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Old 11-16-2019, 12:33 PM
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I think American society runs on poor choices


70% of Americans say they are struggling financially

Based on my reading of internet content, lots of people believe that the majority of struggling Americans are reckless spenders. They eat out too much. They buy too many toys. They buy new cars every three years instead of buying used and holding onto it. They are constantly shopping online. They are always trying to keep up with the Jones's.

Or maybe they made just a couple of colossally stupid choices. Like they took out $100,000 for college tuition only to wind up working at the same retail job they had in high school. Or they spend the same amount of money on a wedding. Even if they are frugal in all other respects, they still deserve to suffer from the consequences of their dumbassery. According to the Judgey McJudgersons who dwell in internet comment sections.

I don't know if the majority of struggling Americans are struggling solely because they made bad choices. I mean, yeah, I see plenty of poor people waiting for the bus who are wearing namebrand sneakers. But I don't think they'd be driving a car but for those sneakers. I also think that it is increasingly becoming hard to discern a reasonable choice from a poor choice. Like, yeah, you shouldn't take out a student loan totaling more than your entry level salary post-graduation. But if your student loans wind up totaling $55K and your first job only pays $30K, did you make a poor choice? Or it is too soon to tell one way or the other?

That said, I'm inclined to agree that a good chunk of the "struggling" demographic is there because they've been seduced by the sirens of consumerism. Not all of them, but a good chuck. All the $5 lattes, $20 poke bowls, $800 smart phones, and $500/month car notes are seemingly necessary for some folks to cope with the miseries of life. And to be fair, it takes guts to tune out the sirens when they are your support network. People will drop $100,000 on students loans and weddings because that's what everyone around them is encouraging them (explicitly and implicitly) to do. Your friends are talking about doing a trip to an exotic location? YOLO, bro! And if you don't appreciate YOLO, you will suffer from FOMO! I don't share this specific anxiety, but I get it. It sucks to see other people having fun and "living their best life" while you're sitting over here eating soggy cornflakes so you can save for your retirement fund. Not everyone can be the rugged individualist who can tune out what "everyone" is up to.

It is certainly fun to beat up on people who make unwise financial decisions. But I'm having a hard time imagining a society like the one Americans have that isn't highly dependent on some huge fraction of the populace (maybe even 70%) being unwise with their money. Like, if everyone who eats out too much stopped eating out so much, then the restaurant industry would be kicked in the balls. You'd see fewer restaurants and fewer people working in restaurants. If everyone stopped financing new cars and only bought used (or ditched cars all together), then auto plants all across the country would have to lay off thousands of workers. Which would then devastate local economies--from day care providers to real estate markets. If people were to rein in their consumer spending, then many retail job would shrivel up. Amazon workers would have to find some other soul-crushing job. Maybe they could drive for Uber or Lyft? But aren't those jobs dependent on other people having jobs?

If everyone's paycheck is ultimately tied to someone spending money they really shouldn't be spending, then it's kind of hard to poo-poo Gordon Gekko's assertion that "Greed is good". It isn't morally good, but we are all nonetheless benefiting from it. I don't think most Americans would want to live in a society where everyone is responsible and only makes "right" choices. We may say we want this, but I don't think most people have thought about what this would really look like.

What do you think?
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Old 11-16-2019, 12:37 PM
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I think it is just largely inertia and "everyone else is doing it" - combined with an exaggeration of the pros and underestimation of the cons.

If everyone around you is taking out $60,000 in student loans to do a liberal-arts degree, you might feel pressured to go along with the current, even if it is a terrible current. Combine that with cheesy slogans like "higher education is an investment in your future" and you're on your way. (Yes, higher education is an investment, but there are far better and cheaper ways to get a fully-accredited, solid degree than to plunk down six figures at an Ivy League.)
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Old 11-16-2019, 01:06 PM
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I do not think it is possible to justify irresponsible choices when they have critical consequences like global warming and environmental pollution. Who cares if someone eats out every single night or practically never, or if many cheap, mediocre restaurants close in favor of fewer, better ones? But we must care about food waste and the consequences of industrial agriculture. If someone caves under the spam and fills their house with crap they don't need, that is their problem, but if that crap ends up in a toxic landfill that is my problem.

I disagree that there is anything bad per se about "spending money" (unless we are discussing hard-core communism), but sometimes it is not obvious how to connect the dots. Nothing wrong with fashionable sneakers, but maybe there is an exploitative sweatshop in the pipeline? Maybe not? How is the customer supposed to know?
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Old 11-16-2019, 01:07 PM
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Originally Posted by Velocity View Post
I think it is just largely inertia and "everyone else is doing it" - combined with an exaggeration of the pros and underestimation of the cons.

If everyone around you is taking out $60,000 in student loans to do a liberal-arts degree, you might feel pressured to go along with the current, even if it is a terrible current. Combine that with cheesy slogans like "higher education is an investment in your future" and you're on your way. (Yes, higher education is an investment, but there are far better and cheaper ways to get a fully-accredited, solid degree than to plunk down six figures at an Ivy League.)
The only people plunking down six figures at an Ivy League are people with household incomes well into six figures. If your household income is in that range and you have to entirely borrow the cost of your kid's education . . . Well, that isn't your first poor choice.

Ivy League educations are generally affordable. They aren't accessible. It's the kid with an 1250 on their SAT and so so grades that is likely to lack an affordable choice.
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Old 11-16-2019, 01:07 PM
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What do you think?
These are critical questions I consider frequently, but I can't say I've come to real conclusions, yet. I certainly couldn't have posed them as well as you.

One thing I sense is that, for many people, spending is the only real agency they have in their lives.
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Old 11-16-2019, 01:10 PM
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I don't think most Americans would want to live in a society where everyone is responsible and only makes "right" choices. We may say we want this, but I don't think most people have thought about what this would really look like.
I say we try it.

People are talking a lot more about income inequality these days, and how the super-rich have such disproportionate influence compared to the rest of us.

