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Comment by light_hue_1 | Hacker News Reader

Yet Biden is trying to run on how good the economy is. (No, I don't support Trump and I don't vote republican, not that in my state this would matter, but that doesn't mean any side is beyond criticism).

Salaries are falling. My academic salary has not kept up with inflation at all; we're all way behind. Childcare is obscenely expensive. Mortgage rates are through the roof and owning a house is beyond hope for many young people now.

Things are rough out there. I fear that people will give up democracy by voting for Trump just because the economy is so bad for many people.

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I don't think you're wrong about perceptions, but by virtually every fact-based metric the economy is doing fucking great. The inflation spike has been a setback, but it's a minor blip compared to the 70's (and overdue considering how low inflation was for 20 years). The long-term trend of housing costs sucks, but it pre-dates the last few administrations and most of the blame should fall on local governments.

We had essentially been exporting inflation to places like China for about 30 years until 2018 or so. As soon as our free trade policies changed under the previous admin it was clear that we were in for some inflation. Throw in covid and this is the result - the choice was either let the economy fall into another great depression or send checks out to people. We kind of did the latter. I think the inflation we're experiencing now is better than the alternative.

That's a false dichotomy. We could have done nothing and the economy would have been. Sending people checks was only excused because of an inexcusable shutdown.

It's not just a perception.

I can tell you that every family that I know in my department, unless they're independently wealthy, is seriously hurting compared to any time in the past decade. That includes faculty and students.

Metrics don't include many things. For example, the fact that your ability to buy a house has fallen dramatically. Or the fact that rents in my city have gone up 25%+ in the past 3 years and now graduate students have to share 1 bedroom homes (they use curtains to separate out the living room). Or that the cost of childcare has skyrocketed to the point where it's far higher than a mortgage.

Home ownership is looking normal if you include places outside large cities, but those cities are where the grad students and media are.

https://www.redfin.com/news/gen-z-millennial-homeownership-r...

By https://www.macrotrends.net/cities/largest-cities-by-populat...

Somewhere over half of Americans live in cities. Not just grad students and media

I didn't say otherwise.

By McNamara's fact-based metrics, we were winning the Vietnam War. These aggregate measurements might be good at the high level, but say nothing about an individual's perception of reality. People know their personal economic situation is bad right now, they don't really care about the macroeconomics, that's not what "The Economy" is to the average American.

I don't know man, I paid $9 and change for a coffee and croissant today. Things feel expensive.

Old people are doing great, while young people are getting squeezed.

Some old people are doing great ... meanwhile:

The elderly are becoming homeless at a rate not seen since the Great Depression

https://news.ycombinator.com/item?id=37641471

Looks like 2020 data? Social security COL increase was 8.7% this year. That’s pretty great compared to engineering salaries in the linked article.

Great? 2020?

* I'm pretty sure that the bulk of those that became homeless are still homeless and that more ederly are still becoming homeless at high rates.

* How many of those do you think are getting the kind of Social Security that is sufficient to meet needs?

* You'd rather a social security pension with an 8.7% increase over a median engineering salary of US $169,000?

This makes no sense. Inflation should hit old people the worst. They aren't exactly getting promotions and parking their nest eggs in high risk investments...

And yet you had no qualms about making that completely discretionary purchase. You’re doing fine.

people don't vote on data but on perceptions and real feelings.

if the gvt report say unemployment is down. but you're having a hard time finding a job who are you to believe ?

if the gvt says grocery prices are down. but then you go into the shop with $20 and only buy two things who are you to believe.

Inflation this time is in a big part due to corporate profits - unions and regulations are needed to give workers a fighting chance at bargaining power

will give up democracy by voting

Some strong cognitive dissonance going on in your comment, friend.

My plan is to just leave the US for somewhere with a real social safety net at some point. I don't believe the US can turn things around at this point, there's just too much "tech debt" so to speak.

> My plan is to just leave the US for somewhere with a real social safety net at some point

This is a lot easier said than done. Sure you could move to Canada (for example) but better do it before you get over a certain age and you have to demonstrate that you have a certain net worth. If a lot of Americans decide to start leaving that's only going to make it harder to emigrate to other places.

Leaving the US is funny, its like a ex that won't stop calling and harassing you. The US wants its taxes first before any other country collects. If you try to permanently sever ties, its a long expensive process.

Tax liability only matters for people who make tons of money. Further, chances are you are not going to Burma, and rather going to another western country, and in those cases you are going to a country that has a tax treatises/agreements with the US in some form.

