OT: WSJ: Middle Class deeply into debt

I don't want to be that guy that outright dismisses an article. BUT when you start off your argument with a listing of things that have inflated AND cars is your number one, you either aren't fact checking or are just assuming no one who reads it will. 

Surprisingly, cars and electronics have not increased with inflation.  They've actually decreased when you factor in the little bit of wage inflation we have had and wage inflation sounds really shitty but when you factor in that we've had very little cpi core inflation its not near as bad as some make it out to be. 

So while the essence of the article is correct in that some items have skyrocketed relative to wage growth.  Others haven't and some have even decreased.

Below is everything you'd ever care to know about automobile inflation and it touches on wage growth.  Automobiles are fascinating in the topic of inflation.  Just think of what automobile makers are up against.  They've had increased labor cost, increased raw material cost, increased/more costly emission standards, safety standards and on and on and yet they've been able to keep the car affordable to the middle class because they HAVE TO.  They must have cars remain affordable because if they don't they wont have a customer base to sell them to. 

http://www.freeby50.com/2008/11/history-of-new-car-costs-and-average.html

5,4,3,2,1...

This is headed straight to sensitive topics by noon lol!

Cars may not have,  but Trucks and SUVs have gone insane.   in  06 i bought a new GMC Sierra 4x4 for 28k  that same truck  (feature wise)  in 2017 was neary $60,000

EDIT:  I would also like to see how the wage increases have broken down by income bracket.   I know a lot of blue collar jobs have seen nickle and dime increases annually while upper management has seen very significant jumps.  it looks good when they take wages as a whole,  but if the upper 10% are eating over half of the total increases in annual income that really skews the affects of income increases in regards to buying power.

@"JimmyinSD" said: Cars may not have,  but Trucks and SUVs have gone insane.   in  06 i bought a new GMC Sierra 4x4 for 28k  that same truck  (feature wise)  in 2017 was neary $60,000

Oh I know, I've got a 2003 Cummins diesel that we're sitting on.  The same truck was about $40k in 2003 and is around $55ish today. 

Edit, you know what, thats not that bad our truck is just old lol.  Its 2.3%/yr which .5%/yr behind wage median growth. 

@"AGRforever" said:

Below is everything you'd ever care to know about automobile inflation and it touches on wage growth.  Automobiles are fascinating in the topic of inflation.  Just think of what automobile makers are up against.  They've had increased labor cost, increased raw material cost, increased/more costly emission standards, safety standards and on and on and yet they've been able to keep the car affordable to the middle class because they HAVE TO.  They must have cars remain affordable because if they don't they wont have a customer base to sell them to. 

http://www.freeby50.com/2008/11/history-of-new-car-costs-and-average.html

 Lots of dark clouds in the auto industry these days...Slowing economy in China etc...Ford in particular is having a very difficult time:

Ford debt has been downgraded to junk

Frankfurt, Germany (CNN Business)Moody's downgraded Ford's credit to junk Monday evening. It said the automaker faces considerable business challenges, and its poor financial performance badly positions Ford to take on its planned $11 billion restructuring

https://www.cnn.com/2019/09/10/business/ford-downgrade-junk/index.html

@"purplefaithful" said: 5,4,3,2,1...

This is headed straight to sensitive topics by noon lol!

this really shouldnt become political,  because neither party is immune to criticism on this matter..... of course it will become political because both parties know that its a hot potato so they both pretend to be the "one" that is giving a shit about fixing these issues.

Really though full size Pickup Trucks and SUV's are a luxury for well over 75% of the population.  Very few actually need them in there family but a Suburban is the ultimate Soccer Mom status symbol and the 3/4 Crew Cabs are the ultimate compensation tool.  And before you say anything I have both.  

What is truly interesting is if you want a new Pickup you can configure one for about $35,000.  It has no comfort features but nobody seems to want to give up those comforts.  Also while not as prevalent after the housing crash how many late 20's early 30 years olds did you see newly married with a new house, 2 new cars, new camper, boat and a was making interest only payments. That screwed a lot of people.  But most came out of college expecting that stuff.