But lest we forget, the super-rich are the super-rich partly (maybe mostly) because we're falling for the myths of consumerism. We're the ones who are making them rich and powerful. If we're struggling because of it, maybe it's time to stop buying into the ideology that keeps us down here and them up there!

This isn't to say we should blame poor people for their situation. Like you said, plenty of people can't realistically spend less, or consume less.

But just imagine what would happen if millions of people opted out of the excesses of consumerist culture and started "being responsible and only making the 'right' choices." It would basically be a revolution! We'd all have to make sacrifices, lots of things might get less convenient than they are now. But I can't help thinking the benefits would outweigh the costs in the long run.

That's why I think that spending and consuming less is one of the most radical, ethical, self-empowering things a person can do right now.
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Old 11-16-2019, 01:14 PM
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To answer the OP more directly, why should Joe Random be frugal and save money? So that there is more for others to waste?

Like I was saying, there are lots of dire problems but it is difficult to address them at such a low level. I would buy a good car too if I relied on it to get to work, even if the ultimate problem was shitty public transport, or something even more abstract.
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Old 11-16-2019, 01:22 PM
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Originally Posted by Velocity View Post
I think it is just largely inertia and "everyone else is doing it" - combined with an exaggeration of the pros and underestimation of the cons.

If everyone around you is taking out $60,000 in student loans to do a liberal-arts degree, you might feel pressured to go along with the current, even if it is a terrible current. Combine that with cheesy slogans like "higher education is an investment in your future" and you're on your way. (Yes, higher education is an investment, but there are far better and cheaper ways to get a fully-accredited, solid degree than to plunk down six figures at an Ivy League.)
Like Manda Jo said, nobody who isn't already rich is paying full tuition at an Ivy League university -- this is a classic case of "the sticker price isn't the real price." Moreover, if you can get into an Ivy League school, and your primary goal is financial return on your investment*, you would have to be a fool not to go. The whole point is networking and connections. Elite employers recruit at elite schools.

People do make poor choices that land them with a lot of student loan debt, but those choices mostly involve a) paying full sticker price at run-of-the-mill private schools that do not confer a significant advantage over cheaper schools; and / or b) failing a bunch of classes and not completing the degree, or taking an inordinately long time to complete it.

I'm saying all of this not to nitpick or hijack the thread, but to make the point that it's not all that easy for most people to KNOW what the good choices are, especially if they don't have family members or mentors with this knowledge.

* There are lots of good reasons why a qualified student might NOT want to go to an Ivy League school, but those mostly have to do with wanting a different social or educational environment, or already knowing that you want to do something with your life where such a degree wouldn't be an asset. I can think of very, very few circumstances where it would be a poor financial choice.
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Old 11-16-2019, 01:24 PM
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In the US, everything has gone up, except wages. All the other 1st world countries have a safety net. Universal health care, housing, higher education, much less crime, etc..
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Old 11-16-2019, 01:27 PM
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For one, taking a bus instead of a car can be a good choice and not a poor one....
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Old 11-16-2019, 01:31 PM
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To answer the OP more directly, why should Joe Random be frugal and save money? So that there is more for others to waste?
....?

The benefit to Joe Random in saving money is......that he has more money.

It is better for Joe Random to have $20,000 in a savings account, and zero credit-card debt, than the other way around.
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Old 11-16-2019, 01:50 PM
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I tend to agree. I make roughly the mid-upper end of what my job function does in my area (engineer, non-management) and I have some toys (paid off truck, paid off bike, another bike to be paid off in the next 6 mos) but no kids or anything like that. I see people I work with who are in the same salary grade as me (so I have a general idea of what they make) who have a big house, 2 kids in travel sports, a boat, jet skis, 2 new-ish cars, go on 2-3 vacations every year, and so on. I wonder how it's possible to do that without being leveraged to the gills. I mean, sure, a lot of them are 2-income families (so basically pulling down 2x what I do alone) but that's just so much more shit than I have. I don't feel "rich" so much as I generally don't have to worry about money, but I can easily see being stretched thin if I spent money on all the things they do.
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Old 11-16-2019, 01:54 PM
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Like Manda Jo said, nobody who isn't already rich is paying full tuition at an Ivy League university -- this is a classic case of "the sticker price isn't the real price." Moreover, if you can get into an Ivy League school, and your primary goal is financial return on your investment*, you would have to be a fool not to go. The whole point is networking and connections. Elite employers recruit at elite schools.
This is mostly true, but not always.

Many years ago, when student debt was barely a blip on the radar, I read an article in which a woman complained about how she would never repay her student loans. Her degree was from the University of Chicago -- admittedly not "Ivy League" but a top-tier school with tuition to match. She majored in Social Work.

There are a lot of good things you can say about a career in social work. Making good money is not one of them. It really doesn't matter too much who your employer is.

I remember thinking at the time that she could have gone up to road a bit and gotten her degree from the Jane Addams School of Social Work at the University of Illinois at Chicago. Her tuition would have been a lot lower, and the Jane Addams school may well be more prestigious than the University of Chicago.
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Old 11-16-2019, 01:59 PM
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I tend to agree. I make roughly the mid-upper end of what my job function does in my area (engineer, non-management) and I have some toys (paid off truck, paid off bike, another bike to be paid off in the next 6 mos) but no kids or anything like that. I see people I work with who are in the same salary grade as me (so I have a general idea of what they make) who have a big house, 2 kids in travel sports, a boat, jet skis, 2 new-ish cars, go on 2-3 vacations every year, and so on. I wonder how it's possible to do that without being leveraged to the gills. I mean, sure, a lot of them are 2-income families (so basically pulling down 2x what I do alone) but that's just so much more shit than I have. I don't feel "rich" so much as I generally don't have to worry about money, but I can easily see being stretched thin if I spent money on all the things they do.
The thing is that if everyone lived like you (and me), then we wouldn't enjoy the quality of life that we currently enjoy. My salary is tied to people buying big houses, toys, cars, and vacations.

