

“Stubborn inflation has shrunk a lot of Americans’ financial margin for error from slim to about none, forcing people to lean more heavily on credit card debt,” Schulz said.

Credit card debt has remained stable over the last two decades. However, in the years since the pandemic, households largely spent down their excess savings, which sparked a rebound in credit card balances. Consumer spending continues to remain strong, despite high borrowing costs.

“There’s very little reason to believe that we won’t continue to see new credit card debt records being set going forward,” Schulz said.

This is entirely normal. At a target of 2% annual inflation, even if all else was equal, we would expect total credit card debt to increase by 2% annually. However, all else isn't equal, as the population also increases, so we should expect total credit card debt to increase by more than 2% each year. That said, yes, one would expect that increase to be somewhat seasonal (e.g. increasing more in the 4th quarter and summer, leveling off at other times).

 

[Dr_Zaius]

The fact that housing increases in value is a bug not a feature for the overall economy. It puts new home buyers out of reach and into renting, this driving those costs up. Vicious cycle and all that.

After I wrote the above I was thinking about my son who graduates in May with an engineering degree and has a job lined up with one of the big local companies. When I took my first engineering job out of college 3.9X the salary would equal what we paid for our house. If my son would want to buy our house, it's about 7.7X his starting salary. Now, we're probably a little above "starter" home, so if you say instead of our house we get a modest house in a decent neighborhood, it would have been about 2.2X for us, whereas it's about 3.6X for him. Even with interest rates lower than they were back then, that's a big difference. And we're talking starting salaries above the general populace in both cases.

 

[SFBayDuck]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I just did the calculation on our home, and it has averaged about 4.1% a year over our ownership, which doesn't sound huge but when you compound that over 20+ years vs. a nominal inflation of 2.3% or so it makes a big difference.

Health insurance takes a bite even if you're healthy. For a family plan my monthly contribution when I started out was $25. Now it's over $800, and that's just for the insurance and doesn't included copays and out of pocket costs.

State, municipal, and local tax rates have also gone up over 30% in that time.

We also put aside what money we could for the kids college educations, which I presumably don't need to tell anyone here about that cost trajectory.

The only things that really come to mind that have notably gotten cheaper over that time period are electronics and air travel. Cars seem about neutral to me if you don't need the trendy models.

We got our house as a foreclosure post housing crash for $85K. When we were getting ready to sell in 2019 a real estate friend of ours said to target $130K. Before we were ready to move, covid happened, then the market went sideways. By the time we were ready to re-consider a move, we realized we only have 5 people in this house for 3 more years, and decided we want to start saving for a 2nd house, so we're staying put. But if we were to take it to market? That same friend said we'd easily get way north of $200K now.

Our house has increased in value > 60% in just 5 years.

My situation almost identical. Bought for $85k in 2003. Now around 250k.

I mean I know it to be true, but I’m still blown away that there are places in this country with housing prices in the $2s (and below).

 

[Orange&Blue]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I just did the calculation on our home, and it has averaged about 4.1% a year over our ownership, which doesn't sound huge but when you compound that over 20+ years vs. a nominal inflation of 2.3% or so it makes a big difference.

Health insurance takes a bite even if you're healthy. For a family plan my monthly contribution when I started out was $25. Now it's over $800, and that's just for the insurance and doesn't included copays and out of pocket costs.

State, municipal, and local tax rates have also gone up over 30% in that time.

We also put aside what money we could for the kids college educations, which I presumably don't need to tell anyone here about that cost trajectory.

The only things that really come to mind that have notably gotten cheaper over that time period are electronics and air travel. Cars seem about neutral to me if you don't need the trendy models.

We got our house as a foreclosure post housing crash for $85K. When we were getting ready to sell in 2019 a real estate friend of ours said to target $130K. Before we were ready to move, covid happened, then the market went sideways. By the time we were ready to re-consider a move, we realized we only have 5 people in this house for 3 more years, and decided we want to start saving for a 2nd house, so we're staying put. But if we were to take it to market? That same friend said we'd easily get way north of $200K now.

