We interrupt our romp through the funny money world...exploring the link between crooked money and crooked behavior...to give thanks for the whole funny money system.
My advice to readers is to read the book "The Housing Boom and Bust" by Dr. Thomas Sowell. There you will see a full explanation for the housing crisis that preceded the 2008 mortgage crisis. Full disclosure - the interest rate was somewhat peripheral, and a reaction - rightly or wrongly - to the actual problem. You'll also be able to more easily see the relationship between the Swamp and Wall Street banks which continues, virtually unabated.
Note especially the fact that whether contemplating "50 year mortgages" (which Bill and I would both agree as wholly inappropriate), we continue to hear crickets when inquiring whether WS Banks should be constrained to reasonable limits on owning (monopolizing?) housing stock.
Surely, the road to a feudal perdition lies in allowing a "landed gentry" of banks to emerge and strengthen even as we create a permanent class of renters as modern day Serfs. As those of us who still have an appreciation of history would observe - that won't end well.
Spot on, Ed. This won't end well and there is a good chance the ending will arrive in 2026. Of course, the delusional Trump lovers will blame it on - Biden?, Democrats?, China?, Russia? ¿Quien sabe? But regardless of whom they blame it will still happen. The kool-aid drinkers just keep on drinking.........Ol' Bill, we with eyes wide open appreciate your thoughts. Thank you and Happy Thanksgiving!
Frankly speaking, my sense is that a stock market and housing “re-set” is well overdue. Normally occurs in eleven to thirteen year cycles, we’ve been on a drunken sailors dream leave since 2008 - seventeen years and counting. I see Trump as trying to dodge this bullet but I have doubts as to his tariff and other reforms as well intentioned and even well targeted but coming too late. He’ll definitely be blamed for what is a far overdue crash from the concurrent fiscal excesses of our “Uni-party” handlers, but that too will just be more wallpaper. Still, I always give respect to “the man in the ring”, even if I know that most will not.
An addenda post: I used to own a residential and commercial construction company when I was younger. I also have a background as a Process Plant design engineer as well as an industrial Project Controls, capital budget estimator. I spent the bulk of my career either designing, building or estimating capital budgets for Oil & Gas, Chemical, Power and/or Biopharmaceutical plants.
My observation from my earlier home construction days was of a typical capitalist driven (read messy but self-correcting) system which saw many bankruptcies of builders as housing prices collapsed when housing stock became too expensive for the market to support. Interestingly, some of the most skilled and insightful builders were veterans of multiple bankruptcies. You would lose your current investment, but no one could eradicate your technical skills. One could simply reincorporate - often under the guise of other family members. As I said, it was messy.
Additionally, there were housing cycles to contend with, and few builders would anticipate the timing of these cycles in a manner that avoided the collapse while retaining past profits. I exited this business once I fully realized that low interest rates-built homes while the inevitable, reciprocal high interest rates, built industrial facilities with corporate Bond sales. A Kiplinger Letter of the late 1980's had exposed me to a study that had established that "when fewer than 5% of those making an average income could afford to buy an average priced home, the housing market would go into recession". A key insight.
Makes me now wonder what sort of corrective action could occur when banks own and control the housing stock and the lending mechanism that drives both housing stock growth and affordability - all while also issuing credit cards to their Serfs... err... I mean renters.
The ways of capitalism aren't as easy and appealing as the superficial sirens song of statism but, unlike the dead and manipulative yet constantly erring hand of statism as corporatism (see China's own housing mess today) - honest money capitalism is, at least, self-renewing.
Holy cow, Gary, what an idea! Bill, the patriarch of a financial newsletter, offering solutions to help his subscribers make and keep money? Actually, I’ve been long been b****ing about Bill’s lack of value to this newsletter, not to mention his never-ending diatribe against DJT. Dan and Tom keep me reading this newsletter. Bill’s contribution is worthless. Too bad, but as the Golden Rule says: He who has the gold makes the rules. Meanwhile, to all the commenters to Bill’s claptrap, have a great Thanksgiving and don’t forget to offer thanks.