So while I can cluck my tongue at people for buying shit they don't need, I feel like I can't cluck at them too much.
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Old 11-16-2019, 02:13 PM
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From the OP:

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Originally Posted by monstro View Post
All the $5 lattes, $20 poke bowls, $800 smart phones, and $500/month car notes are seemingly necessary for some folks to cope with the miseries of life. And to be fair, it takes guts to tune out the sirens when they are your support network.
This, ultimately, is the issue. This argument about student loans is ignoring the elephant in the room. I live in a very, very poor part of the country and I work for our local community college teaching GED classes. So I see a lot more of this than I care to. Here's my observations. Forgive me in advance if this comes across as a stream of consciousness.

We are a social animal and to that end we like to be like our neighbors, friends, and even strangers we see on the street. Keeping up with the Joneses indeed. That's why fashion and design trends are, well, trends: people like things that other people like even if the value obtained from those things only comes from fitting in with society.

The $5 lattes is a perfect example. A can of Folgers costs maybe $8 at my local Safeway, which is not the cheapest store in town. If one is used to paying for $5 lattes at Starbucks that can of Folgers, paired with an $10 Mr. Coffee from Wal-Mart, will pay for itself almost immediately. Yeah, it's not a exactly the same, but not hard to make frothy hot milk and mix the two. But that's not what people do. They go to Starbucks because their friends go to Starbucks and they see the ads for Starbucks and... and... and... Brewing a pot of coffee first thing in the morning is no longer standard for coffee drinkers, in my experience. Again, in my small, economically depressed, rural, poor county drive-through coffee stands are HUGE: there are literally dozens within a 15 mile radius of me, and this is a town of 20k people. And of course now everyone has to buy the special, higher-priced Pumpkin Spice whatevers because it's the "in" thing. Yeah, it might taste good (I think it tastes like ass, but I'm a coffee snob so what do I know), but so does numerous other combos that don't cost as much. Pumpkin Spice itself has become part of our cultural identity.

It's part of our culture. It's what is "cool." Does it make financial sense? Of course not. But people don't think that way. Same with the newest iPhone that costs the same as a small used car. Does it make financial sense to buy one? Of course not. But not having one makes one a social pariah. I'm dead serious. I've had whole classrooms discussing the merits of the newest phone offerings, and then decrying the one student who still used an old Motorola Razr. That one student didn't have a $200/month phone bill, but he was also made to feel like an outcast because of it.

From the link in the OP:

Quote:
Almost 20% of people earning between $30,000 and $100,000 said they spent more than they earned — an increase of more than 4 percentage points from last year.

"That suggests there is a real squeeze being put on the middle class," Levy said. "Income is not keeping pace with expenses."
I disagree that someone making $30K / year is anywhere within spitting distance of "middle class," unless they are living frugally and have a home and car that's paid off. While there are numerous definitions of middle class (we've discussed it here before), home ownership, personal and retirement savings, and at least halfway decent health insurance are usually part of that definition. 30K / year isn't going to give someone those benefits.

And therein lies the problem: someone making $30K/year, who should likely be taking extra money and putting into a savings account, an IRA, and making similar wise choices isn't being told "hey. you're poor... might want to think about not blowing $500/month on Starbucks and iPhone payments." No, these people are told they need these things, they deserve these things, and that having them will make their lives easier and better. Whether or not they do those things is subjective, but I argue they do not.

So yes. I think America runs on poor choices. The Christmas advertising season is in full swing; just observe how much money literally the whole fucking country is being encouraged to spend ostensibly to celebrate the birthday of a long-dead Palestinian. Most Americans will spend a large amount of money that they otherwise would not because it's part of our cultural identity. Just like buying lattes and Big Macs and iPhones and new cars every few years is all part of cultural identity.
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Old 11-16-2019, 02:14 PM
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The consumerism in this country, and the constant, unrelenting sales pitches certainly contribute to a lot of poor choices.

I decided to make 2019 a minimalist year, meaning that I tried not to buy any non-consumable physical items that would take up space in my home. The exercise has made me acutely aware of how much we are constantly being bombarded with the message that we need more stuff. I started referring to "the people who want you to buy stuff" as a way of recognizing and identifying those messages. Just last week, I noticed that the little news scroll that runs in the elevators in my office building is about 90% consumer news - and that's in addition to the advertisements. Most of the "news" is about new products, or the latest gadget innovations. It's all designed to get you to buy something.

I can't deny that consumerism is the engine that runs the U.S. economy, but I also think that we're making it harder and harder for people to differentiate wants and needs. We're also making it harder for people to define happiness - would I be happy if I just had the latest smartphone or the snazziest car? That seems to be what the media is telling us. Then we end up with a nation of unhappy people because their happiness depends on an ever-increasing pile of stuff. Fortunately, we're one of only two countries in the world that permits advertising for prescription drugs, so you can be sure there's a pill for that.
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Old 11-16-2019, 02:25 PM
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The $5 lattes is a perfect example. A can of Folgers costs maybe $8 at my local Safeway, which is not the cheapest store in town. If one is used to paying for $5 lattes at Starbucks that can of Folgers, paired with an $10 Mr. Coffee from Wal-Mart, will pay for itself almost immediately. Yeah, it's not a exactly the same, but not hard to make frothy hot milk and mix the two. But that's not what people do. They go to Starbucks because their friends go to Starbucks and they see the ads for Starbucks and... and... and... Brewing a pot of coffee first thing in the morning is no longer standard for coffee drinkers, in my experience. Again, in my small, economically depressed, rural, poor county drive-through coffee stands are HUGE: there are literally dozens within a 15 mile radius of me, and this is a town of 20k people. And of course now everyone has to buy the special, higher-priced Pumpkin Spice whatevers because it's the "in" thing. Yeah, it might taste good (I think it tastes like ass, but I'm a coffee snob so what do I know), but so does numerous other combos that don't cost as much. Pumpkin Spice itself has become part of our cultural identity.
In addition to this, people who splurge like to criticize people who don't. If your friends ask you, "Hey, we're going out for coffee together, wanna join?" and you either decline, saying, "Sorry, I can't afford a $6 latte, I'm trying to build up my savings" or go but don't buy something, they will make you feel small, or shun you as a cheapskate or just "not one of our kind" from that point on.
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Old 11-16-2019, 02:36 PM
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This is mostly true, but not always.

