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View Poll Results: What Are YOU Cutting Back For the Economy? (Choose As Many As You Want)
Smaller House or Apartment 15 22.73%
Get Rid of Pets 2 3.03%
Private School for Children 6 9.09%
Older or Smaller Car/ No New Car 29 43.94%
Boat/ RV/Motorcycle or Other Vehicle 7 10.61%
Internet/Cable or Satellite TV or Radio 11 16.67%
Wal*Mart Instead of Grocery Stores or Dept Stores 17 25.76%
Cell Phones/ Home Phone 5 7.58%
Delay Retirement 14 21.21%
Delay College/ Children's College 4 6.06%
Not Taking Vacation/ Vacation Close To Home 34 51.52%
Stop or Cut IRA Contributions 13 19.70%
Other 16 24.24%
Multiple Choice Poll. Voters: 66. You may not vote on this poll

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Old 03-04-2009, 07:17 PM
 
Location: where you sip the tea of the breasts of the spinsters of Utica
8,298 posts, read 14,122,898 times
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Quote:
Originally Posted by himain View Post
We really haven't cut back anything at all. We are planning a quick trip in May, just leased a new MB last night, planning a two week 5 year anniversary trip in late Dec, finish furnishing the house, getting house painted interior, building a gym in bonus room, etc..

We have no debt except the house, two cars, HD, and a cat. We make good money and will continue to spend it to support the economy. I mean Im not going to sit here and think the world is going to end, blah blah blah. IF the shet hits the fan, then we'll deal with it at that point.

I've said this before, the more people hold onto their money and don't spend, the more people will lose their jobs due to business closing.

IF you have the money to spend, spend it!!!!!
So you're sacrificing your future to save our nation! How noble of you.
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Old 03-04-2009, 07:18 PM
 
20,599 posts, read 19,259,253 times
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Quote:
Originally Posted by NCyank View Post
Depending on where you live, $35K is a very nice income....IF you have no debt and can manage that $35K wisely. Personally, we could live on even less but wouldn't have the extras or pay off the house early. $50K would provide a lot of extras in the way of activities for the kids or a few nice vacations each year (nice being $6-$8000, not $20,000).

If you know people who are living well on $35K (and without debt) while you are sitting at home eating ramen noodles (an exaggeration) earning $90K I'd invite them over for dinner and find out just what they are doing that you are not. I bet they don't have car payments, a HELOC, CC debt, student loans, etc. Most people spend the majority of their income on debt and wonder how they will ever get ahead.
Hi NCyank,

Someone has to service debt and continue to go into debt. The only reason why someone can make 35k a year is because someone making 90k a year is in debt. If they go bankrupt and do it again they are doing us a favor. God bless them.
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Old 03-04-2009, 07:40 PM
 
48,505 posts, read 96,603,039 times
Reputation: 18304
But no one is doing anybody a favor by spending 140% of income as americans were doing average ouit. That is why we are borrowing money from the chinese who save 40% of income. When they decide to bring the money home if need we are in trouble when they sell teh treasury notes they hold.
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Old 03-04-2009, 08:12 PM
 
20,599 posts, read 19,259,253 times
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Quote:
Originally Posted by texdav View Post
But no one is doing anybody a favor by spending 140% of income as americans were doing average ouit. That is why we are borrowing money from the chinese who save 40% of income. When they decide to bring the money home if need we are in trouble when they sell teh treasury notes they hold.
Hi texdav,

Actually most Americans were just trying to find an inflation hedge and tax policy was a freight train behind it. Anyone not buying a house just got poorer for the last 20 years. Most Americans have micro-economic sense but they are just clueless in the macro economic sense. You still don't seem to quit get the picture of the current financial system. We as a society absolutely must increase debt perpetually or go into default. It does not matter if the most profligate spender among us put 50% down on their house. Interest on commercial bank credit must be paid and the only way to introduce new money in the system to pay the interest is more debt or defaults. We are never solvent whether we save or not. If it were not sub prime defaulting it would just be other borrowers.

Last edited by gwynedd1; 03-04-2009 at 09:14 PM..
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Old 03-05-2009, 06:34 AM
 
Location: Way up high
22,196 posts, read 29,224,809 times
Reputation: 31258
Woof, how am I sacrificing my future? Because I'm spending money in order to make sure my future is still running??