Why in the world do you waste your time reading Bill's claptrap? Why not just read Dan and Tom's comments only. At a minimum, why not explain why DJT deserves admiration instead of opprobrium.
Isn’t it just like Ole Billy to blame DJT for the 9% inflation recorded under cadaver Biden watch. Billy you out did yourself today, spoken like a true democrat. “If it is in print, on the internet, it must be true”. Oye, perhaps Billy has assigned his prose to a BOT so he can prepare for T-day. Perhaps, but given this windbags recent loss of creditability - unlikely. Happy T-day Billy!
Bill, I'm thankful for you! What a world you have shared with me. Your moutain home, Mary, your brother's wine work, your Hands and their family adventures! All wonderful glimpses away from my half acre spot in a town pushing 2000 souls! So grateful, my friend. Ali
Bongo Bill's TDS induced relentless bashing of Trump is hilarious. I didn't realize that Trump was the one that came up with the idea of the 50-year mortgage, but it doesn't matter. 50-year mortgages are not going to happen unless banks are willing to offer them and customers are willing to accept them. It's called the free market, Bill. A 50-year mortgage can be evaluated on its own merits without bringing Trump or anyone else into it. But that's not the Bongo man's way.
Bill, I think everyone gets the fact that you don't like the current occupant in the White House and agree with your analysis of the state of the housing market. So instead of pointing out the flaws of the orange man and the modern dumbocratic party (i'll take the orange man anyday); instead, why don't you start presenting SOLUTIONS?
Mr. Bushouse, You nailed it. Bill doesn't like to present specifics about debt slashing (or specifics about any major issue anymore it seems) because he knows that would cause massive job loss because so many jobs in the U.S. are completely or partially propped up by debt. This would lead to a depression, which would wipe out the GOP, bringing the radical Democrats to power. They would then immediately reverse all of these budget cuts, and go on a wild spending spree, exploding the debt again. And they would pass a mass amnesty, open the southern border, restrict free speech on line, persecute their political enemies, try to further restrict gun rights, add even more onerous controls over domestic businesses, etc.
So even if Bill's idea of slashing the budget could occur, it wouldn't solve anything because the Democrats would regain power via voter backlash and reverse this slashing. So the budget has to be cut gradually, while trying to strengthen domestic businesses. After watching the recent result in VA with DOGE cuts and the huge backlash by fed. govt. employees and contractors, even putting in a person as AG who wished death upon GOP members and their children, and a person as Gov. who wouldn't take a stand on trans men in women's bathrooms, locker rooms, & sports, the gradual solution appears to be difficult at this stage as well because debt-for-jobs is so enormous. So maybe sky-high inflation will have to occur at some point to wake up the folks. I don't know. Again, any solution to right the ship would be difficult at this stage.
Hi, GROK, I need your help again. Here's what is happening now. What would it take to have you understand "". It's not price. It's not supply. Even the Dems are deceiving themselves! AXIOM: ALL goods or services are affordable IF one has the cash or credit available for them to make the purchase. BUT, even if gas were at $1.99, IF you do not have the cash or credit, IT IS NOT AFFORDABLE. PERIOD.Ask our government with $38Trillion debt. Ask the people with $13 Trillion debt. "IT'S THE MONEY, S...... 90% of it gives 10% of the people "AFFORDABILITY" Let the other 90% of the people "eat cake". Please RT This message is not political. We must go from T.I.N.A. (There Is No Alternative) to T.A.R.A. (There Is Real Alternatives). CAN YOU COMPLETE THIS CHANGE IN Comparison TO INCOME TODAY compared to1950s? Commercial Real Estate (CRE) Loans Outstanding: As of August 2025, U.S. commercial banks hold approximately $3.03 trillion in CRE loans, representing a critical vulnerability amid rising delinquencies and maturities. This figure underscores the sector's fragility, with