An economic update; How valuable is the 1971 middle-class lifestyle in today’s dollars?

The early-1970s middle-class lifestyle is now impossible to achieve for most people

While inflation continues to eat away at the typical household’s wealth, its long-term ramifications have been devastating. Don’t wait for a collapse, society’s been collapsing for decades.

Recall my economic analysis from last October, titled The new world order and how it destroyed the middle-class lifestyle. In that analysis, I estimated how much a household needed to be worth in 2021 dollars in order to enjoy the typical 1971 middle-class lifestyle.

I determined that last year’s average household with children needed at least $1 million in balance sheet wealth to enjoy the typical middle-class lifestyle of the early 1970s. Read further to find out what the updated value has become.

Real growth (after inflation); Home prices continue to move further out of reach for the typical household. Good luck waiting for a reversion to the mean

You may think that $1 million is excessive, so let’s consider the dynamics of the early 1970s middle-class household and the benefits they took for granted;

  • A single wage earner was usually enough to cover all expenses
  • These families could afford to have more than a couple children
  • Medical costs were much more reasonable and health insurance was less expensive
  • College tuition was much more affordable, and were not subsidized with student loans
  • Social Security benefits were much higher in real spending power
  • Employers usually provided defined benefit plans and pensions for employee retirement
  • House prices were much lower when compared to household incomes.

In 2010, house prices were 2.68x median household income. As of the beginning of 2022, this number is close to about 4x, and should be higher now. In 1970, this number was about 2.00-2.05x.

Laughing at the alt-finance media; Just based on this one chart alone, there is no other nation that wishes to have their currency attain global reserve status.

The alt-media have been demoralized to think there is going to be some sort of reversion to the mean, but they are totally unable or unwilling to recognize the multi-decade secular changes to trends that have essentially collapsed the lives of the poorest 90% of the population. The US dollar has been spread far and wide, and about 80% of them have been exported to foreign lands to hide the obvious.  Those who cannot come to terms with this sobering reality will always end up on the wrong end.

I now calculate the 1971 middle-class lifestyle for 2022 to be worth about $1.11 million, and based on current trends, this year-end value should be about $1.18 million.

If you wish to enjoy the middle-class lifestyle of 1971, be prepared to have a balance sheet of about $1.2 million by the end of the year.

  • This strong balance sheet will allow you to sustain your household with one wage, so your wife doesn’t have to work,
  • It will allow your wife to stay at home to take care of your three children,
  • This amount will provide you with a financial cushion to pay the mortgage on your house,
  • You should expect to have defined contribution assets at least $550,000 by 45 years of age, which will offset the loss of purchasing power to your future SS benefits and loss of defined benefit plans,
  • Your savings will allow your children to attend college without the help of student loans, since few people back 50 years ago resorted to educational loans as financing schemes,
  • You can afford any medical expenses as healthcare costs were only a fraction of what they are today.

Why wait for society to collapse? It has been for a long time now and only those waiting for the collapse to happen have not been notified.

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19 thoughts on “An economic update; How valuable is the 1971 middle-class lifestyle in today’s dollars?

  1. The big difference between gun owners in the United States is that the second amendment is crystal clear and concise. There is no ambiguity, yet the synagogue of Satan has tried desperately to overturn it. That’s why in countries like New Zealand and Canada the Federal government can unilaterally outlaw guns. That’s impossible here in the United states. Imagine if that talentless PC hack, Kamela Harris, becomes president. She’s still essentially powerless to restrict gun ownership from the Federal level. She can drag white people through the mud all she wants and she still would not be able to execute anything of legal standing. Funny thing is she’s married to a white guy.

    The more that the federal government tries to restrict gun ownership, the more guns that are sold. That’s the amazing thing about the 10th amendment of the constitution. It works hand in glove with the second amendment.

    The more of these mass shootings that take place, the more states that sign laws for constitutional carry.

    West Virginia is constitutional carry and if it wasn’t, imagine the bloodbath that would have taken place in Charleston by that black man.

  2. Even the fire and brimstone preachers are a bunch of one-worlders, yet they don’t even know it.

    Since no one in the church understands the monetary system and economics anymore, they are unable to grasp the relationships that are all interconnected.

  3. It’s no secret about it, this needs to happen as the sides are drawn going into war. This is done intentionally.
    ———-

    US Rivals Shunning Dollar Lifts Yuan-Ruble Trading by 1,067% – Bloomberg News

    https://www.bloomberg.com/news/articles/2022-05-30/yuan-ruble-trading-explodes-as-america-s-rivals-rebuff-dollar

    (Bloomberg) — The emerging multi-polar world now includes foreign-exchange markets — as China and Russia, the biggest challengers to U.S. supremacy, boost direct trading between their currencies.