Many years ago, when student debt was barely a blip on the radar, I read an article in which a woman complained about how she would never repay her student loans. Her degree was from the University of Chicago -- admittedly not "Ivy League" but a top-tier school with tuition to match. She majored in Social Work.

There are a lot of good things you can say about a career in social work. Making good money is not one of them. It really doesn't matter too much who your employer is.

I remember thinking at the time that she could have gone up to road a bit and gotten her degree from the Jane Addams School of Social Work at the University of Illinois at Chicago. Her tuition would have been a lot lower, and the Jane Addams school may well be more prestigious than the University of Chicago.
To piggy back on this, lots of people think that where one goes for grad school is much more important than where they go for undergrad. So they'll go the inexpensive public university route for undergrad and then blow their financial wad on an expensive grad school program. Like the A.R.T Institute at Harvard.
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Old 11-16-2019, 02:41 PM
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This is my understanding of what's happened in the last ~30 years.

The % of jobs that pay $20/hr or more (inflation adjusted has shrunk).
The % of able bodied adults in the labor force has shrunk
The % of jobs that are contract or permatemp has grown.

Meanwhile

Regressive taxes have gone up. FICA taxes, property taxes, sin taxes, fuel taxes, etc all went up.
Wages stagnated

And most importantly

The cost of housing, health care, child care and real estate skyrocketed. Most everything else declined in price. People like to talk about how its because people buy iphones, but its really beacuse a house that used to cost 100k now costs 500k, or because you used to be able to get good health insurance for $80/month and now you need $600/month for junk insurance with a 5k deductible. Or how now you need both parents working, which means you need 1k a month for daycare.

IMO that is what it really comes down to. Housing, health care, child care and real estate have skyrocketed in price. Meanwhile regressive taxes have gone up, wages have stagnated, and 'good' jobs are becoming rarer and rarer.

Job security is also much harder than it was in the past. Nowadays you never know when there will be a round of layoffs.
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Old 11-16-2019, 02:55 PM
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For one, taking a bus instead of a car can be a good choice and not a poor one....
I can see from your location where that's a good choice. See my location? When I worked (I'm retired now), it would take me 2 hours or more one way to get to work and back on the bus.
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Old 11-16-2019, 03:00 PM
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I am amazed at how much money people spend on vehicles.

A technician I work with just bought a brand new F-250 truck with extended cab, extended bed, and every option. I am guessing the price is at least twice his yearly salary. And then he complains he's living paycheck to paycheck.

I'm 52 and have owned dozens of vehicles. I currently own eight. I pay cash for them. I have never taken out a loan, and I have never made a car payment in my life. Most vehicles I purchase are at least 10 years old, and somewhere between $2K and $7K. The downside is that I spend a lot of time working on cars. But I enjoy it, and it teaches me a lot about mechanics and engineering.
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Old 11-16-2019, 03:03 PM
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....?

The benefit to Joe Random in saving money is......that he has more money.

It is better for Joe Random to have $20,000 in a savings account, and zero credit-card debt, than the other way around.
That is true, but it is none of my business if Joe wants to spend lots of money on crap, not that I approve the principle of buying shit you don't need. If nobody did it, not only would life go on (no economic collapse), society would be tangibly better off.
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Old 11-16-2019, 03:15 PM
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... Like they took out $100,000 for college tuition only to wind up working at the same retail job they had in high school. Or they spend the same amount of money on a wedding.
I've often wondered why Americans "need" as much money as they do. Do they really spend $100,000 on a wedding? My wife and I live quite frugally but comfortably. (My teen-age son OTOH has had several smart-phones and spent much more on his computer than I spent on my last three laptops combined. He's about to buy the latest iPhone. I can hardly say No — it's his SocSec money!)

People focus on the $23 trillion "national debt." However there is another $50 trillion of debt owed by American companies and individuals.

The U.S. borrows to run a trade deficit with the rest of the world. Among OECD countries here are the top 11 by size of current-account deficit as percentage of GDP, along with the top 5 surpluses:

Turkey -5.55%
United Kingdom -4.07%
Canada -2.98%
New Zealand -2.74%
United States -2.40%
Australia -2.34%
Mexico -1.64%
Slovakia -1.50%
Chile -1.48%
France -1.42%
Greece -0.82%
...
Denmark 7.58%
Germany 8.05%
Switzerland 9.32%
Netherlands 9.80%
Ireland 12.54%
(It surprises how often the Anglophonic countries end up together near an extremum on various lists!)

Here are similar lists for trade balance:
Greece -9.4%
Latvia -7.0%
United Kingdom -6.9%
Luxembourg -6.0%
Lithuania -5.0%
Portugal -4.9%
Turkey -4.7%
United States -4.0%
Israel -2.3%
Spain -1.6%
...
Switzerland 8.0%
Korea, South 8.5%
Germany 8.6%
Netherlands 11.9%
Ireland 37.4%
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Old 11-16-2019, 03:17 PM
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Originally Posted by monstro View Post
To piggy back on this, lots of people think that where one goes for grad school is much more important than where they go for undergrad. So they'll go the inexpensive public university route for undergrad and then blow their financial wad on an expensive grad school program. Like the A.R.T Institute at Harvard.
No-one should be paying for grad school. Your institution should be paying you to go there, by giving you the full tuition waiver and grad student stipend. If you get admitted to grad school without money, that school doesn't really want you. (The cost of grad school is still pretty steep, because the opportunity cost is high. But no-one should be taking out loans to pay for their tuition, fees, or living expenses.)

This lady who paid for the ART program should have gone elsewhere, where she would have at least had a teaching assistantship.

