Government student loan programs - access to easy money by students limited the incentives for cost containment at universities. More money, higher tuition and subsequent higher student debt. The schools also added administrative staff (and increasing salaries and benefits like healthcare) to deal with increasing regulation and student expectations.
Let us start at the beginning of the rise in costs. The enactment of Medicare.
A quote from the article…
“Finkelstein estimates that the introduction of Medicare was associated with a 23 percent increase in total hospital expenditures (for all ages) between 1965 and 1970, with even larger effects if her analysis is extended through 1975. Extrapolating from these estimates, Finkelstein speculates that the overall spread of health insurance between 1950 and 1990 may be able to explain at least 40 percent of that period’s dramatic rise in real per capita health spending”
And then we have the promise of the ACA… it promised to reduce costs and the rise in costs. It did not.
Medicare, Medicaid and the ACA make the government responsible for paying 47% of all the healthcare costs in the US. All good programs, all poorly managed.
Now we come to housing. Demand vs Supply. Why can’t we get more supply? Lets use a state with the highest median cost of housing in the US, California as an example.
A developer buys a plot of land for millions of dollars. In the low cost midwest, permits and zoning might take as long as 9 months. California can take 3 to 4 years or longer.
What about the type of home? The high carrying costs and zoning requirements for lot and house size push developers to build large and expensive homes to cover their costs. A small home doesn’t cost that much less than a large one to build due to labor requirements and material costs but they do make a larger profit. Building codes are a good thing. Zoning is a good thing but taking it too far gets you California, Massachusetts, Washington and New Jersey as the 4 of the top 5 highest cost of housing states in the US.
Government backed Student loans have existed in this country for almost 70 years. Student loans (private) have existed for almost 200 years. School tuition didn’t start really increasing beyond inflation the past 20 years. Funny how it was fine for the first 50 years.
Medicare is ONE part…but you’re claim is that the GOVERNMENT was THE ONE AND ONLY cause. Insurance company’s profits increase of over 300% is by far a bigger factor.
ACA didn’t promise cheaper medical insurance for all. What it did promise was affordable healthcare for people who don’t have health insurance and get rid of some of the extremely unfair practices like denying coverage for pre-existing conditions.
Again, that’s been going on for decades. Now all of a sudden, it’s a problem?
Bull. I served on my towns planning board for over a decade. Zoning does not directly influence home costs. We have zones 1,2 and 3. Zone 3 stipulates a 2 acre lot rural. Zone 1 a 1/4 lot plot size if on sewer and 1/2 -1 acre if septic. The ONLY added cost to the builder is the amount paid for plot size. A 3bdr home on 1/2-acre lot with a septic is about the same price as a 3bdr home on a 2-acre lot with septic.
And zoning has absolutely NOTHING to do with the higher costs. California, Washington, Massachusetts, Texas, and New York lead the United States as the top high-tech states based on job volume. This is where people in tech want to live. MA is a very small state (square area) compared to the other states so there’s not a lot of room to build homes. The tech area is concentrated around Boston and outward. The closer to Boston the higher the cost. Andover MA has one of the most restrictive zoning laws in the State, yet homes in Andover are far less then home in Medford because Medford is closer to Boston.
CA is a very special state because of the amount of people and the high-tech influence. Funny how CA and MA have about the same zoning laws but CA home prices are almost DOUBLE the MA home prices. Seems a lot other factors are in play. The big institutional investors only account for 15% of the investor market. Most are small investors of 2-5 people pooling their money. In our town alone - 40% of all home sales last were by investors. They are out bidding everyone.
Gov backed… Not government held. Banks used to determine the risk for student loans and lent money accordingly. When the government took that over there were no limits, no risk analysis and there was no possibility of bankrupting yourself out of your loan. That happened on July 1, 2010. It wasn’t the direct cause but it made the problem worse.
I did not say it was the only cause, Medicaid and the ACA have their share. It is not the only cause but it is a significant contributor as is fraud.
It absolutely did promise that.
Bring down health care costs, with savings of $2,500 a year for every American family.
OK, FWIW let me attempt to bring this discussion back to reality …
Medicare/Medicaid costs have increased because people generally died somewhere between 65 and 70 AND
Because new medical technology has greatly extended the general lifespan, for better or worse.
Looking back even 20 years ago, I assumed that after 65 I was on “Borrowed Time”. the hips, the vision or a heart attack would all mean a quick end but today we have treatments, which are costly.
We can easily get back to the old and existing Medicare cost model but who want’s to tell your Grandma or your Mother “Sorry, your Macular Degeneration treatment or Hip Replacement is too expensive?”.
Social Security, enacted during the Depression, has never been a Retirement Account but a Social Welfare for the elderly who lost their homes and savings as the result of Bank Failures since the initial recipients never paid a dime into Social Security but still received benefits.