    Monthly volumes on the ruble-yuan pair have surged 1,067% to almost $4 billion since the start of the war in Ukraine as the two nations seek to reduce their reliance on the dollar and boost bilateral trade to overcome current and potential U.S sanctions. The spike coincides with a rally in the ruble to a five-year high against the yuan.

    That’s a sign Russians are increasingly turning to Chinese goods to replace stalled Western imports and international brands that have vanished from store shelves. For China, it creates the latest boost for the internationalization of the yuan just when growing tensions with the U.S. are slowing that process.

    “The main players in the yuan-ruble market are corporations and banks, but there is also a growing interest from retail investors,” said Yuri Popov, a currency and rates strategist at Sberbank CIB JSC. “The volume on the Moscow Exchange’s spot market has surged. This is due to sanctions concerns, as well as the intentions of Russia and China to encourage the usage of national currencies in bilateral trade.”

  4. Here are some anecdotal observations regarding inflation in home improvement. I just took delivery on some kitchen appliances and there were huge differences between 5 months ago and a year ago with last week.

    Last year, I took delivery of two sets of appliances and I had all sorts of problems getting delivery. In the past week I took delivery on another set and the prices were more appealing and delivery was quick. Availability was there this time around. I’m noticing price increases at home Depot and Lowe’s are slowing drastically.

    Of course at the supermarkets, I haven’t noticed the same phenomena yet. So it’s loosened up somewhat, there are still big gaps in the shelves and though prices haven’t been rising as fast as in the past couple years, they are still rising.

    1. Euro area CPI data come in hot for the month. Higher than expected.

      Canadians may outlaw handguns? Ouch. Come to America, where we can defend ourselves. Trudeau says there’s no reason to own handguns anymore. Sounds like Lenin after the Russian revolution.

      1. Yes, they are coming for our guns in Canada. They have been for a long time, handguns have been heavily restricted here for decades, almost nobody has them (legally). Most people are surprised and already thought they were illegal.

        I still think confiscation is a long way off in the US because it isn’t yet complete here in Canada.

        If you can still acquire a handgun in the States with minimum hassle then it looks like it will be quite a while before they are gone. Just my opinion, which along with $2.50 will get you a large coffee at Tim Hortons.

  5. A subscriber in an email asked me why I think stocks and asset prices will move higher.

    Here is the answer.

    In order for the NWO engineers to bring their multicultural global kingdom to fruition, the governments must spend trillions more to amalgamate all the world’s people together into a one-world socialist society.

    Take my word for this, the variances in IQ alone make it an impossibility according to economics. If we wish on the monkey’s paw, we can be conned by the NWO media to allow the governments to spend tens of trillions to make it happen.

    Only fools cannot see the results. This is why the rich get richer and asset prices must continue climbing.

    I can’t tell you what prices will do next month, but we can only hold down a beach ball in the water for so long.

  6. The saying you get what you pay for no longer applies, really any purchase now. I haven’t had that “the price is right” feeling in a long time.
    All these bug infested tear down houses in certain areas that are triple priced what they were pre covid. Cheap overseas made slop marked up 500% in the box stores. They put it on the clearance rack minus 60% tag prices and people think they are getting deals. Even 1991 was a year to remember as affordable compared to today.

    1. Look at the first chart on this page and my comment answering an email from a subscriber regarding asset prices and why I say they will still move higher…

      M2 is up 50% in the past 2-3 years, and it will never decline. COVID spending created these “crises” and the answers will take tens of trillions more to bring the one-world socialist amalgamated kingdom to fruition. Even the fire and brimstone pastors like Lawson will call me racist for speaking derogatorily about it.

      So, what is fair price? Based on M2 growth, what you are saying is the new fair price.

  7. Done by design, so that small real estate investors are forever shut out. It’s one less way for you and me to get ahead. There are no mistakes here.

    Overpriced, overwhelmed, over it! Landlord confessions. NBC – Episode 2

    https://youtu.be/KqMjXo_cYS0

  8. I don’t like that growth in US home values outpaces incomes chart.
    What does a 100% growth rate since 1965 mean? I can’t even read the chart or begin to understand what it means. It’s obviously designed to make the reader go OMG the house line is so much higher than the income line, without thinking about it much. Use that method to compare anything that’s increased a tiny bit against something that hasn’t, expand the y-axis to fit the page, et voila! One thing looks like its skyrocketing against the other.

    So houses are what, increasing 100% a year, and wages only 20%? In 8 years houses will be worth 256 times what they are now? Or does the chart say houses have doubled since 1965? Neither option makes any sense.

    Can you explain exactly what this crappy chart is supposed to be telling us?

    1. It’s the real growth in house prices versus the real growth in income. All it is plotting is the price growth after inflation; It’s the real growth. While wages have grown 25% in real terms, house prices have grown 125% in real terms.

