So, about those tax cuts from Trump’s first term…

Summary

Marketplace Podcast Summary: "So, about those tax cuts from Trump’s first term…"

Release Date: February 6, 2025
Host: Kai Ryssdal
Guests: Blake Emerson (Professor of Law and Political Science, UCLA), Stacey Vanek Smith, Eric Zwick (Economist, Chicago Booth School of Business), Owen Zadar (Economist, Princeton University), Caroline Bruckner (Managing Director, American University’s Tax Policy Center), Robert Dietz (Chief Economist, National Association of Homebuilders), and others.

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1. Government Control and Constitutional Challenges

Timestamp: [00:31] – [09:17]

Host Kai Ryssdal opens the episode by addressing recent developments where Elon Musk and allies have gained significant control over the Treasury Department's payment system and other critical economic infrastructures. This shift has raised alarms about potential constitutional violations and the undermining of established governmental structures.

Key Discussions:

• Constitutional Violations: Blake Emerson asserts that actions taken by Musk and the Trump administration, such as attempting to shut down agencies like USAID and controlling the Treasury payment system, constitute clear violations of Congress's constitutional powers. “[These actions] really strike at the core of those constitutional powers that are held by Congress and not by the executive branch.” ([02:41])

• Shadow Executive Branch: Emerson highlights the emergence of what he terms a "shadow executive branch," where Musk's influence potentially displaces traditional executive structures. This raises questions about accountability and the true locus of executive power. “What's not clear now is who exactly is running the show... there’s some genuine doubt about whether that executive power is where it's supposed to be.” ([03:51])

• Economic and Political Risks: The disruption of predictable government functions introduces systemic uncertainty, posing grave risks to both market and political stability. Emerson emphasizes the unpredictability and potential arbitrariness of government decisions under this new arrangement. “[Uncertainty] creates really grave risks, I would say, for market stability, but also more profound risks about political stability.” ([04:10])

• Accountability Challenges: Determining who holds the decision-making authority becomes complicated, making legal accountability difficult. Emerson notes the challenges courts face in enforcing actions when true decision-makers remain obscured. “It’s going to be hard for the courts to get their grip on what's really happening...” ([08:32])

2. Economic Data: Labor Market Shifts

Timestamp: [09:17] – [10:36]

Kai discusses the latest economic indicators, focusing on Wall Street's relative calm amidst ongoing economic shifts. ADP’s payroll report indicates a robust job addition of 183,000 in the previous month, primarily driven by the service sector, while the manufacturing sector saw a decline.

Key Points:

• Service Sector Growth: The economy continues its shift from goods production to services, with services adding 190,000 jobs compared to manufacturing losing 6,000. “[The] overall share of US Manufacturing has been declining pretty consistently for decades.” ([10:43])

• Manufacturing Challenges: Despite strong overall job growth, the manufacturing sector struggles, reflecting a broader trend of economic evolution away from traditional manufacturing roles.

3. Wildfires in Los Angeles: Economic Impact

Timestamp: [11:21] – [14:38]

Sabri Benishore reports on the catastrophic wildfires in Eaton and Palisades, LA, which have caused insured losses estimated at $75 billion—three times more than the next four most destructive California wildfires combined.

Key Insights:

• Urban Fire Challenges: The devastation is attributed to legacy structures built before modern fire codes, making them more susceptible to fires. “Michelle Steinberg... says the majority of the homes... were built before 1950, long before modern fire codes, which makes them more flammable.” ([13:15])

• Economic Escalation: Rising property values and increased number of homes in hazard zones exacerbate the financial impact. Economist Tom Coringham notes, “In the last five years, [price increases] really drives the increase in costs associated with this event.” ([13:53])

• Insurance Gaps: The actual total cost may be higher as not all losses are covered by private insurance, indicating deeper economic vulnerabilities. “...more people are losing their private insurers, meaning the real total cost... might be even higher.” ([14:07])

4. Tax Cuts from Trump's First Term: Impact and Future

Timestamp: [17:09] – [22:18]

Stacey Vanek Smith delves into the implications of the 2017 Tax Cuts and Jobs Act, which reduced corporate tax rates from 35% to 21%. Economists Eric Zwick and Owen Zadar analyze the effectiveness and long-term consequences of these tax cuts.

