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10 Things You Didn't Know About US Household Income Allocation
From Nick Colas of ConvergEx
Four decades ago no one had cell phones, the Internet, or personal computers; households had landlines, only offices or research centers had any kind of computer, and wireless anything wasn’t even close on the horizon. These days, of course, there is more than 1 cell phone per person in the US, laptops are standard fare, and using dial-up or wired Ethernet is like living in the Stone Age. But each of these technological advances comes with a cost; and, more specifically, a cost a family in the 1970s didn’t have to cover. The price of a cell phone plan and wireless internet is well over $1,000 per year; more if you add in the price of a $1,500 laptop or a $200 smartphone, which most of us tend to replace after a few years of wear and tear.
With average post-tax income of $63,000, according to the latest Consumer Expenditure Survey, these bills might not seem like a lot to shell out – only about 4% of post-tax wages – but they’re costs that the families of 1973 avoided completely. How have the households of the 21st century managed to incorporate these added expenses?
Surprisingly, though, the average household in 2012 spent a bit less of its post-tax income than its counterpart from 1973: 81.2% versus 85%. Part of this is simply a matter of size: there were 2.5 people per household in 2012 and 2.9 in 1973. But regardless of family size, the way we spend on just about everything has changed – and not just because we pay for multiple smartphone plans and satellite TV. As prices (read: inflation) and necessities have evolved, so has the mode of income allocation among American families.
Read on for our list of “10 Thing You Didn’t Know About US Household Income Allocation”, derived from the self-reported CES data from the BLS:
- We may be fatter that we were in 1973, but we’re doing it on the cheap. Only 12.8% of the average household’s expenditures is spent on food (both at and away from home), versus 19.3% in 1973. As we mentioned, a decline in food expenditures makes sense as household size has decreased. But if we assume that each member of the household ate an equal percentage of the food purchased, that would mean that in 1973 each person “consumed” 6.7% of expenditures via food; in 2012, the same calculation yields 5.1% per person. So we’ve managed to save a bit on the food front – which is surprising given that food inflation has largely kept pace with overall CPI.
The decrease makes a bit more sense when we look at where we tend to spend our money on food. While we spend about as much on eating out as a 1973 household, we spend significantly less on meat, dairy, and bakery products. Instead, we put more money into fruits and vegetables, sugars, and “miscellaneous foods” – all of which have a lower inflation rate (and are generally cheaper) than the popular 1970s foods.
- Home is where the heart – and the money – is. In 1973 30.8% of post-tax income went to housing, compared to 32.8% in 2012. Shelter – owned and rented dwellings – increased the most, going from 15.9% of expenditures in 1973 to 19.2% in 2012. The bump in the housing market definitely plays a part here in terms of higher home prices, but so does the fact that the average home size in 2012 was nearly double what it was in 1970: 2,700 versus 1,400 square feet. Our spending on “other lodging” – vacation homes, timeshares, etc. – is also more than four times what it was in 1973: 1.3% against 0.3%.
- And we’re cost-efficient housekeepers at that. “Household operations” and “housekeeping supplies” have declined from 3.2% and 1.6% in 1973 to 2.3% and 1.2% in 2012. Laundry, textiles, and furniture all account for about half the amount of expenditures as they used to. My personal favorite here is “floor coverings”: these accounted for 0.5% of expenses in 1973 and 0% in 2012, which I like to think represents the death of the shag carpet. Taking a look at CPI, this significant drop in spending on household furnishings and operations makes sense: inflation in this category is up exactly half as much as overall CPI, just 124%.
- We’re always plugged in – 24/7, at $0.16/hour. That is, utility costs are higher – mostly due to more spending on electricity. We don’t have to spend as much on natural gas (0.7% vs. 1.1%) or fuel oil (0.3% vs. 0.7%), but our plugged-in lifestyle is pushing electricity expenses up to 2.7% of expenditures as of 2012 compared to just 1.9% in 1973. And according to the CPI, electricity inflation is slightly less than overall price growth; if it had kept pace over the years since 1973, we’d probably be allocating much more to this expenditure category. That said, we pay much less for TVs, DVD players, and any other “entertainment” equipment.
- When it comes to spending on phones, though, we’re almost completely unplugged. Surprisingly, despite more than 1 cell phone per person in the US, telephone services cost about the same as they used to. A 2012 household spends 2.4% of all expenditures on phone services, while the 1973 family spent 2.2%. The evenness here is likely a combination of two factors. First, more and more families are dropping landline service altogether, thus cutting costs of overall telephone services. In fact, the CTIA Wireless Association estimates that 35.8% of households were “wireless-only” at the end of 2012. Secondly, cell phone service providers have bumped up prices over the years, likely to keep revenues even as they lose more and more landline users. In the end, these costs seem to balance out; hence the lack of change in income allocation here.
- There’s more pain at the pump now than there was in 1973 – and that despite record high oil prices that year. Transportation overall doesn’t take up quite as large a chunk of income, but we’re spending more on gas and public transportation. Overall, the transportation category accounts for 17.5% of expenditures in 2012 compared to 19.3% in 1973: vehicle purchases and expenses are down from 9.5% to 6.6%, but gasoline and motor oil has risen from 4.2% (during an oil crisis!) to 5.4%. We’ve actually cut back on motor fuel expenses recently, though, and for good reason: prices are up 310% over the last 30 years. That probably contributes to our higher expenditure on public transportation, too; 1.1% of expenses go there now versus 0.8% in 1973.
