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Old 02-28-2012, 07:42 PM
 
3,327 posts, read 3,338,937 times
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Quote:
Originally Posted by slackjaw View Post
May, might, and you seem to be assuming a 0% increase in incomes vs. your guess at 25% increase in food costs over time.



Agreed, and other areas of people daily costs could be lowering.
I provided the numbers. The past few years, incomes have been stagnant or declining for the vast majority of earners.

Prices have been mainly failing for elastic goods; such as commoditized electronics, non luxury services, etc. People can live without these goods/services and can adjust rather easily. They can't do so with inelastic goods/services.

Whether an xbox 360 falls from $400 to $200 means little when your average produce receipt increases by 20%, 25%, or 30% in the same period.
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Old 02-28-2012, 09:25 PM
 
12,870 posts, read 12,869,513 times
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again, the BIG issue is the increasing government burden due to that overspending, not the individual overspending anymore. (from my prior post household debt HAS fallen).
.

In 2001 total credit market debt was up to $28 trillion. Today it is now well above $53 trillion and inching closer to slapping on another trillion dollars this year. If you look at Greece as a microcosm of the bigger issue, you realize they are treating a solvency issue as if it were a liquidity issue. Let us be absolutely clear that all of this debt will never be paid off. This warrants repeating:

“The $53 trillion in total credit market debt will never be fully repaid.”

In essence the total debt markets are growing even though the debt will never be paid off. Since most thinking people get this, the banking sector is leveraging central banks to basically print money since no person would lend money out knowing they would never be paid back.

look at our economy and tell me there is even a chance of paying that back. we are going to be dealing with a new reality.

American incomes and low wage America

look at just one amazing statistic:
Back to the income data it is hard to believe that half our country has incomes under $32,000 a year. Over 68,500,000 households have reported incomes below that figure.
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Old 02-29-2012, 03:52 PM
 
12,870 posts, read 12,869,513 times
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for those who would like to point out that "wall street is still making money" i would like to point out this statistic:
Even as stocks have returned to lofty heights from their March 2009 lows, the percentage of Americans saying they hold individual stocks, stock mutual funds, or stocks in their 401(k) or IRA fell to 54% in April -- the lowest level since Gallup began monitoring stock ownership annually in 1999.

i think more americans see the disconnect between what is happening on wall street and what is actually happening on main street.
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Old 02-29-2012, 07:44 PM
 
8,266 posts, read 10,463,124 times
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Quote:
Originally Posted by wawaweewa View Post
Prices have been mainly failing for elastic goods; such as commoditized electronics, non luxury services, etc. People can live without these goods/services and can adjust rather easily. They can't do so with inelastic goods/services.
Yet they don't, which doesn't sit well for any argument implying mass suffering because of rising food prices. What is food inflation about 6% over the past 12 months? Inflation adjusted income went up 4% in the second half of 2011 alone. Do you know the average percent of an income spent on food vs. years past?
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Old 02-29-2012, 08:10 PM
 
3,327 posts, read 3,338,937 times
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Quote:
Originally Posted by slackjaw View Post
Yet they don't, which doesn't sit well for any argument implying mass suffering because of rising food prices. What is food inflation about 6% over the past 12 months? Inflation adjusted income went up 4% in the second half of 2011 alone. Do you know the average percent of an income spent on food vs. years past?
You have to take everything in context and separate the wheat from the chaff.

Wholesale food prices rose 6%. Purely from anecdotal evidence, retail prices have increased by more than 6%. Let's take a few examples.

A can of generic Tuna cost $1.00 for 6 oz. Now it costs $1.00 for 5 oz. More like 16% increase in cost.

A lb of potato salad use to cost $1.50. Now it's $2.00. More like 33%.

A bottle of hot sauce that used to cost 89 cents, now costs $1.29. An increase of around 45%.

A load of Italian bread used to cost $1.29 but now is $1.79. An increase of ~39%.

These are all NYC food prices which are some of the cheapest in the nation as a result of the massive amount of volume and variety that is churned here. As well as a ton of competition from both independent and large corporate chains.

There is no way that retail food prices have only risen 6%.


Second, please specify what income you are referring to. Which percentile do rising food and energy prices hit the hardest? Take a look at http://www.census.gov/hhes/www/incom...H01AR_2010.xls . That is the historical household income from 1967 through 2010. Where is this 4% rise you speak of? The bottom two fifths incomes hadn't risen in '11 either.


Historical spending on food in the US as a share of disposable income has greatly decreased but again it is skewed. Disposable income at the top 2 fifths have increased greatly pulling the average down. Also, real GDP per capita has risen almost 8x since the late 20's but on the other hand the GINI coefficient is at record lows in the US since the late 20's.