Our house has increased in value > 60% in just 5 years.

My situation almost identical. Bought for $85k in 2003. Now around 250k.

bought for 230k in 2014. zillow estimates value now 420k. that's in Oklahoma. just crazy.

 

[Marauder]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I just did the calculation on our home, and it has averaged about 4.1% a year over our ownership, which doesn't sound huge but when you compound that over 20+ years vs. a nominal inflation of 2.3% or so it makes a big difference.

Health insurance takes a bite even if you're healthy. For a family plan my monthly contribution when I started out was $25. Now it's over $800, and that's just for the insurance and doesn't included copays and out of pocket costs.

State, municipal, and local tax rates have also gone up over 30% in that time.

We also put aside what money we could for the kids college educations, which I presumably don't need to tell anyone here about that cost trajectory.

The only things that really come to mind that have notably gotten cheaper over that time period are electronics and air travel. Cars seem about neutral to me if you don't need the trendy models.

We got our house as a foreclosure post housing crash for $85K. When we were getting ready to sell in 2019 a real estate friend of ours said to target $130K. Before we were ready to move, covid happened, then the market went sideways. By the time we were ready to re-consider a move, we realized we only have 5 people in this house for 3 more years, and decided we want to start saving for a 2nd house, so we're staying put. But if we were to take it to market? That same friend said we'd easily get way north of $200K now.

Our house has increased in value > 60% in just 5 years.

The fact that housing increases in value is a bug not a feature for the overall economy. It puts new home buyers out of reach and into renting, this driving those costs up. Vicious cycle and all that.

Right. If you're a homeowner and were able to refinance or buy when interest rates were low, you're doing fine. If you're a renter who would like to buy a home but can't afford it and meanwhile you're seeing your rent skyrocket, you're not doing fine. That's the biggest issue with our economy right now IMO.

 

[SFBayDuck]

Credit card debt hit a record $1.21 trillion — here's why 'no one should be surprised,' expert says

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending.

www.nbcnews.com

Collectively, Americans now owe a record $1.21 trillion on their credit cards, according to a new quarterly report on household debt from the Federal Reserve Bank of New York.

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending, and are now 7.3% higher than a year ago.

At the same time, credit card delinquency rates “remained elevated,” the New York Fed researchers found — with 7.18% of balances transitioning to delinquency over the last year. That uptick could indicate “borrowers are having some difficulty repaying,” the researchers said on a press call Wednesday.

“Stubborn inflation has shrunk a lot of Americans’ financial margin for error from slim to about none, forcing people to lean more heavily on credit card debt,” Schulz said.

Credit card debt has remained stable over the last two decades. However, in the years since the pandemic, households largely spent down their excess savings, which sparked a rebound in credit card balances. Consumer spending continues to remain strong, despite high borrowing costs.

“There’s very little reason to believe that we won’t continue to see new credit card debt records being set going forward,” Schulz said.

This is entirely normal. At a target of 2% annual inflation, even if all else was equal, we would expect total credit card debt to increase by 2% annually. However, all else isn't equal, as the population also increases, so we should expect total credit card debt to increase by more than 2% each year. That said, yes, one would expect that increase to be somewhat seasonal (e.g. increasing more in the 4th quarter and summer, leveling off at other times).

Yup, we've talked about this in here before. These headlines are intentionally misleading and pretty much meaningless without context. Pick your denominator - GDP, percentage of household income, something. But you have to have one.

That's why I think something like tracking delinquencies is much more meaningful. The article says they "remain elevated", but compared to what? The last decade? Yes, they're high and have been trending up, so that is a red flag. But if you look at the last few decades, they're still relatively low.

I'll give this article credit - at least it linked to the data sources. Took me awhile to dig through it but it's there, although the numbers seem different than what the FRED site I linked to above show. Anyone know why that might be?

 

[FreeBaGeL]

I think who really got squeezed on wages were the middle class. The high end was getting theirs, while the minimum wage wage earners got a bump because the labor market was tight.