Don't hate the player, hate the game..
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Old 03-05-2009, 08:27 AM
 
Location: Denver, CO
79 posts, read 483,910 times
Reputation: 45
Please excuse the sarcasm, but this question is absurd…

In light of the current economic conditions, I vow to sacrifice the following for the greater good:

I vow to:
• Continue renting a 1 bedroom apartment so that I can pay more taxes to the government
• Delay having children even (though my wife is approaching 35) so more of our income can be devoted to the bail out. We will also ensure that our children (if we can still have them) and their children are equally devoted to getting us all out of this mess, even though they had nothing to do with it.
• Move away from all my friends and family to a more affordable state where I can further dedicate more of my hard earned income to banks and speculators who need it most.
• Postpone any vacations until I reach retirement age. I may not be as in great of shape as I am now, but hey that’s what motorized chairs are for.
• Carry on contributing to the black hole of my 401k, so it can continue mysteriously be reallocated to the Bernie Madoff’s of the world.
• Report any interest that I earn on my bank account as income so the government can further enjoy the fruits of my labor.
• And so on…

To seal the deal, I will hold my hand above my heart and re-pledge my allegiance:

“I pledge my allegiance to the Fed of the United States of America, and to the greed of the Republic (and Wall Street) for which they stand, one nation under what ever God you choose (so long as you don’t say Jesus; that apparently is forbidden), with liberty and justice for banks, speculators, and over indulgent individuals.”

I came from Orange County, CA… and witnessed first hand how people overleveraged themselves by buying expensive homes they could not afford and then withdraw their equity to purchase lavish cars, furniture, and vacations. I was looked down on and was pitied for not hopping on the home buying train before it left the station.

I’m not sacrificing any more than Uncle Sam forces me to.
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Old 03-05-2009, 12:43 PM
 
Location: Charlotte, NC
2,193 posts, read 5,040,654 times
Reputation: 1075
Quote:
Originally Posted by gwynedd1 View Post
Hi texdav,

Actually most Americans were just trying to find an inflation hedge and tax policy was a freight train behind it. Anyone not buying a house just got poorer for the last 20 years. Most Americans have micro-economic sense but they are just clueless in the macro economic sense. You still don't seem to quit get the picture of the current financial system. We as a society absolutely must increase debt perpetually or go into default. It does not matter if the most profligate spender among us put 50% down on their house. Interest on commercial bank credit must be paid and the only way to introduce new money in the system to pay the interest is more debt or defaults. We are never solvent whether we save or not. If it were not sub prime defaulting it would just be other borrowers.
It's odd, no matter how much you tell a person that money = debt, they still don't get it. I just had this one week conversation on another board about the creation of money and at the end it was ignored. I understand a lot of people don't think about it, as I never thought about where a dollar came from until this whole crisis started and then I started researching it.

But I would think more people on this board would understand.

I don't know how we can explain the disconnect.
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Old 03-05-2009, 01:58 PM
 
20,599 posts, read 19,259,253 times
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Quote:
Originally Posted by sheenie2000 View Post
It's odd, no matter how much you tell a person that money = debt, they still don't get it. I just had this one week conversation on another board about the creation of money and at the end it was ignored. I understand a lot of people don't think about it, as I never thought about where a dollar came from until this whole crisis started and then I started researching it.

But I would think more people on this board would understand.

I don't know how we can explain the disconnect.

Hi sheenie2000,

Yep, miss that little detail and most of what people say will come out nonsense. Thats why it usually does. If one sees a snake swallow its prey they will just assume when it tries to swallow its tail it will work out just the same. They can't see whats different. Our money is what we owe to a bank, with interest.

Consider having 5 gift certificates from Starbucks for 1 coffee each. Those are Starbuck IOUS. Also consider if you went to lunch with someone and wanted a drink but did not have enough. You could just give someone who wants coffee the Starbucks gift certificate. The next day that someone could just give it back to you if you bought them a drink at a lemonade stand. If everyone trusted Starbucks then it could be a medium of exchange. However all that is being passed around is debt. Starbucks owes. Thats our money and it just means our government owes. What happens when Starbucks provides the coffee? The money and debt is destroyed.
How do we get this money? From a bank at interest. We promise to pay a bank back so we have money printed for us typically by backing with some asset like a house , or for smaller, higher interest loans, our history of paying our debts. So when I get this "loan" I circulate it as money. However its my debt. Without my debt you all would have less money. I pay the bank back with someone else's money borrowed from a bank.

