Warren Buffett and our kid's future.

[clifp]

I've been an owner Warren Buffett's Berkshire Hathaway stock for  20 years and have been reading his annual report even before that.

There is always more than few nuggets of wisdom in his annual letters.

It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve). As a result of this negative drumbeat, many Americans now believe that their children will not live as well as they themselves do.

That view is dead wrong: The babies being born in America today are the luckiest crop in history.

American GDP per capita is now about $56,000. As I mentioned last year that – in real terms – is a staggering six times the amount in 1930, the year I was born, a leap far beyond the wildest dreams of my parents or their contemporaries. U.S. citizens are not intrinsically more intelligent today, nor do they work harder than did Americans in 1930. Rather, they work far more efficiently and thereby produce far more. This all-powerful trend is certain to continue:

America’s economic magic remains alive and well. Some commentators bemoan our current 2% per year growth in real GDP – and, yes, we would all like to see a higher rate. But let’s do some simple math using the much-lamented 2% figure. That rate, we will see, delivers astounding gains.

America’s population is growing about .8% per year (.5% from births minus deaths and .3% from net migration). Thus 2% of overall growth produces about 1.2% of per capita growth. That may not sound impressive. But in a single generation of, say, 25 years, that rate of growth leads to a gain of 34.4% in real GDP per capita. (Compounding’s effects produce the excess over the percentage that would result by simply multiplying 25 x 1.2%.) In turn, that 34.4% gain will produce a staggering $19,000 increase in real GDP per capita for the next generation. Were that to be distributed equally, the gain would be $76,000 annually for a family of four. Today’s politicians need not shed tears for tomorrow’s children.

Indeed, most of today’s children are doing well. All families in my upper middle-class neighborhood regularly enjoy a living standard better than that achieved by John D. Rockefeller Sr. at the time of my birth. His unparalleled fortune couldn’t buy what we now take for granted, whether the field is – to name just a few – transportation, entertainment, communication or medical services. Rockefeller certainly had power and fame; he could not, however, live as well as my neighbors now do.

Though the pie to be shared by the next generation will be far larger than today’s, how it will be divided will remain fiercely contentious. Just as is now the case, there will be struggles for the increased output of goods and services between those people in their productive years and retirees, between the healthy and the infirm, between the inheritors and the Horatio Algers, between investors and workers and, in particular, between those with talents that are valued highly by the marketplace and the equally decent hard-working Americans who lack the skills the market prizes. Clashes of that sort have forever been with us – and will forever continue. Congress will be the battlefield; money and votes will be the weapons. Lobbying will remain a growth industry.

The good news, however, is that even members of the “losing” sides will almost certainly enjoy – as they should – far more goods and services in the future than they have in the past. The quality of their increased bounty will also dramatically improve. Nothing rivals the market system in producing what people want – nor, even more so, in delivering what people don’t yet know they want. My parents, when young, could not envision a television set, nor did I, in my 50s, think I needed a personal computer. Both products, once people saw what they could do, quickly revolutionized their lives. I now spend ten hours a week playing bridge online. And, as I write this letter, “search” is invaluable to me. (I’m not ready for Tinder, however.)

For 240 years it’s been a terrible mistake to bet against America, and now is no time to start. America’s golden goose of commerce and innovation will continue to lay more and larger eggs. America’s social security promises will be honored and perhaps made more generous. And, yes, America’s kids will live far better than their parents did.

In page 21 of the letter  he goes on to talk about some of the amazing productivity gains that have occurred in the US and Berkshire which will help ensure this generation of babies are indeed the luckiest crop in human history. 

Investors can learn a lot from reading the rest.

[ahoy]

Interesting reading.  Nice to have some hope. We tend to forget how far we have come.   I subscribe to Peter schiff on my FB page, nothing but doom and gloom.  It's kinda depressing actually.  He was pretty accurate with the last housing bust though.

[Yaeger]

Interesting reading.  Nice to have some hope. We tend to forget how far we have come.   I subscribe to Peter schiff on my FB page, nothing but doom and gloom.  It's kinda depressing actually.  He was pretty accurate with the last housing bust though.

I like Dr. Doom. His analysis is pretty good, I like his ability to look at macro economic trends, his realistic predictions about the FED, and an honest appraisal of the what could happen. I can't shake the feeling that I feel like I'm being lied to whenever I listen to Janet Yellen talk about interest rates and the economy.

I follow the bogglehead philosophy of staying the course with a simple, diversified portfolio. However, deep down I want the market to crash, hard, so I can scoop up cheap stocks instead of buying at the top like I feel like I'm doing now..

[arebelspy]

Great analysis by the Oracle. 

Someone on these forums said the other day (maybe in the thread about that Yelp employee quitting?) that millenials have a lower standard of living than our parents, and I strongly disagreed.  Glad to see Warren does too.

Everything is just getting better and better!

Thanks for posting!

[soccerluvof4]

Interesting reading.  Nice to have some hope. We tend to forget how far we have come.   I subscribe to Peter schiff on my FB page, nothing but doom and gloom.  It's kinda depressing actually.  He was pretty accurate with the last housing bust though.

I like Dr. Doom. His analysis is pretty good, I like his ability to look at macro economic trends, his realistic predictions about the FED, and an honest appraisal of the what could happen. I can't shake the feeling that I feel like I'm being lied to whenever I listen to Janet Yellen talk about interest rates and the economy.

I follow the bogglehead philosophy of staying the course with a simple, diversified portfolio. However, deep down I want the market to crash, hard, so I can scoop up cheap stocks instead of buying at the top like I feel like I'm doing now..

Peter Shiff does make things sound convincing but makes tries/does make his money by being just another black swan. IF he keep predicting he hopes to be eventually right.

[arebelspy]

Interesting reading.  Nice to have some hope. We tend to forget how far we have come.   I subscribe to Peter schiff on my FB page, nothing but doom and gloom.  It's kinda depressing actually.  He was pretty accurate with the last housing bust though.

I like Dr. Doom. His analysis is pretty good, I like his ability to look at macro economic trends, his realistic predictions about the FED, and an honest appraisal of the what could happen. I can't shake the feeling that I feel like I'm being lied to whenever I listen to Janet Yellen talk about interest rates and the economy.

I follow the bogglehead philosophy of staying the course with a simple, diversified portfolio. However, deep down I want the market to crash, hard, so I can scoop up cheap stocks instead of buying at the top like I feel like I'm doing now..

Peter Shiff does make things sound convincing but makes tries/does make his money by being just another black swan. IF he keep predicting he hopes to be eventually right.

Yup.  He predicted the housing crash (along with a lot of other people), and has been riding that since.

However he's predicted doom and gloom, nonstop, since 2009.  It hasn't happened, and we've had a 7-year bull market.  Whenever the next bear market hits, it's hard to give him any credit for "predicting" it, since he's been wrong predicting it the last 7 years in a row.