That's my take on it as well. Upper management is of course doing fine, but things like engineering seem to be doing quite well too (although there are always particular sectors/industries that are the exception). And at least in PA even though the minimum wage hasn't technically budged, the wages for the low/minimum skill jobs are up substantially. I feel like mid-career medium skilled people - think people with high school or associate's degrees and maybe 10-15 years experience, are really the ones getting squeezed. They've been stuck in the 2-4% raise range, and the price spikes of the last half decade, particularly things you can't dodge like housing and insurance, is just eating into their financial safety buffer. That's just what I glean from talking to people, but I feel like if you were making $45k in 2018 chances are you don't feel great about the economy right now.

It's lifestyle creep as well. Because those same people in the middle complaining about how unaffordable things are now are the same people spending by far more money and a higher percentage of their money than ever before on non-essential categories like travel, concerts, tickets, nicer cars than they need, etc.

Obviously I'm not saying down to the person, but as a broader category, people will note the increase in groceries or utilities which is definitely true, but a huge bulk of the increase in spending in on non-essential items/experiences that people are CHOOSING to spend money on. If they stopped spending on those things, the prices would go down. But the prices keep going up because the companies selling those things can't find a price high enough that people will stop paying for. If anything, the biggest problem many of those businesses have is overcrowding, in that they keep raising prices and there are still TOO MANY people paying them.

 

[SWC]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I just did the calculation on our home, and it has averaged about 4.1% a year over our ownership, which doesn't sound huge but when you compound that over 20+ years vs. a nominal inflation of 2.3% or so it makes a big difference.

Health insurance takes a bite even if you're healthy. For a family plan my monthly contribution when I started out was $25. Now it's over $800, and that's just for the insurance and doesn't included copays and out of pocket costs.

State, municipal, and local tax rates have also gone up over 30% in that time.

We also put aside what money we could for the kids college educations, which I presumably don't need to tell anyone here about that cost trajectory.

The only things that really come to mind that have notably gotten cheaper over that time period are electronics and air travel. Cars seem about neutral to me if you don't need the trendy models.

We got our house as a foreclosure post housing crash for $85K. When we were getting ready to sell in 2019 a real estate friend of ours said to target $130K. Before we were ready to move, covid happened, then the market went sideways. By the time we were ready to re-consider a move, we realized we only have 5 people in this house for 3 more years, and decided we want to start saving for a 2nd house, so we're staying put. But if we were to take it to market? That same friend said we'd easily get way north of $200K now.

Our house has increased in value > 60% in just 5 years.

The fact that housing increases in value is a bug not a feature for the overall economy. It puts new home buyers out of reach and into renting, this driving those costs up. Vicious cycle and all that.

Right. If you're a homeowner and were able to refinance or buy when interest rates were low, you're doing fine. If you're a renter who would like to buy a home but can't afford it and meanwhile you're seeing your rent skyrocket, you're not doing fine. That's the biggest issue with our economy right now IMO.

this is me i refinanced and bought a point and have an interest rate just under 3 percent so basically i can never move now because i would never come close to getting that again take that to the bank brohans

 

[MAC_32]

I mean I know it to be true, but I’m still blown away that there are places in this country with housing prices in the $2s (and below).

This market's grown to the ~$3's (the good burbs around here start around there and go up to ~$6), which is still crazy cheap by your standards, but we're dinged because we're on a quasi-main road. It doesn't bother us because we have an unusually large backyard for this area (we back up to a school instead of another street) that's heavily wooded enough to drown out the sound. Our guy thinks we could still net something near market, our location just makes predicting a bit more volatile. Don't really care to vet further cause we aren't going anywhere.

We just decided the option of it and a ~half mil plus lake house in a few years will fit us better than a bigger primary home.

 

[MAC_32]

It's lifestyle creep as well. Because those same people in the middle complaining about how unaffordable things are now are the same people spending by far more money and a higher percentage of their money than ever before on non-essential categories like travel, concerts, tickets, nicer cars than they need, etc.

You're not wrong, but what alternative suggestions do you have for entertainment?

 

[TripItUp]

We just decided the option of it and a ~half mil plus lake house in a few years will fit us better than a bigger primary home.

