39% of Americans have literally no savings. It's not because they don't want to...it's because they can't afford to.
The spending vs. savings discussion is a minority. The 18% in the middle are one car transmission, ER visit, or leaky roof away from disaster.
bullshit
let me qualify that...bullshit to anyone not dealing with a medical emergency due to a lack of universal healthcare.
this country has a spending problem, not a revenue problem, from the gov down to the high school grad.
i suppose i'm talking about personal responsibility, at all points on the curve.
seems like a defeatist attitude...rather than working to fix the issue you see, even if just on the individual level by saving, instead spending.
was it easier for young people in the 80s to buy a house when lending standards were tougher, and mortgage rates were double digits?
anyway, going to put down this thread jack.
39% of Americans have literally no savings. It's not because they don't want to...it's because they can't afford to.
The spending vs. savings discussion is a minority. The 18% in the middle are one car transmission, ER visit, or leaky roof away from disaster.
I'm not ready to make a judgement of right or wrong on that, but I will say that the people who should be adjusting things to avoid this are not those at the bottom of the curve. Lead by example.
This is where the government needs to lead, and Trump proved that he will not protect citizens versus corporations and potential opportunities for him to profit.
During his first term, Trump eliminated consumer protections. He:
Repealed the Consumer Financial Protection Bureau's rule on forced arbitration, allowing financial companies to force consumers into arbitration rather than allowing them to pursue claims in court.
Signed legislation to overturn the CFPB's rule that would have allowed consumers to join together in class action lawsuits against banks and other financial companies.
Weakened post-Great Recession financial regulations, including parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
People need to be responsible, but there are many at the bottom who don't know any better and find themselves making very short-term decisions to survive day-to-day. Government needs to help these people, and prevent their being taken advantage of by the wealthy and corporations.
It's all very complex and I doubt either of us has the entirety of it. But I do think it's a reaction to the system they see. They see stalled wages and lots of money going other places. They see a government willing to spend well beyond its means and tax them for it (a lot of that money going to people who already have plenty and are paying a lower tax burden than they are). There have been strikes and protests in the past, but they haven't been particularly effective (Reagan/ATC, Occupy etc.). I'd surmise that they are coming at it from a version of Kurt's point of view. It's all going to blow up, so might as well have that avacado toast today. What's the point of austerity if you know you'll never afford a house and the whole system may collapse? I'm not ready to make a judgement of right or wrong on that, but I will say that the people who should be adjusting things to avoid this are not those at the bottom of the curve. Lead by example.
i suppose i'm talking about personal responsibility, at all points on the curve.
seems like a defeatist attitude...rather than working to fix the issue you see, even if just on the individual level by saving, instead spending.
was it easier for young people in the 80s to buy a house when lending standards were tougher, and mortgage rates were double digits?
anyway, going to put down this thread jack.
I certainly am not arguing improvements in the playing field...but are you arguing the bottom half is overspending because they are entitled to it? Getting it while they can?
Is the playing field less level or fair now than it was 80 or 100 years ago, when the middle class began to come into its own?
If the field isnt level than work towards making it better...strike, protest, dont buy the s#$t the ones who own the capital are selling.
No, and yes, respectively.
It's all very complex and I doubt either of us has the entirety of it. But I do think it's a reaction to the system they see. They see stalled wages and lots of money going other places. They see a government willing to spend well beyond its means and tax them for it (a lot of that money going to people who already have plenty and are paying a lower tax burden than they are). There have been strikes and protests in the past, but they haven't been particularly effective (Reagan/ATC, Occupy etc.). I'd surmise that they are coming at it from a version of Kurt's point of view. It's all going to blow up, so might as well have that avacado toast today. What's the point of austerity if you know you'll never afford a house and the whole system may collapse? I'm not ready to make a judgement of right or wrong on that, but I will say that the people who should be adjusting things to avoid this are not those at the bottom of the curve. Lead by example.
