In a somewhat mosaic theory (I know news outlets are really just presenting doom and gloom), I think the United States is in a bad way financially. We're basically underbuilt in housing, too much money has been created so rates are crazy, sort of a double edged sword but people keep spending. There was an article today floating around that said paycheck to paycheck is now the dominate American living style.
Taking that all in, whats essentially the endgame or how do things get better? Do we need to have some sort of recession/depression, do people need to learn to live with less, do we redefine our living style and everyone begins to shift to new ways to live (one car families? smaller houses? no vacations?).
Would like to hear everyone's thoughts.
I am not sure if there is one concrete answer but I'll start by saying a recipe to not fix what is going on is devaluing education by lowering standards/ rigor and curtailing a potentially revolutionary technology (AI) that has the ability to advance our country/society and grow our GDP compared to national debt.
I think we absolutely need to devalue education. It is completely decouppled from its value. What we need to do is reprioritize education to actually fill skills gaps that exist in the econonmy. Simply using a UG of Masters degree as an easy way to filter on candidates is a joke and has created massively perverse incentives in the economy.
Everyone gripes and complains about the infastructure of the US, which in reality is actually amazingly good, but then continue to shovel everyone to college to get pointless degrees that don't serve any real purpose other than to inflate the cost of the workforce driving further inflation.
Agree about degree inflation, but we would not have this problem if college standards were raised to allow only those fit to attend.
We need to repeal the Bush and Trump tax cuts and go back to a stable tax regime. Almost all the deficit comes from the fact that the government keeps cutting the amount of money it collects but will not even think about cutting spending. I will get tons of monkey shit thrown at me for being 'socialist' for wanting to raise taxes on wealthy corporation, but the USA was not even close to being socialist in 2001 or 2016 before each round of tax cuts, the overton window just shifted.
Second off I think we need to start building something other than suburbs. The suburbs as the ideal American dream made a lot of sense when there was nothing but farmland past Queens but now you can drive for hours and hours and still technically be in the NYC metropolitan area. While I would prefer to live in a single family house, it's better to have a mix of single family and multi family buildings than to have shitty little ranchers sell for millions of dollars like in Cali.
HE WON'T QUIT TILL THE JOB IS FUCKED
On the housing, the question would be could you get people to live in multi family? Would that also have to change, maybe bigger apartments? Problem with building a lot of these is that people want the luxury dwellings, and that ends up almost being as much as a house.
MF units are similar to rental building units. To the tenant it’s essentially the same if they’re renting which is often how it is
The deficit doesn't fucking matter. The ONLY thing that actually matters is the growth potential. We don't need to raise taxes, we need to restructure how the tax system works so that it actually incentivizes the correct type of investment.
The financial doom and gloom is really no different than 10 years ago, or 10 years before that. Every generation (I take it you are a zoomer) feels like they have it the worst and that they are the first to realize the American Dream or the Middle Class is 'dead'. Simply not true. Go drive around any crap burb and youll see plenty of people living the good life. There wont be some seismic economic shift that every 22 year old with no lived history thinks they will witness because they dont yet realize they are just a fish turd floating in the ocean and the book of life doesnt have their existance as the main character
Are there legitimate concerns? Yea sure. America servicing debt at high interest rates isnt sustainable (even if 'the debt!' has been a meme for literally decades)
But housing production isnt. There isnt a housing issue in America, there is an entitlement and cry baby issue. Housing is affordable, you just have to *gasp* move to be able to afford it just like your ancestors have done for centuries.
The more things change the more they stay the same
The issue is that housing actually is much less affordable than before. 20-30 years ago, one could work for 5 years and buy a decent to nice suburban home, now it’ll take more than a decade for that same house and it won’t necessarily be a nice home or in a great location.
How far out would people need to move to live decently? Once your out far enough you’re in some bumfuckville town in Pennsylvania, as if anyone working a finance job would want to move there
Still very possible. The quality of houses are much MUCH nicer than 20-30 years ago. That's what people miss.
Also women are in the workforce earning more than men now. You cant complain about not being able to afford a house if you are single, you are competing against dual incomes. Even if you are a physician you will lose to a DINK couple of accountants or nurses.
You want that same house that your parents had at your age? You can, it exists, and it's under 200k under 150k. Problem is people are entitled and cant fathom going backwards in quality of life
I'd have to disagree with some ways. I'm not trying to make it out as "financial doom & gloom", there is a "sky is falling" with every generation. Could people move for housing, sure; but we're still drastically underbuilt. I just think we're seeing things that haven't happened in the United States before (or for a long time).
For example:
1. 50+ bids on a house on the market
2. People opening stealing from stores
3. rise of drug use/homelessness
You are right though in that sense that there were thinks people worried about in history that ending being pretty mute. For example, when they first had horse and buggy carriages in NYC, people thought Manhattan would drown in horse crap; or when cars where introduced people thought it would take jobs; or the year 2000 when planes were suppose to drop out of the sky nothing happened. I'm sure you could time travel back to when WW1 and WW2 were going on and things looked pretty bleak, but we pulled through. My question is more, how do we pull through this?