- Healthcare shmealthcare. A bit of a surprise here: healthcare actually didn’t take up too much more of expenses in 2012 than it did in 1973. Consumers reported spending 6.9% of their income on healthcare in 2012 versus 6.4% 40 years prior; in fact, medical services as a category went from 3.4% to 1.6% over those four decades. But the costs of health insurance and drugs (prescription and non-prescription) as a percentage of expenses almost doubled, from 3.1% to 5.3%. Again, it’s important to remember here that since household size has decreased, expenditures per person are actually higher now; still, given the recent focus on healthcare costs, it’s a bit surprising that we report spending about the same as families from 1973.
- We’re behaving ourselves a bit more financially when it comes to indulgences. According to the CES we don’t spend quite as much on ourselves or our “vices” as we did in 1973. Personal care products and services, apparel, alcoholic beverages, and tobacco all take up a substantially lower portion of expenses nowadays: altogether they used to take up 12% of expenditures, versus just 6.1% now. A lower smoking rate explains the tobacco, but we can’t say for sure why we’ve allocated so much less to ourselves over the past 40 years. My best guess, though, is that we’ve re-allocated to spending on our pets and hobbies: they took up 1.3% of expenses in 2012 and just 0.9% in 1973. Shag carpets out, dog Halloween costumes in.
- …But also more frugal when it comes to others. Sadly, we are not as generous as we used to be. 6.1% of spending was on “cash contributions” to churches, non-profits, etc. in 1973, but in 2012 it was only 3.7%. But we are giving more to others, if unwillingly: expenditures on pensions and social security are up to 10.2% from 5.8%.
- Diversification is not the name of the game when it comes to sources of income. The first batch of consumers from 1973 reported that 7.7% of income came from self-employment: only 4.4% of 2012 respondents said the same. Likewise, 4.7% of 1973er’s income came from “interest, dividends, rental, or other property income”; we only collected 2.1% that way. Finally, “other” income accounted for only 0.3% of 2012 consumer income, while it was 2.6% in 1973.
As we mentioned, households in the 21st century are spending less of their income overall compared to families from the 1970s: 81% versus 85%. It’s a bit of a mystery, then, why we aren’t managing to save more: families in 1973 reported a personal savings rate of 13%, while ours is just 4.6%. Where are we putting the extra money? Not into retirement accounts, stocks, or bonds, clearly. Paying off debt? Possibly. Whatever the case, it’s clear the consumer is changing the way he/she spends: dedicating more to our homes and our lifestyles (fancy phones, entertainment, pets…) and forgoing more savings and investments. The 1973 households surveyed are still more or less in decent financial standing today; we’ll see how it works out for those of 2012.
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"Paying off debt?"
Yes. Our own plus that of others.
Ward, don't you think you were a little hard on the Beaver last night?
The reality is that everything is good......until the EBT's stop flowing.
But Jobs used to be Full Time, Manufacturing Jobs. Now we have Part Time, Retail Jobs.
This time, much different
Layoff / Closing List
http://www.dailyjobcuts.com
.
But we also have a whole lot more consumerist shit. We have iCrap everything. We all own at least two cars, er rent them from the bank that actually owns them. The Cleavers had one. We have several TVs, while they might have had one...or was it a radio? And we eat out way too much, fueling the service sector jobs.
At my house we're guilty of the two cars. But we own both of them outright. We also have an old iPod bought off of eBay for less than half the original price. We're just as guilty, so the fingers point back this way too. And all that stuff is just indispensible. Those savages somehow got through life without them, but what kind of a life could that have been? I mean they didn't even have drones back then. And no wonderful Monsanto products. And how did they live with only THREE channels? They couldn't watch American Idol 24/7 like we can...
I miss those days.
We only remember the good times. It is quite possible to live without modern medicine, cell phones, air conditioning, access fo global information or fresh veggies year round. We could even forage for nuts and berries, hunt game, live in huts and teach kids the fine arts of weaving and trapping. I imagine every generation had its "good old days". This was certainly true in the past when one considers the virulent opposition to gas lights, electricity, cars, computers, automation and even plumbing and sewer (loss of jobs).
In the "good old days" you would not have a computer to voice your opinions or get news and information instantly on which you can comment immediately.
You're quoting Ecclesiastes and prbly don't know it.
But just to segway my ISP was down for 12 hrs and you would have thought the earth caved in around here.
Great site -unfortunately.
Thanks
I'm sure he was hardon the beaver every now and then. Of course, not as easy sleeping in seperate beds
June, the boy started talking to me about post-tax income like paycheck deductions are the only taxes being paid. He forgot completely about other taxes that are NOT deducted from a paycheck and have been growing leaps and bounds for years now. They're not trivial any more. Look at our own property taxes. They're up 50% in the last 10 years but my income is the same.
Not to mention the cost of education has gone parabolic. I'm not sure we can afford to put both our boys through college. They're good kids but my money is on Wally to be successful in business. We'll get Beaver a nice internship at Goodwill or something.
I'll have a talk with them about it later.
" He forgot completely about other taxes that are NOT deducted from a paycheck and have been growing leaps and bounds for years now. They're not trivial any more. Look at our own property taxes. They're up 50% in the last 10 years but my income is the same."
SSSHhhhhhh......first rule of coming out of the MATRIX is don't let Agent Smith KNOW you're out.
But you're right. Stealthily the bastards are upping taxes EVERYWHERE in order to buttress against the collapse. Property tax in particular.....which has the dual shock value of not only depriving you of even more of your labor in the form of income.....but giving lie to the notion that ANYONE OWNS private property.
Bullshit......you rent from the government.
