this post was submitted on 03 Oct 2024
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Again, same. Though for me, it was December of 2019 and a son, and I was laid off in late January. Wild times.
We had carved away at our cash reserves building a house that our larger family could actually fit in, and they hadn't built back up yet. It was a calculated risk to do that rather than buy, and I wouldn't have changed the calculation in hindsight, but the one-two-three-four punch of house-child-layoff-pandemic within the span of a few months isn't really something you expect when you're doing the numbers.
I'm glad for you. And also: your situation is not normative.
A couple of things to note:
Those numbers end in 2010, which means that they're actually almost as far away from today as the beginning of that study is from the end of that study. A lot has happened in the last 14 years.
Those numbers also end right as the country was digging its way out of the 2008 financial crisis, which was largely caused (as I'm sure you recall) by debt mismanagement (specifically subprime mortgages). Those numbers, in and of themselves, are signposts of the very institutional and systemic changes I'm taking about.
It's impossible to disentangle the chicken and the egg here. Were people in more debt in 2010 because rates were low? Or were rates low because the economy was burning, largely because more people were in bad debt situations?
Actually, the data suggests that private per capita spending in the US has tracked more or less with inflation since at least 1960.
My parents used credit in the 90s. We had car payments and a mortgage (and their mortgage rate was in the double digits, no less—but it was still a smaller percentage of their single monthly income than my 2.8% mortgage is today, in a better field, with a second income.
Again, the chicken and the egg: do people not save up because they don't want to? Or because they can't? If our car dies, I can't save up to buy another. I have to buy now and pay later.
With your caveat, I'm amenable to entertaining your argument for a significant portion of the population. I just don't recognize it in practice.
I just don't see the numbers bearing that out. And anecdotally, it might be easier to sign up for a credit card online, but I was getting junk mail about credit cards on the day I turned 18, in 2003. One of my first jobs included trying to pitch a private label grocery store credit card to everyone who walked in. When I got to college (also in 2003), a credit card company had a booth there and was offering students free pizza if you signed up for a credit card. I didn't bite, but there was a substantial line at that booth. So it might be quicker now, but I haven't received a mailer for a credit card in years.
Me too. I think we might be the same person. This is honestly kind of weirding me out.
Housing costs as a factor of monthly income are back up to 2008 Financial Crisis levels, though; and over the last two decades that growth you're talking about has been concentrated largely at the top. The numbers support peoples' assertion that we're getting poorer.
Thanks for chatting with me about this. It's a really interesting topic.