Affordability: How Far We’ve Fallen, What It Really Takes to Get Back

How We Went From Affordable to Extracted—and What It’ll Take to Fix It

Listening to a “debate” between Chris Smith and

Alex Berenson

got me thinking about the Covid days. How did the cash injected into households affected affordability? I did some digging and some math.

That math kills one of the biggest lies that were told: we can’t afford our lives because we waste our money on dumb shit. (Think Avacado toast or lattes)

During COVID, the federal government issued three rounds of stimulus payments totaling $814 billion. For a typical family of four, this meant up to $11,400 total over about 18 months. That works out to roughly $630 per month. There are also other injections in the form of child credits, expanded unemployment and so on.

So what happened?

One impact was that U.S. savings rate exploded. It tripled, hitting 33.8%, the highest in more than half a century. It’s now back to under 5% right where the system wants us.

We didn’t blow the money. We saved it. Paid off debt. Caught up on bills. For once, we could breathe. That tiny bit of slack — an average of ~$630 a month — did more to stabilize American families than decades of tax credits and lectures about personal responsibility.

It didn’t just boost savings. It cut child poverty nearly in half. By September 2021, we had the lowest child poverty rate ever recorded in U.S. history. All because we gave families enough to get ahead.

Then, of course, corporations and politicians took it all away. Congress let the expanded Child Tax Credit expire. Stimulus ended. Prices spiked — not because people had too much money, but because these massive companies used global supply shocks as an excuse to raise prices and fatten margins. Multiple studies found that corporate profit expansion was a major driver of pandemic-era inflation, with profit margins contributing over 40% of price increases in 2021.

So if we’re going to talk about affordability, let’s start with this:

People aren’t the problem. The system is.

And the fact that we could move the needle so far with just $630 a month tells you how deliberately close to the edge we keep everyone.

Now the affordability article I had planned before Dave Smith got me thinking about Covid…

Elise Slotkin and Zohran Mamdani walk into a bar and start talking about affordability. The problem is that both of them are going to fall short of actually restoring 1960s affordability—whether in Michigan or New York City or anywhere—unless they start looking to the power of the state to restore it. The power of the state’s capacity to build. To build housing, to build healthcare capacity, to build infrastructure, to build rockets, to build satellites and launch them, to build roads, bridges, tunnels, high-speed rail.

The math doesn’t add up—we established that. For the bottom 80% of Americans, the core necessities of life now consume more than 100% of take-home pay. But what I didn’t tell you: how far we’ve actually fallen, and what it would really take to climb back out.

Because when I say we need to restore affordability like we had in the 1950s and 60s, I’m not talking about minor policy tweaks. Minor policy tweaks will not get us there.

First of all, these industries and institutions are captured. They will do everything they can to maintain their death grip on our economy and their methods of extracting money from us. But it’s also the scale and scope of what we’re talking about here.

We’re talking about pricing that has more than doubled in terms of what basics you could afford on a median incoming. That means the only way to get back to 1960s purchasing power is either to cut prices in half or double income, or some combination of the two. And that means we’re going to have major asset reductions for a lot of people, which will be disruptive as hell. We have to be really intelligent about how we do this—coordinated and deliberate.

We have to build our economy around production and productivity. Around creating things of value, whether services or goods. Not building trash or what will become trash in a few months, but the core elements of what makes our society functional and our lives high-quality.

That’s why I’m talking about rebuilding the entire foundation of how we produce the things people need to live. And that means doing something that will make every corporate lobbyist in Washington break out in hives: we need to bring production back under public control.

Look at the Consumer Expenditure Survey data for 2023. Housing alone accounts for 32.9% of household income. Transportation takes another 17%. Food consumes 12.9%. Healthcare eats up 8%. And that’s before we even get to childcare—which doesn’t even get its own line item in the survey because they’ve buried it in other categories. But we know from separate data that families are spending 10-20% of their income on childcare, sometimes more.

Add it all up: housing, transportation, food, healthcare, education, clothing—and you’re looking at well over 100% of median household income for most Americans. That’s not a budget. That’s a death spiral.

In 1960, the median house cost 2.3 times median household income. Today? It’s 5.6 times. College tuition has increased 1,200% since 1980, while wages grew 18%. Healthcare spending per capita has grown from 6.9% of GDP in 1970 to ~18% today.

But this isn’t just pricing problems. These are production problems. And more specifically, they’re ownership problems.

When housing costs have tripled relative to income, that’s not because houses got three times better. It’s because we stopped building enough of them, and we made the process of building them slower, more expensive, and more bureaucratic. When healthcare costs exploded, it wasn’t because we got dramatically healthier. It’s because we built a system that prioritizes revenue extraction over actual care delivery.

And when politicians stand up and promise to “tackle affordability,” what do they offer? Tax credits. Subsidies. Price controls. It’s like trying to fix a broken water main with duct tape. You’re not addressing the fundamental problem—you’re just moving money around while the infrastructure continues to crumble.

Real affordability comes from productive capacity that’s designed to serve people, not shareholders. It comes from being able to make the things people need, efficiently, at scale, without some private equity firm or tech billionaire skimming profit off the top.

In 1969, when things were affordable, we produced 151.5 million tons of steel—22% of global production. We made the machines that made other machines. We had complete supply chains from raw materials to finished products. And critically, much of this productive capacity was either directly publicly owned or operating under frameworks that prioritized national economic goals over pure profit maximization.

