Well, we had a good ol' chat about student loan debt over the weekend. You all can keep talking about it. I'm leaving the thread open. Here are some links to recent relevant articles and reports:
Income inequality between age groups increased in the past year. Experts point to the declining value of homes and the rise in college debt.
The typical U.S. household headed by a person age 65 or older has a net worth 47 times greater than a household headed by someone under 35, according to an analysis of census data released Monday.
While people typically accumulate assets as they age, this wealth gap is now more than double what it was in 2005 and nearly five times the 10-to-1 disparity a quarter-century ago, after adjusting for inflation.
Obama is doing what he should have done several years ago. Instead of giving the states a blank check and then letting them use the stimulus money to fill in the gaps in the budget. He wants to create jobs by fixing the aging infrastructure. We need WPA programs, not state budget fillers! Now, if he can only get this plan through Congress.
In order to save money, state and local governments are filling jobs with contract workers, instead of full time workers.
Apt. 11d 
The raw numbers in that article are scary for both the older and younger age groups. The median household headed by someone under age 35 is basically broke (net worth $3,700) and the median household headed by someone 65 and over better have either somebody in the workforce or somebody who retired with a regular pension.
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What’s frightening is that the median net worth for households over 65 is only $170k. That’s not a lot of money for a “retirement” that could last decades especially when a lot of that net worth is the illiquid value of housing, as a I imagine it is for many retirees.
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Or what MH said.
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“What’s frightening is that the median net worth for households over 65 is only $170k. That’s not a lot of money for a “retirement” that could last decades especially when a lot of that net worth is the illiquid value of housing, as a I imagine it is for many retirees.”
As a matter of fact, that is almost precisely the value of the median US home today, so yeah, that’s how I would bet.
Of course, I read a lot of sad tales of woe of 65-year-olds who bought their homes when they were dirt cheap, kept on doing cash-out refinances as value rose, and are losing their homes today. So a 65-year-old today who still has their home equity today is in a relatively good position.
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This has the taste of junk data to me, but you can never be sure. First, the “47 times greater” figure is based on the fact that young households have a net work close to zero, so the change in that young-person number is going to dominate the calculation.
Give every household a check for $1,000, and you haven’t changes the underlying truths, but you’ve cut the rate from “47 times greater” to “37 times greater.” Cut the net worth of the young some more, and the number goes quickly from “47” to “1 gazillion.”
Also, a “household led by a person 65 or older” is not a 65 year old married couple planning for 20+ years of joint retirement. It is the average of them and the 86 year old whose kids are trying to sell her assets and wait out the lookback period so she can qualify for Medicaid for the nursing home. I bet that “household led by a 65 year old (and no older)” is more than twice the assets of the group as a whole.
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I agree that the “47 times greater” isn’t a very good way to present the information, but that hardly makes it junk data. That just means some reporter doesn’t understand the best way to present certain types of number.
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MH — I think it’s my general frustration that I am generally a good Democrat, and I think that there needs to be more efforts on job creation, and I agree that the tax system should be skewed more to tax higher income people, I really don’t care a bit about “income inequality” at all, think it’s a horrible lens to view the problem, and get even more frustrated when articles like this feel that they have to shoehorn even less relevant instances as examples of “inequality” as if that was somehow the only important thing to look at.
I my view, the rich have done and will do as good or better under more progressive economic policies. I care about improving the lot of the poor and (to a lesser degree) the middle class, and if those lines are moving in the right direction, I couldn’t care less if the rich are getting rich faster, because the wealthier poor people are now buying more stuff from capitalist fat cats, or what percent of the pie everyone has.
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I don’t think it works like that, thought I used to. This kind of thing is good evidence that income inequality have reached the point where the middle class can’t replace itself.
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For better or worse, WPA-type programs really aren’t feasible these days. Municipal work forces will complain if they are displaced by low-wage workers, environmentalists will try to stop most new construction projects, local contractors will object to government-constructed (as opposed to government-financed) projects, etc. It simply wouldn’t be possible to gather up a bunch of unemployed ex-sergeants as foremen, somee of out-of-work engineers, and a big bunch of men with shovels and build a riverfront esplanade in a major city in the next six months.
That applies to infrastructure projects. The WPA also hired out-of-work college graduates for things like local archive transcription and indexing. We could do that with unemployed Ph.D.’s today, maybe. Except they’d probably insist on producing tracts on phallocratic hegemonism is early Essex County instead of transcripts of early Essex County land records.
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“I read a lot of sad tales of woe of 65-year-olds who bought their homes when they were dirt cheap, kept on doing cash-out refinances as value rose, and are losing their homes today.”
So, you know my dad? Not the best when it came to finances. For the last few years of his life, we didn’t want to intervene because he couldn’t walk, and being able to control the finances was the only thing he really could do and feel good about from his bed. But we were gnashing our teeth there at the end, wondering what we were supposed to do with my mom. Right now we have her in the house still, getting by, but she has zero equity.
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“For better or worse, WPA-type programs really aren’t feasible these days.”
I don’t agree. True, all the problems you mention will have to be faced. But, they can be addressed — municipal work forces will complain if they are displaced, but not if they’re augmented by them, and the point of a works program wouldn’t have to do it at “low wages.” There are projects that environmentalists will not want to stop and others that they won’t be able to stop.