Your second paragraph gets to the real heart of the matter, spending / living within your means. A paradigm shift has made this increasingly hard to do. From cash to credit as the primary way of conducting business transactions and with the intervention of technology that requires constant upgrading (and additional expense not previously in any equations). It is nearly impossible to exist without being online and having plastic money to make even the simplest everyday purchases more difficult (actually too easy once you get that little piece of plastic) and more expensive for all. And now that piece of plastic is getting replaced by your smart phone.
The consumer has become conditioned to using plastic (credit) instead of cash. Cash is finite and when spent its absence is readily noted. Using plastic disconnects the expense of the purchase from this noticeable result of less cash on hand. The consumers spend their credit line and manages it ok until an event like runaway inflation happens. A budget no longer works and the interest on the accumulated debt goes up an additional 5% to 10% depending on your credit worthiness / score. To make matters worse, that is compounded monthly.
Everyone seems to forget that the merchants transaction fees of an average 3% per transaction is now included automatically into an item's cost which everyone pays even if they use cash. Like people forget that everytime the corporate taxes go up, that expense is simply passed on to the consumer, which ultimately pays the tax, not the corporation as presented by those who advocate for higher corporate taxes.
Back to those who are living beyond their means. Once the budget blows up with runaway price increases and and an increase in interest costs, the die is cast. Consumers are forced to use their credit lines just to exist, with the added interest expense which makes paying down the principal nearly impossible. It causes the people who actually had a handle on things to now being required to live beyond their means to keep the same level of function that is needed. It becomes the snowball rolling down the hillside.
How do you recover from the trap you fell into ? This trap created by the paradigm shift ?
Not even sure if that is achievable anymore because the hole has now become so much deeper than thought or planned for.
The increases of mortgage rates that increases the cost of housing. Those increases also get passed onto renters, not just single home owners. With runaway inflation and a tight housing market made worse by the unplanned for demand of at least 10 million additional people suddenly needing shelter, this expense now increases dramatically. Rents naturally rise as a result of lower supply and higher demand and more money chasing the lower supply resulting in another direct cause of inflation.
The perfect storm. Looking back at history, the middle class was never supposed to exist in the first place. WWII happened and the returning warriors came into their own and jumpstarted the Middle Class as we have come to know it. This current financial storm puts the last nail into the coffin of the Middle Class.
Am I making any sense ? Please let me know.
OBTW ... these thoughts have long been part of the things I have considered. The very first thread that I started 18 years ago almost to the day takes this into consideration.
you seem to be providing insight into the "cultural" aspects of spending or how consumers were "persuaded" to spend more.
yes, for 99% of us we need a cell phone and internet service. on the other hand, we need longer need a phone line or even to "rent" a phone, as was done in the 70s.
so arguably, there may be a few more necessary bills these days than in the past, but it doesnt explain the "lack of budgeting"
most took their pandemic windfall and spent it at amazon, dicks sporting goods, macys....then, when the restrictions were lifted started traveling again...and by late 2023, that savings was blown and debt started creeping up again.
but even before the pandemic, spending beyond means was common fashion.
show me the cash flow of any 20-30 year old and I would easily bet that 50%+ of their food budget is door dash, uber eats...
Productivity has increased dramatically since the 70s, Wages while up, are not nearly where the productivity gains have been. Productivity equals more production and therefore (typically) more profit. But the profit has accumulated at the top and not been share equitably with those doing the producing. If it had been, their wages would be higher and their spending wouldn't driving debt, it would simply be spending of their larger wages. Some of that may have gone into savings as well. But they wouldn't be 'living beyond their means' if their wages (means) had increased proportionally to production (or even anywhere close to that). Billionaires are doing well by gaming the system. Getting larger gifts from the government they buy. But they don't need that help, the common guys do - the ones who's wages haven't kept up. The wages haven't kept up because the billionaires are sucking up a larger portion of the growth. An equitable system would address this. It has already been destabilizing, the extent just isn't known yet. - https://radioparadise.com/community/forum/post/4005019
Sure, that explains why the rich got richer as those who control the capital haven’t shared the gains equitably with labor. That’s a bigger argument about the failures of capitalism, which includes how or who should receive the excess profit, as well as how do we account for all costs? Labor always gets screwed. Something Marx tried to address.
