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That's because you're looking at the trees instead of the forest.
A box of nothing...
Quote:
Originally Posted by sterlinggirl
1. Do you have any data to show why college and healthcare costs have far outpaced the rate of inflation other than government subsidies?
Firstly, I said nothing about health care and for a good reason, the issue is complicated. In terms of education, this issue is filled with smoke and mirrors. Public university tuition has gone up over the years, but this has a lot do with changes in state budgets. The inflation adjusts costs for private universities has not dramatically changed over the years, but even there the issue is tricky as tuition makes up a smallish part of most private universities funding.
The easy credit environment over the last decade likely inflated tuition to some degree, but this was due to a credit bubble and not some government policy. A
Quote:
Originally Posted by sterlinggirl
2. Farm subsidies encourage us to grow things we don't need while neglecting to grow the things we do need. This, in turn, raises the prices of everyday necessities.
Free feel to post a study that shows to what degree farm subsidies inflate the aggregate cost of food stuffs. Likewise for sugar tariffs.
Quote:
Originally Posted by sterlinggirl
5. Your argument to this contradicts your argument to number 4. If the program was an absolute failure it wouldn't have affected it, but if it succeeded at all, it propped up prices by an additional $8K which will leave people further in debt for the next 30 years or so...which according to your own reasoning will hinder their ability to contribute to society through the purchase of goods and services.
Perhaps you don't know what the word "contradiction" means? There is no contradiction, my point in #4 is that the program was rather short lived and any increase in price would have be similarly short lived. The point here is that the credit has not stopped the market from correcting, I'm not even sure how you'd find out if and to what degree it inflated prices. If you have a study post it.
The old fashioned way - hard work and financial restraint. We all need to roll up our sleeves and get down to the hard work of paying off the debt we accumulated by years, decades even, of living beyond our means. Pay off those credit cards and put those payments and interest into our savings accounts and CDs! Keep your car longer instead of trading up every two or three years! Build REAL equity in our homes by buying homes we can actually afford and paying our mortgages down early instead of using imaginary equity based on grossly inflated property values, and do this BEFORE we use our home equity loans to take vacations or get kitchen makeovers or whatever else it is we got in debt for in the first place. Remember that the term "home equity loan" is a marketing gimmick cooked up to replace the older term that much more acurrately described it - SECOND MORTGAGE.
I know that most folks here will not agree with me, but this is the only way to build long term financial health for most of us middle class working stiffs. I only wish I had discovered this years earlier.
Once you've done everything I stated above, put your money into gold and oil stocks and mutual funds. After all, they are going up, right?
You're right about this, and I expect it will continue up for at least another few months before it peaks, but hey, this is the United States of America for Pete's sake. If you can't find a company to hire you, start your own!
While the consumer has tightened his belt and is beginning to learn not to spend more than he makes, the government is doing the opposite which is putting the consumer farther and farther behind. The government is saying this morning that at least $40 billion of the money lent to GM and Chrysler will never be repaid. Do the math, what is your individual share of that debt. If you add the deficits from Social Security and Medicare to the rest of the government debt we are looking at about $200K per taxpayer. We are looking at ever increasing taxes for decades to come. That money will not be contributing to the economy or creating the jobs that we will desperately need. I am all for optimism, but only if it is realistic. We have MAJOR problems that are not being addressed. Until we begin to fix the things that are really wrong with this country, recovery is a pipe dream.
Sounds like people are finally buying what they can afford, novel concept. Buying is down because people are no longer over consuming in excess of their income, now that the cost of debt has increased so much, but not necessarily turning into misers.
Your post sums it up quite nice.
Consumers are buying and paying down debt. Quiting a bad habit "cold turkey" often leads to failure and really is no fun.
Location: Georgia, on the Florida line, right above Tallahassee
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Quote:
Originally Posted by user_id
A box of nothing...
The easy credit environment over the last decade likely inflated tuition to some degree, but this was due to a credit bubble and not some government policy. A
As consumers cut debt and fix their balance sheets they will start to have more money to spend. Many people have already done this, and many more will do so over the next few years.
In terms of the recession what is important is that the spending stabilizes and it is doing just that. A modest percentage of spending during this decade was debt driven so consumer spending had to contract once the debt was cut off. But this has already occurred and now people are improving their financial health which is good for the economy...funny you see it the other way.
consumers are servicing debt. (and frankly not doing a very good job of it, if you look at consumer credit default and housing foreclosures). income paid to reduce debt is not available for spending on goods and services. It therefore shrinks the economy, aggravating the depression.
While the consumer has tightened his belt and is beginning to learn not to spend more than he makes, the government is doing the opposite which is putting the consumer farther and farther behind. The government is saying this morning that at least $40 billion of the money lent to GM and Chrysler will never be repaid. Do the math, what is your individual share of that debt. If you add the deficits from Social Security and Medicare to the rest of the government debt we are looking at about $200K per taxpayer. We are looking at ever increasing taxes for decades to come. That money will not be contributing to the economy or creating the jobs that we will desperately need. I am all for optimism, but only if it is realistic. We have MAJOR problems that are not being addressed. Until we begin to fix the things that are really wrong with this country, recovery is a pipe dream.
How did you come up with 200k? I'd like to see the math on that one. I believe there are an estimated 75 million taxpayers in the US. That equates to about 500 dollars per tax payer(over each tax payers lifetime).
How did you come up with 200k? I'd like to see the math on that one. I believe there are an estimated 75 million taxpayers in the US. That equates to about 500 dollars per tax payer(over each tax payers lifetime).
What you are not figuring is unfunded liabilities such as Social Security and Medicare. My figures are actually conservative according to the following articles. Figures vary depending what unfunded liabilities are included. Of course if we default on our obligations to future recipients these figures would be less.
“The latest increase raises federal obligations to a record $546,668 per household in 2008, according to the USA TODAY analysis.”
“Let’s say you and I and Bruce Ericson and every U.S. citizen who is alive today decided to fully address this unfunded liability through lump-sum payments from our own pocketbooks, so that all of us and all future generations could be secure in the knowledge that we and they would receive promised benefits in perpetuity. How much would we have to pay if we split the tab? Again, the math is painful. With a total population of 304 million, from infants to the elderly, the per-person payment to the federal treasury would come to $330,000. This comes to $1.3 million per family of four—over 25 times the average household’s income.”
Excerpt from speech by Richard W. Fisher,
President and CEO of the Federal Reserve Bank of Dallas.
consumers are servicing debt. (and frankly not doing a very good job of it, if you look at consumer credit default and housing foreclosures). income paid to reduce debt is not available for spending on goods and services. It therefore shrinks the economy, aggravating the depression.
Do you even read what you respond to?
"As consumers cut debt and fix their balance sheets they will start to have more money to spend. Many people have already done this, and many more will do so over the next few years."
The slowdown was household net worth—the difference between the value of assets and liabilities—was an estimated $50.4 trillion at the end of the first quarter of 2009, $1.3 trillion dollars less than at the end of 2008.
that doesn't seem like more money to spend.
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