Professional school is a different story. You'll pay for professional school, unless you're doing a program that combines your training with a PhD program.

Last edited by Scribble; 11-16-2019 at 03:19 PM.
  #25  
Old 11-16-2019, 03:45 PM
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Based on my reading of internet content, lots of people believe that the majority of struggling Americans are reckless spenders.

That said, I'm inclined to agree that a good chunk of the "struggling" demographic is there because they've been seduced by the sirens of consumerism. Not all of them, but a good chuck. All the $5 lattes, $20 poke bowls, $800 smart phones, and $500/month car notes are seemingly necessary for some folks to cope with the miseries of life. And to be fair, it takes guts to tune out the sirens when they are your support network. People will drop $100,000 on students loans and weddings because that's what everyone around them is encouraging them (explicitly and implicitly) to do.
...I don't think most Americans would want to live in a society where everyone is responsible and only makes "right" choices. We may say we want this, but I don't think most people have thought about what this would really look like.
First it's not just Americans. I realize some people want to use a topic like consumer spending and debt to segue over to how govt social spending should be higher in the US (but sometimes based on underestimating how high it is in the US especially counting state and local). Which perhaps it should be, or not, not to debate that here. But the US isn't near the top of the list of countries for household debt as % of GDP, a list which also doesn't go particularly according to "higher govt social spending=lower household debt".
https://tradingeconomics.com/country...ds-debt-to-gdp

And those %'s have generally increased in most countries over time, whether lower or higher than US now.

Also on a macro basis I'd distinguish pretty sharply between borrowing for education, an investment, v borrowing for consumption (say weddings). Though I realize in micro every day terms a person might make unwise choices for one or both those things for similar reasons in terms of their own personality and desire or social pressure to imitate other people. Still, society wide you want people to invest in education, if it's productive investment, and give incentives to invest *wisely* (making higher education 'free' at the margin for the individual, though obviously not free for society as a whole, wouldn't seem necessarily a good way to improve the quality of those decisions). Whereas though a lot people have the view of say lavish weddings, 'well they keep people employed so that's necessary also', but in economics the difference is that lavish weddings don't increase society's ability to generate future economic output, but sound education investments do.

Otherwise, it's basically a tangent IMO to negatively judge the virtue of people who spend beyond their means, though even more of a tangent to say that overspending by some people is the excuse to raise other people's taxes. Basically I think, no libertarian particularly, you can have a mixed capitalist/socialist system, which is what we already have in the US along with all the other rich countries, and still just draw a line that spending within one's means, except for outright poor people*, is the person's own problem. It doesn't mean they are a bad person that they get themselves into debt, it doesn't make me morally superior that I don't. But it's also not my problem that they do, not my responsibility to fix it. I see that as a reasonable middle ground.

*there are loads of people living beyond their means in the 3rd and 4th, and even highest income quintile. It's by no means limited to people in the lowest quintile where 'safety net' discussions are most relevant, or even 2nd quintile.

Last edited by Corry El; 11-16-2019 at 03:48 PM.
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Old 11-16-2019, 05:38 PM
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Rutger Bregman’s book, Utopia for Realists, has some very interesting and useful things to say about poverty, consumerism, and work. Short version: we could divvy up the existing pie differently and end poverty, reduce credit and consumerism’s role as palliatives and necessary for keeping a ridiculous economy afloat for the 1%, spend less time at work, and have better healthcare and education. The other Kropotkin argued at the end of the 19th century that it was possible then, and he was right. Productivity has increased several times since then, but some people think that wealth and the labour of others should be deployed to make them even wealthier. I don’t say “eat the rich,” because I’m trying to go vegan, but we only have poor people because we have rich people.
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Old 11-16-2019, 05:54 PM
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Or as an unknown American poet put it,

The Two Bums

The bum on the rods is hunted down as an enemy of mankind
The other is driven around to his club, is feted, wined and dined

And they who curse the bum on the rods as the essence of all that's bad
Will greet the other with a willing smile and extend a hand so glad

The bum on the rods is a social flea who gets an occassional bite
The bum on the plush is a social leech, bloodsucking day and night

The bum on the rods is a load so light that his weight we scarcely feel
But it takes the labour of dozens of folks to furnish the other a meal

As long as we sanction the bum on the plush the other will always be there
But rid ourselves of the bum on the plush and the other will dissappear

Then make an intelligent organised kick, get rid of the weights that crush
Dont worry about the bum on the rods, get rid of the bum on the plush
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Old 11-16-2019, 06:30 PM
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I am, as I type, sitting in my classroom, which is a computer lab. I just had a student, a gentleman in his 50’s practice writing an essay before scheduling a GED test. He said he had to do it from our machines because he did not have a computer or internet access at home, although he could do it on his new phone. It was easier for him to do it on one of our desktops though, so that’s what he did.

It is not my place to judge whether or not he made a sound decision in purchasing a new phone (I could see it was a Galaxy S10 when he set on the desk next to him) over a cheap laptop. Maybe he needs a phone with internet capabilities more than he needs a cheap laptop. But ultimately, this is a needs vs wants issue.
This…

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Originally Posted by Wesley Clark View Post
IMO that is what it really comes down to. Housing, health care, child care and real estate have skyrocketed in price. Meanwhile regressive taxes have gone up, wages have stagnated, and 'good' jobs are becoming rarer and rarer.

Job security is also much harder than it was in the past. Nowadays you never know when there will be a round of layoffs.
Should also not be discounted. Housing prices have gone up astronomically, as has the other things you mentioned, notably healthcare. My wife works in a daycare center, one that has a good reputation locally. It’s one of only two actual centers in our city. All the other daycares are operated out of private homes.

Every single parent that brings their kid to my wife’s center is white-collar and rather well-off by our town’s standards: physicians, attorneys, a local judge, and business owners. Nobody else can afford the monthly daycare cost.

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I am amazed at how much money people spend on vehicles.