......and Morpheus says....."Welcome......to the desert of the REAL. "
Agreed. In my area, trash pickup was included in the property tax, now it is a fee. All of those little fees add up.
For just the price of a cup of coffee per day, you can afford to do X.....
Except after a while you can't afford to buy everyone a cup of coffee a day.
It's all a matter of management. Here in Tennessee we still have no income tax, have a surplus and are growing as folks flee CA & NJ. The states that made crazy ass promises to unions (we are right to work) and voters are now suffering the consequences. The key is not getting on the gravy train because once you do, the Zombies will expect to maintain their "lifestyle" (get paid to do nothing).
Things not mentioned - the cost of cable and internet access, the custom of eating out instead of cooking, the lottery (I know many idiots who fork down $20/week for years), the 2nd (or 3rd) car but mainly the inability of wages to keep up with inflation. If folks really want to save, they usually can.
Well......hold on their PAHDNER.....I live in the state income tax free state of Florida. And let me tell you....from someone who has been here for 20 years.....once all those outsiders come in as they have been for years here and they are now in TN......you're taxes are going to go up....FOR SURE. All those extra consumers and garbage makers are going to put further strain on your resources both natural and infrastructure wise.
Remember this about the "BLESSED GROWTH" paradigm. Beware of what you wish for.....you just might get it. The human body has a name for rampant growth......it's called Cancer. As a survivor of one (lymphoma) and a battler of another (skin) I know what it's all about, both bodily......and civically here on the state level.
So enjoy all that growth of the nutbags from Californication and Joisy. Not only will they put a strain on your resources and eventually be a cancer on your state.....they will bring the cancer of their failed mind-set to TN politics.....starting at the local level and then eventually to the state.
In other words.....in 20 years or less.....TN will be fucked and your taxes and fees (a sneaky word for other taxes) WILL go up. It's a metaphysical truth.
A glimmer of truth in your post.
"nutbags from Californication and Joisy"
Anyone who would move from CA to TN or NJ is, indeed, a nutbag.
Here's to hoping that TN changes them instead.
WG- Now that's funny !!
a couple items that save money are new too.
not buying stamps, making copies, magazine subscriptions, comparision shopping online for travel entertAinment food clothing.
This is no big mystery.....particularly about the fact that although we nominally spend LESS than our forefathers in the 70's.....we have LESS personal wealth and MORE useless shit at our disposal.
It is the logical conclusion of 50 years of programming by the Marketing/Banking/Industrial Complex to instill in all of us the "Consumerist Mind"......that is....."Keeping Up With The Jones"......."The American Dream".
Money has to move.....<ahem>.....DEBT has to move around so MORE DEBT can be created. In the words of Frank Herbert's classic "Dune"......."THE SPICE MUST FLOW !"
Oh....let me correct myself a bit. I left out one key piece of the "Complex" above. I should have typed......
"The Military/Marketing/Banking/Industrial Complex". For when the "SPICE DOESN'T FLOW" then it becomes a "National Security Issue"....because the delusion of the American Dream IS a National Security Issue.
Which means WAR is right around the corner, folks. THE SPICE MUST FLOW !!!!
More like,
The Global Criminal Oligarch Cabal Bankster Intelligence Crime Syndicate.
They've incrementally placed their "Agent Smiths" in all of the highest levels of Education, Political, Religion & Economic "systems" to enslave mankind.
Pure unadulterated Evil.
I'll say it until I am blue in the face.....<my God.....I look like a Smurf even now>......The Matrix was not a science fiction movie so much as it was a documentary from the future disguised as science fiction allegory.
Yep, do what I do; simply go to the local big bookstore and read the magazines there instead of buying them
Thermos brand makes a nice personal size thermos perfect for bringing your own coffee, and a small slice of cake fits easily into your pocket and beats buying one of their 5 dollar cookies.
If you don't have time to finish the articles that interest you, use your phone to photograph them and read them later.
Fill a ziplock bag with hand soap on the way out - makes a decent shampoo.
Riggio is not happy with you. Now pick up your cheap a$s nook and scram. Keep the change you filthy animal.
Yeah but my yearly expenses on cheese fondue cocktail parties has fallen dramatically
Average household in 2012 spent 5.9% of its post-tax income on cheese.
Ah memories of .gov surplus grilled cheese sandwiches! Ketchup soup and an off-brand ginger ale completed the meal.
Things were simpler, then.
Them's good eats !
Isn't it all increased taxes? Everybody keeps saying taxes keep going up.
they are going up, way up, but only on far less than half of the population.
Ground up between the hard place of taxation and the rock of inflation...
"As we mentioned, households in the 21st century are spending less of their income overall compared to families from the 1970s: 81% versus 85%"
But, how many households in the 1970's only had ONE breadwinner? Today, both the husband AND the wife need to work to make ends meet. So really, divide that 85% in half, because it takes twice the labor to generate that number.
Too true, I need three more wives and the must bring in an income but cannot generate any expenses. No driving, eating, clothing, medical expenses, etc.
Excellent point. Percentage comparison is deceiving w/I the rest of the story.
Instead of going to things I choose, much of my income now goes to things I have no choice about.
You're going to add wives to spend less money? Good luck with that shit... While not exceptionally rare, women who don't waste money are not particularly common either. It generally works something like: the husband's income is "community money" whereas the wife's income is hers. When the pile of community money is large enough, she files for divorce. Winning.
I think you missed the humor. I am stating income requirement in terms of 'wives' not dollars with absurd requirements.
Please don't tell me I should have put /sarc/ on the comment.
I up arrowed you after reading your first two sentences. Then finished reading your post.
Thanks?