Furthermore, spending on food does not take into account quality. The poor today can feast on fast food dollar menus and highly processed food "product". They don't have to spend much but how much food (as in nutrition) is in there? Too bad we pay for it on the back end with huge medical costs.
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Old 03-01-2012, 04:42 PM
 
Location: Great State of Texas
86,093 posts, read 70,607,063 times
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The standard of living has been declining for at least a decade.
It was the availability of easy credit (aka DEBT) that made it not noticable.
Now with the RE ATM shut down people find they cannot live within their paycheck anymore and still afford "the good life".

So sad that many didn't wake up to this fact a decade ago.
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Old 03-01-2012, 10:09 PM
 
48,519 posts, read 81,760,688 times
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IO don't thnik so otherwsie millions of cellphone would be unshelfs and the comparison of restaurants i now compoared to the 50's wouldn't exist.Even lower middle lcass lives better thasn their solid middle class ancewstors but their life choice are different as to what they insist on having.
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Old 03-01-2012, 10:47 PM
 
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Quote:
Originally Posted by texdav View Post
IO don't thnik so otherwsie millions of cellphone would be unshelfs and the comparison of restaurants i now compoared to the 50's wouldn't exist.Even lower middle lcass lives better thasn their solid middle class ancewstors but their life choice are different as to what they insist on having.
I hear this analogy going around a lot. Many are now fond of saying that J. Pierpont Morgan never dreamed of having what even the poor have today. That analogy is wrong because we must compare in relative terms not in absolute terms.

Last edited by wawaweewa; 03-01-2012 at 11:53 PM..
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Old 03-15-2012, 10:39 AM
 
1,410 posts, read 1,757,044 times
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Quote:
Originally Posted by Simple Living View Post
I have been telling people for the last year to stop buying "stuff"; to pay off their debt as quickly as possible because bad times are coming and the only way to make it through will be to be debt-free. At least consumer debt-free. Get those credit cards paid off as quickly as possible and cancel all of those monthly subscriptions that nickel and dime you to death... magazines, movie channels, cable, eating out, going to movies, buying coffees and pastries, NetFlix, gym memberships, extra cell phone charges like internet, games, texting, etc., Stop buying video games, DVDs, CDs, books, etc., (Use the library, they're free to use.) At least narrow them down. Cancel cable altogether and just use NetFlix, if giving up television is too hard for you.

Most Americans won't do this because we don't want to go without. We don't want to be deprived and we've fallen for the media and advertising hype: "Make YOUR life better! YOU deserve the best!" We're addicted to stuff, convenience and entertainment. Microwaves aren't fast enough for us now. We're addicted to instant gratification and sacrificing these comforts is "insane" to us.

It's possible to live simply and get your debts paid off, though. I figured I'd rather "suffer" for a short time and be free from debt for the rest of my life. Then, during the hard times, it won't be so hard. I've put my plan into action and, by the end of the year, I'll be debt free and have some savings.

No, that doesn't make me any better than anyone else. I just wish people would take control of their debt and be drastic about it, instead of babying it so they don't have to hurt, suffer or go without.
It isn't just a matter of cutting out luxuries and debt. Our standard of living has dropped in this last decade or so also due to inflation on those things that we need like groceries, gas and basic household goods...not to mention healthcare costs and rising utility costs. Our money just doesn't go as far as it used to, leaving less disposable income. And savings too - even if there is enough left over to sock away in savings, I'd be better off stuffing that money into a sock than in a bank because due to those incredibly low interest rates, there isn't much incentive to save money without the interest income that it used to get.
Speaking of interest rates, why aren't they the same across the board: mortgages, credit cards and savings account, all the same % at any given time?
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Old 03-15-2012, 10:51 AM
 
1,410 posts, read 1,757,044 times
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Quote:
Originally Posted by Simple Living View Post
I long for the return to simpler times when towns and cities weren't open 24/7, but actually closed on Sundays. (Many places on Saturday, too.)

I'd love to see people return to a bartering service so everyone could afford to get what they need. The single mother babysits for credits towards the plumber fixing her toilet, whose earning credits to "pay" for the dental work he needs done so the dentist can earn credits to "pay" for babysitting services so he can take his wife out. Every service is worth a different, but fair, amount of credit, which is stored and used for bartering. I've lived in places where people did this and it was great!

Frankly, after they invented indoor plumbing, they could have just stopped with all inventions right there! We had all we needed with that!
Back in those days, there would've been a stigma to single motherhood, so I doubt that anyone would've been too eager to barter with her due to isolating her socially. Also, this would've only worked in some tiny little village where everybody knows each other. Where I live, it's a large, very transient population with lots of turnover, making it too hard to keep track of who owes who what, let alone tracking them down if they don't hold up their end of the bargain at that time. Besides, so much is dependent on cash, not just services.
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