FEIE as an example is a deduction that currently goes for around the first ~$120k you earn, you also have your standard deduction. This only applies if you have spent at least 11 months in another country. Then there's housing, foreign tax credit, and so on.

In reality, most expats who earn any sort of income pay $0 to US. The only requirement is that you file every year, like all citizens to the US. Double dipping, like you're alluding to pretty much does not happen much.

Relinquishing citizenship has a fee of $2350 minimum attached to it, which is hefty, but if you're giving up your citizenship, chances are that the bill is paltry compared to your supposed other benefits.

You’re right to some extent but are omitting the potentially hefty exit tax depending on your net worth/income, see https://www.greenbacktaxservices.com/knowledge-center/exit-t...

Grass is always greener I suppose. I look at the real tax rate and earning potential of Americans vs Canadians, and it's tough to make a case for coming to Canada. I guess if you like maple syrup and curling.

Can confirm, I did not find my dream of keeping a high-paying-by-Canadian-standards US remote job and moving my family to Canada so we could pay taxes there, spend our money there, and my kids (they actually give you a boost on immigration score!) could grow up to contribute to the Canadian economy, to be achievable. I’d have had to find a Canadian employer first to have a chance, which would mean a 40-60% pay cut (and I ain’t making FAANG money) and probably giving up remote, on top of it.

Getting in’s not easy, not sure how all the obviously-first-gen immigrants working as e.g. taxi drivers in Canada got in. All refugees, maybe? Spouse had a points-granting technical degree and landed a Canadian job in that field before immigrating? They’re secretly famous artists or brain surgeons (special immigration categories) and just moonlighting for fun? Unclear.

I wonder if the Canadian government is secretly planning for a mass influx of American refugees hopping the border at some point in the future. That would be kind of ironic.

Where would you go? Isn't inflation much worse in most of Western Europe? Money is probably pouring into the US dollar because of lost confidence in other currencies. If those countries don't turn things around eventually, then will the safety net even survive your lifetime? Does SE Asia have any safety net?

No, Asian countries have less of a safety net than the US even. They do have cheaper healthcare and housing. (But after you've bought the housing then you want it to become less cheap, of course.)

I think the general strategy is to build wealth in the US on a US salary and then move to a cheaper COL location elsewhere.

Was in Europe this summer. Even if inflation is comparable or worse everything was still far cheaper than the US.

Tons of people did that before the pandemic and moved to cheap places like Portugal, Spain, and Italy. Now those places are expensive, they are still broke (so the safety net might still go away in your lifetime), but also now the locals are hopping mad that all these 'expats' are coming and driving up real estate prices.

It's more expensive but eating out is nothing like the US. Got 2 euro coffees and croissant combos in Spain all summer. Especially since tipping 20% is not expected.

When I mean by "they are still broke" I meant governments that have to provide the safety nets. And what I meant by "expensive" was more things like real estate prices. Sorry for the confusion.

> Mortgage rates are through the roof

relative to where they were 3 or 4 years ago they've gone up a lot. But historically, the average mortage rate has always been around 7 to 7.5% - right around where we are now. Mortgage rates seem to be reverting to mean - they'll probably overshoot a bit before they start moving back down.

> owning a house is beyond hope for many young people now.

Yes, prices are still way too high. This is largely due to the dearth of home building during the 2008-2014 period (great recession and aftermath). We need a lot more units built and quickly. Neither party is addressing the supply problem. Also, it's not an exclusively US problem - it's a problem in most of the developed economies of the world.

> relative to where they were 3 or 4 years ago they've gone up a lot. But historically

People keep saying this. (I'm sorry, my negative reaction is definitely not your fault, I've just heard this a lot) It's getting really annoying :)

If I could buy a house for what it cost in 2005 in my city I would gladly buy one at 7%. But housing is now 2.5x the cost. A 500k house at its peak in 2005 is now around 1.5M.

> Yes, prices are still way too high. This is largely due to the dearth of home building during the 2008-2014 period (great recession and aftermath). We need a lot more units built and quickly. Neither party is addressing the supply problem. Also, it's not an exclusively US problem - it's a problem in most of the developed economies of the world.

I don't agree that this is the cause. We haven't been building enough housing for a long time.

The problem is that the US has a crazy system. Mortgages are not assumable. Nor are they portable. And they're locked in for 30 years. I don't know of any other country that has this combination of factors. That just leaves people feeling trapped and unable to move whenever rates go up.