Key Arguments:

• Insufficient Economic Growth: Zwick and Zadar found that while corporate spending increased by 10-20%, it only offset about $100 billion annually in lost government revenue. “These are enormous and staggering amounts of money. So I would just say focus on the numbers...” ([19:19])

• Disproportionate Benefits: The tax cuts primarily benefited higher earners, who are more likely to save extra income rather than spend it, limiting the broader economic stimulus. Caroline Bruckner explains, “For higher earners, extra money will often go into savings, and that doesn't really help the economy.” ([20:16])

• Policy Challenges: Extending individual tax cuts would require significant legislative action, with the Congressional Budget Office estimating a cost of nearly $3.5 trillion over the next decade. Zwick warns of a contentious debate likely to overshadow essential fiscal discussions. “Balancing taxes and spending isn't some Hail Mary pass... we have a national debt that totals $35 trillion.” ([21:16])

• Historical Precedent: Zwick points to the late 1990s as a period when the U.S. successfully balanced tax policies with economic growth, suggesting that similar approaches could be effective. “We've done it before... a vibrant economy and a tax system that raised as much revenue as we were spending.” ([22:18])

5. Affordable Housing Innovations: Floating Cabins

Timestamp: [22:50] – [26:02]

In the "Adventures in Housing" segment, Sarah and Brandon Jones share their experience living on a floating cabin in Lake Fontana, North Carolina, as an affordable housing alternative.

Highlights:

• Cost Efficiency: The Joneses purchased their cabin for $22,000 and found it more affordable than traditional housing options. Robert Dietz explains the financial benefits, “You could take one month's worth of rent, mortgage payment... and have a whole solid year on the water.” ([24:40])

• Lifestyle Trade-offs: While living on the water offers affordability and natural beauty, it comes with inconveniences such as limited access to amenities and services. Sarah notes, “it can be inconvenient in some ways, but... so much more convenient.” ([25:13])

• Community and Recreation: The floating lifestyle provides unique recreational opportunities, enhancing the quality of life despite certain inconveniences. “Our free time, we can hop in a kayak right off the front porch..." ([25:20])

6. Retirement Savings Trends

Timestamp: [22:50] – [26:02]

In the final notes, Kai addresses retirement savings, highlighting a dichotomy where half of private sector workers are saving in 401(k) plans, yet 40% are not saving enough to maintain their lifestyle in retirement.

Key Points:

• Savings Disparity: While participation in retirement plans has increased, the adequacy of savings remains a significant concern, particularly for lower and middle-income workers. “40% of the American working population is not saving enough to keep up their lifestyle through retirement.” ([23:21])

• Economic Vulnerability: Insufficient retirement savings contribute to long-term economic vulnerability for a substantial portion of the workforce, emphasizing the need for policy interventions and financial education.

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Conclusion

This episode of Marketplace delves into critical issues affecting the U.S. economy and governance, from constitutional challenges posed by executive overreach to the long-term impacts of tax policies and innovative solutions in affordable housing. Additionally, it sheds light on the complexities of retirement savings within the current economic landscape. Through expert insights and real-world stories, the podcast offers a comprehensive analysis of the factors shaping today’s economic and political environment.

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Notable Quotes:

• Blake Emerson: “We are dealing with a serious and systemic set of constitutional violations right now...” ([01:52])

• Blake Emerson: “The Supreme Court ought to take seriously, given its recent preoccupation with the administrative state...” ([06:53])

• Caroline Bruckner: “Lower income taxpayers tend to have pent up demand, things they need or want but can't afford.” ([20:16])

• Eric Zwick: “Balancing taxes and spending isn't some Hail Mary pass... we've done it before.” ([22:18])

---

References:

• Marketplace: marketplace.org
• UCLA Department of Law and Political Science: UCLA Law
• Chicago Booth School of Business: Booth School
• National Association of Homebuilders: NAHB
• American University’s Tax Policy Center: AU Tax Policy
• National Fire Protection Association: NFPA
• Pitchbook: Pitchbook

This summary is designed to provide a comprehensive overview of the episode’s key topics and discussions for those who have not listened to the original podcast.