nearly $1 trillion in loans due for refinancing in 2025 alone—exacerbated by office space vacancies and higher interest rates—potentially triggering widespread defaults if unaddressed. Residential Real Estate (RE) Loans Outstanding: Total U.S. mortgage debt stands at $12.94 trillion as of Q2 2025, fueled by post-pandemic homebuying surges but now strained by elevated rates and affordability crunches. This massive exposure—up $3.4 trillion since 2019—threatens household balance sheets, with equity at $35.8 trillion providing some buffer but not immunity to a broader credit crunch. Total Student Loans Outstanding: The U.S. student debt burden has ballooned to $1.81 trillion as of Q2 2025, affecting 42.5 million borrowers and marking the second-largest consumer debt category after mortgages. With average balances at $39,075 and delinquency rates climbing to 11.3%, this "lost generation" of debtors risks amplifying economic drag through suppressed spending and wealth inequality. These staggering figures—$17.78 trillion in combined CRE, residential, and student debt—reveal a debt supernova teetering on the edge. Far beyond subprime echoes, this scale demands immediate reckoning: without structural reforms, we're sleepwalking into systemic meltdown. Wake up—inaction isn't an option; it's the accelerant. Banking Analytics: Modifications to Commercial Real Estate Loans Rise As of June 30, 2024, the amount of commercial real estate loans whose lending terms were modified by U.S. banks had risen 66% over the past year—signaling "extend and pretend" tactics that mask brewing defaults and delay the inevitable pain. Put them under the microscope before the dam breaks. The Moonshot Mandate: Trump's Wealth Distribution Compact A bold blueprint to redistribute trillions from speculative flows to productive renewal—seizing the moment to avert collapse while igniting equitable growth. Core pillars: Micro-levies on frictionless finance, targeted debt relief, and infrastructure moonshots funded by the system's own excess. No more trickle-down illusions; this is flood-up economics for the forgotten middle. TODAY: The markets are jittery amid resurgent U.S.-China trade tensions.
Thoughts
Income Affordability: 1950s vs. 2025 – The Erosion of Purchasing Power
In the post-WWII boom of the 1950s, the American middle class embodied the promise of upward mobility. Median household income stood at approximately $3,300 in 1950 (equivalent to about $40,500 in 2025 dollars, adjusted via CPI inflation multiplier of 12.3x from 1950–2025). By 1955, it had risen to $4,400 nominal ($47,000 today). These earnings bought a full life: a modest home for 2–3x annual income, college tuition under $500/year (free for many via GI Bill), and healthcare costs averaging 4% of income. Household debt-to-disposable income ratios hovered below 40%, with total debt service payments consuming just 8–9% of earnings—leaving ample room for savings, family vacations, and community stability.
Fast-forward to 2025: Median household income has climbed to $83,730 (real terms, up ~106% from 1950 adjusted levels), reflecting broader workforce participation (e.g., dual-income households now standard vs. single-breadwinner norm in the '50s). Nominal growth is even more dramatic—28x higher—but this masks a fractured reality. Top 10% earners capture 50% of gains, while middle-quintile real wages stagnate at 1–2% annual growth since 1980. Key costs have outpaced income: Housing now 5–7x median income (vs. 2.5x in 1950), college tuition up 1,200% inflation-adjusted, and healthcare devouring 18% of median budgets.
Debt-to-income tells the harsher truth: Ratios have ballooned to ~105% (total household debt ~$18.2 trillion vs. ~$20 trillion annual disposable income), with service payments at 9.8% of earnings—double 1950s levels. Student debt alone ($1.81T) burdens 42 million, suppressing homeownership and family formation. The '50s offered "affordability as axiom"—cash in hand meant access. Today? Incomes may be higher on paper, but inequality funnels 90% of wealth to 10%, leaving the rest chasing credit-fueled illusions. From T.I.N.A. to T.A.R.A.: Redirect speculative trillions via micro-levies and debt jubilees to restore flood-up equity—before Dalio's collapse clock strikes midnight.
