Author Topic: Elizabeth Warren's research on the "The Over-consumption Myth"  (Read 45931 times)

ariapluscat

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #50 on: September 04, 2014, 05:14:46 PM »
Research like this always upsets people who like to think that their comfortable circumstances are entirely due to their own hard work. Some people don't like being shown that life isn't fair, and their reaction is to oppose those trying to even the odds.
I'd say so.  The struggles for insurance if you have any sort of problem and housing in the cities where jobs are - these two struggles intense and can snap up a large portion of your budget. I think that costs are very high as an engineering student with a minor recurring medical problem. Since I'm paying my own way via scholarships & gov't grants, my experience of college cost is different than the avg middle class family but friends constantly complain and many of them went into (or were forced into by their parents) the STEM fields to get scholarships and job stability. As far as health, I challenge the MMM forum to DIY chemotherapy or a colonoscopy once the insurance company cuts their loses.

MMM advice focuses heavily on allaying these costs - housing, education and health- because they've gone up so much. Some families don't have the resources -health, training, talent, inclination, whatever - to take on all of these difficulties themselves so they pay the cost for others to provide those services.  I skimmed her paper, but I agree that these costs have gone up and more of the average family's income goes to fixed costs and housing than extra purchases. In any case, offering resources for families to, say, create a home and garden for themselves, make healthy lifestyle choices and be supported in illness, and be exposed to public art and culture seems like a good thing!

ariapluscat

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #51 on: September 04, 2014, 05:20:40 PM »

Elizabeth Warren is a person that not only works to identify what has changed, but actually backs it up with data. Some of the stuff she's uncovered has genuinely surprised me
I thought it was really interesting that she quotes the spending on appliances went down but quoted $300 per year on computers. It seems like a strange contradiction - also how do you spend so much on computers each year?

4alpacas

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #52 on: September 04, 2014, 05:24:39 PM »
I'm a huge fan of Elizabeth Warren, and was going to start a thread on her book The Two Income Trap That book changed my whole view of family finance. I think it should be top of the list of any aspiring Mustachian.

The basic premise of her book is that having two incomes makes one more vulnerable to economic shocks rather than less because you don't the back up earning power, in other words if the husband loses his job, in a 1 income house the wife can go back to work.


I didn't read the book, but my husband and I watched her lecture on YT about 5 years ago on the topic. It hammered home to both of us to NEVER become dependent on a second income. So far, I have to say it has been a very good lesson learned for us.
That's exactly what I got from reading her book.  Even if you don't like her politics and political recommendations, the data from the book spoke to me.  The biggest problem with spending is over committing to recoccuring bills that you can't easily drop (mortgages, car payments, cell phone contracts, etc.).  It made me understand why my friends feel so strapped for cash when they feel they're not spending on anything "frivolous."*

*I put frivolous in quotes because I'm sure mustachians could tear their budgets to shreds.

MrsPete

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #53 on: September 05, 2014, 06:29:07 AM »
If you look at the typical my budget is a wreck oh help case study here, many do boil down to, you have more house than you can afford, or you have more car than you can afford. The other expenses are minor optimizations that help but won't change the picture as long as the family has too much house or too much car.

This article seems to put housing and transportation expenses in a different category than consumer goods, mistakenly because while you do need a place to live and a way to get around, if your budget is broken, you don't need the particular housing or vehicle that's breaking it.
Agree completely.  I think this "too much house and car" thing is super-common, and I think it comes about because of two things:

- People buy emotionally and think mostly about "I want this" rather than what they can comfortably afford.  I mean, gourmet kitchens and heated leather seats are nice things!  I can understand wanting them, and if the salesperson is saying, "Yes, you can finance this", I do see how people buy too much.

- People buy those big-ticket items without stopping to consider their overall budget.  That is, they consider what mortgage they can afford without considering that mortgage in conjunction with their other needs and wants.  And then once it's done, it's not so easy to get out of a mistake.

I do think over-consumption on these two items is a killer for more than a few household budgets.  While the article addressed the increase in size of houses, it didn't address the increase in "fancy stuff inside" the houses; that is, granite countertops, handmade tile, 5K showers, etc.  Those things are driving up the cost of housing as much as the square footage. 

I do agree that the "you can't change this" price stuff:  Medical costs, taxes, etc. are increasing, and we as individuals don't have all that much control over those things -- but I also think the over-consumption thing is playing a part.

MrsPete

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #54 on: September 05, 2014, 06:31:43 AM »
Over-simplifying her thought process to a bite-sized chunk, her basic premise appears to be:

Buying a house is too expensive for one earner anymore, so two people work. This requires two cars and childcare. The interest payments required to pay for it all (combined with rising healthcare costs) keeps them in a hole with no money left for discretionary spending. So families are struggling even while they aren't completely blowing all their money on stupid stuff. 

I'll simply point out that Mustachians of all political persuasions and income levels find plenty of good ways to avoid the house, car, and debt traps. You are in control of your own choices.
I agree that we are MOSTLY in control of MOST of our choices -- the exceptions being, sometimes people get sick, lose jobs, suffer catastrophic losses genuinely not caused by their own mistakes -- but those are exceptions to the rule. 

The big thing is, too many people don't recognize that they have control over their choices (and their results) UNTIL they've already made the mistakes. 

MrsPete

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #55 on: September 05, 2014, 06:35:56 AM »
Housing - she says it herself - the average size of the American house has increased dramatically. Overconsumption.

She says that more people are living in houses over 25-year years old and asserts that the new homes are not bought by median earning families.
I suspect this varies widely.  For example, I live in a booming area.  When I moved here 14 years ago, my neighborhood of old brick ranch houses kind of stood alone.  In the years since, no fewer than a dozen new neighborhoods have grown up around us -- some of them are pricey, all-brick luxury homes, while others are smaller, more modest homes.  And interspersed throughout are the occasional farmhouses (now minus the farm land).  These homes are all bought by middle-income type folks. 

I'd guess that in an established city, where no "new land" is available, people would live in older homes -- perhaps renovating them to their own needs.

PloddingInsight

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #56 on: September 05, 2014, 07:14:50 AM »
I think she gets it exactly backwards.  Home prices are not causing people to live on two incomes.  Two-income families are inflating home prices.

