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I can't speak for everyone in the USA - but we and many members of our family are trying to get RID of all the stuff we built up while raising the kids. We don't buy anything new (wow -not even a 4K monitor or TV!).......
I use many of the same tools I bought at yard sales 30+ years ago. I sold the rest that I don't need.
What I think a lot of people don't understand is how much of the GDP is their overpriced Security State and Medical System. So the economists scream "look- GDP went up", when all it really meant was that more people suffered and died and paid too much for the basics.
Sure, we need food, housing and transportation and communication. But those things are not going up in price (taken together) - and, if people are getting rid of "stuff" it also makes sense they are staying closer to home for vacations, etc.
I see all this as a good thing - of course, we have to fix the medical and military spending.
This is more of a "Euro" style lifestyle, where walking, hiking, boating, etc. are the main forms of recreation. In places like Denmark and Germany that's what a lot of people do every weekend - hike, picnic, sightsee, etc.
It's truely time to tamp this crazy over consumption model (USA) down...for our own good.
Are you just objecting to the comment about affordability based on the house itself? Because the rest of his post is spot on. And BTW, the experience you see is rather unique. The SF Bay Area is definitely an anomaly. You're not paying for the house when you buy here. Go buy that house in Des Moines or Indianapolis or Pittsburgh and it will offer the same savings he is referring to.
I live in Oregon, not Portland btw, which is multiple times cheaper than the Bay Area.
I'm objecting to the notion that the reason young people, or "snowflakes," are not all millionaires is due to the normal costs of modern life.
The poster in question blamed our housing choices, cable TV, computers, phones, and internet for our woes, in that order.
Like I said, I had a 2/1 1950s house that I was lucky to buy during the downturn. It appreciated like crazy once the economy improved. It was cheap when I bought it because people in the area were losing their houses to foreclosure right and left.
I don't have cable and don't know anyone that does who doesn't already have discretionary income. I have a home computer that cost about $800 and should last 3-4 more years. I have internet that costs me $70 a month, but necessary because my job is 20-40% online. I have a smartphone that I bought refurbished for $200 on eBay a year ago & I expect to use for at least 1-2 more years. Service is $50 a month.
So that's 1000 in one-time costs and 1500 a year. So what is that, maybe $50,000 in related costs over a lifetime? $60-70k if I splurge a bit? I made more than that selling my 1950 house. Since my job requires internet, and pretty much everyone I know communicates via smartphone now, including even people like my mom, it probably returns much more than I'll pay.
Just getting up and moving to Indianapolis is not necessarily the ticket. I just looked up the Zillow for Indianapolis. Yes, it appears there are cheap 2/1's there that can be had for 80-100k, quite affordable. They don't appreciate much, though, and most were older and will come with significant carrying costs. Those for sale appear to stay on the market 5-7 months, which indicates people don't want to live there all that much. Why?
Furthermore, moving is not "free," there are costs to it. Not least of which are the costs in lost wages. I'd probably lose 6 months of wages while I looked for new work- that's 30k.
Location: New Albany, Indiana (Greater Louisville)
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If capitalism is failing then so is (or was) communism and hard core socialism. Want to be poor in Venezuela? Humans have never found a long term solution to eradicate income inequality. Best we've done is ease the pain for the poorest with safety net programs.
That nearly 70% of US GDP by-disposition goes to personal consumption expenditures is not some measure of national greed. In China, PCE has stubbornly remained below 50% of GDP, and both the people and the government are unhappy about it.
I do not know if pure capitalism is possible or even a good thing. But what the USA has is far from that, an economy that is largely manipulated by various factors, not just supply and demand, but in large part the Federal Government.
Is that hyper consumer state of mind an integral part of capitalism? No, it also has been a standard in many nations and many economic isms. Even the Russians were overjoyed at the thought of buying stuff, stuff they didn't need, but wanted, regardless of the financial suffering that caused them down the road.
The Chinese are now included in that shopaholic group, and the poorest of South American's want their stuff also. This is marketing on steroids, not capitalism, it is consumerism, a new economic "ism" which popped up among the many isms, and one that has taken hold the world over. It most likely isn't sustainable, and we may see an involuntary return to a more frugal lifestyle, but not in the near term.
It seems like you're conflating the increase in consumption with solely an increase in consumerism driven by mass marketing.
In reality, the shift to which you refer was caused primarily by the transition from a managed/centrally-planned economy (under a communist/socialist scheme) to a more open market economy.
Russia under the strict economic controls of communism, was austere because like all such economies, there is no way for the invisible hand to function. When you interfere with that, you get these inefficiencies where the prices don't reflect demand so there is no input signal to make more stuff. Russians waited in lines for food staples. If you wanted windshield wipers for your car (Because someone had stolen yours), your best bet was to steal a pair from someone else. Can't just nip on down to Kragen's and browse through an aisle packed with wipers for every car on the road in a centrally planned economy.
Quote:
Originally Posted by redguard57
I live in Oregon, not Portland btw, which is multiple times cheaper than the Bay Area.
I'm objecting to the notion that the reason young people, or "snowflakes," are not all millionaires is due to the normal costs of modern life.
The poster in question blamed our housing choices, cable TV, computers, phones, and internet for our woes, in that order.
Like I said, I had a 2/1 1950s house that I was lucky to buy during the downturn. It appreciated like crazy once the economy improved. It was cheap when I bought it because people in the area were losing their houses to foreclosure right and left.
I don't have cable and don't know anyone that does who doesn't already have discretionary income. I have a home computer that cost about $800 and should last 3-4 more years. I have internet that costs me $70 a month, but necessary because my job is 20-40% online. I have a smartphone that I bought refurbished for $200 on eBay a year ago & I expect to use for at least 1-2 more years. Service is $50 a month.
So that's 1000 in one-time costs and 1500 a year. So what is that, maybe $50,000 in related costs over a lifetime? $60-70k if I splurge a bit? I made more than that selling my 1950 house. Since my job requires internet, and pretty much everyone I know communicates via smartphone now, including even people like my mom, it probably returns much more than I'll pay.
Just getting up and moving to Indianapolis is not necessarily the ticket. I just looked up the Zillow for Indianapolis. Yes, it appears there are cheap 2/1's there that can be had for 80-100k, quite affordable. They don't appreciate much, though, and most were older and will come with significant carrying costs. Those for sale appear to stay on the market 5-7 months, which indicates people don't want to live there all that much. Why?
Furthermore, moving is not "free," there are costs to it. Not least of which are the costs in lost wages. I'd probably lose 6 months of wages while I looked for new work- that's 30k.
Okay, but you realize that what you're talking about in discretionary spending (some portion of which it seems you deem necessary), is a fraction of what most people actually spend. They also buy a lot of other products they don't actually need.
And even taking your fairly meager level of "frivolous" spending, at $1500/year....with its lifetime total of maybe 70K on the upside, think about the massive opportunity cost of that. If you put that same 1500/year into investments from the age of 20 to the age of 70, a total of 50 years of investing and compounding, at the historical average 7% growth rate, you'd have $650K.
So sure, you see it as these small indulgences only cost you $70K. Not so bad, you think.
But in reality, it will cost you $650K. That could easily be the difference between a comfortable retirement and a subsistence one.
Threads like this suggest to me that if AI does get invented, it will be the only kind we have. What capitalism rewards, by the way, is power. Nothing else.
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