Insights & the Money Squeeze: These aren't abstract—$17.75T total means ~95% of median household income just to service at current rates (assuming 105% debt-to-income). CRE's low delinquency masks the "non-conforming" reality: Banks modified terms on billions to avoid fire sales, but with rates jumping from 4% (2022) to 6%+, refinancings could trigger 10-15% defaults if values drop 20% (offices already have). Residential feels "stable" at 4% delinq, but FHA (low-income heavy) at 10%+ echoes subprime vibes. Student debt? A 9% delinquency black hole, siphoning $100B+ yearly from spending—inequality's accelerator.
This reinforces the axiom: Affordability = cash/credit access. With 90% locked out, it's cake for the top while the rest rations. The C.A.R.D. blueprint—micro-levies on finance's $10T+ daily churn, targeted jubilees (e.g., forgive $500B student/CRE for under-$100K earners), moonshot infra—could redirect $2-3T to flood-up relief. Dalio's collapse? We're at 9 o'clock; T.A.R.A. now or bust. READ MORE, Then RT. https://bestsolutionsfl.blog/2025/11/18/one-step-for-growth-and-prosperity-one-step-for-all-mankind/
@elonmusk
Elon, please give @POTUS @SecScottBessent and the whole team uncensored Grok.
They NEED to see the raw numbers on affordability and the $17.75 TRILLION debt supernova before it’s too late.
Wow! Yep! So right except there are NO Real Alternatives. It is way past the point of righting this ship. It is already drowning and it won't take much longer before the band is underwater. This is just human nature showing its ugly side. The reason this happens time after time is for the same reason - human nature never changes. Money and Power causes Power and Money. Going to be ugly folks and the Orangeman is going to be the fall guy. It really isn't his fault. The system needed someone like him to facilitate a faster draining and Boy is the system getting its wish. Enjoy this Thanksgiving, Folks. Next years will be so different.
I am not necessarily a fan of the 50 year mortgage, but in considering it I think you need to factor in that you are borrowing present value dollars and paying it off the mortgage in future dollars of less value. The purchasing power of a dollar 50 years ago is 6 times what it is today. Meanwhile the value of the average house has gone up by 7.1% a year since 1975. In addition the interest paid is often tax deductible. Food for thought.
Michael, I'm a simple guy. I see life as a series of stages, particularly when assuming the responsibility of caring for oneself and a family.
I had set a goal of retiring my mortgage at a point in life where I could then save for funding my child's education and then, my own retirement, debt free.
We continue a need to allow for these most human events to unfold and to be dealt with in a manner that doesn't see our dreams crushed under an avalanche of life's inevitable stages. Specifically, a never-ending debt accrual for housing on top of your family's needs in other critical areas, and your own retirement with a shred of dignity in eldercare.
We are now staring into an economic abyss being actively created by banks working in tandem with government apparatchiks. Many of whom are living protected lives with government pensions on top of social security or, in the case of the banks, extractive, corporatist plunder.
Trump's 50 year mortgage suggestion makes sense if at the same time he would admit that
the US Government has no ( I mean absolutely zero) intentions of getting control of the future
rate of inflation (worthlessness) of the "Federal Reserve Note".
I googled the average cost of a house in 1975 and it was $46,000, and the interest rate was 9.05%. The facts are the only way you could have tied up that $46,000 house was to buy it, even if it took a 9.05% - 30 mortgage.
What about the time value of money? Would not the last years of the mortgage have dollars that are less than a dime at the time the mortgage was taken out. In current dollars what would the total payment really be? Is the intent not to make it that people start out getting into a house and not being so house poor for the first decade. That of course assumes that investment funds are not still buying up all the new houses.
My advice to readers is to read the book "The Housing Boom and Bust" by Dr. Thomas Sowell. There you will see a full explanation for the housing crisis that preceded the 2008 mortgage crisis. Full disclosure - the interest rate was somewhat peripheral, and a reaction - rightly or wrongly - to the actual problem. You'll also be able to more easily see the relationship between the Swamp and Wall Street banks which continues, virtually unabated.
Note especially the fact that whether contemplating "50 year mortgages" (which Bill and I would both agree as wholly inappropriate), we continue to hear crickets when inquiring whether WS Banks should be constrained to reasonable limits on owning (monopolizing?) housing stock.