A technician I work with just bought a brand new F-250 truck with extended cab, extended bed, and every option. I am guessing the price is at least twice his yearly salary. And then he complains he's living paycheck to paycheck.

I'm 52 and have owned dozens of vehicles. I currently own eight. I pay cash for them. I have never taken out a loan, and I have never made a car payment in my life. Most vehicles I purchase are at least 10 years old, and somewhere between $2K and $7K. The downside is that I spend a lot of time working on cars. But I enjoy it, and it teaches me a lot about mechanics and engineering.
Agree with this wholeheartedly. Again, it’s a Needs-vs-Wants issue. An acquaintance of mine bought a brand new Dodge Ram 3500 a few years ago. It had everything imaginable: long bed, 4 doors, highest trim level, diesel, 4WD, special-ordered paint package, several dealer-installed options like electronically retracting running boards and trailer towing package and hitch. The price he paid? $72K and some change.

$72,000 for a damn pickup. He’s not a farmer, construction worker, or someone else that needs a pickup as part of their daily duties. He doesn’t even have a trailer to tow, even though he got a tow package. I could have found a perfectly serviceable pickup with the same basic configurations (4 door, 4WD, diesel long bed) for maybe $5K on the local Craigslist.

But maybe I’m way off base with all of this, and letting my own conceit cloud my judgement. I will soon be starting teaching full-time at satellite campus. I will have a 70-mile daily commute, with about 15 miles of that outside of cell phone reception. I will be looking at buying a new (2020) car. I will likely finance it as I don’t have the cash to buy it outright. I will buying a small, cheap car (Toyota Corolla, Honda Fit, Kia Soul, or similar) with a basic trim package because that is what I need. If I was going by Wants instead I’d be trying to buy the new Supra. The difference, I think, between the purchase I am considering and the one my acquaintance made is that I am planning on spending 1/5 of my annual income on basic transportation with no frills, and he spent his entire annual income on a vehicle that provided basic transportation, but also provided every other feature at a premium price. He couldn’t even park it in his driveway due to the length and had to park on the street.

Am I being an idiot for buying new and driving it into the ground instead of purchasing an old beater with high mileage and unknown provenance? I don’t know, but this is something I have been researching for a couple months (I even started a thread about it here on the Dope) and I think I’m making the right choice. I hate working on cars and have no desire to risk a breakdown on a deserted, windy mountain road where the cell signals never reach. To me, that’s worth a small car payment each month. When I brought this up on the Dope, at least one poster clearly thought I was being arrogant and foolish.
  #29  
Old 11-16-2019, 07:05 PM
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Originally Posted by Fretful Porpentine View Post
People do make poor choices that land them with a lot of student loan debt, but those choices mostly involve a) paying full sticker price at run-of-the-mill private schools that do not confer a significant advantage over cheaper schools; and / or b) failing a bunch of classes and not completing the degree, or taking an inordinately long time to complete it.
And there are structural issues here. Most Texas public schools have a 4-year graduation rate under 25% and a 6-year graduation rate under 50%. And Texas public colleges aren't atypical here. When people talk about runaway student debt, everyone loves to imagine an Ivy League Alumna with a degree in French Lit. But that's not what it is: it's the first generation college student who had a good enough SAT to get into their local regional university but not enough to get any funding beyond a Pell Grant. He majors in business or engineering. This kid is bright enough and may well be pretty determined, but he doesn't understand the system or how to college, gets little advice or guidance--partially because he doesn't know it exists or that he needs it--and so he flounders and struggles and eventually drops out, with $80K in debt and a job as an assistant manager at a Dominos. THAT'S the student debt crisis, and blaming it on stuck up kids going to Ivy League schools is so misinformed it drives me batty.

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Originally Posted by Anny Middon View Post
This is mostly true, but not always.

Many years ago, when student debt was barely a blip on the radar, I read an article in which a woman complained about how she would never repay her student loans. Her degree was from the University of Chicago -- admittedly not "Ivy League" but a top-tier school with tuition to match. She majored in Social Work.
"Many years ago" is a very important qualifier here. Fancy, heavily endowed private schools--like UChicago--have totally reorganized their approach in the last twenty years.

Last edited by Manda JO; 11-16-2019 at 07:05 PM.
  #30  
Old 11-16-2019, 08:17 PM
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People’s paychecks are tied to the spending of others, but that doesn’t mean that the spending is necessarily efficient, prudent, or proper. If we “improved” our spending behavior, we’d still be spending. It’s just that we’d be spending on other things of theoretically greater utility, and the distribution of labor in the economy would look different. But one’s choices with money are not limited to “spend on low-value goods and services” and “stick money in a mattress”; you have the freedom to spend on a variety of options.
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Old 11-16-2019, 08:37 PM
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This kid is bright enough and may well be pretty determined, but he doesn't understand the system or how to college, gets little advice or guidance--partially because he doesn't know it exists or that he needs it--and so he flounders and struggles and eventually drops out, with $80K in debt and a job as an assistant manager at a Dominos. THAT'S the student debt crisis, and blaming it on stuck up kids going to Ivy League schools is so misinformed it drives me batty.
And there's a good chance he grew up in an environment that encouraged him to go to a university rather than consider a trade of some kind.
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  #32  
Old 11-16-2019, 09:37 PM
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I am amazed at how much money people spend on vehicles.

A technician I work with just bought a brand new F-250 truck with extended cab, extended bed, and every option. I am guessing the price is at least twice his yearly salary. And then he complains he's living paycheck to paycheck.
I was at Home Depot the other day, picking up 28 sheets of corrugated metal roofing. I parked my 2000 F-150 next to some ginormous Ram something-or-other. That truck made mine look like a toy - it absolutely loomed over mine. But, here's the funny thing: I could put my roofing in my truck bed, and he couldn't. The monster truck was a crew-cab, and it had a short bed. My little F-150 has a full 8' bed. I guess if you want to drive your family back and forth to the grocery store, that truck would be useful, but if you want to actually haul crap...

