The monster called inflation has effectively limited home ownership and car ownership to the two worker, middle-upper and upper middle class and above. Car ownership? Ha. Leasing is the order of the day, the dealers make money on the car once, then collect it in 2 years and sell it for close to new retail with interest to the next victim. The new owner takes a big hit on depreciation and will be lucky to sell the car for a fraction of what he paid if he keeps it over a few years or hits over 100,000 miles.
A beachfront home could be bought in Southern California for $20,000 in the mid-sixties. Now the exact same home is worth $1,500,000. A Cadillac convertible to go with the beachfront home ran about $5000 now the equivalent is about $100,000.
The home could be bought and mortgaged by one man with a salary of $20,000 a year. Monthly mortgage payments would be about $130 for a 20 year loan. The car could be financed the same way for another $50-80 a month. The man's wife could stay at home, raise the kids and be the anchor.
Today, the combined income to acquire the home and car would be about $550,000 dollars a year. The monthly payments would be in the ballpark over $12,000 a month
Basically, the home and car was available to an upper middle class family on one income in 1965 and today would require, more likely than not, a dual income to enjoy about the same things. And the equality is even more superficial when one considers the beachfront home is now not "new" but over 40 years old!
That's not an "umpire" - that's an economic "mugger."
The incomes are not keeping up anywhere near inflation. Inflation has royally ripped off everyone - including the rich.
The rich have to work harder, earn far more proportionately and be a bit smarter to live just as good, and hopefully better, than folks in the upper middle class used to be able to live!
No, I'm not afraid of deflation.
Current Events » in reply to do you understand how DAMAGING deflation is?
It's Soooo obvious you don't live in the US. ;-)
The whole thread (56 posts)
- One more item on minimum wage
- The Reader's Digest school of economics.
- "Some businesses shouldn't be in business."
- re: What and how much is a living wage...
- What a ...
- "A business that can't afford to pay its employees a living wage is a failed business"
- You don't LIKE numbers, do you? (n/t)
- "Some businesses shouldn't be in business."
- Talking dirty.
- The Reader's Digest school of economics.