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there is a part to this concept you didnt add in. Real wages has decreased while cost of living has increased. This also helps with why people live on credit.
This very well may be true, but I am certainly not knocking down the bucks I was just 5 years ago and I don't have a single credit card. Granted I am a frugal man compared to how most people I know live and I am one of those few who likes the feel of paper cash in my hands. I realize my money doesn't go as far as it once did and I also realize that wages are not keeping up with the cost of living. My response to this is what I would suggest to my own government, curtail spending in order to stretch the income that is coming in.
I would love to own a new car and have been staring down a 50" LCD TV, but chances are I will buy neither. I will keep slapping new parts on my old car that gets 36mpg, and I will keep looking at my old 36" tube TV until the magic smoke escapes and I am forced to buy a new one. In both cases, by the time they are dead, I will have saved the money to buy a new one in cash. The transaction will be between me and the vendor and no credit middle man sucking up bucks for the sake of instant gratification.
I realize I am probably like one of those old codgers that buries money in a jar in the back yard and spends too much time in the garden, but it is also nice to wake up each day knowing that I don't really owe anyone anything. My costs are minimal because my needs are, its really quite simple.
tn whoa whoa, your car get 36? what car do you have?
I agree with you 100% on everything you said though. But like someone else said, once we start being forced to live with in our means, our economy will tank until the government finds a way to diversify our economy passed this 72% consumer spending business we have been up to thus far.
I too would like a new car but will opt for a cheap motorcycle and supplement it with my 93' car .
Last edited by Wild Style; 03-01-2008 at 08:00 PM..
IMO I think if the government bails them out..they'll just return to what they were doing before and will treat it like a clean slate..ready to start over again.
They won't go through any major hardship and learn from it.
tn whoa whoa, your car get 36? what car do you have?
I agree with you 100% on everything you said though. But like someone else said, once we start being forced to live with in our means, our economy will tank until the government finds a way to diversify our economy passed this 72% consumer spending business we have been up to thus far.
I too would like a new car but will up for a cheap motorcycle and supplement it with my 93' car .
I agree..72% consumer spending is not the way to run our economy.
I drive an older model Jetta that does 0-60 in less than 12 minutes! I average 36mpg because I admit I drive like a half crazed mountain wildman and will probably end up wrapped around an oak tree before I am 60. Many other owners of this car are getting anywhere from 42 to upwards of 47 mpg. (or so they are reporting) 1991 Volkswagen Jetta Review and Specs
I cannot control how my government earns or spends its money other than how I protest at the polls during an election. If everyone were to live within their means and force the government to have to alter its economic policies, well then great. There is no one in the world to bail me out for making bad choices so I am forced the make the best choices I can. The fact that uncle McSam can print as much money as he wants then wring it out of me if he makes bad choices sucks but what recourse do I have but to suck it up?
All I have control over is how I live, earn and spend my own money, so I kind of have a difficult time having sympathy for those people who took out a 0 down mortgage on a house with an ARM that they could no way in the world afford to pay for the whole loan. Who have more than three credit cards with at least one maxed out, two cars and looking to lease the newest Lexus, then buy the new norditrack to set in the corner and collect dust until the repo man shows up to take it all back.
Ammo, the currency of the new millennium may not be such a humorous thought anymore the way things have been going lately.
Nope. I won't drink that particular brand of kool-aid. You can't be a consumer nation if you run a trade deficit. Doesn't make sense.
Did you learn that at one of those free-dinner seminars at some local restaurant? The 72% number refers to the share of GDP that is represented by personal consumption expenditures. In the Dec 2007 quarter (seasonally adjusted) that number was actually 70.5%. The trade balance doesn't at all enter into it in the way that you imagine.
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Originally Posted by ViewFromThePeak
But you can hold back the economic collapse for a few years sticking foreigners with IOUs. We did that, until now.
You can't "stick" foreigners with US Treasury securities. The transactions occur on account of there being willing buyers and a willing seller at the prices and yields prevailing.
Quote:
Originally Posted by ViewFromThePeak
In order to be a consuming nation you have to be able to export a reciprocal amount of goods or services. Much of our economy is based on worthless non-exportable services like landscaping, homebuilding and law. If you can't export it, it doesn't contribute to you as a consuming nation.
Gibberish, start to finish. And as an FYI, US exports of services were at an annual rate of better than $500 billion in 2007-IV. They were just about 30% of total exports.