So when he tries to use data and graphs and such to prove his point, it's basically bunk.  He said the same things in 2010 (for example), and was wrong then. When he's coincidentally right, it's not because his data proved it and he knew it, it's because everything's cyclical and a stopped clock is right twice/day.

[Paul der Krake]

Yeah I don't get the whole "first generation that's worse off than their parents" soundbite. They moan about the affordability of such and such (usually home ownership and education), completely disregarding the incredible gains in virtually everything else.

Halve my salary, straddle me with 100k of debt; I'll still pick to live today over my parents' or grandparents' generations.

[shelivesthedream]

Perhaps it's because people are finally realising that social mobility eventually has to work both ways to be sustainable. It's so gr at that poor Bobby from the terrible local school went to university and is now an IT manager and has bought a house, but isn't it terrible that my little Arabella has to actually prove that she's worth Ł60k/yr in her job as a beauty products journalist?

[purple monkey]

I've been an owner Warren Buffett's Berkshire Hathaway stock for  20 years and have been reading his annual report even before that.

There is always more than few nuggets of wisdom in his annual letters.

It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve). As a result of this negative drumbeat, many Americans now believe that their children will not live as well as they themselves do.

That view is dead wrong: The babies being born in America today are the luckiest crop in history.

American GDP per capita is now about $56,000. As I mentioned last year that – in real terms – is a staggering six times the amount in 1930, the year I was born, a leap far beyond the wildest dreams of my parents or their contemporaries. U.S. citizens are not intrinsically more intelligent today, nor do they work harder than did Americans in 1930. Rather, they work far more efficiently and thereby produce far more. This all-powerful trend is certain to continue:

America’s economic magic remains alive and well. Some commentators bemoan our current 2% per year growth in real GDP – and, yes, we would all like to see a higher rate. But let’s do some simple math using the much-lamented 2% figure. That rate, we will see, delivers astounding gains.

America’s population is growing about .8% per year (.5% from births minus deaths and .3% from net migration). Thus 2% of overall growth produces about 1.2% of per capita growth. That may not sound impressive. But in a single generation of, say, 25 years, that rate of growth leads to a gain of 34.4% in real GDP per capita. (Compounding’s effects produce the excess over the percentage that would result by simply multiplying 25 x 1.2%.) In turn, that 34.4% gain will produce a staggering $19,000 increase in real GDP per capita for the next generation. Were that to be distributed equally, the gain would be $76,000 annually for a family of four. Today’s politicians need not shed tears for tomorrow’s children.

Indeed, most of today’s children are doing well. All families in my upper middle-class neighborhood regularly enjoy a living standard better than that achieved by John D. Rockefeller Sr. at the time of my birth. His unparalleled fortune couldn’t buy what we now take for granted, whether the field is – to name just a few – transportation, entertainment, communication or medical services. Rockefeller certainly had power and fame; he could not, however, live as well as my neighbors now do.

Though the pie to be shared by the next generation will be far larger than today’s, how it will be divided will remain fiercely contentious. Just as is now the case, there will be struggles for the increased output of goods and services between those people in their productive years and retirees, between the healthy and the infirm, between the inheritors and the Horatio Algers, between investors and workers and, in particular, between those with talents that are valued highly by the marketplace and the equally decent hard-working Americans who lack the skills the market prizes. Clashes of that sort have forever been with us – and will forever continue. Congress will be the battlefield; money and votes will be the weapons. Lobbying will remain a growth industry.

The good news, however, is that even members of the “losing” sides will almost certainly enjoy – as they should – far more goods and services in the future than they have in the past. The quality of their increased bounty will also dramatically improve. Nothing rivals the market system in producing what people want – nor, even more so, in delivering what people don’t yet know they want. My parents, when young, could not envision a television set, nor did I, in my 50s, think I needed a personal computer. Both products, once people saw what they could do, quickly revolutionized their lives. I now spend ten hours a week playing bridge online. And, as I write this letter, “search” is invaluable to me. (I’m not ready for Tinder, however.)

For 240 years it’s been a terrible mistake to bet against America, and now is no time to start. America’s golden goose of commerce and innovation will continue to lay more and larger eggs. America’s social security promises will be honored and perhaps made more generous. And, yes, America’s kids will live far better than their parents did.

In page 21 of the letter  he goes on to talk about some of the amazing productivity gains that have occurred in the US and Berkshire which will help ensure this generation of babies are indeed the luckiest crop in human history. 

Investors can learn a lot from reading the rest.

Were you able to get 1,000% return.
Boy, wish I had invested with him.
Good for you!!!

[josstache]

Hmm, the CEO of a publicly traded diversified holding company whose fortunes are broadly linked to the health of the US economy had bullish things to say about the US economy.  Buffett likes to cultivate an image of folksy, American pie optimism, but he has a viewpoint to sell just like anyone else in a similar position.

While he may nevertheless be right about the economy, his social commentary lacks nuance, as should be expected.  As the data show ( https://www.census.gov/hhes/www/income/data/historical/household/ ), the bottom 40% of America have seen their income largely stagnate in real terms since 1967, due in part to actual declines since 1999.  The lion's share of the gains have gone to the top 20%. Piketty writes that inequality of income in America today is at historically unprecedented levels. Saying that inequality will be "fiercely contentious", with lobbying as a "growth industry", is not very satisfying. It is possible that Congress will be the battlefield, but history is also rife with examples of people taking their frustrations outside the legislative process. 

As a more minor point, it's arguable that Americans actually have become inherently more intelligent since 1930 -- https://en.wikipedia.org/wiki/Flynn_effect .

[Bucksandreds]

We're basically treading water for 30 years for the median person in this country, statistically.  That's not taking into account the student debt differences of the average young worker today versus any previous time period. If we don't continue to expand median income then we will be worse off than the median in the year 2000.  Investing in our youth through lower student debt levels would be a good start.

http://www.statista.com/statistics/200838/median-household-income-in-the-united-states/

[arebelspy]

To the last two posts: Income may be treading water in real terms, but advances in technology make our standard of living higher, even with the same income.

(And yes, it's stagnant because the majority of real gains have gone to the top few percent--that doesn't change the fact that the average person's life is STILL better off, even if the gap is bigger than ever.)

[tobitonic]

These are the kinds of statements that illustrate how much of a con artist Buffett (and pretty much every billionaire) is. As josstache noted, he has a very vested interest in portraying himself and his country this way. Income inequality is real, and it's been getting worse for quite a while throughout our society, with the expected negative results. Sticking our fingers in our ears and doing the optimism dance doesn't change societal issues any more than insinuating everything is hopeless and efforts are meaningless.

[arebelspy]

Yes, income inequality is real.