Transcript

[Kai Rysdal]

Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same Premium Wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to [e-mail].

[Ryan Reynolds]

Switch upfront payment of $45 for 3 month plan equivalent to $15 per month Required intro rate first 3 months only, then full price plan options available, taxes and fees extra. See full terms at Mintmobile. Do.

[Kai Rysdal]

On the program today. This Economy and the Law from American Public Media, this is Marketplace in Los Angeles. I'm Kyle Rizzol. It is Wednesday today, the 5th of February. Good as always to have you along, everybody. We are all becoming more familiar this week with parts of this economy that until now have had just worked, most prominently the critical Treasury Department payments system. Elon Musk and his allies have taken some degree of control of that system and others. And that and all the rest of what's happening get right to the heart of how this economy is run. Blake Emerson is a professor of law and political science at ucla. Blake, it's good to have you on the program again.

[Blake Emerson]

Thanks, Kai. It's good to be here.

[Kai Rysdal]

I think it's important to avoid euphemism and innuendo in this conversation and all the conversations that are being had about this. What is happening in the federal government right now, Elon Musk, his minions, what the executive branch is doing and doing to itself, I suppose. How is this not illegal? Or is it illegal?

[Blake Emerson]

Yeah. So I do think we're dealing with a serious and systemic set of constitutional violations right now that include several clear violations of both statutory law passed by Congress as well as provisions of the Constitution. Just to give one example, the way that Musk and the Trump administration have attempted to shut down government agencies like USAID and to take control of the treasury payment system really takes away Congress's power to make the laws, which includes the power to spend money, the power to create administrative agencies. And these actions really strike at the core of those constitutional powers that are held by Congress and not by the executive branch.

[Kai Rysdal]

I wonder if what's happening here actually is that they are trying to set up an extra constitutional way to run this chunk of the American economy.

[Blake Emerson]

That's right. I mean, I see a risk that there is a kind of shadow executive branch that's operating alongside of and within and may be displacing the structure that is set up by the Constitution and by the laws enacted by Congress. And so when you have Musk and Musk's assistance taking over a system that's housed in the treasury without meeting the requirements for appointments that are set up in the Constitution, that subverts the accountability structures that the framers designed. What's not clear now is who exactly is running the show. And that includes questions about whether the Treasury Secretary is in charge or is Musk in charge, but also, more fundamentally, who holds the executive power right now? I mean, the Constitution says that the executive power shall be vested in a President of the United States. And at the moment, with this kind of sweeping delegation of executive power to Musk, I think there's some genuine doubt about whether that executive power is where it's supposed to be.

[Kai Rysdal]

One wants government to be, as best as possible, risk free. And it seems to me by doing all of this, they are exposing the United States writ large, all of us, and our interactions and negotiations and contracting and all of this to an immense amount of risk.

[Blake Emerson]

That's right. So I think one problem here is that transactions and decisions that the government routinely makes concerning payments, concerning regulations that would not have been in doubt previously, are now uncertain. Right. So it's uncertain what decisions have been made, whether those decisions are going to hold up when courts review them. And when you have that degree of systemic uncertainty, it creates really grave risks, I would say, for market stability, but also more profound risks about political stability. Because when the usual structures of government that have been in place for over a couple hundred years now are being displaced with a new system that we don't understand, that seems to be going outside the law, the results of that become quite unpredictable and, frankly, scary.

[Kai Rysdal]

You are a professor of law also, though a professor of political science at ucla, so put on your political sciences hat for me here for a second. The institutions of this economy work, it seems to me, in no small measure, because the institutions of this democracy work, that is to say, the rule of law, fair and adequate regulation. What's the macro threat to the economy by the dysfunction of politics right now?

[Blake Emerson]

So I say that the macro risk is a basic breakdown in the predictable enforcement of federal law that touches really every nook and cranny of the economy. So you have actions, for instance, like Trump removing officials from the National Labor Relations Board, which he is not permitted by law to do. The statute says you have to provide some kind of a good cause reason for that, which he did not provide. And that's just one example of myriad violations of impairing the functioning of regulatory agencies up and down the line from the board to something like the Federal Reserve that I think are now in question. And when that happens, you lose that basic predictability that enables people to make transactions in the marketplace based on reasonable expectations about what's going to happen in the future and what the laws really are. So we're losing that stable framework and replacing it with something much more discretionary and even arbitrary and unaccountable.

