I am trying to answer the question: “Why is life so expensive?” Figure 12 has an interesting chart. It is the fixed costs of a family comparing 1970 to 2004. Mortgage costs have increased by 166%. Car maintenance by 150%. Taxes? 220 PERCENT! Or, in numbers, per year: Mortgage increased by $4,000; car by $3,000; taxes by $12,000! And daycare, generally unneeded in 1970, adds another $12,000. Numbers already adjusted for inflation.
IMO, these are the reasons for why life is more expensive now: Inflation has gutted wealth and wages, there are more taxes for an average family, and housing and college prices have skyrocketed. I blame monetary policy for the latter. From 1970 – 2010, wages grew by about 25% while fixed costs (mortgage, car, health, childcare, and taxes) grew by 235%. It’s simple: IT’S THE GOVERNMENT, STUPID.