A very interesting chart on long-term trends in consumer spending appeared in this NY Times story about home prices and housing costs as they relate to the U.S. economy.
Did anyone have any idea that health care costs played such a big role in personal spending before and after World War II? More recently, we should be thankful for the advances in food production and the waves of cheap imports or Americans would be even more stretched.
![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
Tim,
I think the line that spikes around WWII is food, not health care. They made food and health care lines of similar colors so it does look confusing.
Shhh. Don’t tell voters in November that the Federal Reserve created the housing bubble and that both the Rs and Ds are bought up and the same thing.
I agree with ip, Tim is misled into thinking that healthcare spending was so high around WWII by the crossing point of the food and heatcare lines.
But the graph is pretty interesting – thank you, Tim
Yes, they really should have used something other than different shades of gray. High food costs makes much more sense since people weren’t spending a lot on anything but necessities before and after the war.
What’s interesting is that, back then, we were like emerging economies are today in that food was a much larger part of consumer spending.
Still a fascinating chart (that makes more sense now).
One conjecture that can be drawn from the graph is that for the last 80 years housing costs were pretty stable at around 15% of income. This suggests that these costs will continue to grow at the same rate as personal income in the future,
Funny…
My biggest household expenseby far isn’t even shown on that chart.
And I know it has been growing exponentially since before WWII.
Taxes.
Do these all add up to anything near 100%? Seems like only healthcare has really risen a lot over the years. What’s the rest being spent on, entertainment and personal expenditures?
Tim U:
You imply that personal income will grow?