[Kai Rysdal]

This is a little bit sideways, but roll with me here. You probably have some classes this afternoon out at ucla. What's it like teaching the law at this moment? In the law?

[Blake Emerson]

Yeah. It's a moment where you're trying to teach a moving target. And I think one of the things that's really interesting and challenging about this moment is that the law around the executive branch is already in flux. And so the Supreme Court has already been, over the past 10 to 15 years or so, changing rules around presidential power, around judicial review of administrative agencies. And now Trump is stepping into that space and trying to exploit some of those ambiguities and. And changes. And when you look at what's happening now, I think that Trump's actions fly in the face of the kind of Constitution that the Supreme Court has been trying to defend, one, that when agencies act, they are bound by the laws enacted by Congress. And that also when agencies act, there is a clear line of accountability to the White House and to the president, and the seizure of treasury payments and the like create this risk that that hierarchy of accountability is being displaced by something that is very difficult to challenge and to hold to account. And these are problems that the Supreme Court ought to take seriously, given its recent preoccupation with the administrative state and problems around presidential power.

[Kai Rysdal]

Let's talk about accountability here for a second before I let you go off the glass. If we don't know who's in charge, if we don't know who is these decisions and what the lines of authority are. And yes, lawsuits have been filed, but how do you know who to hold accountable?

[Blake Emerson]

Yeah, and that is a tough question. What we can do is that there are officials who, by law, are vested with authority. Right. So if we're talking about the treasury system, we have the Secretary of the treasury, and we have assistance to the secretary. And so we can rely on kind of the official chain of command. It's just going to be hard for the courts to get their grip on what's really happening if the people who are being sued are not the true decision makers. Because if, because if the true decision maker is somebody else, then your injunction on the treasury secretary is not going to be super useful.

[Kai Rysdal]

Right. Blake Emerson across town at the UCLA School of Law. Blake, thanks for your time. I appreciate it.

[Blake Emerson]

Thanks very much, Guy. Take care.

[Kai Rysdal]

Wall street today, traders still not concerned. We'll have the details when we do the numbers. The way it works on weeks, when we get the government's unemployment report, which is this week, it's coming to us on Friday. On Wednesday of those weeks, we get a report from ADP. They process payrolls for 25 million workers here. And by ADP's estimates, this economy added 183,000 jobs last month. That's pretty good. But the data does also show a pattern settling back in. This country's economy is less about producing goods than it is about producing services. Marketplace's Sabri Benishore has that Part of this economy makes things manufacturing, mining, building. And part of the economy does things healthcare, lawyering, interneting. In January, according to ADP, the making things part of the economy lost 6,000 jobs. The servicey part gained 190,000.

[Ryan Reynolds]

That's been the story of the US labor market and occupational employment really since the mid 2000s.

[Kai Rysdal]

Christophe Combemale is an assistant research professor of engineering and public policy at Carnegie Mellon.

[Ryan Reynolds]

The overall share of US Manufacturing has been declining pretty consistently for decades.

[Kai Rysdal]

And yet there is one part of the making economy that could be, should be much stronger than it is, and that is construction. There's ample construction demand. Jim Corridor is senior analyst for industrials at Pitchbook. You know, economic indicators are not all that strong right now, but projects are long lived. So there's stuff that's been planned years ago that's ongoing. So why then in this country recovering from hurricanes and fires were just 4,000 construction jobs added in January?

[Robert Dietz]

The industry has been experiencing a long run skilled labor shortage, labor.

[Kai Rysdal]

Robert Dietz is chief economist at the national association of Homebuilders. To be fair, construction is facing a lot of problems, from zoning to supply chains. But labor is one of the big ones.

[Robert Dietz]

In any given month, the construction industry short 3 to 400,000 workers. Output of the sector could be larger if the workforce was larger.

[Kai Rysdal]

Construction lost a million and a half workers, Deeth says, in the housing bust after the Great Recession, it is still clawing its way back.

