What you said merely inflates the value of stocks. It doesn't actually explain why things have gotten worse and you're making a weird separation between stock h

What you said merely inflates the value of stocks. It doesn't actually explain why things have gotten worse and you're making a weird separation between stock holders and savers, they are functionally equivalent. We have cheap goods from China now, so what exactly is going wrong in your scenario? You didn't flesh that part out at all. If anything, you've decided to gloss over it, because housing is the primary issue. As someone else has said: current account deficit is capital account surplus, meaning that the Chinese are flooding the US with money that could be used to build housing, but the Americans in their wisdom decided that that's a stupid idea and the money should go in the same quantity of housing and bid it up instead. Unlike stocks people actually need housing to live in. It doesn't take much to explain how a rising cost of housing makes people feel squeezed, since it can literally lead to their eviction and homelessness.