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Education only makes up 2.3% of household expenditures and healthcare 8.2%.[1] You're cherry picking and ignoring strong deflationary pressures increasing the a

Education only makes up 2.3% of household expenditures and healthcare 8.2%.[1] You're cherry picking and ignoring strong deflationary pressures increasing the affordability of food (13% of expenditures), clothing (3%), transportation (17%), utilities (6.5%), entertainment (5%), and furniture and appliances (3.3%). As for housing, the cost per square foot, adjusted for inflation, is only 12% higher than it was in 2000. (Moreover this doesn't account for the major improvements in new housing stock, such as fire safety, attached garages, swimming pools, high ceilings, central A/C, high-capacity electrical circuits, etc.) The median cost of housing has only gone up, because consumers have demanded substantially larger homes. And this ignores the fact that mortgage rates are substantially lower than historical averages. Even accounting for our bigger, nicer homes, the percent of expenitures on shelter has barely budged from 18.7% in 2000 to 19.1% in 2019. [1]https://www.bls.gov/cex/2019/combined/age.pdf https://www.bls.gov/cex/2019/combined/age.pdf [2]https://www.statista.com/statistics/682549/average-price-per-square-foot-in-new-single-family-houses-usa/ https://www.statista.com/statistics/682549/average-price-per... [3]https://www.bls.gov/cex/2005/standard/multiyr.pdf https://www.bls.gov/cex/2005/standard/multiyr.pdf

toomuchtodo 6y ago
> You're cherry picking and ignoring strong deflationary pressures increasing the affordability of food (13% of expenditures), clothing (3%), transportation (17%), utilities (6.5%), entertainment (5%), and furniture and appliances (3.3%). I'm not ignoring these at all, and it should be clear where these lie on Maslow's hierarchy versus shelter, healthcare, and earning potential (education) [1]. Mortgage rates being low only means you're bidding up scarce assets further by borrowing with the little income you have. This attempts to sell affordability in the same way a car dealer salesperson sells you on the payment, not the price. And transportation? The average price of a new car just surpassed $40k [2]. There's a reason 7 year car loans have become common [3]. [1] https://www.reuters.com/article/us-usa-fed-dudley-ipad/ipad-price-remark-gets-feds-dudley-an-earful-idUSTRE72A4AC20110311 https://www.reuters.com/article/us-usa-fed-dudley-ipad/ipad-... (“I can’t eat an iPad.”) [2] https://www.usatoday.com/story/money/cars/2021/01/07/new-cars-trucks-suvs-financing-downpayment-prices/4139776001/ https://www.usatoday.com/story/money/cars/2021/01/07/new-car... [3] https://www.npr.org/2019/10/31/773409100/the-7-year-car-loan-watch-your-wallet https://www.npr.org/2019/10/31/773409100/the-7-year-car-loan...
- dcolkitt 6y ago
  > The average price of a new car just surpassed $40k In nominal terms, the inflation rate of new cars was in aggregate 3.5%[1] since 1995 (not 3.5% per year, 3.5% total.) Over the same period, household after tax income increased by 111% in nominal terms. Therefore the affordability of a new car, for the average household, doubled over the period. Moreover the average longevity of a car increased from 8.5[3] years to 11.9 years[4]. That means the amortized cost of one year of car ownership, in terms of household income, has fallen by a factor of three. [1]https://www.in2013dollars.com/New-cars/price-inflation/1995-to-2020?amount=15000 https://www.in2013dollars.com/New-cars/price-inflation/1995-... [2]https://www.bls.gov/cex/1995/aggregate/age.pdf https://www.bls.gov/cex/1995/aggregate/age.pdf [4]https://www.caranddriver.com/news/a33457915/average-age-vehicles-on-road-12-years/ https://www.caranddriver.com/news/a33457915/average-age-vehi...

toomuchtodo 6y ago

> You're cherry picking and ignoring strong deflationary pressures increasing the affordability of food (13% of expenditures), clothing (3%), transportation (17%), utilities (6.5%), entertainment (5%), and furniture and appliances (3.3%). I'm not ignoring these at all, and it should be clear where these lie on Maslow's hierarchy versus shelter, healthcare, and earning potential (education) [1]. Mortgage rates being low only means you're bidding up scarce assets further by borrowing with the little income you have. This attempts to sell affordability in the same way a car dealer salesperson sells you on the payment, not the price. And transportation? The average price of a new car just surpassed $40k [2]. There's a reason 7 year car loans have become common [3]. [1] https://www.reuters.com/article/us-usa-fed-dudley-ipad/ipad-price-remark-gets-feds-dudley-an-earful-idUSTRE72A4AC20110311 https://www.reuters.com/article/us-usa-fed-dudley-ipad/ipad-... (“I can’t eat an iPad.”) [2] https://www.usatoday.com/story/money/cars/2021/01/07/new-cars-trucks-suvs-financing-downpayment-prices/4139776001/ https://www.usatoday.com/story/money/cars/2021/01/07/new-car... [3] https://www.npr.org/2019/10/31/773409100/the-7-year-car-loan-watch-your-wallet https://www.npr.org/2019/10/31/773409100/the-7-year-car-loan...

dcolkitt 6y ago
> The average price of a new car just surpassed $40k In nominal terms, the inflation rate of new cars was in aggregate 3.5%[1] since 1995 (not 3.5% per year, 3.5% total.) Over the same period, household after tax income increased by 111% in nominal terms. Therefore the affordability of a new car, for the average household, doubled over the period. Moreover the average longevity of a car increased from 8.5[3] years to 11.9 years[4]. That means the amortized cost of one year of car ownership, in terms of household income, has fallen by a factor of three. [1]https://www.in2013dollars.com/New-cars/price-inflation/1995-to-2020?amount=15000 https://www.in2013dollars.com/New-cars/price-inflation/1995-... [2]https://www.bls.gov/cex/1995/aggregate/age.pdf https://www.bls.gov/cex/1995/aggregate/age.pdf [4]https://www.caranddriver.com/news/a33457915/average-age-vehicles-on-road-12-years/ https://www.caranddriver.com/news/a33457915/average-age-vehi...