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Were we better off?

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AUTHOR: R Quinn on 7/12/2024

In 1975 the Social Security COLA was 8%, in 1979 9.9%, 1980 14.3% and 1981 11.2% reflecting soaring inflation. I project 2025 will be 2.3% or less if inflation keeps falling. 

During the oil embargo in 1974 gasoline jumped 35% a gallon in one year to $0.53 a gallon equivalent $3.36 in 2024 – if you could get gas then. As of July 8 the average US price a gallon was $3.608 with significant variations by state and individual station – $3.01 in Mississippi and $4.76 in California.

Mortgage rates were in the 9% range  

So, the question is, were we better off back in the good old days?

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Mark Eckman
3 months ago

I think about how my grandsons will consider these the “good old days” and will have the same tribulations when they reach my current age.

stelea99
3 months ago

We received a new grandson last November. When my first son was born in 1973, we couldn’t make many phone calls because of toll and long distance charges from monopolist Ma Bell. There was no easy way to share photos or for relatives to see the baby unless they visited. There were no personal computers, cell phones, or even portable phones in our home.

Now we can see our new grandson virtually anytime he is awake via FaceTime. His parents have a photo setup on Google photos with thousands of pics and videos. Although we are 2000 miles away we feel much more connected with him than our parents ever felt for our kids. I can print a photo of my grandson for pennies should I want one.

Life has changed so dramatically compared to 50 years ago. Technology we take for granted now was science fiction then. There is virtually no aspect of life that has changed dramatically.

When I got out of the USAF in 1972 and went to work, there was no Roth, or other IRA, or 401k. Our health insurance didn’t provide maternity coverage. The health insurance had 20% coinsurance, and no out of pocket maximum. I had no sick days. There was a 3 calendar year waiting period before I could get a bonus or be vested in the retirement plan. At the company where I worked there were zero female employees except in clerical jobs. There were zero black employees,

Nostalgia is wonderful when we look at old photos and remember the “Good ol days”. Well, they weren’t.

David Lancaster
3 months ago

Not with a 13.5% mortgage on our first house in 1984. Makes today’s rates look like a bargain. I was so financially naïve back then.

Last edited 3 months ago by David Lancaster
Jeff Bond
3 months ago

Sounds like me. Bought a house in 1980 and had to get a 12-3/4% ARM (quarterly adjustment, if I recall) that was tied to T-Bills. There was no ceiling or floor for adjustment. The first couple of years we watched the negative amortization kill us, then for a couple of years we were able to gain it back. After a total of four years or so we refinanced with a fixed rate (around 10%) with essentially no gain or loss. Never did an ARM again.

Rick Connor
3 months ago

I found this article on CNBC discussing the change in home prices. Their article says that median home prices doubled from 1965 to 2024. The ratio of median home price to median salary went from about 3 times to a bit over 5 in the same time period. There was no attempt to quantify the value, whether in terms of size, efficiency, land, ….

My parents bought their first single home, a 2400 sq ft Colonial in the Phila suburbs in 1965 for about $22,000 . At that time that was considered a large home in that are. Today, homes in that area can be 50% larger. Back then my father paid extra to have more than one electrical outlet per bedroom. There was no air condition, and the oil heat wasn’t very efficient. The windows weren’t very efficient, and the attic insulation left a lot to be desired. It was very difficult to get comfortable temperatures in all 4 bedrooms. There was no fancy deck or paved patio. I think a dishwasher was extra. No soft close kitchen drawers or cabinets. Structurally it was very sound. My father was in the mortgage business and knew this was a quality builder. Three generations of my family lived happily in that home until my wife and I sold it in 2021.

parkslope
3 months ago

When we purchased our first house in 1975 it cost about 1.5 times our household income. In 2022, 48 of the 100 largest markets had price to income ratios greater than 5.

Last edited 3 months ago by parkslope
mytimetotravel
3 months ago

What was wrong with the replies on the other, identically titled, thread?

Jonathan Clements
Admin
3 months ago
Reply to  mytimetotravel

There was nothing wrong. There shouldn’t have been a duplicate post — it was a website bug — so I deleted the version with the fewest responses.

Nuke Ken
3 months ago

When I saw the third identical piece appear briefly, this time in the articles under Jonathan’s name, I really had to wonder what was going on.

Nuke Ken
3 months ago

Feeling deja vu.

Jack Hannam
3 months ago

In general, there has never been a better time or place to be born than today in the USA.

Patrick Brennan
3 months ago

Well, one thing is for certain, things are a whole lot better than they were on 13 July 2020. Back then, my wife’s cousin, a physician, had just died of Covid, you couldn’t have a proper funeral, two other relatives got really sick, and I began to wonder what may have happened to the “better angels of our nature”. I’m grateful for today.

Jeff Bond
3 months ago

Nope. These are the good old days.

Rick Connor
3 months ago

As the song says : “Cause the good ole days weren’t always good
And tomorrow ain’t as bad as it seems”. The answer is some folks were better off, but not everyone.

William Perry
3 months ago
Reply to  Rick Connor

Great Billy Joel music video! Thanks Rick.

Dan Smith
3 months ago

My dad used to say that he remembered when bread was a nickel a loaf, but he didn’t have a nickel. Regarding gas, my little SUV gets 3 times the mileage as whatever I drove in 1974, and my income many multiples of my 1974 income. I’ve never had it as easy as I have it now.

JGarrett
3 months ago

Socially, we are 1000x better today of where the old days were. Fortunately, all people today are treated with far more consideration and respect than ever was the case in the old days. And, I think we’ll all agree, that is far more important than anything financial. We have progressed greatly in that regard.

Nuke Ken
3 months ago

Probably 100 million different answers to that question, depending on who you are talking to and what aspects of life they find most important.

Last edited 3 months ago by Nuke Ken

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