Tag Archives: economic recovery

Sept 16, 2015 – Arsenal For Democracy 143

  By

Posted by Bill on behalf of the team.

AFD-logo-470

Topics: How to redirect hundreds of billions of dollars in subsidies for the wealthy toward low-income programs; the low-wage service economy recovery; should the US accept more Syrian refugees? People: Bill, Kelley, Nate. Produced: September 13th, 2015.

Episode 143 (55 min):
AFD 143

Discussion Points:

– CFED.org: “Redeploying $540 Billion in Federal Spending to Help All Families Save, Invest, and Build Wealth”
– Why it doesn’t feel like a recovery: So many new jobs in retail services get paid less now than before the recession’s peak.
– Should the U.S. accept more than just 10,000 Syrian refugees in the coming year?

Related Links

– Corporation for Enterprise Development (CFED): “Redeploying $540 Billion in Federal Spending to Help All Families Save, Invest, and Build Wealth”
– NYT: “Low-Income Workers See Biggest Drop in Paychecks”
– AFD by Kelley: “United States to accept (a few) more Syrian refugees”

Subscribe

RSS Feed: Arsenal for Democracy Feedburner
iTunes Store Link: “Arsenal for Democracy by Bill Humphrey”

And don’t forget to check out The Digitized Ramblings of an 8-Bit Animal, the video game blog of our announcer, Justin.

Podcast: Play in new window | Download

Subscribe: RSS

U.S. homeownership in 2015 (in a global context)

  By ,

us-home

Statistics and analysis compiled for and by The Globalist Research Center.

In the second quarter of 2015, the homeownership rate among U.S. households reached a new recent low of 63.4%, according to the U.S. Census Bureau. This was the lowest reported rate since 1967!

Homeownership in the United States had reached an all-time high of 69.2% in 2005, two years before the housing bubble burst in late 2007. Following the recession, prospective buyers shifted instead into renting. Growth in the rental market — approaching record occupancy levels in many areas of the country — is one of the factors driving down the share of homeowners in the overall pool of households.

At the same time, U.S. home buying and home prices have actually increased recently. But that demand has largely come from institutional investors, speculators, and foreign buyers. This makes it harder for ordinary homebuyers, especially in the youngest generation of would-be first-time buyers, to break into the market.

For comparison to some other major economies’ homeownership rates, about 53% of German households own their homes, 73% of Italian households own their homes, and 90% of Chinese households own their homes. The global average, however, is slightly below the latest U.S. homeownership rate.

But not all homeowners are created equal. In Romania, 95.6% of households own their own homes as of 2013 — the highest ownership rate of any EU country. And eight of the ten EU member countries with the highest rates of homeownership are all former Warsaw Pact or Soviet states. (Another is ex-Yugoslavian.) The ownership level is similar in Russia itself, where 84% of housing was owner-occupied as of 2010. All of this is at least partially related to rapid housing privatizations in the early 1990s. However, there are concerns that many of the homes in those countries, constructed in the suburbs and countryside during the Communist era, might not hold up much longer. Little new construction occurred in the decade after 1991. This could potentially put much of the housing stock in jeopardy and add major stress to those already relatively poor European nations.

Homeownership promotion has long been a goal of U.S. public policy — maybe because of its cultural association with early American colonists, homesteading pioneers, and the American Dream. Today its promoters seek to encourage building up equity and to ensure a steady need for jobs in the construction industry. The George W. Bush Administration, for example, promoted what it called an “ownership society.”

The general idea (in theory, at least) is that when people living in a home-owning household reach retirement age, the equity they have in their residence can provide a major source of funds to finance their retirement.

Home-owning households are generally wealthier, as least on paper, because a residence is often their largest asset. However, that asset is usually not a readily accessible source of cash.

Moreover, more than two-thirds of American homeowners in 2014 had mortgages on their homes. Homeownership is far less associated with debt in China, for example, than it is in the United States. Taking out a mortgage to buy a property is very uncommon in that country, barely reaching double-digits as a percentage share of homeowners in 2010.

Congress: Low bar, everybody down

  By

Word on the street is that we’re supposed to be excited about the not-yet-passed budget deal between Democratic Sen. Patty Murray of Washington and Republican Rep. Paul Ryan (the 2012 VP nominee) of Wisconsin.

Not because it’s a good deal. It’s still bad on its internal merits, relative to the fiscal direction we need to take the government and the economy. It’s being hailed as a good deal more because:

  • it exists,
  • it’s relatively long-term (through fall 2015, not another short fix),
  • and it’s not quite as horrendous as the 2011 Budget Control Act, known commonly as “the sequester.”

The latter was a haphazard across-the-board slash-and-burn measure, rather than a thoughtful targeting that took into account economic conditions. This is a somewhat more considered set of cuts that partially considers economic conditions.

Or as the Washington Post WonkBlog put it: “The budget deal is good for the economy because it isn’t terrible“…

The budget deal that Sen. Patty Murray (D) and Rep. Paul Ryan (R) announced Tuesday night could be good news for the U.S. economy in 2014. Not for what it contains. Rather, for what it doesn’t contain — and for the fact that it exists at all.

[…]

In other words, at a time of high unemployment, falling deficits and low interest rates, budget-cutting is still making the economy worse than it otherwise would be. But with this deal, Washington policy will be less counterproductive than it otherwise would be.”

Congress really seems to be facing some “soft bigotry of low expectations” from the American public and media these days. But I’m not sure why we’re supposed to throw a parade when they fulfill their minimum required duties — such as passing budgets and funding the operations of our national government — like they’re supposed to (and kind of still do a bad job even when they do that).

I understand that it’s seen as “progress” that we’re close to getting an actual budget passed for the first time since 2010 — though let’s not count our chickens before they’re hatched — but it’s a dangerous path to travel too far down because it both emphasizes value in reaching any deal no matter how bad, and because it only encourages marginal cooperation rather than actually policy engagement by the Republicans.

We’re getting a deal that will continue to put a major drag on the economic recovery — just a little less of one — and we’re still making huge cuts in vital areas. Is it better than nothing or further artificial fiscal crises? Probably. But not by a lot.