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How Americans Spent Their Money in the Last 75 Years
Topic Started: 13 Jan 2017, 11:51 AM (3,662 Views)
b_b
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One observation: The gains from a real decline in the cost of food and clothing (i.e. productivity gains) have gone back into housing......
Edited by b_b, 13 Jan 2017, 11:52 AM.
(S – I) + (T - G) + (M - X) = 0
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skamy
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b_b
13 Jan 2017, 11:51 AM
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https://cdn.howmuch.net/content/images/1600/how-americans-spent-their-money-in-the-last-75-years__f_-f285.jpg

One observation: The gains from a real decline in the cost of food and clothing (i.e. productivity gains) have gone back into housing......
This is Barden's argument that all extra wealth ends up in housing due to competition for the best homes in the best locations.
Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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b_b
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skamy
13 Jan 2017, 11:57 AM
This is Barden's argument that all extra wealth ends up in housing due to competition for the best homes in the best locations.
Yep. Hard to argue against that.

The next big move may come when technology reduces the real cost of transportation (driverless cars, solar power, etc).
Edited by b_b, 13 Jan 2017, 12:19 PM.
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Terry
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b_b
13 Jan 2017, 11:51 AM
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One observation: The gains from a real decline in the cost of food and clothing (i.e. productivity gains) have gone back into housing......
In data analytics class, you'd get a C+ for effort. If you really wanted to make those kind of inferences, you would need to frame the data differently; for example, you would want to understand the suburbanites allocation of income as a "basket of spending" that could be measured in % of spending (housing 35%, food 20%, etc) in a time series. The fact the productivity gains in the fast food industry makes food cheaper does not reconcile with a situation where the suburbanites choose to eat fast food because its the cheapest available.
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Trollie
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Terry
13 Jan 2017, 12:53 PM
In data analytics class
You better get cracking then, because you need a lot more work.
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Rufus
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A very interesting chart.

A society that can produce food and clothing more efficiently, but wants to spend more on education, recreation, and health (because we all want to live longer, be more educated, and enjoy ourselves more)

Car ownership gradually became accessible to all and then costs stabilised.

Housing is the real standout. I assume the cost of home ownership incudes property taxes and not just the cost of purchasing.
Higher population so more competition for the most desirable suburbs, maybe the larger and higher quality housing now is more costly to produce, cost of PC items such as ovens, hotplates etc are much higher, but maybe it's the higher cost of compliance and workplace health and safety. Going back 100 years no one cared if someone was killed at work - commonplace.

Perhaps it's just the cost of a more sophisticated society with a higher living standard and higher taxes on housing to fund that higher living standard. I would think that chart would be closely replicate in pretty much every western society.

Edited by Rufus, 13 Jan 2017, 01:52 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Ex BP Golly
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b_b
13 Jan 2017, 12:18 PM
Yep. Hard to argue against that.

The next big move may come when technology reduces the real cost of transportation (driverless cars, solar power, etc).
Improved communications will free people from the need to be dormitory suburbs to commute to work, leading to many redundant properties in crappy locations becoming seen for what they are - an Albatross neck tie.



Edited by Ex BP Golly, 13 Jan 2017, 05:00 PM.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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Trollie
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Ex BP Golly
13 Jan 2017, 04:59 PM
Improved communications will free people from the need to be dormitory suburbs to commute to work, leading to many redundant properties in crappy locations becoming seen for what they are - an Albatross neck tie.


Well we've had vastly improved communications over the last 75 years and the exact opposite has happened. Good luck with that.
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Terry
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Rufus
13 Jan 2017, 01:52 PM
A very interesting chart.

A society that can produce food and clothing more efficiently, but wants to spend more on education, recreation, and health (because we all want to live longer, be more educated, and enjoy ourselves more)

Car ownership gradually became accessible to all and then costs stabilised.

Housing is the real standout. I assume the cost of home ownership incudes property taxes and not just the cost of purchasing.
Higher population so more competition for the most desirable suburbs, maybe the larger and higher quality housing now is more costly to produce, cost of PC items such as ovens, hotplates etc are much higher, but maybe it's the higher cost of compliance and workplace health and safety. Going back 100 years no one cared if someone was killed at work - commonplace.

Perhaps it's just the cost of a more sophisticated society with a higher living standard and higher taxes on housing to fund that higher living standard. I would think that chart would be closely replicate in pretty much every western society.

Actually price deflation through productivity, particularly in food and clothing, is best illustrated by the Japan experience. Uniqlo and TopValu brands are perfect examples and global icons of adapting to consumer attitudes and behavior (price sensitivity and the search for the optimal price / quality trade-off point). The bursting of the bubble was the catalyst for their emergence. The same phenomenon is occurring in Europe and the U.S. as the suburbanites are tapped out.

Similar things cannot happen in Australia. We don't have the manufacturing expertise, the necessary supply chains, the buying power to control producers, nor the demand (give our relatively small population)/
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Bardon
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skamy
13 Jan 2017, 11:57 AM
This is Barden's argument that all extra wealth ends up in housing due to competition for the best homes in the best locations.
Yes and once again the profits are taken up by the economic rent. David Ricardo first defined the theory of economic rent two hundred years ago and it is still 100% valid today.
Edited by Bardon, 13 Jan 2017, 08:00 PM.
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