Excellent point. And, I'm curious where the "average" post tax income of $63,000 comes from. Especially since "median" household income, before taxes, is around $50,000 or so last time I checked. Different metric for sure. But subtract a conservative estimate of taxes from the $50K household and you are looking at around $42,500. I don't know how anyone can do it.
Consider the following incomes:
100k, 60k, 20k, 20k, 20k, 20k, 20k.
Average= 37,143.
Median= 20,000
Definitely. And on that note, how is it that all these expenditures in the article seem to have remained more or less constant over four decades, while childcare (not a concern for most families in 1973) takes a huge chunk of a family budget today?
One of my good friends has two kids, ages 5 and 7. To keep them in a care "program" (for half a day, but closed when schools are closed) costs $1200 a month.
Unbelievable.
What has happened to family size since the 1970's also? We are down to 1 child families and people can't save a buck...
The savings from unlimited, free porn make it all worthwhile.
What is the fucking mystery???
Wages are dropping, in terms of the goods/services they buy, for 99% of the population...
Most households today, 2 people have to work, and are barely scraping by...
Taxes, fees, surcharges, all to pay for a system that NOBODY asked for, but got shoved up their asses anyway...
Croesus or anyone else, does this make any sense? I was thinking about it last night.
They keep marching these morons out on TV telling us how catastrophic a default would be. But they never define it. It's a fact that the U.S owes about 250 bil/yr in interest on it's debt. It's a fact that the U.S brings in about 280 bil/MO in tax revenue. So it is a joke to insinuate that starting on October 17th we won' be able to pay the interest on our debt.
However...Hank Paulson's turtle head Jack Lew implied that the computer systems are not designed to pay some things and not pay others. He is lying. He has to be. The market must know it. If it was true and he did not make that absolutely clear he would be executed post default. More importantly if he even made one press release saying it was an absolute fact that the computer systems would default on every payment because they are designed as such, the stock market would crash 1929 style and the yields on the bond market would explode. Granted, that would simply force everyone's hands to avoid default. But even if temporary, the damage could be severe. So what is going on? They are trying to manufacture a crisis without truly rattling the markets so they can not only raise the debt ceiling, but eliminate it. Thoughts?Hi Fonz:
I'm in the camp that it's 'all for show'. We know (and accept) that eliminating QE would lead to "status-quo nightmares". Forcing the US into default would essentially lead to the same conclusion, no?
Obama doesn't want to negotiate.....but neither do I.
We finally agree on something....let's just stick with that. If default means we can stop funding the IMF I'm not sure how that could be all that bad.
I used to think that in the event the gov did not have the money, they will pay the most important bills. That was naive. Gov will only pay the bills which give the most political leverage. If there is a defualt, reast assured the following will not be paid:
1) Interest on debt: kill the dollar for most pain
2) Firemen and police: Let the riots start and burn property
3) Justice system: No more civil courts so you are screwed.
4) Obama phone and EBT: if it can be made to look like repbulicans did it.
What wont be cut?:
1) DEA
2) Foreign aide
3) Military
4) CIA/NSA
"they will pay the most important bills. That was naive."
Naive, maybe, or just incomplete.
They will pay the most important bills, to them.
There fixed
5) House of Mis-Representatives' Spa and Sauna
I agree, but even if they don't raise the debt ceiling we won't "default". Interest on the debt would get paid first. There is revenue for plenty of other programs as well. Shit we could default and the fed could step in and go to 150 bil a month just to cover any gaps. Maybe that is the plan anyway.
My point is if there was any true threat (computer systems or some Y2K hot garbage) and the treasury sec pointed it out, it would be game over. The Chinese would not be mindlessely jawboning, they would be actively dumping UST's.
This is about eliminating the debt ceiling. Once we do that, we can then eliminate the bond market.
Nobody defines what it would look like because nobody knows. Just everyone is sure it would be "bad" which it probably would. Fortunately, we won't be finding out on the 17th or anytime in the forseeable future.
I would put a sandwich on the idea that we could go past the 17th with no raise of the debt ceiling and facefart would still be above $40.
These guys know the interest on the debt will be paid. Interest rates will not go up. That is all that matters.
Yeah, true. I like the idea that we might end up eliminating the entire idea of a "debt ceiling" over this. And good riddance. Then we could just spend without even a token debate about what it costs. Just break out the big ol' "APPROVED" stamp for everything- Obamacare, the next middle eastern war, constructing the Death Star, etc. We'll party like it's 1999.
It sounds novel, but "everything has its price"...How do you encourage "people" to accumulate debt that is worthless?
Why can't they just borrow money from the Social Security lock-box?
Im not convinced the interst would be paid. It would be a battle between TPTB vs political gain. Obama would like to not pay to get huge polical leverage, but at the same time TPTB would push for payment. Get your popcorn.
Wouldn't the debt ceiling have to be raised for the Fed to step in, buy Treasuries or whatever gov stuff?
I think that a "default" would force the ratings agencies to lower our AAA ratings, and the interest rates on future Debt to rise.
This would have a cascade effect, and potentially result in a runaway chain-reaction of events beyond their immediate and linearly-predictable modeling.
Ultimately, it would accelerate the date of the USD losing its Reserve status -- whose timeline they don't want changed on their agenda. Until D-Day arrives per their Master Schedule, they'll just be playing for time, and -- as Croesus points out -- have games "just for show".
Semi-managed series of crises, Bread & Circus until the 2014 Mid-Terms -- shooting for a majority in the House also. After that (double majority), we'll see the full and naked Fascism that Obama's masters want, and that he would personally enjoy. Therefore, the wheels won't come off the bus till the 2014/2015 time-frame, is my prediction. Whoever is running for President in 2016 is in for a rough ride.
