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The one reason that Americans are so much in debt is a monetary policy which punishes savings and rewards indebtedness.
When the value of your take home pay is being eroded by inflation, you do not have any incentive to save it because it will buy less in 6 mos. than it does today.
Likewise, if you go into debt to purchase a large ticket item such as a home, it will be worth more than you paid for it at some point down the road.
People have been sold the culture of happiness through materialism, and now believe they are only a new car or a 60" TV away from being able to buy their happiness.
The banks create the inflationary fiat money policy, and they benefit from the income stream created by the interest that Americans pay on nearly every item that they purchase.
The one reason that Americans are so much in debt is a monetary policy which punishes savings and rewards indebtedness.
When the value of your take home pay is being eroded by inflation, you do not have any incentive to save it because it will buy less in 6 mos. than it does today.
Likewise, if you go into debt to purchase a large ticket item such as a home, it will be worth more than you paid for it at some point down the road.
People have been sold the culture of happiness through materialism, and now believe they are only a new car or a 60" TV away from being able to buy their happiness.
The banks create the inflationary fiat money policy, and they benefit from the income stream created by the interest that Americans pay on nearly every item that they purchase.
In the mid-1990s a pretty highend regional dept/speciality chain, that I worked for, instituted a program for customers called "I want it all". I was appalled at the notion or at minimum the wording.
We may disagree on the first section, maybe the third, but I totally agree with you on the area I highlighted in red as being the basic issue.
The one reason that Americans are so much in debt is a monetary policy which punishes savings and rewards indebtedness.
When the value of your take home pay is being eroded by inflation, you do not have any incentive to save it because it will buy less in 6 mos. than it does today.
Likewise, if you go into debt to purchase a large ticket item such as a home, it will be worth more than you paid for it at some point down the road.
People have been sold the culture of happiness through materialism, and now believe they are only a new car or a 60" TV away from being able to buy their happiness.
The banks create the inflationary fiat money policy, and they benefit from the income stream created by the interest that Americans pay on nearly every item that they purchase.
Debt, leaving it at the door of materialism only touches lightly on the subject of the why of American debt, AND the clinging to materialism as a newfound religion of sorts. Our economy grew on the back of all that consumption, the US "miracle" economy was nothing more than a reflection of our collective willingness to immerse ourselves in both materialism and debt. Of course the "consumer machine" had everything to do with it, we have come to think of this machine as our economy, and all the encompassing metrics to our consumption has arrived as the exact same stats as that which we measure our national well being...
feh. When the total tax burden on the average person is more than 50% of wages, those pinhole leaks in the fiscal boat are nothing compared to the cannonball hole in the bottom.
And left the big elephant in the room out - mortgages!
Rent is a bigger elephant, it consumes a much larger proportion of renters' incomes than mortgages consume of homeowners' incomes, and renters have NOTHING to show for it while homeowners at least build equity and wealth with their mortgages.
Rent is a bigger elephant, it consumes a much larger proportion of renters' incomes than mortgages consume of homeowners' incomes, and renters have NOTHING to show for it while homeowners at least build equity and wealth with their mortgages.
Renters always pay property tax through rents. The only advantage is that renters can relocate easily.
But a lot of people I know who make decent incomes choose to live in high end condos. They often have substantial student debt, a car not paid off yet, but they pay $1200 for a one bedroom. In most parts of the country, that is quite expensive.
Debt, leaving it at the door of materialism only touches lightly on the subject of the why of American debt, AND the clinging to materialism as a newfound religion of sorts. Our economy grew on the back of all that consumption, the US "miracle" economy was nothing more than a reflection of our collective willingness to immerse ourselves in both materialism and debt. Of course the "consumer machine" had everything to do with it, we have come to think of this machine as our economy, and all the encompassing metrics to our consumption has arrived as the exact same stats as that which we measure our national well being...
We have a consumer economy and a service economy. Reducing consumption and reducing population growth, both of which seem to be what environmentalists want, will hurt our economy and our future fiscal health.
Look at all the social internet driven businesses. Many are for high end tastes and demands that only affluent people have. If these affluent people no longer shop much, travel, eat out, our unemployment rate will skyrocket. We are dependent on the rich, the affluent, the administrative, the techies, the yuppies, to demand services and goods.
Back to the topic of pitchforks. If pitchforks destroy all this, they are not going to build anything. They will just push businesses away, drive money offshore, and burn down factories if we still have some that is. Then the pitchforks will fight among themselves. They have no skills or experience in building industries. They will then have to learn to live in poverty and the ruins of the United states. It doesn't stop there. America will then have to revolve around a China centric world. They will gain more influence over our society and these pitchforks will get to see what authoritarianism means. Good night and good luck.
Rent is a bigger elephant, it consumes a much larger proportion of renters' incomes than mortgages consume of homeowners' incomes, and renters have NOTHING to show for it while homeowners at least build equity and wealth with their mortgages.
True, and a lot of people retiring these days or people that are elderly these days have a lot of their wealth in their homes.
Real estate is a much bigger vehicle for wealth creation than anything else.
Homeowner net worth isn't just a little more than renter net worth., but a LOT more
"The survey indicates in the past 15 years, the net worth of the typical home owner has ranged between 31 and 46 times that of the net worth of the typical renter. Home owners had nearly $200,000 in net worth compared to the average $5,000 net worth of renters."
Hmmm...which net worth would you rather have... $200k..or $5,000? Tough decision right?
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