Quote:
Originally Posted by ViewFromThePeak
You think a few people not being able to get a mortgage is bad? You ain't seen nothing yet.
And this prediction is based on what.
Last edited by saganista; 03-01-2008 at 08:40 PM..
Did you learn that at one of those free-dinner seminars at some local restaurant? The 72% number refers to the share of GDP that is represented by personal consumption expenditures. In the Dec 2007 quarter (seasonally adjusted) that number was actually 70.5%. The trade balance doesn't at all enter into it in the way that you imagine.
Actually, I learned it from Berkeley graduate of economic Peter Schiff and Dr. Stephen Roach, former chief economist at Morgan Stanley. A consumption economy is not sustainable without having balanced trade. We are currently running a trade deficit.
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You can't "stick" foreigners with US Treasury securities. The transactions occur on account of there being willing buyers and a willing seller at the prices and yields prevailing.
We can't stick them now, but we can certainly stick them when they try to sell them. There's no private demand for monopoly money, so central banks have to create them. The Fed will likely have to buy up most of these Treasuries when they're sold.
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Gibberish, start to finish. And as an FYI, the US exported better than $500 billion worth of services in 2007-IV. They were just about 30% of total exports.
Most people thought subprime failure was gibberish too, before that people thought etoys.com crashing was gibberish.
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And this prediction is based on what.
Crash proof, A bull in China, et al.
Last edited by ViewFromThePeak; 03-01-2008 at 08:19 PM..
Did you learn that at one of those free-dinner seminars at some local restaurant? The 72% number refers to the share of GDP that is represented by personal consumption expenditures. In the Dec 2007 quarter (seasonally adjusted) that number was actually 70.5%. The trade balance doesn't at all enter into it in the way that you imagine.
You can't "stick" foreigners with US Treasury securities. The transactions occur on account of there being willing buyers and a willing seller at the prices and yields prevailing.
Gibberish, start to finish. And as an FYI, the US exported better than $500 billion worth of services in 2007-IV. They were just about 30% of total exports.
And this prediction is based on what.
He got the 72% number from me. Where did i get it from? Well from my education. One of my degrees is in International Economics
Your statements are way off the mark. You try to make it seem like 72% of GDP is something other than people SPENDING MONEY and spurring along the economy. It is not rocket science, people spend money (buy goods) and this is how the economy is moved along (again 72% of the economy is made up of this). As for why it was 70% in December, well lets see. We were heading into a recession. When spending is down, because people are doing bad, then that number will be less. Hence the definition of a recession (when GDP is 0 or less). Exports are still not enough to make up for the trillions of dollars spent by consumers, thats a fact and hence why our economy is going into cardiac arrest.
*correction*
he did his on research on GDP, good stuff
PS
He was right about the govt sticking it to investors. They did it to the investors in security backed mortgage packages. Greenspan made it seem like this stuff was the best thing since sliced bread and now people are paying for it. This will hurt us in the long run. When people realize our Financial vehicles can not be trusted money will stop pouring in for corporate and govt investment. When that happens what are we to do?
Yes, some towns will fail. That is, those towns, organizations and people who were banking on idiots rather than being responsible themselves.
There isn't enough oversight and regulation to provide YOU with the transparency needed to know whether or not your own mutual funds or retirement funds are at risk. Does that make you an irresponsible person who banks on idiots? I would guess so, as that's the standard you want to use for everyone else.
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Originally Posted by Nomander
The thing is, life will right itself after a while. sure, there may be some hardships for some that will trickle down or effect people over a distance, but eventually things will straighten out again as the rust gets removed from the metal so to speak.
Well, I guess one could have said the same thing about Hiroshima or Nagasaki. I mean, after a while...
Quote:
Originally Posted by Nomander
The only other option is to bail these irresponsible people out and what happens when you keep taking the heat for a person who refuses to? What do they learn?
All that they need to learn is that they shouldn't trust laissez-faire free market economics. This is a lesson that has been learned before. Too many people forgot. The current difficulties arise all but entirely from policies that people from your neck of the woods recommended and pushed through to adoption. You all were wrong. Again.
Quote:
Originally Posted by Nomander
You won't improve your life as long as you keep making excuses and continuing to subject yourself to that treatment. Its hard, it takes some courage and will be difficult, but you pick up and move on. That is the only way.
It's good that you see this. The first step toward recovery is admitting that you have a problem.
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