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“America’s lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence,” he said. “We need to reinvent our whole system of life.”
From the link I provided, that was the part that interested me. Consumption is a cornerstone of the capitalist world. If people don't consume business falters etc. Food and a few things are a bit different but even they are advertised to create a want in addition to satisfying a need.
In our budget, we started the slowdown of spending a few years before DH retired. We don't buy the new electronics, we don't have cable, we buy off-lease vehicles that get 30 mpg, meals are designed with leftovers/multiple meals. We find pleasure in walks, bike rides, brushing the dogs, reading and a whole bunch of simple things like that, even sitting on the porch having a beer and talking. We don't have to be this frugal. Maybe it is because we are both 60 now but as the highlighted area suggests we have come upon a smaller, better existence.
What would happen to our capitalism if everyone began to do this?
What you are actually describing in the bolded parts is consumerism, not capitalism. Although consumerism is a component of capitalism, it isn't the whole deal by any stretch. The "captial" part of capitalism comes from savings and investment. Since America relies heavily on people from other countries to fund our investments, our citizens gradually increasing their savings and investments over time is a good thing. Of course, if everyone starts saving gobs of money overnight, then you will have a crash. But the chance of people becoming super savers en masse overnight is infinitesimally small. In fact, excessive consumerism was actually a major cause of the 2008 recession that we are still trying to recover from. People borrowed way too much money to fuel consumption. They couldn't afford to pay the loans back. The economy tanked as a result. This was not healthy or balanced. Excessive debt made our economy vulnerable and unstable. Then it crashed. And we're still vulnerable because our debt levels are still high.
I also think a very good, more detailed answer is presented here:
Not necessarily, there is a basic minimal cost of living.
Whenever my monthly income exceeds $1200 I am able to save money, but whenever my monthly income falls short, I have to dip into those savings to cover expenses.
I didn't say that everyone could save money, I said that if you can't, at whatever income level, you're poor.
If you make 1,000,000,000 a year but spend 1,000,000,001 a year you're going to be in the same boat as a person making 100,000 a year and spending 100,001 a year.
"Living modestly" (what used to be called "within your means") is vital for everyone. Plenty of people have built up a fortune only to see it squandered in their lifetime or most certainly by their heirs.
Not necessarily, there is a basic minimal cost of living.
Whenever my monthly income exceeds $1200 I am able to save money, but whenever my monthly income falls short, I have to dip into those savings to cover expenses.
Location: New Albany, Indiana (Greater Louisville)
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The reality is all of the most wealthy must give a part of their pay to the least among them. If you don't pay any welfare then you must pay for security. Look at places like South Africa, low taxes but middle and upper income earners must pay for a private security company. Get on Google Streetview and view the elite neighborhoods in the Third World, people guard their homes like Americans only guard prisons with barbed wire and electric fences.
The good news is after your parachute payment to the poor you can still afford a couple condos and a Lexus.
The bolded is absolutely correct. The toys aren't worth having if you can't easily afford them (and they may still not be as they're usually a pain in the azz to take care of and maintain).
Even better. I figured that the majority of the middle class millioaires were self made. I don't think that someone under $10million is wealthy but doing very well. Chances are that someone up to the $10million mark could choose to work or not work. I doubt that they would be purchasing a jet or a collection of exotic cars. Maybe a single exotic, although if you know what it cost to own those that may be a bad idea.
I think I had read somewhere that of the Forbes 400 maybe a third had created their wealth without the help of ever being wealthy before. Another third had done it on their own but had been raised in families that were more blessed than others. Others grew up wealthy and added to that wealth.
Many that inherit wealth and never learned how to create wealth end up spending it down. Many eliminate the wealth alltogether.
My wife and I will become middle class millionaires in our lifetime. Many will attain that goal.
What you are actually describing in the bolded parts is consumerism, not capitalism. Although consumerism is a component of capitalism, it isn't the whole deal by any stretch. The "captial" part of capitalism comes from savings and investment. Since America relies heavily on people from other countries to fund our investments, our citizens gradually increasing their savings and investments over time is a good thing. Of course, if everyone starts saving gobs of money overnight, then you will have a crash. But the chance of people becoming super savers en masse overnight is infinitesimally small. In fact, excessive consumerism was actually a major cause of the 2008 recession that we are still trying to recover from. People borrowed way too much money to fuel consumption. They couldn't afford to pay the loans back. The economy tanked as a result. This was not healthy or balanced. Excessive debt made our economy vulnerable and unstable. Then it crashed. And we're still vulnerable because our debt levels are still high.
I also think a very good, more detailed answer is presented here:
I've worked in retail most of my life, from small mom/pops to a company that was part of the upper end selling little items like Chanel, Ferragamo, Yurman etc.
Around the mid to late 1990s, they came out with a sales program to entice customers called "I want it all". That was when I knew we as a country were doomed to effects of excessive consumerism. After 130 years in business they didn't make it past the recession of the early 2000s.
We are constantly bombarded by the efforts to make us part with our money/savings, whether it is for cars, electronics, clothing or the new physical aliment and resulting treatment. I'm believing that consumption of product/advertising is the result of the capital investment in that advertising. If we as consumers would dramatically shift away from purchase of wants by ignoring the advertising wouldn't this end up effecting the creation of capital?
We do not buy things because of an ad. When we need new flannel sheets, we check the ads for sales but only when the time comes for new flannel sheets. The ad only directs us to the location. We are not the typical consumer anymore, and we are quite happy not being part of the herd. Others should try it.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by JIMANDTHOM
I've worked in retail most of my life, from small mom/pops to a company that was part of the upper end selling little items like Chanel, Ferragamo, Yurman etc.
Around the mid to late 1990s, they came out with a sales program to entice customers called "I want it all". That was when I knew we as a country were doomed to effects of excessive consumerism. After 130 years in business they didn't make it past the recession of the early 2000s.
We are constantly bombarded by the efforts to make us part with our money/savings, whether it is for cars, electronics, clothing or the new physical aliment and resulting treatment. I'm believing that consumption of product/advertising is the result of the capital investment in that advertising. If we as consumers would dramatically shift away from purchase of wants by ignoring the advertising wouldn't this end up effecting the creation of capital?
We do not buy things because of an ad. When we need new flannel sheets, we check the ads for sales but only when the time comes for new flannel sheets. The ad only directs us to the location. We are not the typical consumer anymore, and we are quite happy not being part of the herd. Others should try it.
Yes, it's really a problem of having your cake and eating it too. If we all go out and spend a lot of money on things we don't really need, more jobs will be created to produce and sell those goods (or import them from China). That's wasting money, however, and means less savings and investment and eventually more people dropping in net worth from overspending. Like you, I ignore advertising for the most part. In fact, we often record TV shows just so we can zip through the commercials with the fast forward button. When I need something I will research prices and if not urgent wait for a good sale. Like the $2,800 refrigerator we bought last weekend for $999 less $100 rebate from the power company. If all of the companies doing consumer research and advertising, TV and radio producers, newspaper, internet and magazine ad people stopped pestering us, there would be a few million more people out of work.
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