Winter In America Gets Colder – Why We Choose Poverty

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Ilargi: Winter In America Gets Colder – Why We Choose Poverty
By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth, Cross posted from Automatic Earth


Broadly speaking, if we look at what has happened to the world’s rich economies from 1945 to today, we can say that in the first 30 years, 1945-1975, real wealth – as expressed in standard of living – across the board, for the vast majority of people, increased.

Over the next 30 years, 1975-2005, the standard of living still seemed to rise, but if we look behind the numbers and between the lines, we see that much of the wealth increase over that period is illusional, because it was increasingly based on credit, i.e. it was borrowed from the future, while at the same time, the costs of “really big ticket” items such as education and health care were moved away from governments and towards citizens, where they began an unstoppable ascent (and we paid for them with credit).

There are umpteen different ways to define standard of living, but it seems quite reasonable to say that, as societies, we hit the top of our wealth in the mid to late 1970?s, although valid arguments can be made for an even earlier date.

And then from about 2005 onwards, we have entered payback time. A fast increasing part of our budgets started to go towards continually rising costs for education, health care etc., AND interest payments on what we borrowed in the previous three decades AND interest payments on what we borrowed to both make those payments and keep the illusion of (increasing) wealth alive. In a glaring example, housing prices went up not because people got richer, but because they could borrow more. ....................(more)

The complete piece is at: http://www.nakedcapitalism.com/2013/10/ilargi-winter-in-america-gets-colder-why-we-choose-poverty.html#gJpceYCEYyTtDgRp.99

[PETRUS]

1. 'bout time for a kick, I'd say