This is a policy decision that Congress and the President actively make to not free up mortgages and make them all assumable and portable. That would relax the housing market. If we're going to wait for building to catch up to fix the situation, well, it won't.

> Mortgages are not assumable. Nor are they portable. And they're locked in for 30 years. I don't know of any other country that has this combination of factors. That just leaves people feeling trapped and unable to move whenever rates go up.

It's true that people with a 3% mortgage do not want to move now if they don't absolutely have to and this is impacting supply. however...

> This is a policy decision that Congress and the President actively make to not free up mortgages and make them all assumable and portable.

I don't think they have the power to do this (and I'm not sure I want them to have that kind of power). You want the President and/or congress to tear up all existing mortgage agreements? That's a massive amount of power you want to hand over to the government.Maybe they could mandate that mortgages going forward be assumable with some legislation, but it would take a while for that to have an effect.

> I don't know of any other country that has this combination of factors.

As I understand it, in a lot of other countries (like the UK) mortgages are essentially ARMs - the rates adjust with prevailing interest rates.

The agencies can just offer refinancing. I agree meddling with the demand side is not great, but that’s what we’ve been doing for decades.

This is a western-wide situation, or at least we have the same problems in Europe, point by point.

The rates are meant to curb inflation but obviously both hurt in their own way. In your mind, what policy is Biden not pursuing that he should be?

Red/Blue politics aside, I'm fairly certain the inflationary issues you're seeing today can be root caused to loose fiscal policy from the Trump era. Biden inherited those issues and can be held accountable to fixing them, but not causing them.

"Red/Blue politics aside, I'm fairly certain it's actually completely red team's fault"

I think what they mean is "let's do this like a blameless postmortem" not "let's pretend that no one has ever done anything wrong."

If we can't be like, "hey the current state of affairs can be traced back to X, Y, Z" without the implication that whoever did X, Y, Z is literally Satan then it's no wonder we never get anywhere.

A blameless post mortem that blames someone and doesn’t identify what actually went wrong?

Look, it's a two sentence comment, you're reading the blame into it. Saying that Mark pushed the change that caused the outage isn't blaming Mark.

Saying that Trump (the original author, doing his best) thought that looser fiscal policy was a good idea and that Biden (the current maintainer) has to be the one to course correct due to unforeseen consequences isn't blame unless you take it as such.

It's caused by there being a pandemic and a war.

Which policies?

It’s silly to ignore Covid. This was going to happen regardless due to an unstoppable pandemic.

It's important to remember that the pandemic and supply chain mess affected all countries fairly badly, and the US is handling it better than a majority of them. So, even though things are not good, it shows a fair amount of skill in returning the US economy to a healthy place.

The other thing unfair to Biden is that Trump got credit for the unsustainable surge in stock prices after the giant republican tax cut, so it looks bad for everyone's savings as the stock settles back to a normal level.

//I fear that people will give up democracy by voting for Trump

I am struggling to parse that sentence. Isn't people voting for whom they want the definition of democracy. Separate from how you feel about the choice that's made.

I believe they’re expecting the reader to make the connection between voting for someone who’s tried to subvert the democratic process and is likely to again, and giving up on democracy.

It’s very common for the person who ends a democracy to be elected to the position that lets them do it, and to be in-fact very popular when they do it.

I understand GP as describing disillusioned people making a knowing, democratic, choice to elect someone who they believe will smash the system.

Exactly.

It's really hard to swallow being told that everything is great, when your lived experience is that it is obviously not great; seriously declining really.

People will eventually vote for anyone who is willing to bring chaos.

All of that was happening before Biden took office. Inflation for the last 10 years has been nuts, but we were slowly boiling frogs until the more recent supply crunch.

There wasn't any significant inflation even at zero interest rates until 2019. It was sometimes negative.

That isn’t true at all. The fed was playing funky games with how they were measuring inflation, sure, but all of us living in the real world definitely could tell prices were rising.

What's funny about the crank websites like Shadowstats that claim to give the real inflation rate is, they never raise their prices.

If it was true that the stats were fake, you could get rich in the bond market with TIPS arbitrage, so why not try it?

Bond rates had been less than inflation for a long time before interest rates rose. But yes, a lot of people made money getting cheap loans with interest rates below or close to inflation. It’s one of the main reasons we are in our current mess.

How is others voting for someone you happen to dislike giving up on democracy?

Because the guy tried to overturn the election and stage a coup when he lost. That's not very democratic.

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