Think about it.  How do people go about buying a home?  They look at their income, and they ask how much they can afford.  Then they go out and buy the most desirable house they can find at that price point.  Result: all their money is now needed to keep the house.  For decades now, the housing market has been dominated by dual-income couples, and consequently people are buying bigger and more expensive houses.  Square footage per person has gone up considerably since the 70s.  How many new developments are being created with small houses that would have been considered modest middle-class homes in 1970?  And of course there's all the money people are plowing into expanding their homes (blowing out the back of a cape cod, for instance), expanding square footage to meet modern tastes.

It does get to the point that in order to buy a "normal" house, a typical couple needs two incomes...  But lets be clear.  Nobody is forcing them to conform to society's norms.  If they bought a house they could afford on one income, they would just have a smaller, more modest house than their dual-income friends would consider acceptable.

sheepstache

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #57 on: September 05, 2014, 07:35:12 AM »
To side-step the question of over-consumption all together, we can simply ask ourselves if achieving ER would have been easier for people in the 70s?

hybrid

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #58 on: September 05, 2014, 07:54:10 AM »
I guess where I am struggling with much of this is where to draw the line between the truly needy and the need to get their act together. I am fairly socially progressive and I believe in a strong safety net. I would have us on single payer health care tomorrow were I calling the shots. I strongly believe in short term benefits on a short term basis. Having said all that, I do feel like too many people with means and opportunity are seeking help from without rather than within too early and too often. I see this at my office quite a bit. There are plenty of folks that are setting fire to $100 bills, all the while griping that their raises are paltry and their expenses so high. On the one hand, they are right. Raises have been much smaller in recent years, costs keep going up and up. Rather than make changes to offset this, they just bitch instead.

I work at a law firm and almost every single administrative assistant has a fancy phone with a data plan. When I got here ten years ago almost no one did. It became part of their new norm. And so I have very little patience for the lifestyle-creep that sucks up so much of their available resources while our health care costs have continued to go up almost every single year.

Helvegen

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #59 on: September 05, 2014, 09:53:14 AM »
That's exactly what I got from reading her book.  Even if you don't like her politics and political recommendations, the data from the book spoke to me.  The biggest problem with spending is over committing to recoccuring bills that you can't easily drop (mortgages, car payments, cell phone contracts, etc.).  It made me understand why my friends feel so strapped for cash when they feel they're not spending on anything "frivolous."*

*I put frivolous in quotes because I'm sure mustachians could tear their budgets to shreds.

I thought it was interesting because I had never really thought about how dangerous it was to completely rely on having a second income. But she's right. It is a form of insurance to not have to rely on a second income in case something happens to the primary income. Right now, both my husband and I work full-time, but we completely bank my income and continue to budget off of his as if nothing happened and I never started working. We know a lot of couples who have lifestyle inflated themselves into the two-income trap she is talking about and if one of the two earners got behind even two paychecks, they would be completely sunk because of how necessary they made the second income to their financial lives. I think of it as a cautionary tale.

Anyway, this was what I watched and it changed my financial life: https://www.youtube.com/watch?v=akVL7QY0S8A

backpacker

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #60 on: September 05, 2014, 11:24:38 AM »
Warren claims that the size of the average middle class house has increased "only modestly" because it is now 6.1 rooms instead of 5.7 rooms. This ignores the possibility that houses are larger and more expensive in part because rooms are larger. In fact, if you look at this summary of the same data Warren is looking at, you'll see that that is exactly what happened. Between 1985 and 2005 the size of the average home increased 10% while the average number of rooms increased only 5%.

Why ignore renters? One way to over-consume is to buy a house when you live in a market where you should be renting.

Warren notes that cars have in fact gotten bigger and that this is part of why they are more expensive. This is necessary, she says, to make room for carseats. Hilarious! Of course, assuming that two cars are a necessity for a middle class family just shows that Warren doesn't read MMM. :)

Showing that families are spending less in a category does not show that they are being more frugal or not over-consuming. A silly example to make a point. The first handheld calculators from 1970 cost about $2,400 in inflation adjusted dollars. This does not show that consumers buying $500 calculators today are being more frugal than consumers in the past.
« Last Edit: September 05, 2014, 11:38:58 AM by backpacker »

SisterX

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #61 on: September 05, 2014, 11:45:15 AM »
  • Warren notes that cars have in fact gotten bigger and that this is part of why they are more expensive. She then makes the absolutely hilarious claim that this is necessary to make room for carseats (page 15).

Actually, if you read any of the threads about carseats on here, people really do have a hard time finding carseats which will fit into a small car.  In the 70s, there weren't even seatbelts in most cars, let alone mandatory carseat laws.  And the age/size during which children "need" to be in carseats keeps going up.  By current height/weight standards, I would have been going into high school before I was technically allowed to not be in a booster seat any longer.  (Discounting the current age limit of 12--12!)  If you've got 3 small children, it can be really, really difficult to fit all three carseats and booster seats into a small car.  Doable, but difficult.
And this is all without examining the social pressure to buy a bigger, "safer" car, "for the kids".  I know, I know, driving with kids is inherently unsafe, and creating safer drivers would be much better than trying to build bigger/heavier cars "for safety", and a million other reasons why the bigger cars only create the illusion of safety.  But most people don't know that.  We discount social pressure a lot on here because we're used to going against the norms, but most people aren't, and probably never will learn that skill.  Even on here, there's a reason we have a forum, and it's not just to hand out tips and advice.  It also works to buck people up when they need a little dose of alternate reality and a reminder that frugality is good.  Call others pathetic all you want for doing what's normal, but it is part of human nature to want to do what our tribe thinks is best, and to fit in.  It is up to people like us, who are used to bucking the trends, to normalize other options, but that takes time.

Zikoris

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #62 on: September 05, 2014, 11:55:35 AM »
To side-step the question of over-consumption all together, we can simply ask ourselves if achieving ER would have been easier for people in the 70s?

In my opinion, it would have been extremely difficult to ER in the 70s without a very high income. We just have so much resources available to us now that were not there before, particularly the internet, that make it so much easier to find and share information, start up side gigs, and optimize our lives. We can use things like credit card churning to travel the world for nearly free, and research and manage our own investments for a fraction of the price of a conventional advisor. As cities grow larger, we have more public transportation than ever before, making it easier than ever to live without a car.