What if we as a society all paid down our loans by 5% and paid 5% interest? We would shrink the money supply to 90% of the original principle. If all of us paid down our debt at the same rate all of us would have increased our debt by about 5.5% because only 90% of the principle is in circulation and the banks now holds 5% of the principle. If we really all decided to be virtuous and pay our debt by half we would be further in the hole closer to 10% since we owe 10% of the entire money supply above the principle. The only way out is to pay your debt faster than anyone else and hope more people go into debt or go in default before you.
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Old 03-05-2009, 02:08 PM
 
Location: Chino, CA
1,458 posts, read 3,275,923 times
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Quote:
Originally Posted by gwynedd1 View Post
The only way out is to pay your debt faster than anyone else and hope more people go into debt or go in default before you.
But gwynedd1,
Going into default is "instant" payoff... so the guy defaulting is getting rid of debt faster than anyone else... killing everybody else as a consequence like we are seeing now. So, if everybody is "defaulting"... you'd want to "default" before the other guy does.

If things were "orderly" and going as "planned"... as new generations get born into the system... they incur the debt so that older generations can pay off debt and retire the money supply.

Unfortunately, we were already facing a bigger challenge prior to today's challenges... there aren't enough new generations getting born into the system to incur more debt... meanwhile, the older generations are still "paying" down debt... and now the defaults... money/debt is contracting faster than the government can create it.

-chuck22b

Last edited by chuck22b; 03-05-2009 at 02:17 PM..
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Old 03-05-2009, 04:07 PM
 
20,599 posts, read 19,259,253 times
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Quote:
Originally Posted by chuck22b View Post
But gwynedd1,
Going into default is "instant" payoff... so the guy defaulting is getting rid of debt faster than anyone else... killing everybody else as a consequence like we are seeing now. So, if everybody is "defaulting"... you'd want to "default" before the other guy does.
Hi chuck22b,

How so? The seller got his money and the bank can't collect from the default. Money does not disappear after a default. If someone "borrows" 250k for a house and defaults he still gave it to the seller. Now the seller has 250k with the buyer on the hook to retrieve the 250k + interest. If the buyer/debtor defaults, its free "wildcat" money for the seller. Its a non interest bearing source of money for the rest of us. Defaults are good with respect to this since it reduces the debt pressure. Obama is just jacking it up. Every time the government "helps" people pay its just more monetary destruction. The only thing that disappears is a bank asset with a default which according to the accounting rules can make them insolvent if they lose too many.

Quote:
If things were "orderly" and going as "planned"... as new generations get born into the system... they incur the debt so that older generations can pay off debt and retire the money supply.
Yes if they pay a perpetual interest rate and continually create productive capital, but they will always have extreme pressure to hold onto capital. Housing is capital for consumption and has no productive capacity. Thats why its game over.

Quote:
Unfortunately, we were already facing a bigger challenge prior to today's challenges... there aren't enough new generations getting born into the system to incur more debt... meanwhile, the older generations are still "paying" down debt... and now the defaults... money/debt is contracting faster than the government can create it.

-chuck22b

The government could easily create as much money as it likes. Its a computer entry. Money shortage is nothing but mass delusion. I could solve it before the end of the week but the whole FIRE economy would have a bounty on me. Don't mess with someone's money press without body armor.
Just actually look at whats happening. Does anyone even know what bank insolvency really is? How many people even know what these trillion in bailouts really are. Does anyone know why an insolvent bank can run like a "zombie" for years ala Japan?
The treasury created computer entries for US treasuries into bank account who then took those treasuries and used them as collateral to borrow from the FED as .25% interest who then deposit this money and the FED pays them .25% interest. Now they have reserves to lend. Then the banks don't lend. Its all book entires to conform to bank accounting rules. LOL
They already spewed out the cash and can't collect so they are "insolvent" but the money that made them insolvent is already out there. The new circular money is going nowhere.
If they really wanted money to go into circulation they would allow defaults and lower taxes , give tax credits, what ever. However up till now they have done nothing of the kind. They want a depression or they are complete idiots. I don't know what the ratio really is but its probably mostly idiots mixed in with some fiends using this to buy up everything cheap.
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