That doesn't make his message wrong.  In fact, he even acknowledges that:

Indeed, most of today’s children are doing well. All families in my upper middle-class neighborhood regularly enjoy a living standard better than that achieved by John D. Rockefeller Sr. at the time of my birth. His unparalleled fortune couldn’t buy what we now take for granted, whether the field is – to name just a few – transportation, entertainment, communication or medical services. Rockefeller certainly had power and fame; he could not, however, live as well as my neighbors now do.

Though the pie to be shared by the next generation will be far larger than today’s, how it will be divided will remain fiercely contentious. Just as is now the case, there will be struggles for the increased output of goods and services between those people in their productive years and retirees, between the healthy and the infirm, between the inheritors and the Horatio Algers, between investors and workers and, in particular, between those with talents that are valued highly by the marketplace and the equally decent hard-working Americans who lack the skills the market prizes. Clashes of that sort have forever been with us – and will forever continue. Congress will be the battlefield; money and votes will be the weapons. Lobbying will remain a growth industry.

The good news, however, is that even members of the “losing” sides will almost certainly enjoy – as they should – far more goods and services in the future than they have in the past. The quality of their increased bounty will also dramatically improve. Nothing rivals the market system in producing what people want – nor, even more so, in delivering what people don’t yet know they want. My parents, when young, could not envision a television set, nor did I, in my 50s, think I needed a personal computer. Both products, once people saw what they could do, quickly revolutionized their lives. I now spend ten hours a week playing bridge online. And, as I write this letter, “search” is invaluable to me. (I’m not ready for Tinder, however.)

Read the middle paragraph.  He's saying exactly what you're talking about--there will be contention over who gets most of that pie (top 1%).  But read the first sentence of the next one.

That's what he's talking about, and those of us saying we have a higher standard of living than ever are saying.

Yes, income inequality exists.  It sucks. We should change it.

But we should also recognize that our lives are better than ever, and be happy and grateful (even while fighting to make things more fair).

[Paul der Krake]

These are the kinds of statements that illustrate how much of a con artist Buffett (and pretty much every billionaire) is. As josstache noted, he has a very vested interest in portraying himself and his country this way. Income inequality is real, and it's been getting worse for quite a while throughout our society, with the expected negative results. Sticking our fingers in our ears and doing the optimism dance doesn't change societal issues any more than insinuating everything is hopeless and efforts are meaningless.

Buffett has maybe 10 years of life left in him and Berkshire could drop 90% overnight without impacting his final days of this earth one bit.

Nobody is denying that inequality is a thing, just pointing out that the standard of living has never been this high. The "bottom half" of society in terms of income, despite all this, has access to riches that were beyond the grasp of kings just a century ago.

[tobitonic]

I read the entire post; his praising of consumerist devices as signs of our improved quality of life rings hollow, as does his typical (because we are in America, after all) myopic focus on the free market and America's improvements compared to America of the past.

This is precisely what I discussed in a different thread about the unwillingness of folks here to learn from folks elsewhere (or even consider what might constitute a good life in any of the other countries with similar bounties of wealth). We have billionaires telling us Everything's Gonna Be Okay, Cuz, America!. And we listen, because, Billionaire!

[arebelspy]

I read the entire post; his praising of consumerist devices as signs of our improved quality of life rings hollow, as does his typical (because we are in America, after all) myopic focus on the free market and America's improvements compared to America of the past.

This is precisely what I discussed in a different thread about the unwillingness of folks here to learn from folks elsewhere (or even consider what might constitute a good life in any of the other countries with similar bounties of wealth). We have billionaires telling us Everything's Gonna Be Okay, Cuz, America!. And we listen, because, Billionaire!

No, we nod and agree because our own experience tells us the same thing.  Because we read books like The Rational Optimist and see that it's true.

Maybe start with the premise of the rest of us aren't idiots, and then work from there.  :)

[human]

I'd like to see that GDP per capita figure with the top 5% wealth earners taken out. Probably still better than 1930 but not sure as good as he claims. Just remember it's not in his best interest torun around saying the sky is falling or things are worse off than ever. Besides we need this growth in incomes to pay for the ridiculous increase in the cost of housing (in general) and all the jewelry he's trying to push on you in his great little letters.

I get it he's been living in the same house for forty years and dontaes money but dont count me as part of the buffet cult that seems to exist here and over at bogleheads.

EDIT: Tubitoni,  I couldn't agree more with your statement.

[arebelspy]

As mm1970 posted in another thread this week:

My point is our generation on average will have a lower standard of living compared to our parents

I strongly disagree.

There's no way I would go back to the past, and that standard of living.  Our standard today is so much higher than anyone's, ever.

I can't speak for how old everyone's parents are.  I'm 45.  My parents "standard of living" when I was, say, 10 years old.

One TV.  For awhile, black and white at 13 inch.
No cable.
Two small cars.
No cell phones.
Hand me down clothing.
A garden.
One bathroom.
No college.
No internet.
One vacation, driving, to NC from PA when I was 7.
Two camping weekends (not a year, total) to Lake Erie.

Now granted, we were on the poor side.  But even my middle class friends didn't go on fancy vacations or have fancy houses.  A vacation was a camping trip, or driving to FL once in 10 years.

Top 1% have more proportionally than ever, but the bottom still have it better than ever, too.

[tobitonic]

I read the entire post; his praising of consumerist devices as signs of our improved quality of life rings hollow, as does his typical (because we are in America, after all) myopic focus on the free market and America's improvements compared to America of the past.

This is precisely what I discussed in a different thread about the unwillingness of folks here to learn from folks elsewhere (or even consider what might constitute a good life in any of the other countries with similar bounties of wealth). We have billionaires telling us Everything's Gonna Be Okay, Cuz, America!. And we listen, because, Billionaire!

No, we nod and agree because our own experience tells us the same thing.  Because we read books like The Rational Optimist and see that it's true.

Maybe start with the premise of the rest of us aren't idiots, and then work from there.  :)

You seem to have jumped rather quickly to the assumption that you were being called an idiot. Maybe let that go and realize that we're not going to see eye to eye on this. : )

[Bucksandreds]

These are the kinds of statements that illustrate how much of a con artist Buffett (and pretty much every billionaire) is. As josstache noted, he has a very vested interest in portraying himself and his country this way. Income inequality is real, and it's been getting worse for quite a while throughout our society, with the expected negative results. Sticking our fingers in our ears and doing the optimism dance doesn't change societal issues any more than insinuating everything is hopeless and efforts are meaningless.

Nobody is denying that inequality is a thing, just pointing out that the standard of living has never been this high. The "bottom half" of society in terms of income, despite all this, has access to riches that were beyond the grasp of kings just a century ago.

The idea that people, even though they're poorer, are better off because of technology is a ridiculous straw man argument that you could use on any time period. Yes, today it is nice to have a smartphone and all that it does, 100 years ago it was nice to have indoor plumbing because before you couldn't have it. That does not mean that it wasn't a better life to be richer before indoor plumbing than poorer with it.  Lower median income means you have to work more hours (lower quality of life) to afford the EXACT same things that you had in the past.  Median income also does not factor in student debt which is higher today by a factor of 5 than it was 20-30 years ago.  This is not a country of poverty. It is also not a country of an improving life situation for the typical person living here.

