Ask HN: What is really wrong with the US economy, really? • Hacker News Board

Re: Ask HN: What is really wrong with the US economy, really?

#121

Post by mikeyouse » Fri, Feb 28, 2014, 1:07 AM UTC

dangrossman wrote: post #83

mikeyouse wrote: post #67

Earlier quoted context omitted.

1) Those are false choices. If rent is $2,000/month, a mortgage would be far more than $1,500. Just an example, my rent is near $2k in SF, an equivalent sized unit on my block just sold for $700k. If you could put 20% down (just save $140,000!), a 30-year mortgage would be $3,500/month -- 75% more than renting. 2) Get a new healthcare plan through Healthcare.gov. The out-of-pocket maximum is $12,700 for a family plan…

> If rent is $2,000/month, a mortgage would be far more than that Typically, the rent is covering an existing mortgage + taxes + insurance + maintenance + profit. If the mortgage were higher than the rent, the building owner wouldn't be making any money renting it out.

Admittedly, lessons from the SF housing market aren't broadly applicable, but due to rent control, the booming home prices, and bizarre property tax rules, it's much cheaper to rent.

Re: Ask HN: What is really wrong with the US economy, really?

#122

Post by giantrobothead » Fri, Feb 28, 2014, 1:15 AM UTC

kevingadd wrote: post #68

giantrobothead wrote: post #35

Earlier quoted context omitted.

Hey, I'm an old(er) guy and I think 110K is a lot of money.

It totally is a lot of money. Unfortunately, everything seems to cost a lot of money these days... Ten years ago I wouldn't have believed you if you told me I'd be spending nearly $10k a year just to get adequate health care, or over $20k a year just to have a reasonable place to live. I was thrilled when my first salaried job paid $35k/year, and couldn't understand why that barely covered my expenses! $35000 is a lo…

For the past few years, I've managed to earn more than I've spent, and have put a good portion of that money in savings. If I should lose my job, I've got a significant cushion to survive on.

110K would make for a bigger cushion, though.

Re: Ask HN: What is really wrong with the US economy, really?

#123

Post by maxerickson » Fri, Feb 28, 2014, 1:21 AM UTC

Mz wrote: post #112

maxerickson wrote: post #101

Earlier quoted context omitted.

Energy cost and availability are a real issue, it's just that if you look backwards, there isn't much of story about where we are right now. (I would take this a step further and say that $4 is still cheap for gasoline; it isn't clear that the much higher fuel prices in Europe have been bad economically. And I'm someone who got to start driving in the '90s when prices fell below a dollar)

I have gone back and checked your links in your second reply. The second one indicates we are now spending between 4% and 6% of total household income on gasoline, which is double or triple what it was in 1979 at 2% of total household income. That's one helluva a jump. And the residential energy link you gave: This is the headline: "Lower residential energy use reduces home energy expenditures as share of household i…

You are reading the graph incorrectly. The values for percent of mean income are in the line graph and shown on the right axes. So in 1979, 5%, 2012, 4%.

It's not a very good measure, it isn't worth analyzing it deeply, but (to me anyway), it doesn't point to a massive increase in energy spending.

Re: Ask HN: What is really wrong with the US economy, really?

#124

Post by maxerickson » Fri, Feb 28, 2014, 1:28 AM UTC

vardump wrote: post #117

maxerickson wrote: post #101

Earlier quoted context omitted.

Energy cost and availability are a real issue, it's just that if you look backwards, there isn't much of story about where we are right now. (I would take this a step further and say that $4 is still cheap for gasoline; it isn't clear that the much higher fuel prices in Europe have been bad economically. And I'm someone who got to start driving in the '90s when prices fell below a dollar)

Concentrating blindly on the gasoline price is misleading. Consider our environment: We largely wear products made directly or indirectly out of fossil fuels. We eat food grown using synthetic fertilizers made out of natural gas. That's also where the plastic in the keyboard you're typing on came from. Not to mention the rest of your computer which probably took at least a barrel of oil to produce from mining the ore…

I'm not denying peak oil, I'm arguing that oil prices (and other energy prices) have not gone up so much in recent decades that they have smashed the economy. They must impact the economy, but I sure would point to things like increased size of the domestic labor force, the skill hoisting of the global labor force and automation before I would point to energy prices. And then things like expectations of skilled labor in the U.S. have changed substantially.

Re: Ask HN: What is really wrong with the US economy, really?

#125

Post by benched » Fri, Feb 28, 2014, 1:38 AM UTC

TepidSolarsoul wrote: post #59

benched wrote: post #19

Earlier quoted context omitted.

I'd say effectively nowhere. My lifestyle is literally identical to what it was 15 years ago when I was just starting out. It honestly feels like the goalposts keep moving. I am doing better than my parents, who were poor. I am doing worse than my grandparents, who had 8th grade educations.

I can't help but feel like you're grossly exaggerating your situation. Convert your rent to a mortgage payment, and lock in $1,500 a month payments (probably around what you are paying in rent right now). The housing prices are only going to go up in Seattle as it becomes more of a tech city (Amazon is building an entire new office in Belltown, for example). Here's a nice (affordable on 110k) house in Seattle: http:/…

This is a good comment. Of course I've seen a lot of these Microsoft effects on the area first-hand (I worked there for 5 years, well after that was any big advantage, of course). Once again though, I am not trying to say that I have it that bad. What I'm saying is that if my own situation qualifies as doing really well, then there is something very fucked up on a large scale.