We are going the route of a second smaller home too. Zero interest in maintaining a big home with a bunch of square footage we wont use or need.

 

[TripItUp]

It's lifestyle creep as well. Because those same people in the middle complaining about how unaffordable things are now are the same people spending by far more money and a higher percentage of their money than ever before on non-essential categories like travel, concerts, tickets, nicer cars than they need, etc.

REAL TALK

 

[Ilov80s]

Not sure the dividend check idea from DOGE savings makes any sense. I doubt it ever happens and Elon says all kinds of random stuff on X but the fact he even acknowledged that as a possible plan seems to run against the idea that these cuts are to save the government money. It definitely is creating a lot of economic confusion. What do you guys think about that idea? I mean don’t get me wrong $5,000 would help a lot but I’m not sure it makes any sense big picture.

 

[Sparky Polastri]

None of this is about saving money. If that was the real goal, they would spend all their time "auditing" defense and social security.

 

[Sand]

None of this is about saving money. If that was the real goal, they would spend all their time "auditing" defense and social security.

This is occurring. One item of note there is that evidently SS has 158 SES employees. That's just absolutely bonkers.

 

[Sparky Polastri]

None of this is about saving money. If that was the real goal, they would spend all their time "auditing" defense and social security.

This is occurring. One item of note there is that evidently SS has 158 SES employees. That's just absolutely bonkers.

I'm talking about the programs not the employees working in the programs.

 

[fatness]

None of this is about saving money. If that was the real goal, they would spend all their time "auditing" defense and social security.

This is occurring. One item of note there is that evidently SS has 158 SES employees. That's just absolutely bonkers.

It's occurring but is not being done very intelligently at the present time.

 

[Sand]

None of this is about saving money. If that was the real goal, they would spend all their time "auditing" defense and social security.

This is occurring. One item of note there is that evidently SS has 158 SES employees. That's just absolutely bonkers.

It's occurring but is not being done very intelligently at the present time.

Crazy we're using COBOL. They estimate a bit under a percent of what they send is bad payments. It's probably higher than that, but it isn't rampant malfeasance going on.

Now Medicare and Medicaid are where there is tons, just tons, of fraud and abuse. That could easily be the entirety of DOGE and have huge payoff.

 

[TheAristocrat]

None of this is about saving money. If that was the real goal, they would spend all their time "auditing" defense and social security.

This is occurring. One item of note there is that evidently SS has 158 SES employees. That's just absolutely bonkers.

It's occurring but is not being done very intelligently at the present time.

Crazy we're using COBOL. They estimate a bit under a percent of what they send is bad payments. It's probably higher than that, but it isn't rampant malfeasance going on.

Now Medicare and Medicaid are where there is tons, just tons, of fraud and abuse. That could easily be the entirety of DOGE and have huge payoff.

 

[Desert_Power]

None of this is about saving money. If that was the real goal, they would spend all their time "auditing" defense and social security.

This is occurring. One item of note there is that evidently SS has 158 SES employees. That's just absolutely bonkers.

It's occurring but is not being done very intelligently at the present time.

Crazy we're using COBOL. They estimate a bit under a percent of what they send is bad payments. It's probably higher than that, but it isn't rampant malfeasance going on.

Now Medicare and Medicaid are where there is tons, just tons, of fraud and abuse. That could easily be the entirety of DOGE and have huge payoff.

Someone should ask Rick Scott where to look

 

[The Z Machine]

None of this is about saving money. If that was the real goal, they would spend all their time "auditing" defense and social security.

This is occurring. One item of note there is that evidently SS has 158 SES employees. That's just absolutely bonkers.

It's occurring but is not being done very intelligently at the present time.

Crazy we're using COBOL. They estimate a bit under a percent of what they send is bad payments. It's probably higher than that, but it isn't rampant malfeasance going on.

Now Medicare and Medicaid are where there is tons, just tons, of fraud and abuse. That could easily be the entirety of DOGE and have huge payoff.

Someone should ask Rick Scott where to look

Oooh, I know this one. It's in his bank account.

