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| Economy |
| Be a good citizen, spend your cash |
| 2009-07-02 |
| Please take the following short quiz, answering each question with a simple yes or no: Is your household income about the same as or greater than it has averaged over the past few years? Is your job reasonably secure? Are your financial obligations — mortgage payments, car payments, school tuition and other family expenses — about what they were last year? Are you saving about 10% of your gross income for all of your future needs combined — emergencies, retirement, the kids' college, a major purchase? If you answered yes to those four questions, you are among the fortunate folks who are faring pretty well despite this severe economic downturn. And kudos to you for managing your career and your finances wisely. (If not, see these nine steps.) Because you are both fortunate and wise, Uncle Sam wants you to play a key role in America's economic recovery. How? By maintaining your normal levels of consumer spending and charitable giving — and, if possible, even increasing them a bit. Spend...Consume...OBEY! Acting as you normally would will help offset belt-tightening by those in genuine distress, who have no choice but to cut back, and by those who aren't in trouble but are cutting back anyway. Why are some people slashing spending even though their incomes are secure? One reason is a drop in their net worths, due to eroding home prices and financial assets. It's the reverse of the so-called wealth effect, which caused people to spend and borrow more freely in boom times, confident that their net worths would keep rising unabated. Now, with their wealth declining, people are acting more cautiously even if their incomes haven't been cut. That's a reasonable response. Unfortunately, overdoing it will aggravate the economic slump. Another psychological factor is at play here: a desire on the part of well-off Americans to show empathy for their less fortunate brethren by spending less. It seems that voluntary frugality is now as chic as high living was during the credit bubble in the middle of this decade. Nowadays, people who are still reasonably affluent are boasting about pinching pennies, eating at home, canceling trips and hanging on to the old car. But I have news for them: If they really want to help individuals who are less fortunate, they should be doing precisely the opposite. Boosting their spending — and their giving — will help businesses forestall some layoffs and eventually put people who have lost their jobs back to work. read the whole thing at the link -I thought it was deeply warped satire at first. Read the comments of the posters too - they're funny and on target. |
| Posted by:Broadhead6 |
| #27 The habitues of the O Club were treated to the details, Barbara. 3dc shouldn't have said that. Deacon Blue's former landlord converted to Islam, quit paying the mortgage without telling his wife, then the bank foreclosed. The new buyer wanted to move in immediately, so Deacon Blues had to find a new home for horses, pigs, geese, and various house animals. He has found a temporary haven, and has settled all the critters while he looks for a permanent home. |
| Posted by: trailing wife 2009-07-02 23:59 |
| #26 Apparently I haven't, 3dc. I haven't had a lot of time the past month for Rantburg (or anything else fun). I'm still in the dark following your explanation. :-( |
| Posted by: Barbara Skolaut 2009-07-02 17:23 |
| #25 Ummm Deacon, I have ten acres in Millbrook you can put your horses on if you wish, WARNING there's no fence (If you wish I'll chip in a bit of cash and labor to build one, it's something I need, Call it rent if you wish) If you don't need a fence come ahead. |
| Posted by: Redneck Jim 2009-07-02 16:55 |
| #24 Another psychological factor is at play here: a desire on the part of well-off Americans to |
| Posted by: Pappy 2009-07-02 15:26 |
| #23 Economies grow through the creation of wealth, not the mere exchange of it AHM. While it's nice that you have grasped the shallow view of Zero's economic plan, how about doing some real economic growth by creating industries and businesses that combine raw materials, innovative new concepts, and MAKE something, creating net new wealth that then gets passed around though salaries, materials procurement, taxes, etc. Since the USA hardly makes anything anymore, we are reduced to trading money back and forth, and sending much of it overseas, so the system isn't even self-contained. It bleeds out real wealth to foreigners. Since we are the only twits that still think the nice dream of free trade works, and the rest of the WTO read China) just cheats, their lower labor costs trumpt transportation costs and we have exported our real wealth production capacity to them. |
| Posted by: NoMoreBS 2009-07-02 14:44 |
| #22 |
| Posted by: OldSpook 2009-07-02 14:43 |
| #21 DoDo, I never said anything about rampant, stupid consumerism. Our economy is very simple, you buy item x from person a so that person a has money to buy item y from person b, ad infinitum. Items are interchangeable for services and person with busines. When people are too afraid to spend money, like they are now to one extent or another, the economy contracts. Even if you assume that everyone only wants to maintain there lifestyle (an idealistic assumption) then the economy must, by need, constantly grow because the population continues to grow. If people are sitting on their money, the economy can't grow. BTW, can no one on this site read? I, and this article, both explicitly mention savings, with me, personally thinking greater than 10%. The whole point of my post is that no one on tihs site appears to have any capability at reading comprehension anymore. Thanks for proving my point. As it were, I save nearly 20%, have a low mortgage rate on a house that is nearly paid off, own land so that I can build another house and have both of my children's college funds fully funded. I thank God every day for my blessings. Now I am going to go spend some money at Home Depot, to do my little part in making sure the local store doesn't go out of business. Maybe some of ya'll would do better in the business world if you learned how to comprehend the meaning of the words you are reading. |
| Posted by: AllahHateMe 2009-07-02 14:35 |
| #20 you haven't been paying attention Barbara. Deacon entered Soap Opera land. All it takes is a Muzzie convert and a scam of some sort. |
| Posted by: 3dc 2009-07-02 13:55 |