Re: Ask HN: What is really wrong with the US economy, really?

#126

Post by mikeash » Fri, Feb 28, 2014, 2:07 AM UTC

Mz wrote: post #25

mikeash wrote: post #23

Where is all your money going? Living in a studio apartment making $110k, you should be able to save thousands of dollars a month. Sounds like a budgeting problem.

He says: "I live in a studio apartment near Seattle. ... My biggest expenses in the last couple years have been rent, medical, and dental in that order." Medical and dental can be really pricy. So can big city rents. Last I checked, an SRO in San Francisco was $1000/mo or more. Most areas, higher average income correlates quite closely to higher local living expenses. So I wouldn't be so quick to judge.

I don't think I'm judging, but rather asking and proposing/guessing.

Let's say his rent is $1,000/month, if that's the biggest expense then rent, medical, and dental together won't be more than $3,000/month. That's a ton of money for basic expenses, but easily doable on $110k/year with plenty left over.

Re: Ask HN: What is really wrong with the US economy, really?

#127

Post by mikeash » Fri, Feb 28, 2014, 2:09 AM UTC

kevingadd wrote: post #38

mikeash wrote: post #23

Where is all your money going? Living in a studio apartment making $110k, you should be able to save thousands of dollars a month. Sounds like a budgeting problem.

Seattle, mid-to-late thirties = near-constantly increasing rents and increasing health expenses. If he's actually in proper Seattle and not the surrounding area, the nearest affordable housing might be dozens of miles away from where he works, increasing his transit costs considerably. Health insurance keeps getting more expensive, and if his plan isn't great he might be shelling out thousands of dollars a year to hi…

It's difficult to see that point when the example given is so out of the ordinary. It's rare to be unable to save substantially on a six-figure salary while single. Whatever causes him to be unable to do so, it's unusual, and thus a bad place to start if you want to discuss general economic woes.

Re: Ask HN: What is really wrong with the US economy, really?

#128

Post by vardump » Fri, Feb 28, 2014, 2:20 AM UTC

maxerickson wrote: post #124

vardump wrote: post #117

Earlier quoted context omitted.

Concentrating blindly on the gasoline price is misleading. Consider our environment: We largely wear products made directly or indirectly out of fossil fuels. We eat food grown using synthetic fertilizers made out of natural gas. That's also where the plastic in the keyboard you're typing on came from. Not to mention the rest of your computer which probably took at least a barrel of oil to produce from mining the ore…

I'm not denying peak oil, I'm arguing that oil prices (and other energy prices) have not gone up so much in recent decades that they have smashed the economy. They must impact the economy, but I sure would point to things like increased size of the domestic labor force, the skill hoisting of the global labor force and automation before I would point to energy prices. And then things like expectations of skilled labor…

I guess we'll see soon enough. I think oil price is the real reason behind the economic trouble.

I think we're in for several more 2008-style stair step economic crashes over a longer period of time, with little growth between them. At least until we can truly replace oil as a transportable high density energy source. (Or until political and societal systems break down.)

Hopefully we get some major new energy source, like cheap fusion or space based generation, like orbital mass production of photovoltaics panels and beaming it back to earth in microwaves. Given sufficient energy, we could just synthesize the liquid fuels we need.

There's unfortunately a low chance we get this magic energy source in time, but let's hope for the best.

Re: Ask HN: What is really wrong with the US economy, really?

#129

Post by wturner » Fri, Feb 28, 2014, 2:31 AM UTC

Thanks for sharing. I'm in my late thirties and I currently have no job. I am waiting to hear back from a 'Kelly' temp agency employee (who was high as shit when he spoke with me) for a job assembling plastic parts for $8. This might amount to less than $150 take home as I might have to take a cab home because the buses don't run after the shift ends. I rent a room in a trailer with no door which had a leaky roof until we put a tarp over it. Additionally my mother has emphysema, works 7 days a week and I am powerless to do anything for her.

I'm convinced that all the geek analyzing of 'structural' economic problems are partially in vain. I think human beings are inherently social animals, thus until the financial moguls, billionaires, the Mark Zuckerbergs and Larry Pages of the world literally feel that people like me have the power to kill them.... then nothing will change.This is the same carnal belief that lead to our democratic social order. Even if you believe in things like a 'living wage' , without the support from the wealthy it won't happen. Those people like most don't do shit unless their is something in it for them, but people like me have no leverage other than being semi suicidal and wanting to kill something.

Voting doesn't work and the government doesn't care.

I really don't think it's too complicated. If 5 U.S. billionaires were murdered under the banner of a living wage for all Americans at least a more honest discussion would ensue among circles that have social clout.

So that's my synopsis.

Enjoy life and.. Have fun!

Re: Ask HN: What is really wrong with the US economy, really?

#130

Post by esw » Fri, Feb 28, 2014, 3:59 AM UTC

jandrewrogers wrote: post #89

Something does not add up here or, at the very least, I am missing something important. I live in Seattle proper, rent an apartment that is relatively expensive by Seattle standards, have a ten year old car, no dependents, etc and have lived that way on a similar income. I am not frugal but I also don't buy much "stuff" which probably has the same effect as being frugal. It would be hard to argue that my life is not…

>How much do you think you should be saving every year such that saving tens of thousands every year is not enough?

OP may not have always had such a high-paying gig. I lost years of potential retirement savings working for under-funded startups (including my own). I'm making good money now and put a decent amount of money into retirement and savings, but I do feel like I'm really far behind compared to similarly-aged friends who stayed in the corporate track.