but… if in our system real wages and wealth have grown for all groups over the past three decades, it doesn’t explain why savings have been depleted and debt has increased. You could argue we have more bills now- cell phones, streaming services… - but how much of this is keeping up with the jones, versus a necessity in 21st century life? Yes, its cultural, but perhaps the correct culture should be spend within your means, which given the data, they should be.
I just went back and read your discussion.
Your second paragraph gets to the real heart of the matter, spending / living within your means. A paradigm shift has made this increasingly hard to do. From cash to credit as the primary way of conducting business transactions and with the intervention of technology that requires constant upgrading (and additional expense not previously in any equations). It is nearly impossible to exist without being online and having plastic money to make even the simplest everyday purchases more difficult (actually too easy once you get that little piece of plastic) and more expensive for all. And now that piece of plastic is getting replaced by your smart phone.
The consumer has become conditioned to using plastic (credit) instead of cash. Cash is finite and when spent its absence is readily noted. Using plastic disconnects the expense of the purchase from this noticeable result of less cash on hand. The consumers spend their credit line and manages it ok until an event like runaway inflation happens. A budget no longer works and the interest on the accumulated debt goes up an additional 5% to 10% depending on your credit worthiness / score. To make matters worse, that is compounded monthly.
Everyone seems to forget that the merchants transaction fees of an average 3% per transaction is now included automatically into an item's cost which everyone pays even if they use cash. Like people forget that everytime the corporate taxes go up, that expense is simply passed on to the consumer, which ultimately pays the tax, not the corporation as presented by those who advocate for higher corporate taxes.
Back to those who are living beyond their means. Once the budget blows up with runaway price increases and and an increase in interest costs, the die is cast. Consumers are forced to use their credit lines just to exist, with the added interest expense which makes paying down the principal nearly impossible. It causes the people who actually had a handle on things to now being required to live beyond their means to keep the same level of function that is needed. It becomes the snowball rolling down the hillside.
How do you recover from the trap you fell into ? This trap created by the paradigm shift ?
Not even sure if that is achievable anymore because the hole has now become so much deeper than thought or planned for.
The increases of mortgage rates that increases the cost of housing. Those increases also get passed onto renters, not just single home owners. With runaway inflation and a tight housing market made worse by the unplanned for demand of at least 10 million additional people suddenly needing shelter, this expense now increases dramatically. Rents naturally rise as a result of lower supply and higher demand and more money chasing the lower supply resulting in another direct cause of inflation.
The perfect storm. Looking back at history, the middle class was never supposed to exist in the first place. WWII happened and the returning warriors came into their own and jumpstarted the Middle Class as we have come to know it. This current financial storm puts the last nail into the coffin of the Middle Class.
Am I making any sense ? Please let me know.
OBTW ... these thoughts have long been part of the things I have considered. The very first thread that I started 18 years ago almost to the day takes this into consideration.
Without watching the story ... my guess: they followed the AIS track back, and then accounted for any wind and current drift. That would get them pretty close.
https://servicetoamericamedals...
The podcast talks about how Art Allen would never have been able to create the system that he did, if he worked in the private sector.
The slightly more affluent "centrists" are prone to promote austerity w.r.t. the have-nots below them. Both on a personal and a government level. IGMFU, thinking they're safe.
A large segment of Limbaughâs audience consists of white males, 18 to 34 years old, without college education. Basically, a guy I know and grew up with named Bubba.