Last edited by beowulff; 11-16-2019 at 09:37 PM.
  #33  
Old 11-16-2019, 09:38 PM
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Not to say that I have made some really, really dumb decisions, boy howdy have I. But reading through this thread leads me to the conclusion that I am a freaking Genius leading an incredibly charmed life (life part is true, genius bit...eeeehhhh debatable)

Imho, the first step to solving any debt problem, national or local or personal is to pry peoples faces (and ears) away from the screens and ear pieces ear buds head phones whatever the hep cats cool kids mod squad is callin em these days
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  #34  
Old 11-16-2019, 11:03 PM
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The OP lists people who are "financially struggling".

Well who isnt and who never did in the past? Everyone has to watch their money and so did our parents and grandparents. Think life is bad now, think of back in the depression or even earlier.

I'd say the big trouble now is the high cost of housing in major cities. Now technically a rule of thumb is to only spend about 30% on housing but many people spend way more and its a constant struggle to pay the rent.
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Old 11-16-2019, 11:12 PM
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And there are structural issues here. Most Texas public schools have a 4-year graduation rate under 25% and a 6-year graduation rate under 50%.
In comparison look at this little tech school in South Dakota.


According to THIS SHEET they boast a 78% graduation rate in just 2 years and a 99% rate of people finding employment in the field, and 82% finding jobs in state. They also boast the high percentage of graduates who move from the financially lower classes to the upper 20%.

Tech schools are really the way to go.
  #36  
Old 11-16-2019, 11:22 PM
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It is true that many people in America are less frugal than they could be or should be.

It is true that people in a poverty mindset tend to accumulate shortsighted habits that are ideal for low cash-flow but bad for higher-wealth situations.

It is also true that being poor in America is in many ways more expensive than being rich, facing certain penalties, deposits, and inconveniences that rich people don't bear. article on the subject

But most of us, we're just spending too much on useless shit. I just bought a $900 handpan instrument that I never play. Hopefully I'll recoup it on eBay, but really, what's that all about.

Last edited by HMS Irruncible; 11-16-2019 at 11:25 PM.
  #37  
Old 11-17-2019, 05:14 AM
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And there's a good chance he grew up in an environment that encouraged him to go to a university rather than consider a trade of some kind.
A whole lot of those kids are the sons and daughters of tradesmen who wanted something different for their kids than what they had--for good reason. HVAC, construction, working on cars--this jobs pay well enough to support a family, but they really suck past 40, and they really, really suck past 50. They are often impossible past 60. Your knees, your back, your feet--these are things that wear out. And then there is the possibility of career ending disease or injury: things that side-line someone with a desk job for a few week lead to a person in the trades being unemployed for months--or forever.

There's a place for the trades. But the community of tradesmen is not a group that is universally happy with their jobs or their life, and a great many of them want better for their kids. And honestly, I think it's foolish for anyone to go into the trades without an exit plan--to be working toward something that will make them less dependent on the ability to do grueling physical labor as they approach middle age.

I also don't think you can let colleges off the hook here. If over half--or 75%--of your students are leaving without a degree, the conversation shouldn't be "Oh my god, all these kids are terrible and unprepared." People love slagging on those dumb unprepared kids who should have accepted their natural station in life. But when that many kids are failing, their are issues with the institution. Some schools are much, much better at supporting students and moving them through.

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Originally Posted by Urbanredneck View Post
In comparison look at this little tech school in South Dakota.

According to THIS SHEET they boast a 78% graduation rate in just 2 years and a 99% rate of people finding employment in the field, and 82% finding jobs in state. They also boast the high percentage of graduates who move from the financially lower classes to the upper 20%.

Tech schools are really the way to go.
Are you claiming that this is typical of tech schools? Because in my link, UT has an 80% graduation rate. There are good schools of every type. That doesn't make tech school the better option for everyone. And, again, it's telling that people in the trades often want different for their kids.
  #38  
Old 11-17-2019, 08:16 AM
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For one, taking a bus instead of a car can be a good choice and not a poor one....
Depends entirely where you live and where you have to go. Not counting the many areas that have no bus service, no one would want to have to take three busses each way to get to work.
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Old 11-17-2019, 09:09 AM
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Tech schools are really the way to go.
But not like ITT and Corinthian.

Keep in mind that community colleges ARE trade schools, but that gets overlooked because they also have academic courses. Since they are publicly accountable and not-for-profit, they're not inflating their "success numbers" or hounding people to take out high student loans.
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Old 11-17-2019, 09:29 AM
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People’s paychecks are tied to the spending of others, but that doesn’t mean that the spending is necessarily efficient, prudent, or proper. If we “improved” our spending behavior, we’d still be spending. It’s just that we’d be spending on other things of theoretically greater utility, and the distribution of labor in the economy would look different. But one’s choices with money are not limited to “spend on low-value goods and services” and “stick money in a mattress”; you have the freedom to spend on a variety of options.
Can you come up with some examples of things of "greater utility" that we'd consume if it weren't for "low-value goods and services" that currently flood the market?

I'm not disagreeing with your point. It's just hard to imagine what it would look like.

Last edited by monstro; 11-17-2019 at 09:29 AM.
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Old 11-17-2019, 09:47 AM
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Depends entirely where you live and where you have to go. Not counting the many areas that have no bus service, no one would want to have to take three busses each way to get to work.
I am a big proponent of public transit. But I'd much rather walk to work than take the bus. Buses are notorious for being late, and that kind of stress isn't good for my quality of life.
  #42  
Old 11-17-2019, 10:22 AM
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I am a big proponent of public transit. But I'd much rather walk to work than take the bus. Buses are notorious for being late, and that kind of stress isn't good for my quality of life.
the best way I've heard buses described is "An urban bus is a device for going from where you aren't, to where you don't actually want to be, at an inconvenient time for you, while burning an awful lot of diesel and doing a ton of road damage in the process."
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Old 11-17-2019, 10:27 AM
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Depends entirely where you live and where you have to go. Not counting the many areas that have no bus service, no one would want to have to take three busses each way to get to work.
Of course it depends entirely on where you live and where you want to go - but an awful lot of people are somewhat judgy about people not owning a car even when they don't need one. That line in the OP about poor people waiting for the bus wearing name brand sneakers - I assume monstro has reasons for believing the people she is talking about are poor. But I encounter an awful lot of people who believe that only poor people take the bus or train and can't understand that it's not uncommon in NYC for someone to own a house but not a car. Or that people might in fact own a car but still take the train/bus regularly because driving to the particular place they're going had no advantage over public transit.* These people seem to think that the only reasons you wouldn't own a car is because you are either too poor or physically unable to drive- and that it could never be just because it's the best decision financially.