 

[Mitchie]

Credit card debt hit a record $1.21 trillion — here's why 'no one should be surprised,' expert says

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending.

www.nbcnews.com

Collectively, Americans now owe a record $1.21 trillion on their credit cards, according to a new quarterly report on household debt from the Federal Reserve Bank of New York.

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending, and are now 7.3% higher than a year ago.

At the same time, credit card delinquency rates “remained elevated,” the New York Fed researchers found — with 7.18% of balances transitioning to delinquency over the last year. That uptick could indicate “borrowers are having some difficulty repaying,” the researchers said on a press call Wednesday.

“Stubborn inflation has shrunk a lot of Americans’ financial margin for error from slim to about none, forcing people to lean more heavily on credit card debt,” Schulz said.

Credit card debt has remained stable over the last two decades. However, in the years since the pandemic, households largely spent down their excess savings, which sparked a rebound in credit card balances. Consumer spending continues to remain strong, despite high borrowing costs.

“There’s very little reason to believe that we won’t continue to see new credit card debt records being set going forward,” Schulz said.

The article linked re: delinquency rates is a year old

 

[the moops]

One item of note there is that evidently SS has 158 SES employees. That's just absolutely bonkers.

How many senior executives should there be for something as massive as SS? Serious question here for I have no idea.

 

[SFBayDuck]

Credit card debt hit a record $1.21 trillion — here's why 'no one should be surprised,' expert says

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending.

www.nbcnews.com

Collectively, Americans now owe a record $1.21 trillion on their credit cards, according to a new quarterly report on household debt from the Federal Reserve Bank of New York.

Credit card balances jumped by $45 billion in the fourth quarter of 2024, driven in part by holiday spending, and are now 7.3% higher than a year ago.

At the same time, credit card delinquency rates “remained elevated,” the New York Fed researchers found — with 7.18% of balances transitioning to delinquency over the last year. That uptick could indicate “borrowers are having some difficulty repaying,” the researchers said on a press call Wednesday.

“Stubborn inflation has shrunk a lot of Americans’ financial margin for error from slim to about none, forcing people to lean more heavily on credit card debt,” Schulz said.

Credit card debt has remained stable over the last two decades. However, in the years since the pandemic, households largely spent down their excess savings, which sparked a rebound in credit card balances. Consumer spending continues to remain strong, despite high borrowing costs.

“There’s very little reason to believe that we won’t continue to see new credit card debt records being set going forward,” Schulz said.

The article linked re: delinquency rates is a year old

Good catch. With a couple of clicks from the article you can get to the most recent Fed Report on Q4. A chart on page 15 seems to show somewhere around 11% of CC accounts are currently >90 day delinquent, which are levels not seen since the GFC. But as I mentioned above, this seems to be in conflict with data put out by FRED which shows delinquency rates at 3.2%, which has recently been rising but is still lower than at any time 1991-2012.

Not sure how to reconcile this, anyone more familiar with these fed data sources than I that can shed some light?

 

[Ilov80s]

One item of note there is that evidently SS has 158 SES employees. That's just absolutely bonkers.

How many senior executives should there be for something as massive as SS? Serious question here for I have no idea.

Yeah I have no experience in this kind of environment. It sounds like a lot but then SS does have 69 million people receiving benefits/services each month and we are talking about managing 3 trillion dollars so that comes out to 1 SES per 430,000 recipients or 1 SES per $18 billion. That doesn't sound too crazy there. But I have no idea.

 

[fatness]

None of this is about saving money. If that was the real goal, they would spend all their time "auditing" defense and social security.

This is occurring. One item of note there is that evidently SS has 158 SES employees. That's just absolutely bonkers.

It's occurring but is not being done very intelligently at the present time.

Crazy we're using COBOL. They estimate a bit under a percent of what they send is bad payments. It's probably higher than that, but it isn't rampant malfeasance going on.

Additional information: Most of that 1% of bad payments were overpayments to living people, not dead people over the age of 150.