My point is that Social Security/Medicare/Medicaid isn’t a Pension but a Tax to ensure a basic standard or care for those most venerable.
The weird thing about this tax is that the more you make the less you pay. Someone earning at a job earning $20,000 a year pays 6.2 % plus AND their employer pays the same 6.2% BUT if you earn over $185,000 you pay no tax at all!
Bottom line, the easy solution to the Social Security / Medicare shortfall is to simply eliminate the Social Security / Medicare maximum. Seriously, would it be too much to ask Elon Musk to pay the same tax on his and his highest earning employee’s income that everyone else is already paying?
This could be misconstrued. If you make $200,000, you are taxed UP TO $185,000 and then the taxes stop. The last $15k is not subject to taxation. The ceiling has been adjusted over time and will continue to do so. If more money is needed, the ceiling certainly could be adjusted further upward to fulfill the needs of the program.
The golden rule- those with the gold makes the rules. The rich are very good at fostering loopholes to avoid paying those taxes. The day the increase is announced, there will also be some provision tacked onto the bill to provide some shelter method for the ultra-rich to divert monies and avoid the increased taxation…
People rich enough to be gainfully unemployed don’t pay FICA. There’s a loophole. Single workers making more than $200,000 pay an additional 0.9% and married employees making more than $250,000 pay the same add on.
They are also adept at avoiding more than just FICA. Warren Buffet is famous for saying that he pays less in taxes by percentage than his secretary does.
So, auto loan crisis is indication of general state of economy?
Boston sci stock is down 50%. They are building a $100 million addition in maple grove. And story in paper says layoffs are coming.
Starting the 2nd or maybe 3rd year after Reagan capped SSN cap I stopped paying in SSN by early November and then my last few years before I retired it was early October. That cap is the WORST thing ever to happen to the funding of social security. It left BILLIONS on the table. I do think there should be a cap - north of $500,000.
And there is a maximum benefit SS pays. Someone who earns $500K a year does not receive more than someone who earned above the maximum their entire career.
Additionally the lowest earners, on percentage receive more than high earners. The payout is regressive.
There are people who had to stop working as a result of disease, or disability, or age-related discrimination. To assume that they retired because they were financially-secure is both inaccurate and insensitive.
The maximum payout for 2026 is $49,824. Someone that gets that retired at 67 and grossed more than the maximum of $185,000 for the last several years before retiring. If they waited until age 70, the annual SS benefit is $62,172. Even then, it isn’t easy to live in only SS.
Yepers, both myself and my wife are on SS disability, never thought when I was younger that I would Not be able to work past my 50’s… I worked up until one morning my alarm went off and I just couldn’t get out of bed from the pain… I let the store manager and area manager know I wasn’t gonna make it in, same thing next day and so on, finally said I need to look into disability retirement and I applied for it and got it 1st try in 5 months (record for TN it seems), never heard (nor had my doctors) of anybody getting it on the 1st try… My wife hasn’t been able to work since her heart surgery in 2015, she was denied SSD a few times, finally went before a judge and he asked 2 question to the government, can she do x work and y work, the government person said no, so the judge asked if she can’t work by your standards then why are we here, she got it that day… So she hasn’t worked since her early 40’s…
Did I/we ever want to be on SSD, heck NO!, am I glad it is out there, YES!!! If not we would be screwed big time…
Simply pointing out the lower earners receive a larger percentage payout than high earners. Technically regressive but in practice progressive depending on how you view it.
The classic retirement discussion talks about the 3 legged stool… pension, savings and SS. It is now, in practice, a 2 legged stool… SS and your Roth/IRA/401K/Savings.
My SIL had to stop working in her early 50s, due to Fibromyalgia. It took close to 5 years, and the reports from 4 different doctors, before she was able to qualify for SSD.
I have a Pulse Generator implant in my back now for Spinal Cord Stimulation now that helps with the pain from my mid back and down… But I have also had a neurological disorder since 2015ish… I probably got SSD so fast over that, but I needed it more for the pain and whatnot at the time… I had lots of stuff going on and I simply pushed myself way to hard way to long and my body just finally said nope, not doing this anymore… I slept for a solid 18-20 hours a day for 3 or more months letting my body recoup before I could stand or walk for over few minutes… It took me 3 to 4 weeks spending a little time here and there applying for SSD, I kept falling asleep… lol
No you didn’t. You said = “If YOU can afford to retire, YOU can afford to live just fine.”
Not everyone is in the same situation as you. I know several people who retired and were doing fine, but inflation has outpaced their income drastically. And don’t get sick because any savings you have could easily be eaten up with a catastrophic illness like Cancer.