Surely, the road to a feudal perdition lies in allowing a "landed gentry" of banks to emerge and strengthen even as we create a permanent class of renters as modern day Serfs. As those of us who still have an appreciation of history would observe - that won't end well.
Spot on, Ed. This won't end well and there is a good chance the ending will arrive in 2026. Of course, the delusional Trump lovers will blame it on - Biden?, Democrats?, China?, Russia? ¿Quien sabe? But regardless of whom they blame it will still happen. The kool-aid drinkers just keep on drinking.........Ol' Bill, we with eyes wide open appreciate your thoughts. Thank you and Happy Thanksgiving!
Frankly speaking, my sense is that a stock market and housing “re-set” is well overdue. Normally occurs in eleven to thirteen year cycles, we’ve been on a drunken sailors dream leave since 2008 - seventeen years and counting. I see Trump as trying to dodge this bullet but I have doubts as to his tariff and other reforms as well intentioned and even well targeted but coming too late. He’ll definitely be blamed for what is a far overdue crash from the concurrent fiscal excesses of our “Uni-party” handlers, but that too will just be more wallpaper. Still, I always give respect to “the man in the ring”, even if I know that most will not.
An addenda post: I used to own a residential and commercial construction company when I was younger. I also have a background as a Process Plant design engineer as well as an industrial Project Controls, capital budget estimator. I spent the bulk of my career either designing, building or estimating capital budgets for Oil & Gas, Chemical, Power and/or Biopharmaceutical plants.
My observation from my earlier home construction days was of a typical capitalist driven (read messy but self-correcting) system which saw many bankruptcies of builders as housing prices collapsed when housing stock became too expensive for the market to support. Interestingly, some of the most skilled and insightful builders were veterans of multiple bankruptcies. You would lose your current investment, but no one could eradicate your technical skills. One could simply reincorporate - often under the guise of other family members. As I said, it was messy.
Additionally, there were housing cycles to contend with, and few builders would anticipate the timing of these cycles in a manner that avoided the collapse while retaining past profits. I exited this business once I fully realized that low interest rates-built homes while the inevitable, reciprocal high interest rates, built industrial facilities with corporate Bond sales. A Kiplinger Letter of the late 1980's had exposed me to a study that had established that "when fewer than 5% of those making an average income could afford to buy an average priced home, the housing market would go into recession". A key insight.
Makes me now wonder what sort of corrective action could occur when banks own and control the housing stock and the lending mechanism that drives both housing stock growth and affordability - all while also issuing credit cards to their Serfs... err... I mean renters.
The ways of capitalism aren't as easy and appealing as the superficial sirens song of statism but, unlike the dead and manipulative yet constantly erring hand of statism as corporatism (see China's own housing mess today) - honest money capitalism is, at least, self-renewing.
And there you go, two posts by Ed Burns that are infinitely more valuable than what the Bongo man wrote.
Holy cow, Gary, what an idea! Bill, the patriarch of a financial newsletter, offering solutions to help his subscribers make and keep money? Actually, I’ve been long been b****ing about Bill’s lack of value to this newsletter, not to mention his never-ending diatribe against DJT. Dan and Tom keep me reading this newsletter. Bill’s contribution is worthless. Too bad, but as the Golden Rule says: He who has the gold makes the rules. Meanwhile, to all the commenters to Bill’s claptrap, have a great Thanksgiving and don’t forget to offer thanks.
Why in the world do you waste your time reading Bill's claptrap? Why not just read Dan and Tom's comments only. At a minimum, why not explain why DJT deserves admiration instead of opprobrium.
What was the alternative to "funny money"? Spend only what we have? Be disciplined? Make tough choices? How do we buy votes otherwise? Best always. PM
Happy Thanksgiving to one and all, now and always. PM
Isn’t it just like Ole Billy to blame DJT for the 9% inflation recorded under cadaver Biden watch. Billy you out did yourself today, spoken like a true democrat. “If it is in print, on the internet, it must be true”. Oye, perhaps Billy has assigned his prose to a BOT so he can prepare for T-day. Perhaps, but given this windbags recent loss of creditability - unlikely. Happy T-day Billy!