So in my opinion, while the cost of a few things has risen (along with wages), we're in a better situation now for retiring young and living a great life than in any time in human history.

sheepstache

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #63 on: September 05, 2014, 12:00:46 PM »
Actually, if you read any of the threads about carseats on here, people really do have a hard time finding carseats which will fit into a small car.  In the 70s, there weren't even seatbelts in most cars, let alone mandatory carseat laws.  And the age/size during which children "need" to be in carseats keeps going up. 

Also cars have become more expensive because in 1998 airbags became mandatory on all new cars.  Interestingly, I read somewhere that this isn't factored into the consumer price index.  When we're talking about inflation, we're still talking about 70's standards of living.

On the housing front, I'd be open to an argument about housing getting bigger but I think she's made the point that we don't have numbers on square feet per person.  So houses may get bigger because of a greater number of multi-generational households or because of more children per family.  I'm inclined to assume that average house size getting bigger means the obvious: that people are buying more house than they need, I'm just making the point that that number alone doesn't tell us.

PloddingInsight

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #64 on: September 05, 2014, 12:15:09 PM »
...we don't have numbers on square feet per person...

I'm pretty sure we have that information.  Maybe not in the detail or format that she'd prefer, but roughly speaking we know the average square footage and the average household size, so what's the problem?

backpacker

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #65 on: September 05, 2014, 12:37:29 PM »
After poking around, it looks like the median household size dropped from 2.76 in 1980 to 2.58 in 2010, about 10%. The size of the median home increased by about 40%. And the inflation-adjusted cost of the median home increased about 80%. Assuming that the cost per square foot of home is the same for houses of different sizes (perhaps an unreasonable assumption), this means that the cost of the median home would have been about 28% higher if families were buying homes of the same size. If they were also buying homes to match the shrinking household size, their housing costs would be only 15% more than in 1980.

So of the extra money that families are spending on house, about 75% of the money is going towards owning a larger home (relative to the size of the household). 25% is due to an unavoidable increase in housing costs.

So Warren is partially right. Families are spending more on housing because housing is more expensive. And MMM is right. Families are spending more on housing because the are buying Too Much House.


StashDaddy

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #66 on: September 05, 2014, 01:01:17 PM »
A funny blog post about Elizabeth Warren's philosophies:

http://livingstingy.blogspot.com/2014/09/the-game-is-rigged-so-dont-play.html?m=1

anisotropy

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #67 on: September 05, 2014, 02:06:18 PM »
After poking around, it looks like the median household size dropped from 2.76 in 1980 to 2.58 in 2010, about 10%. The size of the median home increased by about 40%. And the inflation-adjusted cost of the median home increased about 80%. Assuming that the cost per square foot of home is the same for houses of different sizes (perhaps an unreasonable assumption), this means that the cost of the median home would have been about 28% higher if families were buying homes of the same size. If they were also buying homes to match the shrinking household size, their housing costs would be only 15% more than in 1980.

So of the extra money that families are spending on house, about 75% of the money is going towards owning a larger home (relative to the size of the household). 25% is due to an unavoidable increase in housing costs.

So Warren is partially right. Families are spending more on housing because housing is more expensive. And MMM is right. Families are spending more on housing because the are buying Too Much House.

I would think the increase in housing cost is unavoidable due to land limitation but I might be wrong. If your numbers are correct they are telling a very different story than Warren's.

25% increase over 35 years is hmm pretty mild ?

Threshkin

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #68 on: September 05, 2014, 02:31:14 PM »
I'm a huge fan of Elizabeth Warren, and was going to start a thread on her book The Two Income Trap That book changed my whole view of family finance. I think it should be top of the list of any aspiring Mustachian.

The basic premise of her book is that having two incomes makes one more vulnerable to economic shocks rather than less because you don't the back up earning power, in other words if the husband loses his job, in a 1 income house the wife can go back to work.

I strongly disagree with this premise.  Having two incomes does not make you more vulnerable do economic shock.  Is there much difference between two people earning $50K each or one person earning $100K?  It is not how much you earn as a family, it is how much you SPEND.

Two incomes actually makes the family less vulnerable because it is less likely that both people will loose their income at the same time.  In my mind losing 50% of your income (or any value <100%) is much better than losing 100% of your income.

briandougherty

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #69 on: September 05, 2014, 02:38:52 PM »
So Warren is partially right. Families are spending more on housing because housing is more expensive. And MMM is right. Families are spending more on housing because the are buying Too Much House.

It's a lot more complicated than that.  A lot of housing choices are about buying into neighborhoods.  At some level that's reasonable but at some point it becomes waste. Either way, it's usually a lot more complicated that people wanting the luxury of more square feet.  In my area of the country, suburbs compete to raise housing prices and limit the number of students going to their schools because that hurts the budget. It's really hard to disaggregate why families are making purchases. I think plenty of schools really are worse or at least there is that perception.

I also think it's important to separate the individual from the macro. Just because I can function and live a fine life under a given system doesn't mean I have to like that system. I don't know MMM's politics or much of Warren's work but from what I've seen MMM is just focused on how to be a badass at the individual level and Warren is saying things are not getting better for median households and we should change policies to fix that. I don't see them as mutually exclusive. I see Mustachianism as a guide to do well under the system we have, whatever that might be.

libertarian4321

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #70 on: September 05, 2014, 03:34:59 PM »
Elizabeth Warren is a bomb throwing political demagogue, just like Bill O'Reilly, Al Sharpton, or Anne Coulter.  She just dresses more demurely and uses a lot less yelling and bluster, so it may be harder to identify her as such.

Everything she does is driven by political ideology.  Don't expect rational analysis from someone like her.  Go ahead and read her stuff, but do so knowing she is driven by a political agenda, not a quest for discovery.  Then have fun pointing out all the ways she manipulates statistics to achieve the outcome she desired.


backpacker

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #71 on: September 05, 2014, 03:44:34 PM »
briandougherty: I agree that things are likely more complicated. And I'm just some guying making back of the envelope calculations using statistics dredged up from half a dozen different websites. :D

For neighborhood competition to explain the rise in housing prices, it would have to be that this competition has increased since 1980. Maybe that has happened? I don't know.