There is no risk of default. The corrupt fuckers in charge want to maintain power and control, period.
Nothing short of guillotines will change things now.
Same as it ever was.
Agreed, same group of Meglomanic Globalists that held a knife to our throats back in 08 threatening CONgress with Martial Law.
Fuck them! They're scared, passive aggressive cowards with empty vile threats. Their precious system of Global Bondage & Enslavlement is unraveling & they know it. No more control is what The Elite fear more. That & Orange Jumpsuits.
There is nothing they can do to stop what is coming. They can only prolong it - and in doing so make matters worse. Even in extending it, there is a limit. Since the goal is clearly to keep the party going at all costs, we are going to find out where this limit is.
I somewhat agree, but ...
What if the rollover machine breaks? I think there is 400B of treasuries rolling over in the next 30 days. What if holders of maturing debt get cold feet and want dollars instead of T-debt? Would the fed step in and suck it all up?
Could get interesting ... grab the pop corn.
If you picture the FED as a giant garbage disposal and treasuries as garbage, then I think the answer becomes clear.
As Obama might say, never let a manufactured crisis go to waste. Facts be damned.
As long as the media repeat the absurd mantra that "We're only X days away from default" then the general public will be in something approaching a panic. (The MSM is even quoting the IMF and international sources now to reinforce the tension! As if most Americans know who the IMF is, or who Christing Lagarde is) That's just what Obama et al want. Let the MSM call those Republicans a bunch of right-wing extreme nutjobs, while Harry Reid represents sober responsibility as he presses for unlimited spending. How we ever got to the point where living within one's means (balancing the budget) is considered to be an extreme folly is beyond me. How the MSM got to the point where they can lament the effect on the economy should the government not spend more money to keep it going, yet not question the premise of why the government was allowed to become so integral to the economy, is beyond me. Progressives/fascists have captured all the levers of power - education, information, etc. - and are herding the clueless into serfdom. Worse, future generations of Americans will be born into servitude.
Recommended reading: "A Nation of Deadbeats" by Scott Reynolds Nelson. Saw him on CSpan's Booknotes. Bought the book. Enjoyable. Instructive.
Who gives a flying fuck, moar easing Janet Baby :)
The quiet killer ........PENSIONS UP ALMOST DOUBLE !!!......
snowballing....and you're right, it's quiet. not many get it. tsunami comin'
In PA, at least, nobody but state employees has paid into state pensions for over 10 years. Really difficult to imagine how paying ZERO is "bankrupting" taxpayers like the pension thieves would have us believe.
What do you suppose would happen if I just stopped paying my bills for a decade? Do you think this nation of deadbeats would let it slide? Or sqauwk some more about personal responsibility?
Moar for less. Winning.
Here's one fact regarding household income- Its total bollocks, households have changed in size over time, and they differ from one income bracket to another, so any use of household income data is total and utter bullshit. Please do not ever use household income again, you have done this repeatedly.
http://www.youtube.com/watch?v=wcsvAT4JT-g
Spending more money on basic needs as well as moar stuff we don't need to impress people we don't like. Now were have I heard this before...
We hate it, when our friends become successful.
" I'm working as hard as I can to get my life and my cash to run out at the same time. If I can just die after lunch Tuesday, everything wll be perfect. "
Doug Sanders, pro golfer
i got it ...
soak all of your money in gasoline, then self immolate
problem solved ...
By the way please pay my consultation fee before immolation.
can I help you with any other problems
Wouldn't work for me; my money only melts at around 2000 degrees.
I guess that is part of the story. There are more parts:
1. Taxes (including the state, local, real estates, income sales and others) as a percentage of income and spending. Tax slavery comes from every day living.
2. Debt load compared to income. With interest rates lower, just talking about interest does not show the picture. Debt slavery comes from owing, not from the payments as a percentage of income... that's how governments and elitists work, not real people, who have consequences from debt.
3. Dependency on government
4. Median measurements as opposed to mean measurements. There is no doubt that there is a very financially advantaged section of the population.
5. Net worth as opposed to just savings. Savings are not nearly as productive as they used to be and my guess us that a family has to save roughly 4 to 10 times as much, as a percentage of income (of course this does not apply to the well off insiders), to get the same return they did in 1973.
6. Education costs
Are we happier with 24/7 multimedia propaganda and 24/7 connectedness to a cold unfeeling world that is very personally obsessed, instead of depending on an extended family and close neighbors. Are we healthier being constantly medicated with harmful drugs under the threat of force if we do not comply, eating mass-produced, genetically modified unhealthy food and being bombarded with harmful radiation 24/7? Authors such as the above seem to want to make us think we are and that we need and should want thos so called "advancements".
I say embrace your slavery, but take away the power of the parasites by not letting them manipuate you.
"Median measurements as opposed to mean measurements. There is no doubt that there is a very financially advantaged section of the population."
+1 This above all
It's always the same in most financial numbers: they are quoted as averages, disgusing the fact that there is a large number of people below average balanced by a small number way above average.
Reminds of the story of the 4 people who had 10 chickens in between them: 1 had 10 chickens, 3 had no chickens, so in average each had 2.5 chickens.
But that half chicken didn't do much.... Just laid there.
We mustn't talk about education costs, lest the job cremators feel uncertain!
It's one of my favorite ironies that the same people demanding a college degree for everything howl like banshees about the evils of academia. They hate investing in their business more than they hate Marxism I guess.