[Ricky]

I'm not at all concerned about income inequality for the reasons that Buffett outlines. It doesn't mater how rich Zuckerberg, hedge-fund managers, or any other tech or wall street billionaire becomes, pretty much everyone in America will still benefit from trickle down economics, as they already are. Guess what? Income inequality has only "worsened" in the last 20 years, yet the "poor" are still markedly better off than they were. I mean fuck, gas is $1.65 where I live and nearly $1.30 less than three hours from here. Anyone starting with NOTHING in an area with little to zero opportunities working a minimum wage job could afford a $1500 car and drive to California or any other place with abundant economic opportunity in a matter of months. Even if they stayed exactly where they were in that minimum wage job, they could quit, save for 3 months, travel cheaply around the US or maybe even the world, get another minimum wage job, and repeat. Sounds like a pretty amazing life to me.

I don't automatically believe that just because we're in America that everything will always be amazing, but I also don't believe in fear-mongering. I don't understand how someone enjoys surrounding themselves with negative data all of the time - like how they could keep from being depressed and anxious. Anyone remotely concerned with broad macro economics in 2006/2007 could have predicted the crash or at least thought about it - it didn't take someone studying 12 hours a day to come to that conclusion. All it took was common sense. I admit that the timing was rather impressive, but it's still not like the signs weren't there. It wasn't some type of diving intervention that instilled the prediction into anyone's head.

Anyway, I love Buffett's letters -so much grounded common sense that you just don't (or rarely) get anywhere else.

[human]

Thanks for the enlightment Ricky, glad we all have your permission to bury our heads in the sand.

[Ricky]

Thanks for the enlightment Ricky, glad we all have your permission to bury our heads in the sand.

So you'd rather spend your waking hours worrying about things you have no control over, rather than recognize all of the amazing things and opportunity around you? Have at it, friend.

[Paul der Krake]

Urghhhh. Sorry to be so Panglossian this morning but two things:

1) Enough with the idea that Buffett has a vested interest and is lying through his teeth to sell you more Coca-Cola and GEICO policies. It's about as ridiculous as me saying that Bernie Sanders only campaigns because his net worth is well below where it should be at his age, and he is plotting to get his hands on someone else's money. Attack ideas on their own merit, please.

2) You are NOT comparing the same things. Not even close. You are buying decades' worth of improvements whether you realize it or not. Seriously. Next time you go to a store, take a look around and see what $500 buys you today. Think long and hard about where the exotic food, appliances, services, and everything came from. Think long and hard about how much effort it took to get those $500, or how much effort it would take for the median household to get them. Think long and hard about the value these objects provide you, and what your grandmother and great-grandmother did instead.

[human]

No one claimed he is lying, just question the source. Of course he thinks everything is hunky dory.

I though trickle down economics went out of style a long time ago but it seems it's still fashionable to think the dogs can easily lick the crumbs up off the floor.

Fine I can get a pack of fritos and keurig with an ebt card but that doesn't mean we've waved some magic wand to eliminate the ridiculos distribution of wealth we now have.

[human]

Thanks for the enlightment Ricky, glad we all have your permission to bury our heads in the sand.

So you'd rather spend your waking hours worrying about things you have no control over, rather than recognize all of the amazing things and opportunity around you? Have at it, friend.

You like to pretend that it's all or nothing when it really isn't. After all I'm sitting here watching the snow fall in my warm cozy apartment. Also planning my next backpacking trip and yet somehow I do it all with the knowledge that income disparity exists in the world. Of course this opens me up to the typical attacks, why aren't I in a soup kitchen or helping the homeless with my time? Then I respond with the typical, well that won't change the system will it? Sigh the same ol discussions . . .

[Ricky]

But it is all or nothing for me...I have no choice but to be optimistic and take advantage of the things around me. What good is it going to do me to worry about the net worth of the top 1%? If I were worried about it, I would be doing everything I could to do the small part I could to change what I perceived to be a huge issue. For me, and I'm sure millions of others, it's a non-issue.

All of the people claiming that the extremely uneven distribution of wealth is detrimental for our society really have no evidence to back this up. Just because life is unfair means that everyone can't live a great life? I just don't buy into that. The proof is around you that everyone in America is living a higher standard of living than they were even 30 years ago -or they at least have the opportunity. The thing holding most people who complain back is an endless display of consumeristic behavior. People are still taking on more debt and saving less and less. That's the common argument - that the rich can save and the poor cant. Bullshit.

[aschmidt2930]

Interesting reading.  Nice to have some hope. We tend to forget how far we have come.   I subscribe to Peter schiff on my FB page, nothing but doom and gloom.  It's kinda depressing actually.  He was pretty accurate with the last housing bust though.

I like Dr. Doom. His analysis is pretty good, I like his ability to look at macro economic trends, his realistic predictions about the FED, and an honest appraisal of the what could happen. I can't shake the feeling that I feel like I'm being lied to whenever I listen to Janet Yellen talk about interest rates and the economy.

I follow the bogglehead philosophy of staying the course with a simple, diversified portfolio. However, deep down I want the market to crash, hard, so I can scoop up cheap stocks instead of buying at the top like I feel like I'm doing now..

Peter Shiff does make things sound convincing but makes tries/does make his money by being just another black swan. IF he keep predicting he hopes to be eventually right.

Yup.  He predicted the housing crash (along with a lot of other people), and has been riding that since.

However he's predicted doom and gloom, nonstop, since 2009.  It hasn't happened, and we've had a 7-year bull market.  Whenever the next bear market hits, it's hard to give him any credit for "predicting" it, since he's been wrong predicting it the last 7 years in a row.

So when he tries to use data and graphs and such to prove his point, it's basically bunk.  He said the same things in 2010 (for example), and was wrong then. When he's coincidentally right, it's not because his data proved it and he knew it, it's because everything's cyclical and a stopped clock is right twice/day.

+10.

Apparently yelling crisis until it happens gives people credibility, one of my pet peeves.

[mathlete]

Buffett is right. Things are looking up. A bet against the human race in general is a bad bet as things almost always get better.

The poor and middle class need to stay hungry though IMO. It's nice to have Buffett's optimism about the quality of life improving for all in your back pocket. If we all act like this is enough though, it will make us more and more exploitable by the ruling class.

[human]

I guess that's what irks me the most, people just blindly put the leash on and wag their tail when the bone gets tossed to them . . .

[arebelspy]

I guess that's what irks me the most, people just blindly put the leash on and wag their tail when the bone gets tossed to them . . .

Or rather, I'm happy with all the steak I can eat, and don't care that someone else has more steak than me.

[Bucksandreds]

I guess that's what irks me the most, people just blindly put the leash on and wag their tail when the bone gets tossed to them . . .