Bill, I'm thankful for you! What a world you have shared with me. Your moutain home, Mary, your brother's wine work, your Hands and their family adventures! All wonderful glimpses away from my half acre spot in a town pushing 2000 souls! So grateful, my friend. Ali
Bongo Bill's TDS induced relentless bashing of Trump is hilarious. I didn't realize that Trump was the one that came up with the idea of the 50-year mortgage, but it doesn't matter. 50-year mortgages are not going to happen unless banks are willing to offer them and customers are willing to accept them. It's called the free market, Bill. A 50-year mortgage can be evaluated on its own merits without bringing Trump or anyone else into it. But that's not the Bongo man's way.
A kvetcher has no solutions.... Happy Thanksgiving
Exactly......and this fiat currency crisis has no solution. It is just going to blow sky high.
Always has.
Bill, I think everyone gets the fact that you don't like the current occupant in the White House and agree with your analysis of the state of the housing market. So instead of pointing out the flaws of the orange man and the modern dumbocratic party (i'll take the orange man anyday); instead, why don't you start presenting SOLUTIONS?
Right. Like he never preaches for cutting federal spending and deficits or returning to honest money. Just about every issue….
Easy to say, I've heard the same for decades. Just HOW to make it really happen is what im looking for.
Mr. Bushouse, You nailed it. Bill doesn't like to present specifics about debt slashing (or specifics about any major issue anymore it seems) because he knows that would cause massive job loss because so many jobs in the U.S. are completely or partially propped up by debt. This would lead to a depression, which would wipe out the GOP, bringing the radical Democrats to power. They would then immediately reverse all of these budget cuts, and go on a wild spending spree, exploding the debt again. And they would pass a mass amnesty, open the southern border, restrict free speech on line, persecute their political enemies, try to further restrict gun rights, add even more onerous controls over domestic businesses, etc.
So even if Bill's idea of slashing the budget could occur, it wouldn't solve anything because the Democrats would regain power via voter backlash and reverse this slashing. So the budget has to be cut gradually, while trying to strengthen domestic businesses. After watching the recent result in VA with DOGE cuts and the huge backlash by fed. govt. employees and contractors, even putting in a person as AG who wished death upon GOP members and their children, and a person as Gov. who wouldn't take a stand on trans men in women's bathrooms, locker rooms, & sports, the gradual solution appears to be difficult at this stage as well because debt-for-jobs is so enormous. So maybe sky-high inflation will have to occur at some point to wake up the folks. I don't know. Again, any solution to right the ship would be difficult at this stage.
Frank, couldn't have said it better myself!
Hi, GROK, I need your help again. Here's what is happening now. What would it take to have you understand "". It's not price. It's not supply. Even the Dems are deceiving themselves! AXIOM: ALL goods or services are affordable IF one has the cash or credit available for them to make the purchase. BUT, even if gas were at $1.99, IF you do not have the cash or credit, IT IS NOT AFFORDABLE. PERIOD.Ask our government with $38Trillion debt. Ask the people with $13 Trillion debt. "IT'S THE MONEY, S...... 90% of it gives 10% of the people "AFFORDABILITY" Let the other 90% of the people "eat cake". Please RT This message is not political. We must go from T.I.N.A. (There Is No Alternative) to T.A.R.A. (There Is Real Alternatives). CAN YOU COMPLETE THIS CHANGE IN Comparison TO INCOME TODAY compared to1950s? Commercial Real Estate (CRE) Loans Outstanding: As of August 2025, U.S. commercial banks hold approximately $3.03 trillion in CRE loans, representing a critical vulnerability amid rising delinquencies and maturities. This figure underscores the sector's fragility, with nearly $1 trillion in loans due for refinancing in 2025 alone—exacerbated