Improved Standard of Living

In what ways has life gotten better in the past 30 years, and in what ways has it gotten worse?

Better: I have more money than I did 30 years ago.

Worse: I’m 30 years older than I was 30 years ago.

Oh. You meant for everyone. Sorry.

Food Costs down, but Food quality also down. Education costs up, and educational quality actually down in the lower 12 Grades. Utilities actually higher percentage of basic Household expenditures. Medical Costs up while basic medical service declined. Insurance costs vastly increased, while coverage remained mediocre. Retail service and Warranties much better, but totally designed to lock Consumers into a periodic Credit-financed repurchase program. This is the exchange We made for the improvements from the 1970s. Those improvements were substantial, though, and must be given weigth: We have higher Household debt, We have higher-priced, but actually lower quality housing, and the Middle Class makes up 14% less of the total population according to some estimates.

I lived through the 1970s, and I am still alive today, so that is something. I personally think the proliferation of services We have today incites too much taxation, while unlimited Corporate Price schedules adversely affect the American standard of living. A Worker in the 1970s had only to keep his job, and he could pay his bills, buy his house, and have about 12% of his Income for entertainment or savings. Today, he is likely not to have Life or Medical insurance, and his Car insurance is a major factor of his income. The privilaged Elites–wealthy or educated professionals–image life is better in 2004, but the Working Poor are the ones to ask–they have to live in an inflated-cost life expenditure pattern. lgl

I agree with the prior two posters. Why arbitrarily choose the 70s as a baseline? Why not the late 90s?

The relevant question to be asking is, are we better off now than we were four years ago?

Mike,
The increase of investment spread will be a major alteration, but only under the condition that Investors are able to withdraw their funds. Markets are maintained only by keeping funds within the Market. Siphoning funds from the Markets will reduce Stock and Paper prices, as funds are not there to reinvest. Are Investments the proper way to plan for retirement? If and only if succeeding Generations with sufficient cash think to replace the investment funds which Retirees withdraw for their expenses. Failure in this pipeline reduces such retirement plans to the position of the SS program. lgl

I would submit that the 1960’s and the 1990’s were boom times that couldn’t last and shouldn’t be used as a barometer.

The economic policies of the 1960’s, especially the loose credit practiced by the Fed on the theory that Lyndon Johnson and John Maynard Keynes had put an end to the business cycle, lead to the stagflation of the 1970’s. In the short run, loose credit (i.e., printing money) can act as a driver of economic growth, because it fools people and businesses into thinking they have more money than they really do. It takes years for the effects to be fealt in inflation. The loose conditions started in the mid-60’s and resulted in very good economic growth, short-term. By the end of the decade inflation was increasing steadily. In the long-term people figure out that what they thought was an increase in wealth was really just an increase in the number of dollars in circulation, each one worth less than they thought. Onmce inflation starts to be factored into everybody’s thinking, the game is up.

If the good times of the 1960’s were really the baseline, then why couldn’t they have been exteneded until today? Because they were based on economic conditions that lead to short term gains but had dire long-term consequences.

The 1990’s were similar, but instead of stagflation, the excesses showed up in the stock market bubble, which burst.

Also, since then the world has changed a lot. 9/11 has shifted the US into a mode where security is more important than in the 1990’s when international terrorism was believed to be something that couldn’t happen here (however myopic that view was). I have seen estimates of up $1 trillion dollars of potential GDP has and will be lost every year due to the inefficiencies produced by all of the increased security in the post 9/11 world. What effect does a decrease of $1 trillion dollars GDP do to the so-called “full-employment” rate?

The blissful economic world of the 1990’s where all you needed to get a billion dollar IPO was to create a website that would sell dog food, where everybody believed that the business cycle and inflation had been permanently done away with(we seem to come to this conclusion about once a generation), that world peace would be the norm for as long as the mind could imagine, and that the most dire national problem was whether or not the president should be allowed to lie under oath about cheating on his wife.

Those were good times, but as the events of the last few years have shown, we were just walking around with blinders on ignoring what common sense should have been telling us. We all did it, and I suppose nobody is more to blame than anybody else. The president did what the polls told him, and the polls told him that international terrorism wasn’t an issue.

The country is most certainly NOT better off now than it was 4 years ago. The reality of teh post 9/11 world alone makes that obvious. It’s a silly question. 4 years ago we were blissfully ignorant. We couldn’t go back even if we wanted to.

We need a definition of what makes life ‘better.’

I suggest a longer life is better, as is one with less physical pain. And we probably shouldn’t value living with Alzheimers, etc., very highly. Economically life is better when one has more money (one can do everything one can do with less money, plus have the option to do something additional).

Other than obvious improvements in these areas, life in and of itself is probably no ‘better’ or ‘worse’ than it was 30, 40, or 1000 years ago. Mihaly Csikszentmihalyi’s ‘flow’ seems available to just about everyone who is alive, thinking, and not in physical pain (see above). It is neither created nor destroyed by money. Although the option value still exists, I doubt Americans have exercised that option to actually create more ‘flow’ in their lives.

The ‘would you trade’ question is deceptive – just because people are willing to make the trade, does not mean they will actually enjoy life more after the trade is made.