Or rather, I'm happy with all the steak I can eat, and don't care that someone else has more steak than me.

Why has this devolved into a debate about economic inequality? The real discussion which Buffett talks about is whether this young generation is better off than their parents were. By studying median household income and student loan debt I would say that it's hard to argue that the current youth generation has things better off. I would say that it's not abject poverty that they're looking at but we as a society have a ways to go. Raising median income to at least equal that of our recent peak (2000)  should be a primary goal for us. Helping our youth leave school without a mortgage worth of debt (a thing their parents didn't deal with due to state funding of universities. Boomers benefitted from the funding and then cut the benefit for their children so that their state income taxes would be lower) should be another focus. I don't follow the Bernie Sanders school of free college. I think that higher state funding combined with that funding going to Universities that reign in cost, could help achieve that.

[human]

The focus turned to inequality because that's what buffet conveniently tosses aside as not worthy of focus.

[Yaeger]

The focus turned to inequality because that's what buffet conveniently tosses aside as not worthy of focus.

It's not. It's a bone one of our political parties uses to stoke base emotions of envy, greed, and resentment to garner support.

[Vilgan]

I read every word of Buffett's letter and really appreciated his insights. I've always liked him and I appreciate the fact that he is a lot more honest and down to earth and is open about things that are issues - including calling out the constant doom & doom and "America has gone to crap" rhetoric that many like to spout. I wish more of the 1% were like him rather than the Koch brothers who are using their wealth to create as much more wealth as possible and damn the consequences. If every billionaire was like Gates and Buffett I think the world would be a much better place.

[arebelspy]

I guess that's what irks me the most, people just blindly put the leash on and wag their tail when the bone gets tossed to them . . .

Or rather, I'm happy with all the steak I can eat, and don't care that someone else has more steak than me.

Why has this devolved into a debate about economic inequality? The real discussion which Buffett talks about is whether this young generation is better off than their parents were. By studying median household income and student loan debt I would say that it's hard to argue that the current youth generation has things better off. I would say that it's not abject poverty that they're looking at but we as a society have a ways to go. Raising median income to at least equal that of our recent peak (2000)  should be a primary goal for us. Helping our youth leave school without a mortgage worth of debt (a thing their parents didn't deal with due to state funding of universities. Boomers benefitted from the funding and then cut the benefit for their children so that their state income taxes would be lower) should be another focus. I don't follow the Bernie Sanders school of free college. I think that higher state funding combined with that funding going to Universities that reign in cost, could help achieve that.

It turned to inequality because basically everyone agreed the current generation has things better off than before, but we needed something to complain about.

In other words, almost everyone disagreed with your sentence I bolded.

We're better off, but we could still be EVEN MORE better off income inequality was fixed.

I'm just of the opinion that while we should work on that, we should also be happy and grateful and realize how wonderful everything is, and how the world is just getting better and better.

Others are of the opinion that even though we're better off objectively than the previous generation, it's not enough cause others have more.

This is the summary, as I understand it (though I'm obviously biased, I'm not trying to be).

I think it's really hard to argue that people today AREN'T better off.

Would you really want to go back and live 40 years ago?

As Paul said:

Halve my salary, straddle me with 100k of debt; I'll still pick to live today over my parents' or grandparents' generations.

Look at this description and tell me you want to go back to that:
http://forum.mrmoneymustache.com/welcome-to-the-forum/warren-buffett-and-our-kid's-future/msg994339/#msg994339

And if you do, now tell me that you think MOST people today would want to go back to that.  I don't think most people would, cause their lives are way better off.  We have so many luxuries it's ridiculous.

No, everything's not perfect.  Yes, we can work to make it even better!  But things are pretty damn good, and it's a good idea to appreciate that while we work to make things even better for the next generation.

[Bucksandreds]

I guess that's what irks me the most, people just blindly put the leash on and wag their tail when the bone gets tossed to them . . .

Or rather, I'm happy with all the steak I can eat, and don't care that someone else has more steak than me.

Why has this devolved into a debate about economic inequality? The real discussion which Buffett talks about is whether this young generation is better off than their parents were. By studying median household income and student loan debt I would say that it's hard to argue that the current youth generation has things better off. I would say that it's not abject poverty that they're looking at but we as a society have a ways to go. Raising median income to at least equal that of our recent peak (2000)  should be a primary goal for us. Helping our youth leave school without a mortgage worth of debt (a thing their parents didn't deal with due to state funding of universities. Boomers benefitted from the funding and then cut the benefit for their children so that their state income taxes would be lower) should be another focus. I don't follow the Bernie Sanders school of free college. I think that higher state funding combined with that funding going to Universities that reign in cost, could help achieve that.

It turned to inequality because basically everyone agreed the current generation has things better off than before, but we needed something to complain about.

In other words, almost everyone disagreed with your sentence I bolded.

We're better off, but we could still be EVEN MORE better off income inequality was fixed.

I'm just of the opinion that while we should work on that, we should also be happy and grateful and realize how wonderful everything is, and how the world is just getting better and better.

Others are of the opinion that even though we're better off objectively than the previous generation, it's not enough cause others have more.

This is the summary, as I understand it (though I'm obviously biased, I'm not trying to be).

I think it's really hard to argue that people today AREN'T better off.

Would you really want to go back and live 40 years ago?

As Paul said:

Halve my salary, straddle me with 100k of debt; I'll still pick to live today over my parents' or grandparents' generations.

Look at this description and tell me you want to go back to that:
http://forum.mrmoneymustache.com/welcome-to-the-forum/warren-buffett-and-our-kid's-future/msg994339/#msg994339

And if you do, now tell me that you think MOST people today would want to go back to that.  I don't think most people would, cause their lives are way better off.  We have so many luxuries it's ridiculous.

No, everything's not perfect.  Yes, we can work to make it even better!  But things are pretty damn good, and it's a good idea to appreciate that while we work to make things even better for the next generation.

You're using a single example to prove a point. Here's one to prove the opposite point. My grandfather and I were/are dentists.Both went to college, he had cable TV and I don't, he had a timeshare in Sanibel FL on the ocean for 2 weeks during Spring break. He had $0 student loans. I left school with $220,000. He had a luxury convertible and I have a Ford Fiesta. He had a home on a lake. I can't afford waterfront, etc,etc. he had a positive net worth day1 out of dental school. Mine hit positive 5 years out. He had 2 season tickets to now only affordable by the super rich to Ohio State football. He worked 32 hours per week and golfed all day Friday at the country club. I work 40hours per week (four 10s) and watch my kids all day Wednesday so my wife can work. His wife didn't.  I make slightly above average for a dentist. You are giving zero objective evidence to support your argument.