Another thing to consider is that "buying into certain neighborhoods" can itself be just another luxury purchase. I wouldn't be surprised if parents overestimate the effect of having their children go to a "top" public school.

sheepstache

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #72 on: September 05, 2014, 03:46:35 PM »
After poking around, it looks like the median household size dropped from 2.76 in 1980 to 2.58 in 2010, about 10%. The size of the median home increased by about 40%. And the inflation-adjusted cost of the median home increased about 80%. Assuming that the cost per square foot of home is the same for houses of different sizes (perhaps an unreasonable assumption), this means that the cost of the median home would have been about 28% higher if families were buying homes of the same size. If they were also buying homes to match the shrinking household size, their housing costs would be only 15% more than in 1980.

So of the extra money that families are spending on house, about 75% of the money is going towards owning a larger home (relative to the size of the household). 25% is due to an unavoidable increase in housing costs.

So Warren is partially right. Families are spending more on housing because housing is more expensive. And MMM is right. Families are spending more on housing because the are buying Too Much House.

Interesting.  I wonder if that's specifically within the middle class?  Or do we have DINKs and 1%-ers in McMansions skewing the numbers?

I suppose a reason for the increase could be due to higher building standards which might mean more energy efficiency and less maintenance costs.  Which on the one hand might mean over-consumption might not be the right word for it since it might be a sensible move to save costs (think a mustachian buying a place with a metal roof to save re-roofing costs) but also on the other hand might mean we shouldn't look at it as a rising cost if lower bills elsewhere offset it.

Helvegen

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #73 on: September 05, 2014, 03:47:18 PM »
I'm a huge fan of Elizabeth Warren, and was going to start a thread on her book The Two Income Trap That book changed my whole view of family finance. I think it should be top of the list of any aspiring Mustachian.

The basic premise of her book is that having two incomes makes one more vulnerable to economic shocks rather than less because you don't the back up earning power, in other words if the husband loses his job, in a 1 income house the wife can go back to work.

I strongly disagree with this premise.  Having two incomes does not make you more vulnerable do economic shock.  Is there much difference between two people earning $50K each or one person earning $100K?  It is not how much you earn as a family, it is how much you SPEND.

Two incomes actually makes the family less vulnerable because it is less likely that both people will loose their income at the same time.  In my mind losing 50% of your income (or any value <100%) is much better than losing 100% of your income.

Her point is people have spent all of the second income to where it is as vital as the first. There is no added advantage, it is the bare minimum required to make their commitments in their situation.

My husband and I lived for a long time on one income, still do. If something happened to either breadwinner, the person at home could go back to work to make up the difference then quit again when the breadwinner found work. BTDT. We're a two income household now, but every dime I make is saved and we actually live on less than one income. Do you think this is really the case for most two income families? Probably not. They probably look at how much they are making and all the sudden feel the need to spend every red cent of the second income after having already exhausted the first. Now they don't need to make $50k a year to make it, they need $100k. We make $100k, but only need $35k. If one of us lost our job, so what? Sucks, but we aren't going to the poorhouse in no time flat. If a couple makes $100k, spends $80k of it and someone making $60k loses their job...they are in some trouble pretty quick. That is her whole point about this. People aren't thinking it through when they spend the whole of the second income. Stick their head in the sand that nothing will ever happen to either one of them. Then when it does, they are completely up the creek with commitments that aren't easily disposed of like high car and mortgage payments.

backpacker

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #74 on: September 05, 2014, 07:46:52 PM »
After poking around, it looks like the median household size dropped from 2.76 in 1980 to 2.58 in 2010, about 10%. The size of the median home increased by about 40%. And the inflation-adjusted cost of the median home increased about 80%. Assuming that the cost per square foot of home is the same for houses of different sizes (perhaps an unreasonable assumption), this means that the cost of the median home would have been about 28% higher if families were buying homes of the same size. If they were also buying homes to match the shrinking household size, their housing costs would be only 15% more than in 1980.

So of the extra money that families are spending on house, about 75% of the money is going towards owning a larger home (relative to the size of the household). 25% is due to an unavoidable increase in housing costs.

So Warren is partially right. Families are spending more on housing because housing is more expensive. And MMM is right. Families are spending more on housing because the are buying Too Much House.

Interesting.  I wonder if that's specifically within the middle class?  Or do we have DINKs and 1%-ers in McMansions skewing the numbers?

I suppose a reason for the increase could be due to higher building standards which might mean more energy efficiency and less maintenance costs.  Which on the one hand might mean over-consumption might not be the right word for it since it might be a sensible move to save costs (think a mustachian buying a place with a metal roof to save re-roofing costs) but also on the other hand might mean we shouldn't look at it as a rising cost if lower bills elsewhere offset it.

The numbers are for the median house. So take a big list of all the homes in America and rank them by size. Take the one in the middle of the list. The price of the middle-of-the-list house has gone up by 80% and its size has gone up by 40%. One of the features of doing the statistics this way is that it doesn't matter what the rich are doing. Regardless of whether they are paying 200% more or 1000% more for their houses, the same house will be in the middle of the list.

chasesfish

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Re: Elizabeth Warren's research on the &quot;The Over-consumption Myth&quot;
« Reply #75 on: September 05, 2014, 08:25:54 PM »
Elizabeth Warren:  I went to Harvard and make $350,000 a year, therefore I can tell everyone making $60,000 how to live their life. (And how their problems are everyone else's fault)

Give me a break.  I see her as a slightly more elegant version of Hugo Chavez.  Remember, all of the problems of Venezuela were those awful oil companies.


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Theadyn

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #76 on: September 06, 2014, 07:54:00 AM »
I've read her books, am currently working my way through her latest one.  The Two-Income Trap was eye opening when I read it 12 years ago, I now have my daughter in her 20's reading it now in hope she avoids being in that trap.   

Yes, I do see a lot of people with two incomes become dependent on both incomes, and what happens when a job loss or divorce or illness (or whatever) comes along and they can't make their monthly obligations that require both incomes.   Personally, I think most people are fed the lies of what is the norm and most sheeple follow it.  They are told go to school, go to college, get a job that is secure, get married, buy a house, start a family, both parents work...  and they do it.  Years go by and there they are, in a too much of a house that is near the good schools, driving kids to daycare to be able to go to that second job to pay for the higher cost of the house that is in the good school and having to borrow for the newer car that they are feared into getting for it's safety, etc...   and then something happens and boom!   Most bankruptcies aren't due to frivolous spending.

I, for one, am glad to know someone out there is looking at this data, asking the 'why's', and is trying to do something about it.  If politics is her vehicle to do that, so what.  She is pointing out some things that have changed and things that needs to change (and not always just changing in favor of big banking). 