by office space vacancies and higher interest rates—potentially triggering widespread defaults if unaddressed. Residential Real Estate (RE) Loans Outstanding: Total U.S. mortgage debt stands at $12.94 trillion as of Q2 2025, fueled by post-pandemic homebuying surges but now strained by elevated rates and affordability crunches. This massive exposure—up $3.4 trillion since 2019—threatens household balance sheets, with equity at $35.8 trillion providing some buffer but not immunity to a broader credit crunch. Total Student Loans Outstanding: The U.S. student debt burden has ballooned to $1.81 trillion as of Q2 2025, affecting 42.5 million borrowers and marking the second-largest consumer debt category after mortgages. With average balances at $39,075 and delinquency rates climbing to 11.3%, this "lost generation" of debtors risks amplifying economic drag through suppressed spending and wealth inequality. These staggering figures—$17.78 trillion in combined CRE, residential, and student debt—reveal a debt supernova teetering on the edge. Far beyond subprime echoes, this scale demands immediate reckoning: without structural reforms, we're sleepwalking into systemic meltdown. Wake up—inaction isn't an option; it's the accelerant. Banking Analytics: Modifications to Commercial Real Estate Loans Rise As of June 30, 2024, the amount of commercial real estate loans whose lending terms were modified by U.S. banks had risen 66% over the past year—signaling "extend and pretend" tactics that mask brewing defaults and delay the inevitable pain. Put them under the microscope before the dam breaks. The Moonshot Mandate: Trump's Wealth Distribution Compact A bold blueprint to redistribute trillions from speculative flows to productive renewal—seizing the moment to avert collapse while igniting equitable growth. Core pillars: Micro-levies on frictionless finance, targeted debt relief, and infrastructure moonshots funded by the system's own excess. No more trickle-down illusions; this is flood-up economics for the forgotten middle. TODAY: The markets are jittery amid resurgent U.S.-China trade tensions.
Thoughts
Income Affordability: 1950s vs. 2025 – The Erosion of Purchasing Power
In the post-WWII boom of the 1950s, the American middle class embodied the promise of upward mobility. Median household income stood at approximately $3,300 in 1950 (equivalent to about $40,500 in 2025 dollars, adjusted via CPI inflation multiplier of 12.3x from 1950–2025). By 1955, it had risen to $4,400 nominal ($47,000 today). These earnings bought a full life: a modest home for 2–3x annual income, college tuition under $500/year (free for many via GI Bill), and healthcare costs averaging 4% of income. Household debt-to-disposable income ratios hovered below 40%, with total debt service payments consuming just 8–9% of earnings—leaving ample room for savings, family vacations, and community stability.
Fast-forward to 2025: Median household income has climbed to $83,730 (real terms, up ~106% from 1950 adjusted levels), reflecting broader workforce participation (e.g., dual-income households now standard vs. single-breadwinner norm in the '50s). Nominal growth is even more dramatic—28x higher—but this masks a fractured reality. Top 10% earners capture 50% of gains, while middle-quintile real wages stagnate at 1–2% annual growth since 1980. Key costs have outpaced income: Housing now 5–7x median income (vs. 2.5x in 1950), college tuition up 1,200% inflation-adjusted, and healthcare devouring 18% of median budgets.
Debt-to-income tells the harsher truth: Ratios have ballooned to ~105% (total household debt ~$18.2 trillion vs. ~$20 trillion annual disposable income), with service payments at 9.8% of earnings—double 1950s levels. Student debt alone ($1.81T) burdens 42 million, suppressing homeownership and family formation. The '50s offered "affordability as axiom"—cash in hand meant access. Today? Incomes may be higher on paper, but inequality funnels 90% of wealth to 10%, leaving the rest chasing credit-fueled illusions. From T.I.N.A. to T.A.R.A.: Redirect speculative trillions via micro-levies and debt jubilees to restore flood-up equity—before Dalio's collapse clock strikes midnight.