[Robert Dietz]

You've got more people going to college today. There's been kind of a move away from careers in the trades, for example, not offering shop class in high schools.

[Kai Rysdal]

Or emphasizing college over Trade schools or community colleges that prepare for careers that are actually very much in demand in New York. I'm Sabree Venishore for Marketplace. Early estimates of the Eaton and Palisades fires here in LA last month said they could wind up being the most expensive in US history. A new report from UCLA puts more concrete numbers to those estimates. It says that between them, those two fires likely caused $75 billion worth of just insured losses. That is three times more than the next four most destructive California wildfires combined. Marketplace's Kelly Wells has more on what made this pair of fires so devastating.

[Ryan Reynolds]

The simple answer, there are urban fires. The more structures that burn, the more expensive the fire is. Thing is, urban fires aren't a new problem. What we're really talking about is a return to the urban conflagrations of the.

[Kai Rysdal]

19Th century is what we're actually seeing.

[Ryan Reynolds]

Michelle Steinberg with the National Fire Protection association says the majority of the homes in the Eaton fire footprint, for example, were built before 1950, long before modern fire codes, which makes them more flammable. These are legacy structures with legacy vegetation on small lots really close together, like.

[Kai Rysdal]

A set of dominoes ripping through these structural fuels.

[Ryan Reynolds]

But it's more expensive when those old homes burn in 2025 because those homes and California in general got more expensive, says economist Tom Coringham. He's with Scripps Institution of Oceanography at UC San Diego.

[Robert Dietz]

The fact that the prices have risen.

[Kai Rysdal]

In the last five years, that really drives the increase in costs associated with this event.

[Ryan Reynolds]

Coringham says not only are the houses more expensive, there are just more houses, too.

[Kai Rysdal]

Los Angeles has grown so dramatically in.

[Ryan Reynolds]

The last 50 years, just the increasing.

[Kai Rysdal]

Population within these hazard zones really raised that headline number.

[Ryan Reynolds]

And the thing is, that headline number might actually be too small. UCLA economist Zhu Yung Li authored the report and says she had to estimate the cost of these fires based on the number of people who had private insurance in other recent fires.

[Blake Emerson]

But that may not be true in.

[Kai Rysdal]

The in reality, because more people are.

[Ryan Reynolds]

Losing their private insurers, meaning the real total cost of LA's most expensive wildfires might be even higher. I'm Kayleigh Wells for Marketplace.

[Sarah Jones]

Coming up, you can live on the water for a fraction of the price that you could live on land, affordable.

[Kai Rysdal]

Housing in unexpected places. But first, let's do the numbers down. Dustro is up 317 points today. 7 10%. 44,873. The Nasdaq added 38 points. About 2. 10%. 19,692. The S&P 500 found 23 points in the couch cushions. 0.4% 6061 Alphabet reported lower than expected revenues from its cloud computing business. Google's parent also said it plans to invest another $75 billion into its AI business. Alphabet nonetheless gave up 7.3% today. Strong demand for Hot Wheels helped Mattel beat Wall Street's fourth quarter sales and profit estimates, and it projects higher than expected profits for the fiscal year Mattel sped up 15.3%. That is a lot of Hot Wheels tell you that. Bonds rose Yield on the 10 year Tino down 4.42% you're listening to Marketplace.

[Ryan Reynolds]

This Marketplace podcast is supported by Gusto. Look, payday's awesome. But running payroll, calculating taxes and deductions, staying compliant? That's not easy. Unless of course you have Gusto. Gusto is a simple online payroll and benefits tool built for small businesses like yours. Gusto gets your team paid while automatically filing your payroll taxes. Plus you can offer benefits like 401k, health insurance and worker's comp just for listening. Today you also get three months free. Go to Gusto.com marketplace that's Gusto.com marketplace.

[Kai Rysdal]

Ryan Reynolds here from Mint Mobile with a message for everyone paying Big wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway, give it a.

[Ryan Reynolds]

[e-mail] Switch upfront payment of $45 for three month plan equivalent to $15 per month required intro rate first three months only, then full price plan options available, taxes and fees extra.

