Income, Poverty and Health Insurance Coverage in the United States: 2016

I'm also a layperson, so if a real economist posts something contradictory you'll probably want to listen to them. Of course economists are always contradicting each other so YMMV.

Here's the Wikipedia: https://en.wikipedia.org/wiki/Real_versus_nominal_value_(eco...

> Yes - but we should all be weary of this.

From context, I suspect, though I'm not certain, that you mean “wary” (cautious), not “weary” (tired).

"core" CPI includes housing.

This is funky for another reason: people don't live in similar housing to what people lived in in the past. If you look at census data (American Housing Survey) from 40-50 years ago, you find the average American home was under 1500 square feet, 2-3 bedrooms, 1-2 bathrooms, no AC, no laundry machines, and so on. In fact, the average American home in the 1970s was smaller and had less amenities than the average current American home for people below the poverty line.

Any measure that just looks at the change in housing costs and doesn't adjust for the benefits of on-average larger homes with more amenities will end up overestimating that piece of monetary inflation (accidentally counting lifestyle inflation.) As you say, it's really hard to measure the "real value increase of a product", and that makes a lot of inflation measures... sketchy.

The quote was "this number does decrease." "This number" refers to median income. Income tends to decrease in a recession.

Well, disasters and foreign economic threats aren't due to a politician's policy, and the regulatory environment usually doesn't change straight away (that requires legislation, not just a policy manifesto). War is a rare event as well, and it doesn't necessarily affect the wider economy - the war in Iraq and Afghanistan hasn't affected the US economy much, which quite happily went through a boom time in the early years of the war, then crashed for reasons unrelated to the war. Of course, the economy of Iraq got soundly fucked by war, but that wasn't due to the economic policies of the politician in charge.

> "It is completely dependent on it being the US stock market."

Not really. It's only dependent on stock prices inherently reflecting all of the information buyers and sellers have about their expectations, including expected risk and reward. Trying to "time" the market basically means trying to find a signal other buyers and sellers haven't figured out, or at least not enough of them to cause prices to shift accordingly.

Which isn't to say it's impossible. You can be among the first to notice something is awry. It just probably won't be "the P/E is off"; lots of people look at that. It'll be something like in the last housing bubble -- "huh, I noticed housing prices are way out of reach for median income earners, so I looked into loan practices, and apparently risky loans are being repackaged and sold off in a way that masks the risk" and then watching things like loan default rates like a hawk, and then selling as soon as loan defaults started affecting the market.

There are inexpensive "target date" mutual funds that split between stocks and bonds, adjusting the mix towards bonds as the date approaches.

I think these are a decent choice for disinterested people.

Do you think market will return to this level with your current basket of equities? There is an argument that the market has too much liquidity due to QE and low rates within the fractional reserve system. If the market crashes, will the monetary policy be there to get the market to these highs within 5-10 years?

Also, if you think the market is going down, one doesn’t need perfect timing. You can get out and have cash on hand to buy later. If everything goes down 25% and you sold out 5% below the max value, you now have more money than your peers, which started in the market, to get gains in the future.

If you're retiring in the next five years your exposure to equities should be lower regardless of what the market looks like.

You aren't going to have 100% of your retirement in equities if you're going to retire in five years.

The idea that you should have an interest in what you do for money is a new one and I think fairly unhealthy. It's part of the reason why we have so many young people with degrees in underwater basketweaving who can't find work in their majors.

We're in the midst of an insane sociological revolution regarding "ability." 100 years ago it didn't matter if you had a 140 IQ because you were just out plowing the field the same as your neighbor. For the first time in the history of mankind general cognitive ability is the biggest factor in your ability to acquire resources. Unfortunately that's largely biological in nature. You can reduce IQ pretty easily with poor nutrition, abuse, etc. But it's really hard to raise IQ meaningfully. Life is already difficult for well meaning, hard working people with low cognitive ability, and I think it's only going to get worse. In the meantime, high cognitive ability people will be doing well, whether they're coding or doing other brainy work.

I’m older than that myself. Doing pretty good.

I’m 42 and have recruiters beating down my door.

The wonderful thing about owing so much debt is it really makes the financial incentive for war against you that much lower for your lenders.

The federal government had $3.3T in revenue and all our debt is denoted in our own currency. That's how we're able to borrow.

Real money that we print, yes.

Edit: Since this was down voted, I want to be clear: this is not snark. This was meant as a very real commentary on how important it is that we have the ability to inflate our way out of debt. It's critical to understanding the power dynamics at play here.