I have an ex-army base park 5 minutes from my house that is dying for the WPA. The group you describe could build something glorious in the next six months.
I think the problem isn’t that we couldn’t do it, but that I think we have to seriously consider the arguments that temporary stimulus measures do not correct or right economies in the way that we hope they would. I love the WPA benches and transcripts. I would love to see the ARRA versions of them live for my grandchildren’s generation. But, I don’t believe that the WPA projects fixed the structurally problems in the world economy then. I think there was a transition happening then in the way the world economy was structured, and I think there’s one happening now and that the solutions are not simple.
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I’ve always thought that a license should be required to use ratios in any report.
The data here that I think is relevant is the 4 numbers you can deduce:
year 1984 2010 (?)
under 35 $5000 $3500
over 65 $120,000 $170,000
Numbers rounded. My guess is that the numbers for the under 35’s reflect the lengthening of “childhood”, reduced rates of home ownership, as well as student loan debt. For the over 65’s, it is indeed worrisome that the large scale abandonment of fixed pensions has resulted in only 50K or so more of savings.
And, yes, for both of these groups, we’d expect that the trends are quite different for the 65-70 year olds v the 85-90 year olds and for the 20-35 v 30-35 year olds. There’s a difference in how those gorupings balance the median numbers, though, since the groups are probably about the same size for the 20-35’s, but quite different for the 65-90’s.
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BJ’s comment got me wondering what a ‘household’ is. If this follows the standard census definition, the 20-35 group excludes those in group housing (i.e. dorms) as well as those living with their parents.
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“…build a riverfront esplanade in a major city in the next six months.”
That’s funny–the San Antonio Riverwalk was a WPA project, and one that I feel rather warmly toward. Were you thinking of that one specifically?
http://en.wikipedia.org/wiki/San_Antonio_River_Walk
I’m really glad it’s there, but I think it’s worth noting that they only got it underway in 1939, which was pretty late in the day. Heaven knows how long it would take us to put that sort of thing together these days.
“So, you know my dad?”
That’s a bummer, and unfortunately a very common situation. Was your mom signing off on this stuff to humor him when he was sick?
The average old person is very lucky to make it to retirement with their mortgage paid off and their home equity intact, and that’s not nearly enough to face retirement with.
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“…municipal work forces will complain if they are displaced, but not if they’re augmented by them…”
Hee hee. I’d almost agree to the experiment, just to see the trench warfare that would break out. By the time it was over, your little park would cost as much as a fighter plane. Use city money and build it yourselves–it will be so much cheaper.
More seriously, I realize there is such a thing as Americorps (low paid, entry level temporary federal workers), but they don’t build much stuff as far as I know.
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They are fixing some of it up now, but the lower levels of Schenley Park have trails where you feel like you’re striding past ancient ruins until you see the WPA markings on the bridges.
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Here’s a thought. Approve the shovel ready $13 billion Keystone pipeline project It would create approximately 20,000 construction jobs. As an added bonus, it would increase the supply of “ethical oil” to our nation. Energy security is national security.
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And run right over the aquifer that irrigates my family’s land with absolutely no benefit to them.
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“I have an ex-army base park 5 minutes from my house that is dying for the WPA. The group you describe could build something glorious in the next six months.”
I guarantee that, no matter what is proposed, many people will oppose it, and they will find judicial and administrative avenues to delay if not permanently derail it. The chances of doing something in the next six months, under the legal regime currently in effect, are essentially zero.
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“The chances of doing something in the next six months, under the legal regime currently in effect, are essentially zero.”
My relatives in Western WA who plan to put up some tourist cabins, a utility building and so forth are still getting permit paperwork back after two years of effort. They have been able to clear some trees and put in some road, but that’s all. Hopefully, the actual construction can happen next summer, which will presumably be three years into the process. It will only be able to make money the summer after that, four years into the process. (Times here are approximate, but it has taken a very long time.)
And that’s why a lot of people get ticked off when they hear accusations that the private sector is sitting on money and that all we need is one more big gush of government stimulus money. The way we do things today in the US is the economic equivalent of participating in the Olympic 100 meter, but choosing to do so while hopping forward in a potato sack.
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Here’s an article about the difficulty of doing big government stuff.
“Across the length of the Central Valley, the bullet train as drawn would destroy churches, schools, private homes, shelters for low-income people, animal processing plants, warehouses, banks, medical offices, auto parts stores, factories, farm fields, mobile home parks, apartment buildings and much else as it cuts through the richest agricultural belt in the nation and through some of the most depressed cities in California.
“Although the potential for such disruption was understood in general terms when the project began 15 years ago, the reality is only now beginning to sink in.”
Fifteen freaking years ago!!!!
http://www.latimes.com/news/local/la-me-bullet-train-20111023,0,2248881.story
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“By the time it was over, your little park would cost as much as a fighter plane.”
Hey, that would be perfectly fine with me. Even if all they built was a perfectly beautiful bench. Also, it’s a very big park, so there’s a lot of scope for the imagination.
Since I live near the park, I’m intimately familiar with all the nimbism and conflicting interests that would come into play. I still think that if the Feds gave us 113 million dollars that we could build something perfectly grand that would last for the ages.
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They moved a river in Providence and reorganized the whole downtown in less than 10 years. Apparently, it cost $40 million, most of it paid for by the federal government, according to Mike Stanton, whose words I just paraphrased really badly.
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