| #19 My god, Deacon - what happened? |
| Posted by: Barbara Skolaut 2009-07-02 13:22 |
| #18 A basic fundamental of life - "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." - Wilkins Micawber, from David Copperfield [the book by Charles Dickens]. |
| Posted by: Procopius2k 2009-07-02 12:53 |
| #17 AllahHateMe, I refuse to believe that capitalism needs Christmas to survive. If it does I think I'd rather be a commie. If capitalists want to survive they need to produce something that I really want or need bad enough to part with my hard earned dough. I will not trot my ass down to WalMart for a load of plastic crap from China just to be charitable. When I was in high school, a Pendleton was about the coolest article of clothing a guy could have. Back in those days they were made in Pendleton, Oregon. The one I have now was made in Mexico but I think they still produce the wool in Oregon. Congratulations on the purchase, Sgt. Mom. You'll be glad you had the foresight to buy it next winter. |
| Posted by: Ebbang Uluque6305 2009-07-02 12:46 |
| #16 Sounds like it's become unpatriotic to leave within your means. AllahHateMe: Capitalism only works through consumerism - No. Capitalism only means that people are free to own and operate businesses, own and trade assets (including homes), and generally make their own economic decisions. Capitalism in the U.S. did just fine before the latest bout of rampant cheap-debt driven buying, and continues to work well in parts of the world with better balance between savings and spending. net worth != income Uh, no it doesn't. The U.S., both the government and citizens, needs to live within their means. Economic forces are making that happen, and the current flood of government cash makes the short term look better, but will be no better at bringing prosperity than the overt socialist policies of Russia's communists, China's Maoists, Cuba's Castro or Venezuela's Chavez. |
| Posted by: DoDo 2009-07-02 11:59 |
| #15 AP news: Employers cut a larger-than-expected 467,000 jobs in June and the unemployment rate climbed to a 26-year high of 9.5 percent. Workers also saw weekly wages fall The obvious solution is to send more government money (one way or the other) to Goldman Sachs. |
| Posted by: Anguper Hupomosing9418 2009-07-02 11:59 |
| #14 This makes me want to accumulate more mattress money. |
| Posted by: Anonymoose 2009-07-02 11:18 |
| #13 Sgt. Mom, I sympathize. I've worked in call centers and it's possibly the worst job that you can have while sitting at a desk/cubicle. |
| Posted by: charger 2009-07-02 11:07 |
| #12 I stimulated the economy to the tune of a bit over 600 bucks last month because I had to buy a lot more gas than usual, rent storage space at 2 places, and move my horses because I am noe homeless. Good enough? |
| Posted by: Deacon Blues 2009-07-02 11:01 |
| #11 Did anyone read the article? The article says IF you have a secure job and IF you are saving (of course I'd prefer people to save more than 10%) and IF you still have money left over THEN to spend. If you claim to be a capitalist and can't understand this basic truth, you are a hypocrite. Capitalism only works through consumerism. It's pretty freaking simple really. So all of you whining about your part time job or not working at all, obviously failed reading comprehension. But if people, who are more fortunate, don't consume, then those of you who are less fortunate will be stuck that way. Unless you think the government is going to pull us out of this economic quagmire? I'm confused. By the way, net worth != income. So even if your house lost value, as long as it is worth more than your mortgage(s) then you are in decent shape and should be spending (as well as paying down debts starting with the highest marginal interest rate). |
| Posted by: AllahHateMe 2009-07-02 10:42 |
| #10 Incoming calls, B - only incoming. I do wish we could get fewer of the drunken, and incoherent ones on Saturday nights, though. The ones with bad cellphone reception, also. |
| Posted by: Sgt. Mom 2009-07-02 10:16 |
| #9 What cash? |
| Posted by: 3dc 2009-07-02 09:36 |
| #8 #7 Yeah, last night after toiling away at the part-time phone-bank job This is probably an inappropriate forum, but for the last time... would you please take me off your call list? [snark - snark] |
| Posted by: Besoeker 2009-07-02 09:34 |
| #7 Yeah, last night after toiling away at the part-time phone-bank job at the place that I affectionately refer to as "The Hellhole" I went out and willfully and frivolously spent some of my money on some (wait for it!) new clothes! I had to have something nice to wear at the San Antonio Tea Party's 4th of July bash, you know. It was a whole $18.85 at the thrift store, for a pair of jeans, two tops and a very nice Pendleton woolen blazer that was an absolute steal at $2.99, possibly because it was out of season. (All four of these garments appear to be brand new, BTW) So, does the economy feel stimulated enough yet? I did my bit ... probably overspent, since I didn't actually need the blazer and the second top. I'll spend some more when I sell more books... |
| Posted by: Sgt. Mom 2009-07-02 09:30 |
| #6 Nowadays, people who are still reasonably affluent are boasting about pinching pennies, eating at home, canceling trips and hanging on to the old car. Well, it's interesting to suddenly find you've been 'fashionable' for most of your life. Welcome to the ant colony Mr and Ms Grasshopper. |
| Posted by: Procopius2k 2009-07-02 09:05 |
| #5 Nowadays, people who are still reasonably affluent are boasting about pinching pennies, eating at home, canceling trips and hanging on to the old car. I suspect this may be the "Conservative Resurgence" that Mark Lavin recently mentioned. |
| Posted by: Besoeker 2009-07-02 08:34 |
| #4 My wife lost her job in January (pretty much mutual agreement) and at tax time wanted to put 'Economic Stimulator' for her profession on the 1040 form. |
| Posted by: Glenmore 2009-07-02 08:06 |
| #3 It's hard to spend more money when you've lost your job or had your hours cut. Weinerheads. |
| Posted by: Deacon Blues 2009-07-02 07:26 |
| #2 Remember the derision when Rudy and Dubya told the nation to keep shopping after 9/11? |
| Posted by: Seafarious 2009-07-02 01:32 |
| #1 Be a better citizen, save for the future, and tell those "Experts" to go to hell. I have a firm rule, when it comes to money and government, Whatever they say, do the opposite and you'll be far better off. |
| Posted by: Redneck Jim 2009-07-02 01:30 |