Bubba listens to Limbaugh because Limbaugh gives him someone to blame for the fact that Bubba is getting screwed. Heâs working harder, getting paid less in constant dollars and falling further and further behind. Not only is Bubba never gonna be able to buy a house, he can barely afford a trailer. Hell, he can barely afford the payments on the pickup.
And because Bubba understands heâs being shafted, even if he doesnât know why or how or by whom, he listens to Limbaugh. Limbaugh offers him scapegoats. Itâs the âfeminazis.â Itâs the minorities. Itâs the limousine liberals. Itâs all these people with all these wacky social programs to help some silly, self-proclaimed bunch of victims. Bubba feels like a victim himselfâand he isâbut he never got any sympathy from liberals.
My argument is that wages have been artificially suppressed. People are spending at a ~ appropriate rate for the amount of goods in our society (people in general have never really been savers). If their wages had kept pace, the spending wouldn't be above their means. I'm not against the rich getting richer. But when the top 0.1% gets 100X gains while the bottom 80% get 2X gains, it's not a fair system and it won't be sustainable. Necessity, cultural, whatever, Kids now are planning for future failure of the system and getting theirs while they can. The model they are following is the billionaires who took theirs already a F everyone else, so I'm not really feeling like laying the blame on the least powerful of the two. When it all falls apart the billions aren't going to be worth a lot without a market place and a bunch of people willing to work in it.
Edit to add/clarify: all the stuff they are overspending on is the result of their hard work in increasing overall productivity and output. They just haven't been properly rewarded for their work.
I certainly am not arguing improvements in the playing field...but are you arguing the bottom half is overspending because they are entitled to it? Getting it while they can?
Is the playing field less level or fair now than it was 80 or 100 years ago, when the middle class began to come into its own?
If the field isnt level than work towards making it better...strike, protest, dont buy the s#$t the ones who own the capital are selling.
Sure, that explains why the rich got richer as those who control the capital havenât shared the gains equitably with labor. Thatâs a bigger argument about the failures of capitalism, which includes how or who should receive the excess profit, as well as how do we account for all costs? Labor always gets screwed. Something Marx tried to address.
but⦠if in our system real wages and wealth have grown for all groups over the past three decades, it doesnât explain why savings have been depleted and debt has increased. You could argue we have more bills now- cell phones, streaming services⦠- but how much of this is keeping up with the jones, versus a necessity in 21st century life? Yes, its cultural, but perhaps the correct culture should be spend within your means, which given the data, they should be.
My argument is that wages have been artificially suppressed. People are spending at a ~ appropriate rate for the amount of goods in our society (people in general have never really been savers). If their wages had kept pace, the spending wouldn't be above their means. I'm not against the rich getting richer. But when the top 0.1% gets 100X gains while the bottom 80% get 2X gains, it's not a fair system and it won't be sustainable. Necessity, cultural, whatever, Kids now are planning for future failure of the system and getting theirs while they can. The model they are following is the billionaires who took theirs already a F everyone else, so I'm not really feeling like laying the blame on the least powerful of the two. When it all falls apart the billions aren't going to be worth a lot without a market place and a bunch of people willing to work in it.
Edit to add/clarify: all the stuff they are overspending on is the result of their hard work in increasing overall productivity and output. They just haven't been properly rewarded for their work.
Productivity has increased dramatically since the 70s, Wages while up, are not nearly where the productivity gains have been. Productivity equals more production and therefore (typically) more profit. But the profit has accumulated at the top and not been share equitably with those doing the producing. If it had been, their wages would be higher and their spending wouldn't driving debt, it would simply be spending of their larger wages. Some of that may have gone into savings as well. But they wouldn't be 'living beyond their means' if their wages (means) had increased proportionally to production (or even anywhere close to that).
Billionaires are doing well by gaming the system. Getting larger gifts from the government they buy. But they don't need that help, the common guys do - the ones who's wages haven't kept up. The wages haven't kept up because the billionaires are sucking up a larger portion of the growth. An equitable system would address this.