It takes an academic to declare that a business can't filter applicants by IQ because it's racist.
Healthcare is about the same...wait until Obamacare kicks into full gear - that will increase our healthcare costs.
Did they miss cable TV costs? In 1973 people only used rabbit ears which was free as I recall. Today it can cost $100/mo easy.
How about cars - in 1973 most families only had 1 car - today 2 cars at least - that's a lot of extra expense.
Most goods are cheaper now since they are made by little kids in sweat shops overseas. But wait until the dollar collapse becasue then everything increases in price - no more exporting inflation.
I was helping my daughter with highschool homework. It was on healthcare. There was a statement on the handout: "Increasing healthcare cost is good for the economy". WTF??? this is what they are teaching now? I cant wait for conferences.
The teacher is following a curriculum.
Take your kids out of the government schools and solve the problem.
Help your daughter with her civics homework, if there even is such a course. You will probably be confronted with a statement to the effect that we are "all in this together" and therefore "be a good, obedient citizen".
As mentioned above, and I think first said by Todd Harrison, the internet has been the most deflationary invention in a long time. Fewer useless middlemen now have a job. Uh oh, how they gonna have that "household income" now? Companies found out they can do with less worhless people hanging around the water coolers, and haven't been hiring the losers back. And yes, one job per adult - or welfare - is what it takes to get by these days, even with having fewer kids to feed.
Guess I'm a dinosaur, since I use wired ethernet/internet for most everything. No cel, no cable - in fact, no TV at all here. Other things give me more fun per dollar. Like the solar panels so I don't have an electric bill, the machine shop so I don't have to pay some one else for fixing most things or my other toys and yes, the hated electic Volt I charge from my spare power so I drive for the cost of tire wear, more or less.
Trying to be self sufficient huh? You've just been added to the list buddy.
My Dad (1922-2012) held a career white collar government job ... sophisticated, maybe, but no management invovled.
On his salary he supported a wife and five children. He owned a car and he owned a house for us all to live in. He clothed us, fed us, and took us to doctors and dentists as needed. He paid for a maid once a week. He saved enough money so that he could pay for all of us to go away for four years at private colleges.
And he still saved enough so that afterwards he could travel around the world and live well for another thirty years after he retired.
try doing that now ....
In all probability that job has been replaced by the internet. It is amazing how much of the admin previously done by a level of people is now done by the end consumer, on the internet...
You are making a strong case for big government
Spending less on personal care products are we? What about moisturiser, man- bags, man heels, man lingerie, mascara...omg hunny the list is endless.
http://www.funzug.com/index.php/funzug-mails/wackiest-feminine-fashion-accessories-for-men.html
'With average post-tax income of $63,000, according to the latest Consumer Expenditure Survey,'...
Really? I guess my circle of acquaintances is too poor.
Two words: FIAT Currency
The various forms of financial drag added to the system are weighing everything down. Each transaction includes costs for insurance, legal compliance of one kind or another, some sort of financing, etc. Transactions paid by credit card carry a transaction fee to the merchant which is rolled into the price. Fees or specific taxes everywhere you turn. By the time you get done getting nickled and dimed to death, you're out of money.
Hey Mr. Colas, how about factoring in the fiat costs of shelling out for a college education in 2013 vs, Ward Cleaver's hump for Walley and the Beav. Now do that and we would be getting somewhere with your analysis.
Hmm no mention of taxes, obvious and hidden. Convenient. I feel better already!
ah, yes, four decades ago .....17cents/gallon gasoline; 15cent hamburgs, 10cent COKES & if i wanted money, i had to go babysit for 25cents an hour, payable to me in a silver quarter. my parents purchased a house for $22,000, paid off their 15-year mortgage in 10 years & saved for retirement & earned interest on their savings. don't even get me started as to how angry i am with the situation nowadays & oh, p.s., my dad was a TRUCK DRIVER, & he was proud of the fact that he had a good job & could take care of his family. TRUCK DRIVER, did you hear that Mr. President, sir ?
Like Mark Twain said... "Lies, Damned Lies, and Statistics".
I am so sick and tired of statistics used to purport bullshit. We live everyday in this shit storm and know the drill. I could cut everything that is not mission critical and still not stand a chance.
Another factor here that I blasted someone on recently was how anyone who regularly invested from the 70's to the 00's saw unprecedented gains. Gen X and later did not have that luxury. And after almost 2 decades of nothing in inflation adjusted terms, we have lost too much time to ever make it up (on the assumption of normalcy of course - which is complete horse shit anyhow - but just trying to be fair to the argument, which is critical when talking to sheeple/pollyanna types).
1968: 18 cents for a single-scoop ice cream cone at Baskin-Robbins.
Jamocha Almond Fudge, preferably. In a sugar cone.
"Four decades ago...and wireless anything wasn’t even close on the horizon."
Well, besides radios, televsions, walkie talkies, remote control toys...other than that ya know...nothing wireless...
Author must be an angry boomer trying to reconcile his cognative dissonance just like my father in law - cherry picking distorted figures, some of which fly right in the face of even Elizabeth Warren's work.
Pitiful to say the least.
..we do have Eddie Haskell as the President now with the Three Stooges running everything in sight!
Where's the coke and whores allocation??? jeeesh
It's in Cartegena, shipped on the same pallet destined for (allocated to) CIA agents in Columbia to give to FARC rebells to fly pure coke onto a little known desert airstrip in Arizona. Gotta think like our government does.
What about long distance service on that land line? I fondly remember my family (and myself, before cell phones were widespread) shelling out big bucks to call out-of-state. Our phone bill was as much, or more, than my cell phone bill is, now.