Insights & the Money Squeeze: These aren't abstract—$17.75T total means ~95% of median household income just to service at current rates (assuming 105% debt-to-income). CRE's low delinquency masks the "non-conforming" reality: Banks modified terms on billions to avoid fire sales, but with rates jumping from 4% (2022) to 6%+, refinancings could trigger 10-15% defaults if values drop 20% (offices already have). Residential feels "stable" at 4% delinq, but FHA (low-income heavy) at 10%+ echoes subprime vibes. Student debt? A 9% delinquency black hole, siphoning $100B+ yearly from spending—inequality's accelerator.
This reinforces the axiom: Affordability = cash/credit access. With 90% locked out, it's cake for the top while the rest rations. The C.A.R.D. blueprint—micro-levies on finance's $10T+ daily churn, targeted jubilees (e.g., forgive $500B student/CRE for under-$100K earners), moonshot infra—could redirect $2-3T to flood-up relief. Dalio's collapse? We're at 9 o'clock; T.A.R.A. now or bust. READ MORE, Then RT. https://bestsolutionsfl.blog/2025/11/18/one-step-for-growth-and-prosperity-one-step-for-all-mankind/
@elonmusk
Elon, please give @POTUS @SecScottBessent and the whole team uncensored Grok.
They NEED to see the raw numbers on affordability and the $17.75 TRILLION debt supernova before it’s too late.
The 90% are broke while the 10% feast.
It’s not left vs right.
It’s the MONEY, stupid.
Time for T.A.R.A.—There ARE Real Alternatives.
Wow! Yep! So right except there are NO Real Alternatives. It is way past the point of righting this ship. It is already drowning and it won't take much longer before the band is underwater. This is just human nature showing its ugly side. The reason this happens time after time is for the same reason - human nature never changes. Money and Power causes Power and Money. Going to be ugly folks and the Orangeman is going to be the fall guy. It really isn't his fault. The system needed someone like him to facilitate a faster draining and Boy is the system getting its wish. Enjoy this Thanksgiving, Folks. Next years will be so different.
I am not necessarily a fan of the 50 year mortgage, but in considering it I think you need to factor in that you are borrowing present value dollars and paying it off the mortgage in future dollars of less value. The purchasing power of a dollar 50 years ago is 6 times what it is today. Meanwhile the value of the average house has gone up by 7.1% a year since 1975. In addition the interest paid is often tax deductible. Food for thought.
Michael, I'm a simple guy. I see life as a series of stages, particularly when assuming the responsibility of caring for oneself and a family.
I had set a goal of retiring my mortgage at a point in life where I could then save for funding my child's education and then, my own retirement, debt free.
We continue a need to allow for these most human events to unfold and to be dealt with in a manner that doesn't see our dreams crushed under an avalanche of life's inevitable stages. Specifically, a never-ending debt accrual for housing on top of your family's needs in other critical areas, and your own retirement with a shred of dignity in eldercare.
We are now staring into an economic abyss being actively created by banks working in tandem with government apparatchiks. Many of whom are living protected lives with government pensions on top of social security or, in the case of the banks, extractive, corporatist plunder.
The "value" of the house at best stays the same, in reality deteriorates with wear and depreciation.
The "price" of the house changes, subject to vagaries of the market and political distortions.
‘Home, Home on the range, where the banks and the billionaires roam, where never is heard a more dubious word than…’
Don't try to understand 'em,
Just rope and throw and grab 'em,
Soon we'll be living high and wide, Rawhide…’
Trump's 50 year mortgage suggestion makes sense if at the same time he would admit that
the US Government has no ( I mean absolutely zero) intentions of getting control of the future
rate of inflation (worthlessness) of the "Federal Reserve Note".
I googled the average cost of a house in 1975 and it was $46,000, and the interest rate was 9.05%. The facts are the only way you could have tied up that $46,000 house was to buy it, even if it took a 9.05% - 30 mortgage.
Kvetch. Is that Jewish?
Yiddish, which is, essentially, a dialect of German, with influences from Hebrew. Best always. PM
What about the time value of money? Would not the last years of the mortgage have dollars that are less than a dime at the time the mortgage was taken out. In current dollars what would the total payment really be? Is the intent not to make it that people start out getting into a house and not being so house poor for the first decade. That of course assumes that investment funds are not still buying up all the new houses.