[Kai Rysdal]

See full [e-mail] this is Marketplace. I'm Kai Rysdal with a plea not to shoot the messenger. I note here for the record that tax season has officially started and however painful they might be for the individual taxpayer, 2025 is going to be excruciating for tax policy. Congress is going to have to decide the fate of some of the 2017 Trump tax cuts, officially the Tax Cuts and Jobs act that are set to expire at the end of the year. And given that Congress sometimes needs help focusing, we thought we would give them a hand and take a look at what those cuts have actually meant for this economy. Stacey Vanek Smith has the story.

[Ryan Reynolds]

Let's be real. Taxes are important, but they're important in a sensible shoes, getting enough fiber in your diet kind of way. I had an advisor who referred to corporate tax as the intersection of boring and boring. This is Eric Zwick, an economist at Chicago's Booth School of Business. And he has spent much of his career at this very intersection. Zwick just co authored a study on the economic impact of Trump's 2017 tax cuts, which slashed corporate taxes from 35% to 21%. And he found that companies invested that extra money either building a factory or buying a new machine, buying some computers, buying, like trucks. This is the hope with corporate tax cuts, the companies will take their extra dollars and put them back into the economy, expand, hire more workers, workers who will pay taxes. It's why the Trump administration said the tax cuts would pay for themselves.

[Blake Emerson]

And that's just not true at all.

[Ryan Reynolds]

Princeton economist Owen Zadar teamed up with Zwick to study the impact of the tax cuts. They found that after the 2017 cuts, corporate spending rose between 10 and 20%, totaling billions of dollars a year. But it's not nearly enough to make up for the more than $100 billion per year the government loses because of the lower corporate tax rates.

[Blake Emerson]

These are enormous and staggering amounts of money. So I would just say focus on.

[Ryan Reynolds]

The numbers, but nobody is focused on the numbers because right now everybody's talking about personal income taxes. That part of the tax cuts is set to the corporate tax cut. They were able to make it permanent. However, the individual tax cuts were too expensive, and so for budget reasons, had them expire after 10 years. Caroline Bruckner is managing director of American University's Tax Policy Center. She says to keep those tax cuts in place, Congress would have to take action to extend them under the bill. Almost all of us saw our taxes go down in 2017. And Bruckner's looked at how middle income and lower income taxpayers spent their extra money. I always ask my students, what do you think people pay for? And they're always like a trip to Disney or like a vacation. And I'm like, no, these folks are.

[Sarah Jones]

Paying off credit card debt, they're paying.

[Ryan Reynolds]

Off medical debt, they are paying rent. Lower income taxpayers tend to have pent up demand, things they need or want but can't afford. So when they have extra money, they will spend it. And that ripples through the economy. In fact, Bruckner remembers how she spent one tax refund back in the 90s when she was a poor law student. That check felt incredibly important to me. How much was it for? Do you remember? $500. You still remember the amount? Absolutely. I was working three jobs and going to school full time. Now the economics of income tax cuts is pretty different for wealthier people. They don't necessarily have unpaid bills or pent up demand for stuff they can't afford. For higher earners, extra money will often go into savings, and that doesn't really help the economy. And extending the income tax cuts won't come cheap. The Congressional Budget Office estimates it would cost the government nearly $3.5 trillion over the next 10 years. Economist Eric Zwick expects Congress will have a big fight over this. The big debate, this, the quote unquote super bowl of tax is going to be played, I like to say, on the field of individual income tax policy. Zwick worries the debate will get political and the boring stuff will get lost. Stuff like, how can the government bring in enough money to pay for all the things it wants to do? That's a question we've been dodging for decades. And the result is a national debt that totals $35 trillion. And that makes our whole economy vulnerable. Add to that President Trump's plan to cut corporate taxes further from 21% to 15%, and you've potentially got even less money coming in. But balancing taxes and spending isn't some Hail Mary pass, says Zwick. We've done it before. In the late 90s, the US had a vibrant economy and a tax system that raised as much revenue as we were spending.

[Blake Emerson]

So, yeah, I think the tax system.

[Ryan Reynolds]

Can party like it's 1997. If there are Prince fans out there, maybe they'll forgive me. I think they will. I mean, who better to spice up a tax conversation, Bring a little flair to the corner of boring and boring than Prince. In New York, I'm Stacey Vanek Smith for Marketplace.