Beaver: Hey Wally, what are you guys doing with your pants off?
Eddie Haskell: Beat it, squirt, we're checking out porn magazines.
Beaver: Wally, what's porn?
Wally: It's required reading for SEC jobs, Beave.
Beaver: What's the SEC, wally?
Eddie: It's a bunch of government stiffs that make sure big businesses screw small businesses and take all of your dad's money. Now go find Whitey or Larry Mondello and do something useless, like you always do.
Wally: Yeah, beat it, Beaver, we're busy.
Eddie: Hey, that Mondello kid might just have a future as Fed Chairman.
Wally: Naw, Eddie, by the time he's old enough, they'll probably give it to some dumb girl.
Eddie: Like this one here, Janet Yellen?
Wally: Geez, Eddie, I was just getting a stiffie.
Think like the bastard love child between a politician and a central banker. Obama and Yellen - Bernanke and Pelosi.
The FED could burn two trillion in UST debt - actually print out the paper bills, notes and bonds and have a bond bonfire.
Then have the FED offer to buy whatever UST the Chinese have - China could then use the cash to buy more UST.
Problem solved.
That would allow the treasury to borrow without any fear of the debt ceiling.
With less debt outstanding - interest rates would go down - a smaller FED balance sheet would allow more QE - a spare two trillion in government borrowing would increase GDP.
Very bullish for risk assets.
/sarc/
"It’s a bit of a mystery, then, why we aren’t managing to save more: " I'm not sure it is a mystery, particularly if you start with the premise that the CES is flawed. Consider that the CES is a survey that measures the incomes and expenditures of only 7000 hand selected volunteers two times for one week periods in an entire year. Consider that the reported after tax income average of this group of 7000 Americans is ~63K. (http://www.bls.gov/cex/csxann11.pdf) Consider that the Social Security Administration publishes actual data on every American's W2 tax filings and income as reported to the agency (ex contributions to deferred compensation plans) (http://www.ssa.gov/cgi-bin/netcomp.cgi?year=2011). The figure from this (much larger sample) shows an average earnings of ~41K but a median of ~27K. So, the question I think that should be asked is not what is the mystery underlying where the savings are going, but rather, who the fuck are these CES people with average earnings 30% greater than the average American? Has anyone themselves, or in fact anyone you know, ever participated in the Consumer Expenditure Survey? I know I haven't, and don't know anyone who has...
I'm a family of one and since my ex-mother-in-law's junk hand me down nokia cell phone died last week I had to purchase a new one. I bought a samsung a157 for $15 new and $50 a month unlimited. I use Linux on a 10 year old computer that I got from a school that was throwing them away. My part of the household Internet access is $20 per month (shared with others in the house). So $70 per month for a student is not too much for FASFA to pay. But, I'd be a better student if they would up my FASFA M'Fers.
You're a student with an ex mother in law ?????
I kinda fit that category.
My kids are using walky talkies. They use them to check in every couple of hours as they explore and visit their buddies. I think they have enough range to go far as their school too. They keep the use to a minimum due to the radiation, taught them the codes too.
The savings rate is lower because income inequality is higher (Citibank showed that in its report on the plutocracy). The wealthy have so much money they consume a higher percentage because they can without feeling any ill affects. They still have huge stockpiles of money saved. These affects statistically overshadow anything the other 95% are doing when it comes to saving. That's why it's not useful to talk in terms of average households when it comes to family finances. The outliers at the end can have a very distorting effect. The fact this author doesn't understand that makes me very unlikely to ever read him again.
Aside from that, I remember older generations having large quantities of high quality tools. Many of us now have a few essentials when it comes to tools. I have one screwdriver and I can pop about a dozen different bits into it. My grandfather probably had about 20 different individual screwdrivers of different shapes and sizes. Think of the savings from not having to have all those tools anymore - savings that can be spent on computers.
Agreed, and it also doesn't make any sense to talk about the bottom (pick a number) percentage of households either since the truly poor have incredibly different spending habits (often the reason they're poor) and it doens't make sense to include anyone on welfare either since they have a disincentive to even think about spending.
Read an excellent and comprehensible analysis of Obamacare endorsed by Paul Craig Roberts here:
http://paulcraigroberts.org/2013/02/03/obamacare-a-primer/print/ I find it ironic that the very same people who voted the illegal alien Kenyan homo pothead into the Oval Office, the working poor and middle class, are getting absolutely frickin' hosed by Obamacare. There was an article posted here a while back showing that a family of four that took advantage of government welfare benefits enjoyed the same standard of living as a working family of four earning gross $60,000. Under Obamacare, the equivalent number has to be close to $80,000! Think on that a moment. Basically, it no longer makes economic sense for most middle class workers to work, because $80,000 gross income is probably near the 70th percentile.Is the $63,000 household income? In 73' it was likely that only the man was working. Now we need to have both men and women working. Where is the cost of day care for this new arrangement? Something is wrong with these numbers.
This is my main argument against Feminism. My grandfather could support a family of 8 with 1 adult working 40 hours a week. My own parents maintaind aproximately the same quality of life for a family of 4.5 with 2 adults working 80-90 hours per week total.
Of course back in the '50 grandma was still scrubbing clothes in a wash basin and drying them out on the clothesline. Women actually contributed to the house back then. Oh, AND they took care of loads more kids.
Nowadays if someone says that they're a SAHM I let them know that thanks to washers, dryers, microwaves, and dishwashers alone they have it pretty damn easy.