A July 2024 report from Social Security’s inspector general states that from fiscal years 2015 through 2022, the agency paid out almost $8.6 trillion in benefits, including $71.8 billion — or less than 1% — in improper payments. Most of the erroneous payments were overpayments to living people.

The fact that the Social Security system contains millions of entries from people who are dead is likely distinct from a potential COBOL-caused error, and also not news. A report written by the SSA’s inspector general in 2023 found that 98 percent of those aged 100 or older in the Social Security databases are not in receipt of any benefits. The report added that the database would not be updated because it would cost too much money to do so.

 

[fatness]

Now Medicare and Medicaid are where there is tons, just tons, of fraud and abuse. That could easily be the entirety of DOGE and have huge payoff.

Medicare, no. Medicaid, yes, since Medicaid was (thankfully) expanded when COVID hit. And some medical providers have taken advantage.

But the real money to be saved is from the Department of Defense. And not so much from DOD personnel, but from all the weapons programs that are authorized by Congresses and Presidents whether the military needs or wants them or not, and the cost rises in weapons production that are routinely approved. There are billions to be cut there without the country losing a thing.

It's a mistake to think that the only way to save money from government spending is to eliminate people and take away their jobs. The biggest savings to be achieved are from money given to, in order, defense contractors and unscrupulous medical providers. The obstacle is that those 2 groups have powerful lobbies.

edited to add: DOD has announced a goal of an 8% cut in spending for each of the next 5 years. Math-wise I'm in favor of that, but it obviously all depends on what they try to cut.

 

[Tau837]

Now Medicare and Medicaid are where there is tons, just tons, of fraud and abuse. That could easily be the entirety of DOGE and have huge payoff.

Medicare, no. Medicaid, yes, since Medicaid was (thankfully) expanded when COVID hit. And some medical providers have taken advantage.

But the real money to be saved is from the Department of Defense. And not so much from DOD personnel, but from all the weapons programs that are authorized by Congresses and Presidents whether the military needs or wants them or not, and the cost rises in weapons production that are routinely approved. There are billions to be cut there without the country losing a thing.

It's a mistake to think that the only way to save money from government spending is to eliminate people and take away their jobs. The biggest savings to be achieved are from money given to, in order, defense contractors and unscrupulous medical providers. The obstacle is that those 2 groups have powerful lobbies.

edited to add: DOD has announced a goal of an 8% cut in spending for each of the next 5 years. Math-wise I'm in favor of that, but it obviously all depends on what they try to cut.

As a VP in a DoD contractor, I can tell you that it would be much better to cut Government civilians than contractors. Contractors work under contracts; we have obligations and are generally held accountable. From personal experience, competence and productivity are not required for Government civilians, and those qualities are rare in their workforce. Two cents.

 

[fatness]

There are several comments over in the Federal Employee topic about Elon Musk offering a $5000 check to Americans from the savings he claims DOGE will make for them. And a couple of the responses there were on the lines of "I expect some of my tax money back from all this".

So is it more important to cut costs and balance the budget?
Or is it more important to personally get back some of the money the government supposedly "saved"?
The hard part is, plenty of people support both those things.

 

[gianmarco]

Aside from the upheaval of so many government workers and their lives, what I think is being lost is that I don't need/want my government to be run like a business, maximizing profit and/or minimizing loss.

I need/want our government to provide service to its citizens. Provide quality infrastructure, education, medical care, protection for the vulnerable , and basically ensure that ALL citizens have access to basic human rights. Not just those with money.

When we start losing sight of that just to make sure we cut out waste, a lot of people get hurt. And that's not what our government should be about. I'm willing to accept some excess expenditures to make sure those services aren't lost.

 

[dkp993]

I'm willing to accept some excess expenditures to make sure those services aren't lost.

Sure, in theory. And I’m sure most would agree with this statement. The problem is that it not just “some excess”, it’s that there’s not much that’s more inefficient and slow as government. And when managing large systems (basically anything our government has to manage due to our population size) slow and inefficient equals incredibly expensive. Add that to the fact that the founding principles of our government is to minimized it’s role (ie it was never designed to be this big or control this much) and there are some inherent flaws that feel impossible to overcome.