You want to really see how screwed up things are look at the farmer and his plight.  Buys retail sells whole sale pays taxes both ways and has not really seen a increase in crop prices while inputs have gone wild.   

@"StickyBun" said:

Families Go Deep in Debt to Stay in the Middle ClassWages stalled but costs haven’t, so people increasingly rent or finance what their parents might have owned outright

By 

AnnaMaria Andriotis, Ken Brown and Shane Shifflett

Aug. 1, 2019 11:35 am ET

The American middle class is falling deeper into debt to maintain a middle-class lifestyle. Cars, college, houses and medical care have become steadily more costly, but incomes have been largely stagnant for two decades, despite a recent uptick. Filling the gap between earning and spending is an explosion of finance into nearly every corner of the consumer economy.

Our economic system is designed to reward ingenuity and economies of scale.  If you are a genious or were born one step from the top, you will 95% be in the 1% if that is your goal. 

If you were born into the middle class, lower middle class or poverty, chances are you will stay there. This isn’t 1950 anymore.  The soul of our country has changed, and not for the better. 

@"purplefaithful" said:

@"AGRforever" said:

Below is everything you'd ever care to know about automobile inflation and it touches on wage growth.  Automobiles are fascinating in the topic of inflation.  Just think of what automobile makers are up against.  They've had increased labor cost, increased raw material cost, increased/more costly emission standards, safety standards and on and on and yet they've been able to keep the car affordable to the middle class because they HAVE TO.  They must have cars remain affordable because if they don't they wont have a customer base to sell them to. 

http://www.freeby50.com/2008/11/history-of-new-car-costs-and-average.html

 Lots of dark clouds in the auto industry these days...Slowing economy in China etc...Ford in particular is having a very difficult time:

Ford debt has been downgraded to junk
Frankfurt, Germany (CNN Business)Moody's downgraded Ford's credit to junk Monday evening. It said the automaker faces considerable business challenges, and its poor financial performance badly positions Ford to take on its planned $11 billion restructuring

https://www.cnn.com/2019/09/10/business/ford-downgrade-junk/index.html

@"AGRforever" said:

@"purplefaithful" said:

@"AGRforever" said:

Below is everything you'd ever care to know about automobile inflation and it touches on wage growth.  Automobiles are fascinating in the topic of inflation.  Just think of what automobile makers are up against.  They've had increased labor cost, increased raw material cost, increased/more costly emission standards, safety standards and on and on and yet they've been able to keep the car affordable to the middle class because they HAVE TO.  They must have cars remain affordable because if they don't they wont have a customer base to sell them to. 

http://www.freeby50.com/2008/11/history-of-new-car-costs-and-average.html

 Lots of dark clouds in the auto industry these days...Slowing economy in China etc...Ford in particular is having a very difficult time:

Ford debt has been downgraded to junk
Frankfurt, Germany (CNN Business)Moody's downgraded Ford's credit to junk Monday evening. It said the automaker faces considerable business challenges, and its poor financial performance badly positions Ford to take on its planned $11 billion restructuring

https://www.cnn.com/2019/09/10/business/ford-downgrade-junk/index.html

One has to wonder what is pushing this.  Domestically Household debt service ratio/disposable income is at all time lows. Unemployment is at all time lows.  Is it the lack of car buying by millennials? 

Motor vehicle consumption/GDP peaked (post great recession) in 2017 and has been trending downward. 

Did we all buy our cars that last +10 years already and thus aren't buying them now?  I know we replaced 2 of 3.  One in 16 and one is 17.  The next replacement hopefully wont happen until 21 or 22??

@"JimmyinSD" said:

@"purplefaithful" said: 5,4,3,2,1...

This is headed straight to sensitive topics by noon lol!

this really shouldnt become political,  because neither party is immune to criticism on this matter..... of course it will become political because both parties know that its a hot potato so they both pretend to be the "one" that is giving a shit about fixing these issues.

glaad i grajuated from kollage when i did

Best gift my wife and I could give our son was a debt-free college education: he won't have to deal with that financial anchor. Not everyone can do that, I know,  and I do feel for these kids that are saddled with that kind of debt, specifically if they don't graduate into higher paying jobs. 