For 2012, the U.S. Census Bureau reports that Nominal median household income for 122,459,000 households was $50,099 (i.e., income that has not been adjusted for inflation and decreasing purchasing power) while Inflation Adjusted median household income was $51,017.
In comparison, in 2005 the Census Bureau reported Nominal median income was $45,496; the Inflation-Adjusted median household income was $54,486.
For the year 2000, of 108 million households, nominal median income was $41,262 and adjusted for inflation was $55,987.
In 1973, of the nation’s 69,859,000 households, nominal median income was $9,226, or $48,557 adjusted for inflation.
http://www.davemanuel.com/median-household-income.php
What was also different back then is that people used CASH, not plastic. The debt ratio was therefore automatically lower.
This whole tax-loophole of deducting the interest on the Income Tax is the Toxic Bribe for the masses, that merely drove up RE prices and debt levels across the board. In other countries this loophole (where renters subsidize owners) does not exist, and the incentive is to pay of the damn mort-gage* ASAP. But not in the US of fucking A, where the sheep are brainwashed by their money/drug-dealers to keep dragging it out: "Buy and enjoy today, pay tomorrow."
* Why don't you put "mort gage" into the Translator engine (Latin or French) and see what you get in English?
"With average post-tax income of $63,000, according to the latest Consumer Expenditure Survey, these bills might not seem like a lot to shell out – only about 4% of post-tax wages – but they’re costs that the families of 1973 avoided completely"
And how many are making the average income? Real income has been dropping.
As a baby boomer, i see so many attacks about how we are selfish and didn't save for retirement, but cell phone/internet/big screen TV's/SUV's/etc. cut across every generation.
Generation X,Y, Z are selfish and not saving up for retirement, either. What's that saying- people tend to live up to the level of their income? It knows no generational boundary.
"But also more frugal when it comes to others. Sadly, we are not as generous as we used to be. 6.1% of spending was on “cash contributions” to churches, non-profits, etc. in 1973, but in 2012 it was only 3.7%. But we are giving more to others, if unwillingly: expenditures on pensions and social security are up to 10.2% from 5.8%."
When it is taken from one, one has less to give, after personal expenses.
Really need to drop the avg income. Analyze from 45-50K. And adjust the %'s as non-linear. Lack of savings now would indicate that the expenditure allocations are not accurate.
Any inflation analysis has to include quality detoriation over the yrs. Even though a TV is cheaper now, it doesnt last 20+ yrs like the older models. Cars and their plastic components, a similar case.
2013 Net Worth for President Barack Obama (from davemanuel.com)
Average Net Worth: $3,616,506*
Minimum Net Worth: $852,013
Maximum Net Worth: $6,380,999
Average 2012 Income: $1,639,855**
Min. Gross Income: $681,209
Max. Gross Income: $2,598,500
Name: Barack Obama
Last Filing: May 14th, 2013
Title: President
Salary: $400,000
Party: Democrat
Term Start: January 20th, 2013
Term End: January 20th, 2017
Assets
US Treasury Notes (J) $1,000,001 - $5,000,000
JPMorgan Chase Private Client Asset Mgmt Checking Account (J) $250,001 - $500,000
Vanguard 500 Index Fund (Retirement) $100,001 - $250,000
Vanguard 500 Index Fund (Retirement) (S) $100,001 - $250,000
US Treasury Bills - SEP/IRA$100,001 - $250,000
State of Illinois General Assembly Defined Benefit Pension Plan $50,001 - $100,000
Vanguard 500 Index Fund (Retirement) (S) $50,001 - $100,000
Bright Directions College Savings 529 Plan (DC) (PIMCO Total Return 529 Portfolio PTTRX) $50,001 - $100,000
Bright Directions College Savings 529 Plan (DC) (Calvert Equity 529 Portfolio CEYIX) $50,001 - $100,000
Bright Directions College Savings 529 Plan (DC) (Calvert Equity 529 Portfolio CEYIX) $50,001 - $100,000
Bright Directions College Savings 529 Plan (DC) (PIMCO Total Return 529 Portfolio PTTRX) $50,001 - $100,000
JP Morgan Chase Checking Account (S) $1,001 - $15,000
Northern Trust Checking Account (J) $1,001 - $15,000
US Treasury Bill (J) Less Than $1,001
Income
Dystol & Goderich, NY, NY Book Royalties from Crown Publishing - Dreams From My Father $100,001 - $1,000,000
Random House, NY, NY - Book Royalties - Of Thee I Sing: A Letter To My Daughters $100,001 - $1,000,000
Random House, NY, NY - Book Royalties - Audacity of Hope $50,001 - $100,000
Vanguard 500 Index Fund (Retirement) (S) $15,001 - $50,000
Vanguard 500 Index Fund (Retirement) $5,001 - $15,000
Vanguard 500 Index Fund (Retirement) (S) $5,001 - $15,000
US Treasury Notes (J) $5,001 - $15,000
US Treasury Bill (J) $1,001 - $2,500
US Treasury Bills - SEP/IRA $201 - $1,000
Liabilities
Northern Trust, Chicago, IL - Mortgage on Residence, Illinois $500,001 - $1,000,000
http://www.davemanuel.com/pols/barack-obama/
Who's investing for him... his new BFFs at GS or his old BFFs from South Chicago?
post tax income of $63,000? in a world where 47% don't pay income tax....there's a math problem here somewhere.
How many people in $1973 paid $2.25 for coffee? We have a lot more technology today, but is mankind really benefitting from the cost of all this, or are a very select few reaping all the rewards and lulling us to sleep with constant mind control, stating that we truly need all of this and all these added costs.