She gets my *thumbs up*.  But it is STILL up to us individuals to change things in our own lives!

agent13x

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #77 on: September 06, 2014, 09:34:17 AM »
Elizabeth Warren is leveraging her way into a higher level political career.  Her platform:

1.  It's not your fault and there's nothing you can do about it.

2.  Vote for me.  I'm from the government and I'm going to fix everything for you.

It's this simple.

MidWestLove

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #78 on: September 06, 2014, 11:16:16 AM »
"Elizabeth Warren is a bomb throwing political demagogue"

Yet another professional politician going from ivory tower of universities for political career and wealth, not dissimilar to Hillary (who is multi millionaire hundred times over and yet claims to understand how the rest of the country lives while lying through her teeth). Has  few good idea (i.e. in bank regulation space), has a LOT of political agenda , and 'selective' in her statistics. I would not trust much what she or her current office produces without extensive verification.

lexie2000

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #79 on: September 06, 2014, 11:27:28 AM »
Elizabeth Warren is leveraging her way into a higher level political career.  Her platform:

1.  It's not your fault and there's nothing you can do about it.

2.  Vote for me.  I'm from the government and I'm going to fix everything for you.

It's this simple.

That's the way it looks to me.  Her paper screams of victimization.






sheepstache

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #80 on: September 06, 2014, 11:40:32 AM »
Hillary (who is multi millionaire hundred times over and yet claims to understand how the rest of the country lives while lying through her teeth).

Wouldn't it be weirder if she had the income she's had yet wasn't a multi-millionaire?

Reminds me a bit of a Russel Brand quote I just heard, something to the effect of, "When I was poor and I was talking about inequality they called me a whiner.  Now that I'm rich and talking about inequality they call me a hypocrite. It seems to me they just don't want to talk about inequality."

lexie2000

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #81 on: September 06, 2014, 12:14:53 PM »
"Today, the basic expenses consume 75 percent of the family’s combined income. Their nut —the amount that they must pay in good times and in bad — is fixed at 75 percent of their income (she defines basic expenses as housing, health insurance, transportation, and taxes).  With 75 percent of income earmarked for fixed expenses, today’s family has no margin for error."

Maybe it's just me, but I don't think it takes a rocket scientist to figure out that a two income household that spends 75% of their combined income on "the nut", is setting themselves up for disaster.


"Why is there no acknowledgement that financial misfortune is often a matter of bad luck, and that irresponsible spending has little to do with the long lines at the bankruptcy courts and the high rates of credit card default?"

With obvious exceptions (medical problems), is it really "bad luck"?  Should we completely discount bad planning at best or lack of personal responsibility at worst?

sheepstache

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #82 on: September 06, 2014, 12:50:41 PM »
To side-step the question of over-consumption all together, we can simply ask ourselves if achieving ER would have been easier for people in the 70s?

In my opinion, it would have been extremely difficult to ER in the 70s without a very high income. We just have so much resources available to us now that were not there before, particularly the internet, that make it so much easier to find and share information, start up side gigs, and optimize our lives. We can use things like credit card churning to travel the world for nearly free, and research and manage our own investments for a fraction of the price of a conventional advisor. As cities grow larger, we have more public transportation than ever before, making it easier than ever to live without a car.

So in my opinion, while the cost of a few things has risen (along with wages), we're in a better situation now for retiring young and living a great life than in any time in human history.

Well thank you for being the one person who found this question interesting :)

The things you mention are certainly advantages but I don't find them to be proportional advantages in the way that wages rising with inflation would be.  My side gigs bring in a fixed amount based on how many hours I can work; I can only make so much credit card churning a year.  I want to be able to say that my income increased x% not that I have an additional 10K a year.  The access to cheap investments is a good point.  And I agree that access to more information certainly improves our lives.  An interesting argument about inflation is that while some costs rise because of it, others decrease because of the passage of time.  This goes for cheaper cell phones as well as cheaper car insurance.  I believe flying is cheaper now too, though maybe not as cheap as a decade ago when there was more competition between the airlines (off-the-top of my head, haven't looked up any numbers for that).

I guess I still just keep getting stuck on the figures about wages not matching inflation.  Especially as I know the CPI doesn't take a lot of things into account.  We should all figure the most efficient use of our resources, but it's still a problem if those resources are getting smaller.  As several people have pointed out, individual responsibility for one's own decisions and larger economic policies aren't mutually exclusive.

Maybe it's time to admit that standards of living aren't always going to rise.  And I think this is something Warren gives a tiny nod to without going into it because she mentions that part of the life satisfaction people experienced in the 70s was that people were living better than their parents and they had faith that their children would live even better than them. That life will get better is always a metric that's made Americans happy and maybe we have to drop that. 
Somebody upthread mentioned being able to live more cheaply than in the 70s if they maintained a 70s standard of living.  Such as no cell phone, less travel, less-safe cars, lower quality medical care, etc.  At what point do we admit that the middle class doesn't get to partake in new improvements?  That only the rich are going to enjoy rising quality of life?  Because past a certain point, the rich can only buy so many units of a new technology and that won't be enough to incentivize the mass production that lowers the cost for everyone else.

"Today, the basic expenses consume 75 percent of the family’s combined income. Their nut —the amount that they must pay in good times and in bad — is fixed at 75 percent of their income (she defines basic expenses as housing, health insurance, transportation, and taxes).  With 75 percent of income earmarked for fixed expenses, today’s family has no margin for error."

Maybe it's just me, but I don't think it takes a rocket scientist to figure out that a two income household that spends 75% of their combined income on "the nut", is setting themselves up for disaster.


"Why is there no acknowledgement that financial misfortune is often a matter of bad luck, and that irresponsible spending has little to do with the long lines at the bankruptcy courts and the high rates of credit card default?"

With obvious exceptions (medical problems), is it really "bad luck"?  Should we completely discount bad planning at best or lack of personal responsibility at worst?

Should we base all of our political decisions on rhetorical questions rather than actually doing research?

sheepstache

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #83 on: September 06, 2014, 12:57:56 PM »
She starts off by asking why if family incomes (due to Women entering the work force) have more than double why are families still struggling

This might be a bit OT but one of the interesting arguments for men's wages stagnating is simply that women have entered the workforce.  The labor pool doubles, naturally the laws of supply and demand say the price for labor drops.

lexie2000

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #84 on: September 06, 2014, 02:07:07 PM »


"Today, the basic expenses consume 75 percent of the family’s combined income. Their nut —the amount that they must pay in good times and in bad — is fixed at 75 percent of their income (she defines basic expenses as housing, health insurance, transportation, and taxes).  With 75 percent of income earmarked for fixed expenses, today’s family has no margin for error."

