otnihoithiu

The cost of living went up because households with two incomes outbid households with one income for scarce goods like housing.

I'm not sure how it could have played out differently. Women have always, always worked to support themselves and their families. But the invention of household labor saving devices freed up enormous amounts of time that would have been spent primarily in the household. Of course those women would look for additional opportunities to support their families. It's the same story as men moving from farm labor to factory labor as farm labor became increasingly mechanized.

Highly paid, older office workers are first in line when layoffs happen. Those people then face age discrimination trying to get new positions. Can really derail your earnings.

Wow, you can clearly see the degree to which the housing recession damaged the lifetime earnings of gen Y.

Prices aren't up because people are bidding more for finished goods. Prices are up because commodity costs are up, so the inputs to production cost more. Those costs are passed onto end consumers, to the extent they can afford them, or they are passed on in the reduction in the availability of goods.

If you gave every American 30k USD, most people would go out and purchase a 50k automobile.

Housing, schooling, and healthcare are necessities that people will go deeply into debt to be able to afford. They will pull money out of their retirement to bid on houses or pay for their kids college. They will mortgage anything, and beg from friends and family, to afford healthcare.

These three items are well known to have costs that have risen above inflation for decades.

I offer an alternative explanation: these three items are so vital to people that they will sacrifice spending in other areas to support these costs. All of the unmeasured inflation of the past decades is represented solely in these items.

Another thing people complain about is the wealth gap.

Inflation increases the value of assets. Wealthy people own assets and poor people consume goods to survive. As a result, inflation increases the gap between the wealthy and the poor.

The only realistic way to reduce the wealth gap is to accept deflationary periods. This would also improve the savings rate and reduce debt.

I understand that modern theories believe deflation to be the end of days. I attribute that belief to the fact that a deflationary period was observed during the great depression, and has been believed to be a cause rather than an effect. I frankly disagree with that viewpoint.

I believe that the government has a vested interest in ensuring inflation because the government is a debtor. A protracted period of deflation would bankrupt the government.

People cite the post-war period as one of a smaller wealth gap, but the primary reason for that is that there had been a ten year period of deflation just proceeding it.