[Ricky]

You're using a single example to prove a point. Here's one to prove the opposite point. My grandfather and I were/are dentists.Both went to college, he had cable TV, he had a timeshare in Sanibel FL on the ocean for 2 weeks in Florida. He had $0 student loans. I left school with $220,000. He had a luxury convertible and I have a Ford Fiesta. He had a home on a lake. I can't afford waterfront, etc,etc. he had a positive net worth day1 out of dental school. You are giving zero objective evidence to support your argument.

LOL - and you just gave objective evidence? Anecdotal evidence isn't doing anyone any favors here. What's true, independent of any generation, is what we're born with. There's so many variables that we could go back and forth all day long.

Race/gender/location/parents/motivation/genetics/etc. No one is saying we're all born with equal opportunity - just that overall things are definitely better and that there are definitively more opportunities than there were in the past. Not just different opportunities, but more.

[arebelspy]

I guess that's what irks me the most, people just blindly put the leash on and wag their tail when the bone gets tossed to them . . .

Or rather, I'm happy with all the steak I can eat, and don't care that someone else has more steak than me.

Why has this devolved into a debate about economic inequality? The real discussion which Buffett talks about is whether this young generation is better off than their parents were. By studying median household income and student loan debt I would say that it's hard to argue that the current youth generation has things better off. I would say that it's not abject poverty that they're looking at but we as a society have a ways to go. Raising median income to at least equal that of our recent peak (2000)  should be a primary goal for us. Helping our youth leave school without a mortgage worth of debt (a thing their parents didn't deal with due to state funding of universities. Boomers benefitted from the funding and then cut the benefit for their children so that their state income taxes would be lower) should be another focus. I don't follow the Bernie Sanders school of free college. I think that higher state funding combined with that funding going to Universities that reign in cost, could help achieve that.

It turned to inequality because basically everyone agreed the current generation has things better off than before, but we needed something to complain about.

In other words, almost everyone disagreed with your sentence I bolded.

We're better off, but we could still be EVEN MORE better off income inequality was fixed.

I'm just of the opinion that while we should work on that, we should also be happy and grateful and realize how wonderful everything is, and how the world is just getting better and better.

Others are of the opinion that even though we're better off objectively than the previous generation, it's not enough cause others have more.

This is the summary, as I understand it (though I'm obviously biased, I'm not trying to be).

I think it's really hard to argue that people today AREN'T better off.

Would you really want to go back and live 40 years ago?

As Paul said:

Halve my salary, straddle me with 100k of debt; I'll still pick to live today over my parents' or grandparents' generations.

Look at this description and tell me you want to go back to that:
http://forum.mrmoneymustache.com/welcome-to-the-forum/warren-buffett-and-our-kid's-future/msg994339/#msg994339

And if you do, now tell me that you think MOST people today would want to go back to that.  I don't think most people would, cause their lives are way better off.  We have so many luxuries it's ridiculous.

No, everything's not perfect.  Yes, we can work to make it even better!  But things are pretty damn good, and it's a good idea to appreciate that while we work to make things even better for the next generation.

You're using a single example to prove a point. Here's one to prove the opposite point. My grandfather and I were/are dentists.Both went to college, he had cable TV, he had a timeshare in Sanibel FL on the ocean for 2 weeks in Florida. He had $0 student loans. I left school with $220,000. He had a luxury convertible and I have a Ford Fiesta. He had a home on a lake. I can't afford waterfront, etc,etc. he had a positive net worth day1 out of dental school. Mine hit positive 5 years out. You are giving zero objective evidence to support your argument.

You didn't answer my question.

Would you, if you had a single-use, one way time machine when starting college, like to have gone back 50 years to your grandfather's time?

Do you think your quality of life would be much better if you lived 50 years ago instead of now? 

Then my second question:
"And if you do, now tell me that you think MOST people today would want to go back to that.  I don't think most people would, cause their lives are way better off.  We have so many luxuries it's ridiculous."

I personally would rather come out of dental school today with 220k in debt than 50 years ago with no debt.  Because the world today is so much better to live in.

YMMV?

[Bucksandreds]

You're using a single example to prove a point. Here's one to prove the opposite point. My grandfather and I were/are dentists.Both went to college, he had cable TV, he had a timeshare in Sanibel FL on the ocean for 2 weeks in Florida. He had $0 student loans. I left school with $220,000. He had a luxury convertible and I have a Ford Fiesta. He had a home on a lake. I can't afford waterfront, etc,etc. he had a positive net worth day1 out of dental school. You are giving zero objective evidence to support your argument.

LOL - and you just gave objective evidence? Anecdotal evidence isn't doing anyone any favors here. What's true, independent of any generation, is what we're born with. There's so many variables that we could go back and forth all day long.

Race/gender/location/parents/motivation/genetics/etc. No one is saying we're all born with equal opportunity - just that overall things are definitely better and that there are definitively more opportunities than there were in the past. Not just different opportunities, but more.

I did earlier when I compared median incomes and student loan burdens. I am actually the only person who even attempted to use objective evidence.

[Yaeger]

You're using a single example to prove a point. Here's one to prove the opposite point. My grandfather and I were/are dentists.Both went to college, he had cable TV, he had a timeshare in Sanibel FL on the ocean for 2 weeks in Florida. He had $0 student loans. I left school with $220,000. He had a luxury convertible and I have a Ford Fiesta. He had a home on a lake. I can't afford waterfront, etc,etc. he had a positive net worth day1 out of dental school. You are giving zero objective evidence to support your argument.

So your argument is that because you can't easily buy a house on a lake, you're not as well off? Look at historical trends in median household income vs. inflation and you'll see why Arabelspy is generally correct. Pretty much across the board REAL incomes have risen since the 1950's when measured against the CPI-U (they can buy more stuff). The only age category that's not as well off are the young, probably due to minimum wage laws.

http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-Age-Brackets

[Bucksandreds]

I guess that's what irks me the most, people just blindly put the leash on and wag their tail when the bone gets tossed to them . . .

Or rather, I'm happy with all the steak I can eat, and don't care that someone else has more steak than me.

Why has this devolved into a debate about economic inequality? The real discussion which Buffett talks about is whether this young generation is better off than their parents were. By studying median household income and student loan debt I would say that it's hard to argue that the current youth generation has things better off. I would say that it's not abject poverty that they're looking at but we as a society have a ways to go. Raising median income to at least equal that of our recent peak (2000)  should be a primary goal for us. Helping our youth leave school without a mortgage worth of debt (a thing their parents didn't deal with due to state funding of universities. Boomers benefitted from the funding and then cut the benefit for their children so that their state income taxes would be lower) should be another focus. I don't follow the Bernie Sanders school of free college. I think that higher state funding combined with that funding going to Universities that reign in cost, could help achieve that.

It turned to inequality because basically everyone agreed the current generation has things better off than before, but we needed something to complain about.

In other words, almost everyone disagreed with your sentence I bolded.

We're better off, but we could still be EVEN MORE better off income inequality was fixed.