Maybe it's just me, but I don't think it takes a rocket scientist to figure out that a two income household that spends 75% of their combined income on "the nut", is setting themselves up for disaster.


"Why is there no acknowledgement that financial misfortune is often a matter of bad luck, and that irresponsible spending has little to do with the long lines at the bankruptcy courts and the high rates of credit card default?"

With obvious exceptions (medical problems), is it really "bad luck"?  Should we completely discount bad planning at best or lack of personal responsibility at worst?

Should we base all of our political decisions on rhetorical questions rather than actually doing research?

Absolutely not.  I was simply questioning the conclusions that Warren arrived at based on her research.

I also found this discrepancy:

From the article:  "Job loss, medical problems and family breakups are cited in nearly 90 percent of all bankruptcies. 83"

The footnote: 83  2001 Consumer Bankruptcy Project. Among all households in bankruptcy, 85.0 percent cite income loss, medical problems, or family breakup as a reason for filing.

----------------------------------------------------------------------------------------------------------------------
(Sorry could not unbold the following)
It's 'only' a slight exaggeration, but an exaggeration just the same.  What's the motive?

In addition, how much can we rely on the "research" when statistics that come from peoples' say so are cited?
« Last Edit: September 06, 2014, 02:16:05 PM by lexie2000 »

crispy

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #85 on: September 06, 2014, 05:52:00 PM »


"Today, the basic expenses consume 75 percent of the family’s combined income. Their nut —the amount that they must pay in good times and in bad — is fixed at 75 percent of their income (she defines basic expenses as housing, health insurance, transportation, and taxes).  With 75 percent of income earmarked for fixed expenses, today’s family has no margin for error."

Maybe it's just me, but I don't think it takes a rocket scientist to figure out that a two income household that spends 75% of their combined income on "the nut", is setting themselves up for disaster.


"Why is there no acknowledgement that financial misfortune is often a matter of bad luck, and that irresponsible spending has little to do with the long lines at the bankruptcy courts and the high rates of credit card default?"

With obvious exceptions (medical problems), is it really "bad luck"?  Should we completely discount bad planning at best or lack of personal responsibility at worst?

Should we base all of our political decisions on rhetorical questions rather than actually doing research?

Absolutely not.  I was simply questioning the conclusions that Warren arrived at based on her research.

I also found this discrepancy:

From the article:  "Job loss, medical problems and family breakups are cited in nearly 90 percent of all bankruptcies. 83"

The footnote: 83  2001 Consumer Bankruptcy Project. Among all households in bankruptcy, 85.0 percent cite income loss, medical problems, or family breakup as a reason for filing.

----------------------------------------------------------------------------------------------------------------------
(Sorry could not unbold the following)
It's 'only' a slight exaggeration, but an exaggeration just the same.  What's the motive?

In addition, how much can we rely on the "research" when statistics that come from peoples' say so are cited?

And even within that percentage, how much of that is truly just bad planning?  For example, I had a friend whose husband lost his job and was out of work for close to six months.  They ended up losing their home and filing bankruptcy.  On the surface, that looks like a legitimate reason to file bankruptcy.  The truth?  They were in debt up to their eyeballs and couldn't afford their lifestyle before he lost his job.  They had no money in savings - none.  She hasn't worked since the kids were born and steadfastly refused to get a job throughout this situation even though their children are in school.  I later learned when they were first married they did a spousal consolidation on their student loans and they are in her name only.  They haven't paid a penny on them since they have been married (last time she mentioned it they owed 170K with over half of that being accrued interest and penalties), and she won't get a job because she's worried her wages will be garnished so she sits home and lets them continue to accrue interest.  I have tried to tell her that she's completely screwed if they ever divorced, but she thinks I'm crazy.


MrsPete

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #86 on: September 06, 2014, 06:44:24 PM »
I've read her books, am currently working my way through her latest one.  The Two-Income Trap was eye opening when I read it 12 years ago, I now have my daughter in her 20's reading it now in hope she avoids being in that trap.   

Yes, I do see a lot of people with two incomes become dependent on both incomes, and what happens when a job loss or divorce or illness (or whatever) comes along and they can't make their monthly obligations that require both incomes.   Personally, I think most people are fed the lies of what is the norm and most sheeple follow it.  They are told go to school, go to college, get a job that is secure, get married, buy a house, start a family, both parents work...  and they do it.  Years go by and there they are, in a too much of a house that is near the good schools, driving kids to daycare to be able to go to that second job to pay for the higher cost of the house that is in the good school and having to borrow for the newer car that they are feared into getting for it's safety, etc...   and then something happens and boom!   Most bankruptcies aren't due to frivolous spending.

I, for one, am glad to know someone out there is looking at this data, asking the 'why's', and is trying to do something about it.  If politics is her vehicle to do that, so what.  She is pointing out some things that have changed and things that needs to change (and not always just changing in favor of big banking). 

She gets my *thumbs up*.  But it is STILL up to us individuals to change things in our own lives!
Yeah, I read that book long ago when we were still young and making choices about staying home with children, etc. -- and clearly she was pushing her agenda.  For example, she assumed that all jobs require expensive clothing (and dry cleaning), lunches out, etc.  And she only addressed the years in which your children need full-fledged day care. 

As for two incomes being a trap, that CAN BE true, but it DOESN'T HAVE TO BE true. 

When my husband and I first married, we had essentially nothing (we had $200, two cars -- one that didn't run, a house and a brand-new mortgage, and three college degrees), and we both agreed that our #1 priority was building up a nest egg.  I was working part time and going to school, and we agreed that we'd live off his income and save mine.  Once we had an emergency fund, we started working on paying off the house.  We always maxed out the 401Ks.  We've NEVER planned a lifestyle that depended upon BOTH incomes. 

While two people making minimum wage might not be able to pull this off, the vast majority of Americans can do it -- if they make conscious choices. 