 

[Instinctive]

Aside from the upheaval of so many government workers and their lives, what I think is being lost is that I don't need/want my government to be run like a business, maximizing profit and/or minimizing loss.

I need/want our government to provide service to its citizens. Provide quality infrastructure, education, medical care, protection for the vulnerable , and basically ensure that ALL citizens have access to basic human rights. Not just those with money.

When we start losing sight of that just to make sure we cut out waste, a lot of people get hurt. And that's not what our government should be about. I'm willing to accept some excess expenditures to make sure those services aren't lost.

Yeah, the hardest part is, like with basically anything, 80% of the waste probably comes from about 20% of the sources. When I advise a company on this, it means we look at the highest salary positions/locations/products first and evaluate value. It does not seem like they did this right away - I've theorized a lot about bringing government spending back in line because of the waste I see every day with my clients (DoD agencies / their major weapons program contractors) and at the end of the day, it will hurt people if for no other reason than jobs will go away, period. Outdated DoD programs that in many cases the DoD itself doesn't even want, plus Medicare/Medicaid, plus Social Security are the 20% of sources that make up 80$ of the waste.

I think you could significantly alter healthcare without damaging the economy too much - you'd cause upheaval in insurers, but you could bring cost down somewhat. Major DoD programs - those will cost jobs. Social Security? Mostly it's not even about waste per se, it's about the benefits being too high for what we pay in as a nation, so that's a tough one.

I think the economy impacts if someone really is serious about fixing these are likely to be DoD-related private sector jobs, heavily in manufacturing...and that's the main spot. Although FWIW, there's a lot of research that our government education financial aid programs are the #1 contributor to the skyrocketed cost of higher education over the past 20 years plus. Blech.

 

[Gatorade]

I took a major haircut early last decade to pursue a new career and needed to accept positions at this salary level to get where I am now, there's absolutely no way we could pull off in 2025 what we did ~10 years ago. Even in a low COLA area like here, I couldn't imagine trying to raise a family on < ~$120K / yr anymore.

Even adjusting for inflation, I think housing and insurance costs would make the same decision today absolutely financially untenable for us.

If real net incomes have risen, or at worst stayed flat, for the bottom half of Americans…I’m curious as to what the primary driver of the disconnect is.

He named the two most often cited. If lucky enough to be healthy and find low cost housing you can save.

Yes, but I’d assume those are included in inflation numbers and therefore real wages?

I just did the calculation on our home, and it has averaged about 4.1% a year over our ownership, which doesn't sound huge but when you compound that over 20+ years vs. a nominal inflation of 2.3% or so it makes a big difference.

Health insurance takes a bite even if you're healthy. For a family plan my monthly contribution when I started out was $25. Now it's over $800, and that's just for the insurance and doesn't included copays and out of pocket costs.

State, municipal, and local tax rates have also gone up over 30% in that time.

We also put aside what money we could for the kids college educations, which I presumably don't need to tell anyone here about that cost trajectory.

The only things that really come to mind that have notably gotten cheaper over that time period are electronics and air travel. Cars seem about neutral to me if you don't need the trendy models.

We got our house as a foreclosure post housing crash for $85K. When we were getting ready to sell in 2019 a real estate friend of ours said to target $130K. Before we were ready to move, covid happened, then the market went sideways. By the time we were ready to re-consider a move, we realized we only have 5 people in this house for 3 more years, and decided we want to start saving for a 2nd house, so we're staying put. But if we were to take it to market? That same friend said we'd easily get way north of $200K now.

Our house has increased in value > 60% in just 5 years.

My situation almost identical. Bought for $85k in 2003. Now around 250k.

bought for 230k in 2014. zillow estimates value now 420k. that's in Oklahoma. just crazy.

Bought our house three years ago. According to Zillow it is now worth 50% more. I hope that is true and this is not another bubble about to burst. This is great for homeowners but scary for people now looking to buy. We were in our previous house for seven years and sold it for almost 90% more than we paid originally. This is the best way to built wealth, but you have to be able to get in the game to win the game.