Everyone has at least one relative in the family that is a “glass half empty” kind of person. You know the kind: cynical, pessimistic about the future and usually the Debbie Downer of the party. We’ll call them “Uncle Tim”. While most people are inclined to discuss frivolous and banal topics such as their kid’s soccer team or office fantasy baseball league, Uncle Tim sits at the edge of the patio table interjecting barbs about how the economy is on the brink of collapse, rent is too damn high and the bankers and politicians are to blame for the whole mess. What a buzz kill, right?
According to a recent Zillow report, old Uncle Tim might’ve been on to something. The report shows that Americans are spending the highest percentage of their annual income in 30 years on their monthly rent. High rent isn’t just a problem for people living in New York City or Los Angeles anymore.
Historically in the United States, the median household would need to spend 24.9 percent of their income to afford the rent on the median property. Currently that number stands at 29.6 percent. – Zillow
Renters nationwide are spending nearly 19 percent more of their incomes on rent than they did in the pre-bubble period between 1985-2000. To afford rent in average homes located in cities such as San Francisco, Miami and Los Angeles, the average renter would need to spend over 40 percent of their income.
What this boils down to is one, obvious conclusion: Americans are generally paying more for everything. The cost of living continues to raise while wages remain stagnant. Between 2000 and 2012, the median household income dropped by 6.6 percent, from $55,030 in 2000 to $51,371 in 2012. The flip side of this is a 6 percent rise in average apartment rentals nationwide.
I admit, I’m not the most qualified economic commentator, but you don’t need to be to see something isn’t right. Many “qualified” commentators speculate one solution is for the government to offer more affordable housing for communities. This, of course, would require more government spending to subsidize social services. Highly improbable on a federal level-especially considering the national deficit only grows and never shrinks.
All suggestions of placing more control in the hands of government sounds great…right? It gives you a warm, fuzzy feeling on the inside to know there’s an elected official, sitting at a desk doing their best to make sure Joe Schmo America’s best interests are at hand, even if the evidence is au contraire. One has to look no further than the Affordable Care Act boondoggle as evidence of that.
Ironically enough, the ACA pulls at the middle-class from another direction–treating it like a malleable Stretch Armstong doll from the 90s. If you pull hard enough, green goo will bleed from the doll. The green of course being a metaphor for disposable income the middle-class struggle to keep in their wallet. It’s even harder when the government redefines what a full-time work week is, with many businesses demoting staff from 40-hour per week to 30 to keep in line with the healthcare nonsense.
A conspicuous remedy to the woes of our Republic you don’t hear coming out of Washington D.C. is talk of building a strong working base in America. Without a solid core of job creation in the country, there will never be a strong tax base in which to launch a recovery.
With 90 million Americans unemployed and on welfare, unemployment, and public assistance, the government constantly has to borrow, print and essentially counterfeit money to pay for it. I laugh when paying for a product with a $100 bill and the clerk checks to make sure it’s “real” and not “fake” money. My retort is usually “isn’t it all fake?” which is greeted with a nervous smile like I sprouted another head.
Our friends at the Federal Reserve bank have plenty of forearm strength from holding down the “print” button at the presses the past several years with its endless “quantitative easing” strategy (inflation). In 2012 alone, the Fed pumped $40 billion per month into headquarters of the biggest banks in America–Bank of America, CitiBank, Goldman Sachs, Wells Fargo, Morgan Stanley, JP Morgan Chase, etc. Make it rain, they say.
The money goes from the Fed, to the big banks and ends up in the stock market in order to inflate asset values. This pushes the Dow Jones industrial average and S&P up, but doesn’t increase hiring and consumer spending like they like to have us believe. We could talk about NAFTA alone and how it gutted the American industrial hiring base through outsourcing, but that’s for another day.
So, when does this start painting a rosier portrait for the people who are employed and pay taxes? Unfortunately, prosperity for you and me doesn’t look to be coming down the road anytime soon. Run away inflation has happened many times throughout history. When a country spends more than it produces, the results are costly.
Maybe we should put talk of the NFL draft on the shelf and start listening to Uncle Tim so we the people can figure out how to heal the nation and fire the engines before it’s too late. If it isn’t already.