      Based on the above chart as well, house prices are still cheap here in the United states when compared to other sectors such as medical care and higher education. I’ve been saying this for a long time so we need to get ready to deal with higher real estate prices in the United States forever.

  9. Blackouts Looming Over Millions Of British Households

    By Irina Slav – May 30, 2022, 11:00 AM CDT

    •Six million British households could face blackouts this winter.
    •The energy crunch that began last September has led to a major cost-of-living crisis in the UK.
    •The blackouts fall under a worst-case scenario with gas supply shortages.

    https://oilprice.com/Energy/Energy-General/Blackouts-Looming-Over-Millions-Of-British-Households.html

    As many as six million British households could face blackouts this winter in case of a gas shortage, per a Sky News report citing government modeling of energy fundamentals next heating season.

    The blackouts fall under a worst-case scenario with gas supply shortages, which would also involve limits being placed on industrial gas consumption, the report noted. The blackouts would be the result of gas supply rationing to gas-fired power plants.

    The energy crunch that began last September has led to a major cost-of-living crisis in the UK, leaving the government scrambling to find a solution while electricity bills soar and are about to soar even more this October.

    1. The Brits use way too much heating anyway. When I lived there, I got tired of arriving at work all sweaty because the bus was so hot – like so incredibly hot people would be opening windows sometimes in the middle of winter. Shops were hot, and they have these door heaters that are even hotter. I rode in buses in summer that had heaters on. It was like a sauna. They just need to cut back on heating to a reasonable level, and they might have enough to go around. Seriously.

      The houses were hot. Brits seemed to expect summer weather inside no matter the season. I got tired of having to put a coat on outside, and then sitting in an office getting too hot, as if being in Australian heat wave without A/C. It was ridiculous sometimes. Even the trains were too hot, 80-90 F (28-35 C) in them while it’s snowing outside. Of course hardly anyone had the guts to open a window, but when I did everyone approved. Totally nuts wasting all that heat for nothing! In winter the train should be cooler inside because everyone is in winter clothes. But no, there’s a temperature equality regime to match every other insane equality regime we have. Everyone needs to sweat in the bus to understand global warming or something.

  10. It’s implied here that a college education in 1971 was not necessary at the time. Our manufacturing capacity was still onshore and these jobs paid well. Now, we need a college education (indoctrination) to get ahead.

  11. We have become a nation of gamblers desperate to get back to even, but are unwilling to work for it.
    ————–

    Investors: 60% Used Borrowed Funds to Buy Their Now-Crashed Coins

    Investors who borrowed money to buy cryptocurrencies are feeling the heat now. Here’s the breakdown of how they raised the funds to buy their crypto.

    https://beincrypto.com/investors-60-used-borrowed-funds-to-buy-their-now-crashed-coins/

    A recent study has discovered that over two-thirds of cryptocurrency investors surveyed had borrowed money to make crypto purchases. Rather than using income or savings, they got into debt for their cryptocurrencies of choice

    Investors by age breakdown
    Borrowing money to buy crypto seems to be a young person’s game, with those aged 18 to 24 most likely to have borrowed money to buy their fave cryptocurrencies.

    18 – 24: 70%

    25 – 34: 64%

    35 – 44: 68.9%

    45 – 54: 62.5%

    55 – 64: 45%

    65+: 25%

    How they borrowed
    Different credit facilities have been used to fund cryptocurrency investments, with credit cards and overdrafts leading the way.

    Credit card – 35.5%

    Overdraft – 19.3%

    Personal loan – 14.6%

    Secured loan – 9%

    Payday loan – 7.6%

    Re-mortgage – 3.3%

    Holly Andrews is the Managing Director at KIS Finance. “…Some credit card providers will view this type of transaction as a cash advance, meaning a cash advance fee and higher interest rate will be applied. So, if you are thinking of making an investment into cryptocurrencies, you should only invest an amount of money that you can afford to lose and it should be funded through income and/or savings rather than a credit facility.”

    While the crypto market is volatile, many commentators are predicting the price of the mainstream cryptos to return to record highs, while others say it is a sign of global recession. Borrowing money to buy cryptocurrencies could be a good decision in the long run. Only time will tell.

  12. I suppose the only way is to not buy the system is selling. If you want a family, don’t live in trendy neighbourhoods, live in the country where real estate is cheap and you can grow and can your own food. Raising a family in a small cramped condo in urban areas seems nonsensical to me. The neighbour next door to me bought his house for 188K a year ago, and his ninth child is on the way. It’s a bit extreme, I know, but they have low lifestyle expectations and kids seem happy and well-adjusted. It’s a big old house that had been converted to a duplex at one time. Now the family uses it all but the possibility for rental income in the future is there.

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