* When I worked in Manhattan, I might have saved 10 minutes by driving instead of taking the train- if I paid about $150 a week to park in a nearby garage. So I would have gotten more aggravated and paid an extra $125 a week to save maybe 20 minutes a day. Not worth it to me.

Last edited by doreen; 11-17-2019 at 10:32 AM.
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Old 11-17-2019, 10:41 AM
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From the link in the OP:



I disagree that someone making $30K / year is anywhere within spitting distance of "middle class," unless they are living frugally and have a home and car that's paid off. While there are numerous definitions of middle class (we've discussed it here before), home ownership, personal and retirement savings, and at least halfway decent health insurance are usually part of that definition. 30K / year isn't going to give someone those benefits.
The part you quote says "people," not "households." A two-person household, each making 30K, is solidly in middle-class territory.
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Real median household income in the United States increased 0.8% to $61,937 between 2017 and 2018.
https://www.census.gov/library/stori...from-2017.html
  #45  
Old 11-17-2019, 10:45 AM
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Of course it depends entirely on where you live and where you want to go - but an awful lot of people are somewhat judgy about people not owning a car even when they don't need one. That line in the OP about poor people waiting for the bus wearing name brand sneakers - I assume monstro has reasons for believing the people she is talking about are poor. But I encounter an awful lot of people who believe that only poor people take the bus or train and can't understand that it's not uncommon in NYC for someone to own a house but not a car. Or that people might in fact own a car but still take the train/bus regularly because driving to the particular place they're going had no advantage over public transit.* These people seem to think that the only reasons you wouldn't own a car is because you are either too poor or physically unable to drive- and that it could never be just because it's the best decision financially.
Admittedly New York is America's biggest city. But still--it is only ONE city. To hold it up as a typical American experience is parochial and short-sighted. New York is outside the norm for the typical American in several ways.
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Old 11-17-2019, 11:02 AM
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No-one should be paying for grad school. Your institution should be paying you to go there, by giving you the full tuition waiver and grad student stipend. If you get admitted to grad school without money, that school doesn't really want you. (The cost of grad school is still pretty steep, because the opportunity cost is high. But no-one should be taking out loans to pay for their tuition, fees, or living expenses.)

This lady who paid for the ART program should have gone elsewhere, where she would have at least had a teaching assistantship.

Professional school is a different story. You'll pay for professional school, unless you're doing a program that combines your training with a PhD program.
If you're defining professional school as broadly as you seem to be, I don't understand why ART wouldn't be a professional school.
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Old 11-17-2019, 11:06 AM
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Admittedly New York is America's biggest city. But still--it is only ONE city. To hold it up as a typical American experience is parochial and short-sighted. New York is outside the norm for the typical American in several ways.
I'm not holding it up as a typical city - it's simply one example of why not owning a car and taking public transportation may not due to poor financial choices or poverty. To assume that not owning a car and instead using public transportation is always due to poor financial choices/poverty is equally parochial.

Last edited by doreen; 11-17-2019 at 11:08 AM.
  #48  
Old 11-17-2019, 11:51 AM
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I'm not holding it up as a typical city - it's simply one example of why not owning a car and taking public transportation may not due to poor financial choices or poverty. To assume that not owning a car and instead using public transportation is always due to poor financial choices/poverty is equally parochial.
OK, but no one has expressed this assumption in this thread. I didn't say that riding a bus is emblematic of poor choices.

Yes, I have a good reason to believe that the people I see wearing nice kicks at bus stops are actually poor. Their fast food uniforms are a dead-give away and so is the fact that they walk to low-income housing after the bus lets them out. Quite a few namebrand-clad college students ride the bus in my town, but I find it easy to distinguish them from the folks who are trying to get to menial jobs and the folks who board the bus with small children in one hand and a bag full of groceries in the other.

Public transit in my city is OK. It's good enough that if you live and work in the heart of the city and don't have to get to places exactly on time, it can be as good if not better than a car...as long as you plan things very carefully and are lucky with the bus stops. But it has it real limitations. I went through a period without a car and tried to see how feasible it would be to have the bus be my primary mode of transportation (besides my feet). I gave up after three months. I just couldn't deal with all the time spent waiting for buses (sometimes in crappy weather) and then the stress of late buses. I consider myself pretty hardcore, but I just couldn't deal with that kind of stuff. So in my city, relying solely on public transit--while not being a poor choice--would not be the best choice for most people. I hope one day that changes, though.
  #49  
Old 11-17-2019, 12:24 PM
Mangosteen is online now
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Quote:
Originally Posted by Velocity View Post
In addition to this, people who splurge like to criticize people who don't. If your friends ask you, "Hey, we're going out for coffee together, wanna join?" and you either decline, saying, "Sorry, I can't afford a $6 latte, I'm trying to build up my savings" or go but don't buy something, they will make you feel small, or shun you as a cheapskate or just "not one of our kind" from that point on.
A person that would make such a statement is not a "friend". Find some other friends.
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  #50  
Old 11-17-2019, 12:37 PM
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You don't need to be in an NYC-sized city to have access to a car-sharing service and only pay for the short periods of time you use the car. That won't work if you live way out in the suburbs (because rent is unaffordable in the actual city...), though.

I guess if I had to choose, I would share a broom closet with 3 other people and stay in the city rather than not be able to get to work or school on time.
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