I'm just of the opinion that while we should work on that, we should also be happy and grateful and realize how wonderful everything is, and how the world is just getting better and better.

Others are of the opinion that even though we're better off objectively than the previous generation, it's not enough cause others have more.

This is the summary, as I understand it (though I'm obviously biased, I'm not trying to be).

I think it's really hard to argue that people today AREN'T better off.

Would you really want to go back and live 40 years ago?

As Paul said:

Halve my salary, straddle me with 100k of debt; I'll still pick to live today over my parents' or grandparents' generations.

Look at this description and tell me you want to go back to that:
http://forum.mrmoneymustache.com/welcome-to-the-forum/warren-buffett-and-our-kid's-future/msg994339/#msg994339

And if you do, now tell me that you think MOST people today would want to go back to that.  I don't think most people would, cause their lives are way better off.  We have so many luxuries it's ridiculous.

No, everything's not perfect.  Yes, we can work to make it even better!  But things are pretty damn good, and it's a good idea to appreciate that while we work to make things even better for the next generation.

You're using a single example to prove a point. Here's one to prove the opposite point. My grandfather and I were/are dentists.Both went to college, he had cable TV, he had a timeshare in Sanibel FL on the ocean for 2 weeks in Florida. He had $0 student loans. I left school with $220,000. He had a luxury convertible and I have a Ford Fiesta. He had a home on a lake. I can't afford waterfront, etc,etc. he had a positive net worth day1 out of dental school. Mine hit positive 5 years out. You are giving zero objective evidence to support your argument.

You didn't answer my question.

Would you, if you had a single-use, one way time machine when starting college, like to have gone back 50 years to your grandfather's time?

Do you think your quality of life would be much better if you lived 50 years ago instead of now? 

Then my second question:
"And if you do, now tell me that you think MOST people today would want to go back to that.  I don't think most people would, cause their lives are way better off.  We have so many luxuries it's ridiculous."

I personally would rather come out of dental school today with 220k in debt than 50 years ago with no debt.  Because the world today is so much better to live in.

YMMV?

Oh yeah, it's just 100% certain that life is better here now than before (sarcasm.) Look at incarceration rates, drug addiction, lack of upward mobility statistics, divorce, suicide, mass shootings, etc. there are also examples where things are better today. But to continually just say that everything is better now with no real supporting evidence makes you sound silly.

[Cathy]

By studying median household income and student loan debt I would say that it's hard to argue that the current youth generation has things better off.

This kind of glorification of the past is a pretty good example of the "privilege" concept in action. Even in my own short lifetime, we've made great strides toward the goal of building a more egalitarian society. Obviously there's still much work to be done, but in general, people are more free nowadays to express themselves and conduct their lives as they see fit than they were 40 or 50 years ago (to use arebelspy's time spans). The present is much better than the past, at least in the United States and Canada, especially for youth.

[Bucksandreds]

You're using a single example to prove a point. Here's one to prove the opposite point. My grandfather and I were/are dentists.Both went to college, he had cable TV, he had a timeshare in Sanibel FL on the ocean for 2 weeks in Florida. He had $0 student loans. I left school with $220,000. He had a luxury convertible and I have a Ford Fiesta. He had a home on a lake. I can't afford waterfront, etc,etc. he had a positive net worth day1 out of dental school. You are giving zero objective evidence to support your argument.

So your argument is that because you can't easily buy a house on a lake, you're not as well off? Look at historical trends in median household income vs. inflation and you'll see why Arabelspy is generally correct. Pretty much across the board REAL incomes have risen since the 1950's when measured against the CPI-U (they can buy more stuff). The only age category that's not as well off are the young, probably due to minimum wage laws.

http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-Age-Brackets

My only point was to dispute Arebelspy's claim that one example can prove a point. Of course my example is just one. My argument is that median incomes are down since our peak and that student loan debt isn't even accounted for in that. The median 25 year old American in 2000 had little to no student debt and made more money than they do today. How are things indisputably better today?

[Ricky]

Do you think your quality of life would be much better if you lived 50 years ago instead of now? 

(I know you're not asking me, but) That's really hard to say, actually. I think anyone who spends their time complaining about how things are and what they can't control instead of focusing on self-improvement and taking advantage of things that are available to them are destined to live a low-quality of life, regardless of which era they live in or what they were born with.

Like I get what Buckandreds is saying - there are some shitty problems in the world that need to be taken care of. Not just here in America but all over the world. And guess what? There will always be shitty problems to take care of. There's no one generation that's going to live in the "best time to be alive". I firmly believe that. I think it's great to constructively recognize issues, but the incessant pessimism doesn't get anyone anywhere. Yes, student debt is at a record high and I do believe that what most universities charge is highway robbery. New flash: going to university isn't the only way to live your life or create income.

But I think what myself, ARS, and maybe a few other people have been saying is that it's not so much about the shitty problems that are out there - it's what you can do with your own life that matters. It's looking at the big picture. Maybe that includes trying to fix things. But to just sit around and complain that things are horrible and take no action is not doing yourself any favors.

[Bucksandreds]

Do you think your quality of life would be much better if you lived 50 years ago instead of now? 

(I know you're not asking me, but) That's really hard to say, actually. I think anyone who spends their time complaining about how things are and what they can't control instead of focusing on self-improvement and taking advantage of things that are available to them are destined to live a low-quality of life, regardless of which era they live in or what they were born with.

Like I get what Buckandreds is saying - there are some shitty problems in the world that need to be taken care of. Not just here in America but all over the world. And guess what? There will always be shitty problems to take care of. There's no one generation that's going to live in the "best time to be alive". I firmly believe that. I think it's great to constructively recognize issues, but the incessant pessimism doesn't get anyone anywhere. Yes, student debt is at a record high and I do believe that what most universities charge is highway robbery. New flash: going to university isn't the only way to live your life or create income.

But I think what myself, ARS, and maybe a few other people have been saying is that it's not so much about the shitty problems that are out there - it's what you can do with your own life that matters. It's looking at the big picture. Maybe that includes trying to fix things. But to just sit around and complain that things are horrible and take no action is not doing yourself any favors.

I completely agree with you and have never argued that people should despair about today's society. The point I'm making is that there are for sure worse things about life today as there are better things. It's better to be a minority or a woman or homosexual today in this country than ever before. It's easier to access information and entertainment. It's also more likely to fall out of the middle class today than it was at times before. You're more likely to be in prison today, your middle class children are more likely to commit suicide, or become a drug addict. a child/teen is growing up in a time where mass shootings/terrorist attacks are 'normal.' This is still a fine place to live. The extreme opinions of how great and wonderful everything is today are not in line with reality.

[Yaeger]

You're using a single example to prove a point. Here's one to prove the opposite point. My grandfather and I were/are dentists.Both went to college, he had cable TV, he had a timeshare in Sanibel FL on the ocean for 2 weeks in Florida. He had $0 student loans. I left school with $220,000. He had a luxury convertible and I have a Ford Fiesta. He had a home on a lake. I can't afford waterfront, etc,etc. he had a positive net worth day1 out of dental school. You are giving zero objective evidence to support your argument.

