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Old 04-08-2011, 09:45 AM
Location: West Orange, NJ
12,542 posts, read 17,146,233 times
Reputation: 3674


Originally Posted by sliverbox View Post
The government has been spending more than it could afford for decades. Both through Republican and Democratic administrations. The tax system is completely our of whack. I personally see no reason to be against raising taxes- as long as they are done so evenly and throughout the socioeconomic strata. If raising taxes means we can stop closing schools and resuming infrastructural improvements then count me in. This notion-particularly from the right- that we can NEVER raise taxes is absurd. The cost of running a country goes up just like everything else. I say this as someone who fits within the upper end of the tax bracket.

There is a lot of government waste as well. So far neither side is making a dent in spending but rather going after minuscule cuts along ideological lines. Even if all the social programs were cut this would amount to less than 12% of the budget. Obviously cutting social programs along with regulatory agencies isn't going to do the trick- nor should we be cutting some of these in the first place as they are in some cases safeguards for public safety. But the real drains on the budget will somehow need to be addressed. How they can be addressed is anyone's guess. We're in this situation where everyone wants things but they don't want to pay for them either. A shift needs to happen with how people think.

Long story short- I agree with what you're saying.

As far as generational savings habits, I don't know if its as generalized as that. I grew up in a household where my Dad was out of work every few years. My parents were geniuses at squeezing pennies. We actually had 3 large gardens on our yard ( we lives in the sticks) They had 2 large deep freezers. We basically never bought vegetables. I never thought anything of this until I was older. But basically my baby-boomer parents never knew what real economic stability was. I think its paid off for them because they never did the whole upgrading houses thing nor did they buy new crap all the time.

I graduated right when the dot-com crashed. I had just moved to San Francisco. It was worse then than it is now. I worked in a few warehouses for years at minimum wage. The cost of living is prohibitive here. I still managed to save. Since then I have had a good career and do well financially. But I still save as if I worked at a minimum wage job. We could probably buy a house here. But then again I am wary of putting down such money on a house- especially given the fact that if one or both of us lost a job we would be in trouble as far as making payments. Its a risk. Thus we'll move out of state someday where houses are a lot cheaper.

So I think it depends on your life experience as to how people spend or save.
very well said!
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Old 04-08-2011, 05:32 PM
Location: Oakland, CA
25,945 posts, read 26,650,881 times
Reputation: 24514
I think I have been really fortunate during the Great Recession. At the beginning things were looking really grim. I had a job at a company that was doing awful. I was already underpaid and then they started cutting all of the benefits. I had limited savings because I wasn't making enough, I am a horrible saver and many of my family members needed financial help.

The worst part is when I took a disbursement of 30% of my IRA to help out. The perfect storm, since this was a huge chunk of untaxed income. I ended up with a tax bill of $4500 for that year (considering I usually only received refunds or paid small amounts, this was ridiculous and completey unexpected).

Luckily for me, things really turned around. By sheer luck and cluelessness, when I took the $ from my IRA i did not reinvest it, so it was collecting regular savings interest when the stock market tanked! I have managed to switch jobs 2X in the past 24 months or so and each new job has upped my salary by 25-30%. Happily, I am making ~50% more than I was when the recession started. I have been able to start actually saving, and I am beginning to catchup on my missing retirement saving. And since I have better cash flow, I actually it didn't kill me to pay my HUGE tax bill I had from when I took the disbursement. I also can afford to help my parents without going in the red.

Luckily I happened to fall into the right industry, at the right time and things are growing a lot. I know it will be much easier for me to make a successful career move if needed.
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