Today? We produce 80-85 million tons of steel—4% of global production. We’re a net importer. We ship our scrap steel to China, they turn it into finished goods, and sell it back to us. We’ve gone from making things to assembling things other people made from materials other people processed. And we’ve handed over our state capacity—our ability to actually produce what we need—to people like Elon Musk.

Think about that for a minute. We’re giving our tax dollars to Tesla for EV subsidies, to SpaceX for space contracts, to his various companies for government services. We’re handing over state capacity to oligarchs like Elon Musk and Jeff Bezos. We’re relying on them to build our infrastructure—digital infrastructure, technological infrastructure, rocket infrastructure, space infrastructure, travel infrastructure.

We’re letting them basically become the state. And we’re doing the same thing with private equity in healthcare. We’re terrified of the government running our healthcare, but instead we’re letting these corporate behemoths and corporate monopolies run our healthcare. And we have no control over them. We have no mechanism of even attempting to influence them with our votes. In fact, they do more influencing of our politicians than we do.

We’re paying them to do things we could be doing ourselves, and then we act surprised when they jack up prices because they have no competition.

This has direct, brutal consequences for affordability, and the solution isn’t more subsidies or tax credits. The solution is public production.

Want to fight UnitedHealthcare? Don’t regulate them into slightly less predatory behavior. Build public hospitals. Make public pharmaceutical companies. When people are rationing insulin because Eli Lilly wants to charge $300 for something that costs $3 to produce, the answer isn’t negotiating slightly lower prices. The answer is making our own insulin. When Purdue Pharma creates an opioid crisis for profit, the answer isn’t just suing them. It’s having public pharmaceutical companies that prioritize public health over profit margins.

Want to solve housing? Don’t just subsidize private developers who pocket the subsidies and keep prices high. Build public housing. Create public development authorities. When you need steel, lumber, concrete, wiring, plumbing, appliances, tools—make them publicly or buy them from publicly-owned enterprises that aren’t trying to maximize shareholder returns.

Want to fix energy costs? Stop subsidizing private solar and wind companies and build public energy production. China didn’t become the world’s manufacturing powerhouse by giving tax breaks to private companies. They built state-owned enterprises that could produce at scale without worrying about quarterly profit targets.

The idea that somehow corporations or big business is unique and is our only option to get the things we want and need isn’t just wrong—it’s antithetical to American history. The times we’ve made the most rapid gains were in spite of private industry, not because of it.

The Interstate Highway System? Public project. The internet? Developed by DARPA, a government agency. The technologies that made smartphones possible? Government-funded research. The COVID vaccines that private companies took credit for? Built on decades of publicly-funded basic research. When we needed to mobilize industrial capacity to win World War II, we didn’t ask private companies nicely—we built our own factories and told private industry what to produce.

But somewhere along the way, we bought into this myth that private enterprise is inherently more efficient, more innovative, more capable than public enterprise. And that myth has been absolutely devastating for affordability.

Because private enterprise is optimized for profit extraction, not for affordability. When you have shareholders demanding returns, when you have executives getting paid based on stock performance, when you have private equity firms looking to flip companies for maximum value—affordability becomes an obstacle to overcome, not a goal to achieve.

Public production, on the other hand, can be optimized for exactly what we need: abundance at cost. When you remove the profit motive, when you remove the need to generate returns for shareholders, when you remove the incentive to create artificial scarcity to drive up prices—you can focus entirely on producing what people need as efficiently as possible.

So what would it actually take to restore 1960s-level affordability? We’d need to rebuild public productive capacity on a scale we haven’t seen since World War II.

Public pharmaceutical companies producing insulin, antibiotics, GLP-1 drugs at cost. Public housing authorities building at scale without worrying about profit margins. Public energy companies deploying solar, wind, and nuclear without quarterly earnings targets. Public steel production, public manufacturing—public everything that people need to live.

The reason we need to bring this power back to ourselves as a unified people through our government is because that’s the only way we can hope to have any control over the direction things go, over who these sectors benefit, how they’re assembled, and who has access to them. If we don’t, we’re just going to see more and more of these mega-billionaires—and apparently ultimately trillionaires—who have made their wealth essentially by replacing “we the people” with “they the people.”

This isn’t new. This is very American. Public ownership of energy production, healthcare, education—these things are foundational. A central bank heavily involved in developing our industry and infrastructure. State entities building that infrastructure, not handing away billions to folks like Elon Musk to build it for us.

This is about using our collective resources to build the productive capacity we need to make life affordable again. It’s about stopping the transfer of wealth from working people to shareholders and redirecting that capacity toward abundance. When we control the means of production for the things people need to live, we can ensure those things are produced for use, not for profit. We can build abundance instead of artificial scarcity. We can restore the kind of affordability that lets people live decent lives without going into debt just to survive.

Most politicians won’t say this because it threatens the fundamental business model of their donors. But until we start having honest conversations about who owns productive capacity and who benefits from it, we’ll keep trying to solve affordability through market mechanisms that are designed to prevent affordability.

We broke the system that made things affordable. If we want affordability back, we need to rebuild that system under public ownership and control. Everything else is just moving money around while the real problems get worse.