Also, the argument that a SAH spouse could be more help in a financial emergency by going back to work doesn't necessarily ring true to me:  Yes, a SAH spouse COULD go back to work -- but that isn't necessarily possible on the turn of a dime.  That spouse will need to search for a job, will need work clothes, perhaps transportation, perhaps child care; those things require time and money to arrange.  Yes, the recently-employed spouse might have a car that the new worker could use, but if the recently-employed spouse is searching for work, that transportation may not be available.  Likewise, that spouse may not be available all the time for child care -- especially if illness caused the job loss.  Warren makes it sound as if having a SAH spouse could make a job loss essentially "seamless", whereas the reality is that a typical family who's two paychecks from broke will still have a significant hiccup in the family finances in the face of a job loss.   

Clearly the family who's best prepared for a financial emergency is the two-income family who has been living on less than they earn.  That family is most likely to have savings upon which to fall back and is likely to have insurance coming from two spouses.  Also, those spouses would both have up-to-date work skills and recent work experience and contacts, making them viable candidates for new jobs. 


franklin w. dixon

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #87 on: September 06, 2014, 08:06:26 PM »
lol no myth about it.

The ones that skyrocketed over the years: housing prices, health care costs, child care, and tuition. These are all choice based expenses. Yes, even health care costs.

Life is not fair and it never will be. It's up to each and everyone of us to buy what we can afford. Yes even healthcare costs.
-a person who is healthy, and in addition, a gigantic asshole

franklin w. dixon

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #88 on: September 06, 2014, 08:29:18 PM »
Quote
Where I have trouble though is determining if those school rankings actually mean anything.

I have the same problem.  The school rankings only measure performance of the school based on certain metrics like class size, standardized tests etc.....  I think they are driven up by demographics big time, and so the rankings are not representing the true quality of the schools and teaching.  Wealthy people that can afford to have their kids tutored and give them other advantages end up in the Weston/Lexington type areas, and kids who don't have those advantages who might drag down school rankings are priced out. 

I bought 15 years ago in a community in suburban MA that had school rankings in the bottom part of the upper third in rankings - so not bad but not the creme de la creme.  It was the best I could afford comfortably, and I figured I was smart enough to supplement my kids education where it was lacking if it was indeed a problem.  Personally, although our rankings are not as high as nearby towns, I think my kids are getting a top notch education and it is certainly not worth paying double for a similar size house to get what might be a very small improvement, if any. 

And remember, MA in general just has great public schools.    I grew up in a top ranking school district in MD until age 9, and when my parents moved up here, I was in remedial classes for a year just to catch up to the standards of a very middle ranked school in MA.  When they pull out MA schools and compare them worldwide, they rank up with Singapore and Finland. 

But the point is, according to Warren, it doesn't matter if the schools are really better or not.  Most parents believe that better rankings equal better schools, so that drives prices up.
One of the funniest things that ever happened in my life is that when I went to college at UPenn I got a crash course in who goes to those colleges. I was really surprised and confused to find that I was a complete odd man out because I went to a public school in South Carolina but was just a precocious nerd who got good test scores -- principally because my mom taught me to read and do math before I went to Kindergarten. bc of that school always felt easy and "fun" to me so I plodded along with tippity top academics without really even realizing it until I was in 11th grade and getting ready to apply to colleges. Anyway when I got to college I was really surprised by how many people went to private high schools. In SC the only reason I knew of for people to go to private schools was because they were right wing evangelicals who didn't want their precious children to learn about evilution and the condom. But these people went to non-denominational private schools?? And I thought to myself: what? Everyone says the public schools up here are way better than in the south. So what's even the point?

Anyway since then I've learned about "big" Karl Marx from history and how the ruling class reproduces itself so I get it but the point is that on an individual level doing well academically is tangentially related to school metrics, at best. Whether doing well actually earns you anything is another question. Everything worked out for me but I certainly don't take it for granted. Just the other day I looked up a guy I knew in high school who was even nerdier and higher scoring than I was and it turns out he went to GA Tech and couldn't get a job in his field and has been working in food service for the better part of a decade. RIP.

Elderwood17

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #89 on: September 06, 2014, 09:09:58 PM »
A joint discussion between her and MMM would be interesting.

"Housing costs have gone up so much for a middle class family over the past thirty years."

"Yes because people choose to buy huge houses to hold their stuff"

"Transportation costs have gone up so much the middle class can't take it"

"No one forces  them to drive six thousand pounds of metal 60 miles a day for their job.  Bikes still exist."

franklin w. dixon

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #90 on: September 06, 2014, 09:14:46 PM »
Actually, if you read any of the threads about carseats on here, people really do have a hard time finding carseats which will fit into a small car.  In the 70s, there weren't even seatbelts in most cars, let alone mandatory carseat laws.  And the age/size during which children "need" to be in carseats keeps going up. 

Also cars have become more expensive because in 1998 airbags became mandatory on all new cars.  Interestingly, I read somewhere that this isn't factored into the consumer price index.  When we're talking about inflation, we're still talking about 70's standards of living.

On the housing front, I'd be open to an argument about housing getting bigger but I think she's made the point that we don't have numbers on square feet per person.  So houses may get bigger because of a greater number of multi-generational households or because of more children per family.  I'm inclined to assume that average house size getting bigger means the obvious: that people are buying more house than they need, I'm just making the point that that number alone doesn't tell us.
We do have that information actually: in 1950 the average household size was 3.37 people in 983 square feet, and in 2006 the average household size was 2.61 people in 2349 square feet. the numbers for today are probably very close to 2006 because of the recession and subsequent rebound. Point being that over 60 years the number of square feet per person has increased enormously for a number of reasons. (1) we can build enormous remote houses thanks to car commute (2) under capitalism we live in increasingly isolated alienation pods untouched by human relationships (3) buying gigantic houses "just because." And remember that even though square feet per capita has tripled we've also built billioin dollar self-storage facilities for all the crap you can't possibly fit in your bloated house. Capitalism is a hell of a drug.