[Kai Rysdal]

Home prices, as I think most people are aware, hit record highs last year. So would be home buyers are looking where they can afford cheaper options. Rural communities are an increasingly affordable choice. According to a report out of the University of Virginia, 63% of small or rural counties have seen significant growth in that 25 to 44 year old demographic. But living a rural life doesn't look the same for everybody. Here's today's installment of our series, Adventures in Housing.

[Sarah Jones]

Hi, my name is Sarah Jones.

[Robert Dietz]

I'm Brandon Jones.

[Sarah Jones]

We are the Joneses and we live on a floating cabin on Lake Fontana in western North Carolina. So this is a really beautiful area. We're in the mountains and so there's a lot of vacation homes. Real estate in general in our area is not cheap. But then all of a sudden you see these floating cabins and when I first Saw them, I didn't figure that that was accessible for like a working class person. And then we realized you can live on the water for a fraction of the price that you could live on land. So we bought our very first floating cabin for just 22 grand.

[Robert Dietz]

So we bought our first floating cabin, wooden house. It was sight unseen. We didn't go inside, but we knew what it looked like on the outside.

[Sarah Jones]

And then of course it wasn't livable. It was definitely a fixer upper.

[Robert Dietz]

It was our first tiny home to ever even try to attempt to build.

[Sarah Jones]

It was my first anything to attempt to build.

[Robert Dietz]

Yes. Sarah didn't even not use a screwdriver. She called a Phillips at a star bit.

[Ryan Reynolds]

I didn't know.

[Sarah Jones]

So we spent some money on the renovation, but even so we came out better than you would buying even a single wide trailer on land. So there was no comparison in terms of affordability.

[Robert Dietz]

So the mooring fees on Fontana Lake, in our harbor, or on the lake in general, they range from $450 a year upwards to 5,000. So you could take one month's worth of rent, mortgage payment in a house with your bills and have a whole solid year on the water. Our front porch looks out over the Great Smoky Mountains National Park. There's no houses there, we have a million dollar view, so we don't mind paying that $5,000 a year.

[Sarah Jones]

The first thing that comes to mind for a lot of people would be that this sounds like a really inconvenient lifestyle. And in some ways it is.

[Robert Dietz]

And where we are on the water, you don't just say, I'm going to run down to Starbucks or I might go down and get a burger or I'm stop by the gas station. There is none of that.

[Sarah Jones]

So it can be inconvenient in some ways. But on the other hand, so many things that are valuable to us became so much more convenient. You know, our free time, we can hop in a kayak right off the front porch or a paddle board, we can hop on the boat right off the front porch. We can just jump in the water off the front porch.

[Robert Dietz]

So it made the inconvenient things convenient and the convenient things inconvenient.

[Sarah Jones]

That's. Yeah, I would say so. But in a way, which was what we were looking for, in a way that was good.

[Robert Dietz]

It worked out great. Conveniently inconvenient.

[Kai Rysdal]

Brandon and Sarah Jones on the waters of Lake Fontana in western North Carolina. Whether you are ashore or afloat, share your adventure in housing with us, because everybody's got a story. Marketplace.org is where you can do that. This final note on the way out today, saw this in the Wall Street Journal. Good news, bad news on the retirement front. Data from the Labor Department shows that for the first time, half of private sector workers in this economy are saving for their retirements in 401k plans. However, comma researchers at Boston College say 40% of the American working population is not saving enough to keep up their lifestyle through retirement. Our media production team includes Brian Allison, Jake Cherry, Justin Dueler, Drew Jostad, Gary O'Keefe, Charlton Thorpe, Juan College, Toronto, and Becca Weinman. Jeff Peters is the manager of media production and I'm Kai Rysdal. We will see you tomorrow. Everybody, this is apm. Hey everybody, it's Kai. We've got an exciting offer for you. Now through Valentine's Day, you can show off your love for Marketplace by grabbing an Investor T shirt when you donate $5 a month. Invest in the nonprofit journalism you love and get a shirt to show off your support. Give [e-mail] donate.