Sure, that explains why the rich got richer as those who control the capital havenât shared the gains equitably with labor. Thatâs a bigger argument about the failures of capitalism, which includes how or who should receive the excess profit, as well as how do we account for all costs? Labor always gets screwed. Something Marx tried to address.
but⦠if in our system real wages and wealth have grown for all groups over the past three decades, it doesnât explain why savings have been depleted and debt has increased. You could argue we have more bills now- cell phones, streaming services⦠- but how much of this is keeping up with the jones, versus a necessity in 21st century life? Yes, its cultural, but perhaps the correct culture should be spend within your means, which given the data, they should be.
Curious what you mean by the first comment? What's the relationship between spending and wage growth/ productivity?
billionaries are doing well, as are the ever more common millionaire.
Spent on Amazon...instead of saved/invested a good idea? We know that's what consumers did with the pandemic surplus, which has now been spent while credit debt rises.
Productivity has increased dramatically since the 70s, Wages while up, are not nearly where the productivity gains have been. Productivity equals more production and therefore (typically) more profit. But the profit has accumulated at the top and not been share equitably with those doing the producing. If it had been, their wages would be higher and their spending wouldn't driving debt, it would simply be spending of their larger wages. Some of that may have gone into savings as well. But they wouldn't be 'living beyond their means' if their wages (means) had increased proportionally to production (or even anywhere close to that).
Billionaires are doing well by gaming the system. Getting larger gifts from the government they buy. But they don't need that help, the common guys do - the ones who's wages haven't kept up. The wages haven't kept up because the billionaires are sucking up a larger portion of the growth. An equitable system would address this.
If wages had kept pace with the increases in productivity, most people wouldn't need to live beyond their means.
The billionaires are doing fine, yet we focus on giving them more breaks at the expense of everyone else. Bezo's next billion won't really do anything for him except make him closer to the worlds first trillionaire. If the general population paid a billion dollars less in taxes (spread proportionally) a lot more good would come out of it. Probably better for the overall economy as well because most of that would be spent, lots of it at Amazon.
Curious what you mean by the first comment? What's the relationship between spending and wage growth/ productivity?
billionaries are doing well, as are the ever more common millionaire.
Spent on Amazon...instead of saved/invested a good idea? We know that's what consumers did with the pandemic surplus, which has now been spent while credit debt rises.
You'll love this story: Guy falls overboard 14 miles out to sea. When the boat finally docks, they realize they lost a guy, and the Coast Guard goes and gets him. How did they know where to look?
went to Goldie Hawn's house and checked up on the husband? /did not read the article.
I'm making no judgements, except perhaps people spend too much...and often beyond their means.
And yes, all boats were lifted, but the top half have outpaced the bottom half.
We have a bifurcated economy where the top half are seeing good gains in their wealth, while the bottom half have been in a recession the past two years, struggling to pay bills, despite their own more meager gains. Yet, the quality of life is much greater for all.
If wages had kept pace with the increases in productivity, most people wouldn't need to live beyond their means.
The billionaires are doing fine, yet we focus on giving them more breaks at the expense of everyone else. Bezo's next billion won't really do anything for him except make him closer to the worlds first trillionaire. If the general population paid a billion dollars less in taxes (spread proportionally) a lot more good would come out of it. Probably better for the overall economy as well because most of that would be spent, lots of it at Amazon.
You'll love this story: Guy falls overboard 14 miles out to sea. When the boat finally docks, they realize they lost a guy, and the Coast Guard goes and gets him. How did they know where to look?
Without watching the story ... my guess: they followed the AIS track back, and then accounted for any wind and current drift. That would get them pretty close.
Destroying the government by eliminating capability is counter-productive. Government should be smaller and more efficient, but if you throw out those who understand why and how things were done, things only get worse.
You'll love this story: Guy falls overboard 14 miles out to sea. When the boat finally docks, they realize they lost a guy, and the Coast Guard goes and gets him. How did they know where to look?