So your argument is that because you can't easily buy a house on a lake, you're not as well off? Look at historical trends in median household income vs. inflation and you'll see why Arabelspy is generally correct. Pretty much across the board REAL incomes have risen since the 1950's when measured against the CPI-U (they can buy more stuff). The only age category that's not as well off are the young, probably due to minimum wage laws.

http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-Age-Brackets

My only point was to dispute Arebelspy's claim that one example can prove a point. Of course my example is just one. My argument is that median incomes are down since our peak and that student loan debt isn't even accounted for in that. The median 25 year old American in 2000 had little to no student debt and made more money than they do today. How are things indisputably better today?

I don't think anyone's saying that in all aspects we're better off today, but in general the data seems to support the assumption that we ARE better off. I'd like 1960's healthcare prices, but I wouldn't want 1960's medicine technology vs today. Likewise the same in education. The poor today are better off in pretty much every way than the rich were 100 years ago.

Median incomes have oscillated throughout our history. Prior to the peak in 2000, the last peak was 1989. I bet if we were in sitting in 1995 thinking about how real incomes were down from the peak in 1989 we'd be having the same doom and gloom discussion. The best way to raise that peak is a value-based political discussion that I think is slightly off topic. Personally I think federally-backed student loans are the root cause behind the high cost of education. Just like the housing bubble's push for 'affordable housing', it creates a risk vs. reward mismatch and a perverse incentive structure.

[Bucksandreds]

You're using a single example to prove a point. Here's one to prove the opposite point. My grandfather and I were/are dentists.Both went to college, he had cable TV, he had a timeshare in Sanibel FL on the ocean for 2 weeks in Florida. He had $0 student loans. I left school with $220,000. He had a luxury convertible and I have a Ford Fiesta. He had a home on a lake. I can't afford waterfront, etc,etc. he had a positive net worth day1 out of dental school. You are giving zero objective evidence to support your argument.

So your argument is that because you can't easily buy a house on a lake, you're not as well off? Look at historical trends in median household income vs. inflation and you'll see why Arabelspy is generally correct. Pretty much across the board REAL incomes have risen since the 1950's when measured against the CPI-U (they can buy more stuff). The only age category that's not as well off are the young, probably due to minimum wage laws.

http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-Age-Brackets

My only point was to dispute Arebelspy's claim that one example can prove a point. Of course my example is just one. My argument is that median incomes are down since our peak and that student loan debt isn't even accounted for in that. The median 25 year old American in 2000 had little to no student debt and made more money than they do today. How are things indisputably better today?

I don't think anyone's saying that in all aspects we're better off today, but in general the data seems to support the assumption that we ARE better off. I'd like 1960's healthcare prices, but I wouldn't want 1960's medicine technology vs today. Likewise the same in education. The poor today are better off in pretty much every way than the rich were 100 years ago.

Median incomes have oscillated throughout our history. Prior to the peak in 2000, the last peak was 1989. I bet if we were in sitting in 1995 thinking about how real incomes were down from the peak in 1989 we'd be having the same doom and gloom discussion. The best way to raise that peak is a value-based political discussion that I think is slightly off topic. Personally I think federally-backed student loans are the root cause behind the high cost of education. Just like the housing bubble's push for 'affordable housing', it creates a risk vs. reward mismatch and a perverse incentive structure.

Actually the graph that's attached to the link shows that prior to the 2008 median incomes dropped at most less than 5%. It's been around 100 years since median incomes dropped the 15% they did in the Great Recession. We're 7-8 years out from that and still thousands of dollars away from 2000 levels. Many believe we're due for another recession which would be unprecedented for median incomes to not reach their previous peak between recessions. This country is not trending well economically, but money is only part of what measures a good life.

[Yaeger]

You're using a single example to prove a point. Here's one to prove the opposite point. My grandfather and I were/are dentists.Both went to college, he had cable TV, he had a timeshare in Sanibel FL on the ocean for 2 weeks in Florida. He had $0 student loans. I left school with $220,000. He had a luxury convertible and I have a Ford Fiesta. He had a home on a lake. I can't afford waterfront, etc,etc. he had a positive net worth day1 out of dental school. You are giving zero objective evidence to support your argument.

So your argument is that because you can't easily buy a house on a lake, you're not as well off? Look at historical trends in median household income vs. inflation and you'll see why Arabelspy is generally correct. Pretty much across the board REAL incomes have risen since the 1950's when measured against the CPI-U (they can buy more stuff). The only age category that's not as well off are the young, probably due to minimum wage laws.

http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-Age-Brackets

My only point was to dispute Arebelspy's claim that one example can prove a point. Of course my example is just one. My argument is that median incomes are down since our peak and that student loan debt isn't even accounted for in that. The median 25 year old American in 2000 had little to no student debt and made more money than they do today. How are things indisputably better today?

I don't think anyone's saying that in all aspects we're better off today, but in general the data seems to support the assumption that we ARE better off. I'd like 1960's healthcare prices, but I wouldn't want 1960's medicine technology vs today. Likewise the same in education. The poor today are better off in pretty much every way than the rich were 100 years ago.

Median incomes have oscillated throughout our history. Prior to the peak in 2000, the last peak was 1989. I bet if we were in sitting in 1995 thinking about how real incomes were down from the peak in 1989 we'd be having the same doom and gloom discussion. The best way to raise that peak is a value-based political discussion that I think is slightly off topic. Personally I think federally-backed student loans are the root cause behind the high cost of education. Just like the housing bubble's push for 'affordable housing', it creates a risk vs. reward mismatch and a perverse incentive structure.

Actually the graph that's attached to the link shows that prior to the 2008 median incomes dropped at most less than 5%. It's been around 100 years since median incomes dropped the 15% they did in the Great Recession. We're 7-8 years out from that and still thousands of dollars away from 2000 levels. Many believe we're due for another recession which would be unprecedented for median incomes to not reach their previous peak between recessions. This country is not trending well economically, but money is only part of what measures a good life.

Well, the CPI-U measures the cost of a 'basket of goods' that consists of healthcare, housing, food and drink, transportation, apparel, education and communication. It's indexed to provide a relative price it costs the average person to live and operate in our society. Money is only part of measuring a good life, but what's critical is the ability to acquire basic goods and services, which the CPI measures. The inflation adjusted income vs CPI just shows that the average american is spending less on the necessary goods and has more leftover to on spend than decades ago.

I agree with you, I'm very concerned about where the economy is trending towards. The political dialogue is all about government benefits, instead of the creation of jobs, industry, bringing business to the US. We're more concerned with legal means preventing people and jobs from leaving than we are creating an environment that attracts companies, competition, and ultimately growth.