If you really want to understand how messed up the American economy is, ask yourself: Why are new houses so cheap in America relative to the rest of the world?

There are a few things to consider here.<br><br>Firstly, when you buy a house, you are buying an asset that will provide a service for the rest of your life. It may be the largest purchase you make, and it is something that will be useful for decades to come. Even if it's a money pit, you've got a home for life. <br><br>This means that when you compare the price of houses across different countries, the price of the house is a very important measure of a country's standard of living.<br><br>Now, why should houses be so cheap in the US? I don't know what it is, but the US has always had a very low cost of living. For example, in 2013, a 40-inch TV in the US cost $450. In the UK, the same 40-inch TV would have cost $900 (all dollar values are adjusted for PPP). If we compare housing costs, a 1990 US dollar would buy 89% as much house as it would in the UK, 71% as much as in Switzerland, 67% as much as in Norway, 57% as much as in Germany, 51% as much as in France, and 46% as much as in the Netherlands.<br><br>I think there are a few explanations for this, but I am unsure of all of them. The first is that building a house in the US is much cheaper. I think this is because US builders have managed to streamline the construction process much more than other countries have. In many European countries, the construction of a house will involve hundreds of small companies. Each company will come to your house, and they will each do their own thing. The electrician will come and install your lights, the plumber will come and install your shower, the drywaller will come and install your drywall, etc. This is expensive, because every time the builder hires a new company, he has to pay for the time of the people who own that company. <br><br>Another problem is that there are a lot of regulatory barriers to entry on the market for construction. It is difficult to start a construction company in many places, because you need to have so many certifications, and you have to go through so much red tape. This means that the supply of construction companies is limited, which means that prices for houses are higher. <br><br>But this is not the case for the United States, where you can start a construction company with very few regulatory hurdles. This means that the supply of construction companies is not limited, so there is more competition, and therefore houses are cheaper. <br><br>The other issue is that US workers are cheap. If it costs $100 to hire a worker, and build one house, then building 100 houses will cost $10,000. If it costs $200 to hire a worker, and build one house, then it will cost $20,000 to build 100 houses. If it costs $50 to hire a worker, and build one house, then it will only cost $5,000 to build 100 houses. <br><br>I'm sure there are a lot of other explanations, but these are the main ones I see. <br><br>But I don't know how it is legal to charge so little for a house. I live in NYC, and a one-bedroom apartment costs over $1 million. And I think that is pretty cheap. <br><br>The problem is not that Americans earn less than other countries. The problem is not that Americans spend less than other countries. The problem is that Americans get less than anyone else. Americans have to choose between having a place to live and having access to healthcare, they have to choose between having a place to live and having access to education. <br><br>I know there are a lot of people out there who will say that all of these social services are bad, and that Americans are better off without them. I think that is bullshit.