50+ bids on a house was once in a generation moment because our shortsighted covid response brought rates to zero and flooded market with easy money. Now markets sit on the market for weeks if not months, and that will be the case for the forseeable future
Crime has always been an issue in poor / urban areas, we are just exposed to it a lot more
Can I see a world where parts of America become Brazil where cities are just pure no go zone shit holes? Sure. Is it worth losing sleep over? Not for me
Pretty much this. The primary difference is post secondary education. The young people have a bunch of debt from that. However I would argue that the actual problem there is blown way out of proportion. Housing isn't really that much more on a trend and market adjusted basis. Housing is VERY expensive in a few very specific locations, but is very affordable everywhere else. It's just that young people feel they deserve to live in Manhattan at 23 on a basic office workers salary.
fascism. Only elites in each industry/field/zone get to decide who fabricates what and about how much we get witin 30CCs of whatever that is, adjusted for whatever widget that is.
I sound like a socialist? sorry, show me a better way. The "FREEEE MARKET" has enslaved billions. The deification of freemarkets, let alone FREEDOM itself, just imposes a silent cage about man's life that only fascism has the combo to. I hate it. I wouldn't want to live in an authoritarian society and if I dissented, I'd die and wouldn't have to :/ But you did ask
Yang had the right start.
wtf was this?
The ramblings of your average Hasan viewer.
That guy always spewing random nonsense
A large factor that is often overlooked is the role of demographics. You have a very large generation that is now retired/ on the brink of retirement (or 'forced' out from COVID-related decision - think senior airline pilots, etc.)
The other side of the coin is that the millennial generation is even larger than the Boomers. It will take some time, but market forces will eventually clear up housing demand, shortage of workers, etc.
Headwinds - government spending/ debt, particularly on entitlements. Medicare for Boomers is going to be a big ticket item for the next 2-3 decades.
Tailwinds - rapid technological breakthroughs/ AI. History shows that we adapt and overcome. Sure, the world may look different, but we have always found a way to move forward.
Buddy, none of this is new.
'paycheck to paycheck' has been the dominant way of American living, and frankly most living in the world, for decades.
America is not headed towards any economic crisis that is unprecedented.
You are just too young and lack the life experience to give any of this context
It’s quite interesting as Ronald Reagan in the 1980s faced several significant economic challenges which included high inflation and unemployment (stagflation), an Energy Crisis with high oil prices and shortages, and historically high interest rates, which in turn reduced investment and spending, and budget deficits:
Reagan's approach to overcoming these challenges centered on his economic policies, often referred to as "Reaganomics." These policies were based on supply-side economics and included:
Tax Cuts: Reagan implemented significant tax cuts, most notably with the Economic Recovery Tax Act of 1981, aimed at spurring investment and economic growth.
Deregulation: His administration focused on reducing government regulation of business, which they believed would lead to increased efficiency and economic growth
Monetary Policy: Although not directly controlled by the President, Reagan supported the Federal Reserve's tight monetary policy to control inflation
Reduction in Welfare Spending: To address budget deficits, Reagan aimed to reduce spending in public housing, food stamps and Medicaid
Interest rates: in the later years of his presidency, as inflation cooled off, he supported the subsequent reduction in rates by Volcker which was a key factor in economic recovery
As a result, inflation and unemployment rates eventually decreased, and the economy entered a period of strong growth.
Great comparison, I almost forgot about this period of time and it’s economic challenges.
You are correct - many of these policies during that era were instrumental in helping turn the country around and beneficial in getting both people and companies in the US back on track for continued growth. Such policies could benefit the economy today as well
I cannot imagine deregulation, cutting taxes, and reduction of welfare spending legislation being passed in todays environment.
Agreed. A big problem is giving people something and then taking it back.
A tough pill to swallow but these are the types of changes we need in todays economic environment. This is not a matter of political beliefs, it’s just plain economics
They should have it so that anyone making under 200k should be paying very minimal percentage of their salary to uncle sam, look at Lichtenstein's brackets - how is that country able to function on those rates and we aren't?
Have wondered this as well. If small countries (essentially the same size as a state in the US) can run their country efficiently like this, makes me wonder why our states can’t. Even Florida has it figured out better than states like New York
100% of wealth over $30M should be taxed when you die. If you’re born rich you’re going to get the best schooling and best internships from connections. Which will lead you to produce an income to support yourself and a family.
I mean something seriously needs to change in this country. Can't go on like this.
To think this is the best place in the Anglo-sphere....Nordics are quite nice but obviously very small and homogenous. Same things aren't going to translate 1:1 here
How about supply chain? I am always hearing about supply chain but how to repair it? Where is the supply chain located??
In France the economy seems to have similar constrains as the US. We see higher unemployment here and higher inflation however
Is that a result of Covid or because of cultural differences?
Vivek Ramaswamy made some good points about fixing economy: ultimately increase supply of stuff like
- energy (drill, frack, alt energy)
- inc housing supply in certain areas
- incentivize businesses to boost wages and jobs
The US has a strong economy compare to many part of the world. But there seems no emphasis on social mobility for lower income backgrounds people and students. Why does a university education cost 80k/year here when in the EU it cost under 20k??
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