@"StickyBun" said: Best gift my wife and I could give our son was a debt-free college education: he won't have to deal with that financial anchor. Not everyone can do that, I know,  and I do feel for these kids that are saddled with that kind of debt, specifically if they don't graduate into higher paying jobs. 

The reason college cost has exploded is because the government (not one party or the other) (high school admin) told everyone for the past +30 years they had to go to college or they were stupid.  Then we gave these same students UNLIMITED access to funds guaranteed by none other then .gov.  Of course the colleges are going to increase in cost when they have an endless increase in students with out a clue what they're actually paying for when they sign on the dotted line.  Now days a 4 year degree is nothing more then a hunting licensee.  You have a license to hunt for a job.  Most wont land that big buck, they're going to get some one because the job market it flooded with a million other kids with the same BS business degree.

I'd love to give my kids debt free college and our career trajectory "probably" will allow us to do so but by the time my 8 year old is there what is it going to cost?  Double?  Triple?  Quadruple today?  When is enough enough when it comes to cost?
Out local D1 university can't stop buying land and building buildings because they're so flush with cash they don't care and we're a little school in TN tech.  They're actually competing with the medical industry here because both have snatched up all the real estate between each other and they're now fighting for it. 

@"Vanguard83" said: glaad i grajuated from kollage when i did

Toga Toga Toga!!!!!

@"AGRforever" said:

@"StickyBun" said: Best gift my wife and I could give our son was a debt-free college education: he won't have to deal with that financial anchor. Not everyone can do that, I know,  and I do feel for these kids that are saddled with that kind of debt, specifically if they don't graduate into higher paying jobs. 

The reason college cost has exploded is because the government (not one party or the other) (high school admin) told everyone for the past +30 years they had to go to college or they were stupid.  Then we gave these same students UNLIMITED access to funds guaranteed by none other then .gov.  Of course the colleges are going to increase in cost when they have an endless increase in students with out a clue what they're actually paying for when they sign on the dotted line.  Now days a 4 year degree is nothing more then a hunting licensee.  You have a license to hunt for a job.  Most wont land that big buck, they're going to get some one because the job market it flooded with a million other kids with the same BS business degree.

I'd love to give my kids debt free college and our career trajectory "probably" will allow us to do so but by the time my 8 year old is there what is it going to cost?  Double?  Triple?  Quadruple today?  When is enough enough when it comes to cost?
Out local D1 university can't stop buying land and building buildings because they're so flush with cash they don't care and we're a little school in TN tech.  They're actually competing with the medical industry here because both have snatched up all the real estate between each other and they're now fighting for it. 

@"StickyBun" said: Best gift my wife and I could give our son was a debt-free college education: he won't have to deal with that financial anchor. Not everyone can do that, I know,  and I do feel for these kids that are saddled with that kind of debt, specifically if they don't graduate into higher paying jobs. 

we've done the same thing..  although I did tell my kids I wasnt paying for dreams.  I offered them both a degree in a field that they were interested in as long as that field showed both need and  decent compensation.  My daughter chose health care and is an RN making over 50k a year less than 6 months out, and my son chose the trades and is working in the refrigeration and HVAC industry,  neither of them will ever make 6 figures with these degrees,  but they are both somewhat recession proof and not likely to be replaced by technology any time soon.  I also told them both out of HS that they dont have to make a career out of the education that I pay for,  but it will provide them a decent living while they work on what ever other degrees they may choose to pursue.

A college degree and a half a beef annually... what else could a kid want?

Car prices are absurd. 

People should boycott buying new until they fix the bullshit.  

I am thankful that my daughter has relatively low debt finishing her bachelor degree and my son gets a free ride at USNA. 

Our monetary system is debt based.  By definition, we have to become more
indebted over time, either us as individuals, us as corporations, or us as
governments.  Some times, some of the
groups look better than others, but overall someone has to be going into debt
to create the new money needed to pay off the interests on the older debts.  Every generation will be more indebted than
the last.  It is mathematically built
into the fractional reserve banking system.

The only way out of this predicament is to overhaul our
currency to eliminate charging interest on money-creation.