MidWestLove

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #91 on: September 07, 2014, 07:09:20 AM »
"A joint discussion between her and MMM would be interesting. "

:)

first question - did our tax burden increased or decreased since 40 years ago? Hint. government burden as percentage of GDP is at least 20% higher than it was in 1974.

second question - what is happening to the value or our money and why? Hint, the dollar of 1974 is now less than 20 cents.

may be government is not an answer? continuing to debase our money at ever increasing rate and push us further in debt

how likely are we to hear it from government official/professional politician :)

Argyle

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #92 on: September 07, 2014, 07:34:33 AM »
Oh, come on -- "I am less prosperous because the government made me do it!  They're the ones who insisted I buy a huge house and two clown cars!"  This is just complainypantsism.  We can do better.

dcheesi

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #93 on: September 07, 2014, 09:06:15 AM »
"A joint discussion between her and MMM would be interesting. "

:)

first question - did our tax burden increased or decreased since 40 years ago? Hint. government burden as percentage of GDP is at least 20% higher than it was in 1974.

second question - what is happening to the value or our money and why? Hint, the dollar of 1974 is now less than 20 cents.

may be government is not an answer? continuing to debase our money at ever increasing rate and push us further in debt

how likely are we to hear it from government official/professional politician :)
That's an average annual inflation of about 4%, which isn't that high. And according to current economic theory, a little bit of inflation is actually a good thing.

What matters is buying power, not the face value of the money. The question is whether "real" wages have increased or decreased for the average worker.

MrsPete

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #94 on: September 07, 2014, 10:58:19 AM »
We do have that information actually: in 1950 the average household size was 3.37 people in 983 square feet, and in 2006 the average household size was 2.61 people in 2349 square feet. the numbers for today are probably very close to 2006 because of the recession and subsequent rebound. Point being that over 60 years the number of square feet per person has increased enormously for a number of reasons. (1) we can build enormous remote houses thanks to car commute (2) under capitalism we live in increasingly isolated alienation pods untouched by human relationships (3) buying gigantic houses "just because." And remember that even though square feet per capita has tripled we've also built billioin dollar self-storage facilities for all the crap you can't possibly fit in your bloated house. Capitalism is a hell of a drug.
I agree with your comments, but I'll add three more reasons for the increase in housing:  4) construction techniques (i.e., factory-assembled trusses) have changed the building process; thus, it's now possible to build larger open spaces, and now that it's possible, people want it.  5) for a person with a good credit score and/or downpayment, obtaining a mortgage is pretty easy -- and the general public no longer seems to see living in a paid-for house as a goal.  6) closely related to #5 -- real estate is now looked upon not as simply a place to live, but as an investment; many people buy into the "buy as much house as you can" concept. 

MidWestLove

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #95 on: September 07, 2014, 11:08:51 AM »
"That's an average annual inflation of about 4%, which isn't that high. And according to current economic theory, a little bit of inflation is actually a good thing.

What matters is buying power, not the face value of the money"

the matter is that they are closely connected - one can not keep inflating/debasing the currency while wondering why buying power is going down... while not a fan of peakprosperity.com (another data point with their own agenda), there are a number of points they got right, including exponential growth in the paper money supply destroying the buying power. process that we term "inflation".  combine it with "we are the government and here to help you" programs that take more and more of the disposable income and real buying power is further impacted.

unrelated,  for a person who lived in multiple economic systems, the entire premise and foundation of modern  US economics is weird - we are trying to build it upon consumption (biggest GDP component) and then wonder why we are having problems. Since then "consumption" became "product"?  Why do we think we can stretch consumption into infinity successfully ? Why do we think it would not mortgage our future and our children's future if we keep trying to borrow from the future?

Sofa King

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #96 on: September 07, 2014, 03:27:56 PM »
Personally, I think most people are fed the lies of what is the norm and most sheeple follow it.  They are told go to school, go to college, get a job that is secure, get married, buy a house, start a family, both parents work...  and they do it.  Years go by and there they are, in a too much of a house that is near the good schools, driving kids to daycare to be able to go to that second job to pay for the higher cost of the house that is in the good school and having to borrow for the newer car that they are feared into getting for it's safety, etc...   and then something happens and boom!   Most bankruptcies aren't due to frivolous spending.




I concur!

lexie2000

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #97 on: September 07, 2014, 06:10:01 PM »
Personally, I think most people are fed the lies of what is the norm and most sheeple follow it.  They are told go to school, go to college, get a job that is secure, get married, buy a house, start a family, both parents work...  and they do it.  Years go by and there they are, in a too much of a house that is near the good schools, driving kids to daycare to be able to go to that second job to pay for the higher cost of the house that is in the good school and having to borrow for the newer car that they are feared into getting for it's safety, etc...   and then something happens and boom!   Most bankruptcies aren't due to frivolous spending.




I concur!

How do you really know that?

Captain and Mrs Slow

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #98 on: September 08, 2014, 01:59:04 AM »
considering that this is a political thread theres some great comments here.This is purely anecdotal, from watching friends and stuff I've read, what strikes me as the key point where things go wrong is when income is disrupted people go to the bank and borrow money. a good example was the Horizon oil spill. Had friends, who live an amazing life on one small income, anyways the business was disrupted and what they did what many Americans do in this situation, they went to the bank and got an extension on the mortgage. Now this is the key that drives many (IMHO) to bankruptcy is the income doesn't return, in their case the income did but for many it doesn't.

here is a great example

http://priceonomics.com/what-its-like-to-fail/

There is loads of things you can quibble about in her books, but do keep in mind they were written from a public policy, not personal finance point of view.
« Last Edit: September 08, 2014, 07:57:57 AM by Captain and Mrs Slow »

golden1

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Re: Elizabeth Warren's research on the "The Over-consumption Myth"
« Reply #99 on: September 08, 2014, 05:56:53 AM »
Quote
Elizabeth Warren is a bomb throwing political demagogue, just like Bill O'Reilly, Al Sharpton, or Anne Coulter.  She just dresses more demurely and uses a lot less yelling and bluster, so it may be harder to identify her as such.

Everything she does is driven by political ideology.  Don't expect rational analysis from someone like her.  Go ahead and read her stuff, but do so knowing she is driven by a political agenda, not a quest for discovery.  Then have fun pointing out all the ways she manipulates statistics to achieve the outcome she desired.

Nope.  YOUR political ideology is coloring YOUR opinions and keeping you from any semblance of critical thinking.  Comparing her to Ann Coulter is pretty ridiculous, because she is a troll who does no actual research, just says inflammatory stuff to sell books.

E. Warren, whether you like her or not, has actually studied and worked in the field she writes about.  You can dismiss her all you want if it makes you feel better, but she does have credibility.  I wish she hadn't gone into politics personally, because it has the effect of diminishing her work.