Monstro,
Living poor doesn’t make this country bad. Its living like there is no tomorrow and consuming everything in sight that makes America the crap can it is. Taking what you can get is the best you can do in a place where a person will sooner sell their mom then to actually solve the problems that plague society.
Personally I know, no matter which way you go, helping the economy/government will never benefit the little people, and waiting for someone else to come fix everything has never worked and never will.
The most logical and the most ignorant way to go is to look out for you and don’t worry about anyone else, because they are doing the same.
Honestly, there isn’t much else you can do but participate. As long as you, I, and everyone else play by the rules the economy/government, you got to put back into it, and protect yourself.
There is no such thing as overconsumption at a macro level. At a macro level what we consume is what we produce, and what we produce is what we consume (hopefully: otherwise it goes to waste).
If people, collectively, consume less, the only possible result is that we will produce less. (Otherwise, the extra stuff just goes in the garbage.)
In other words, consuming less has the effect of making us poorer, in the long run.
I’ve cleared out loads of stuff in the last couple of years - I’ve given a couple of thousand books to charity shops. My ex also took a lot of stuff when she left (though not all - we still have the drum kit and a couple of guitars and lots of other stuff; I think she still has more stuff here than I do).
Maybe the huge amounts of space most Americans live in - by London standards - contributes to buying stuff you don’t really need. I mean, people do that here too, but there just isn’t the room for as much stuff before you get sent onto an episode of Hoarders. I’m sure it’d be tempting to buy more and keep it all if there were more space for it.
There was a thread awhile back where I bemoaned this. People disagreed with me, but my mind is convinced that our houses are big for a reason. They create demand for consumer goods. If you have big empty spaces, you feel inclined to fill them up with furniture and other stuff. And if you have a big house, you not only grow accostomed to it, but your children grow up thinking that they need their own bedroom with a finished basement and a breakfast nook to be happy. So they buy big too.
My dad grew up with five other siblings, plus a grandmother and two parents. They all lived in a two room bungalow with a finished attic and a coal cellar. They were sho nuff poor and I don’t think I’d want to raise a family in quarters that cramped. But it does make me wonder about things. If they were able to do it, then all this talk about “needing” more space is a middle-class construction. It’s not a “need”. It’s a “desire”. And it’s truly okay to want more space. But I don’t think it hurts to ask about all the hidden costs and to sometimes ask oneself, “Do we really need all this shit!”
(Now that I’m clearing out for my move, I’ve found that I’ve accumulated a lot of shit too. I’m hoping that moving into a smaller space declutters my life.)
That doesn’t translate to how people should behave at a micro level, though. Stupid spending will result in LESS consumption in the long run.
You’ve forgotten the issue of sustainability. If you run out of the physical resources you’re using to fuel your current lifestyle, they’re not available further down the track and your future consumption will necessarily go down, possibly at a particularly inconvenient or disagreeable time.
Well, pollution fighting is a form of consumption as well. And less wealth means there is less possibility of doing that. In the US, at least, it would be politically impossible to do anything serious about global warming unless the economy, and consumption, is booming.
Also, there’s a fair deal of mistaken information spouted in the name of sustainability. I’d say that organic farming and use of older, less productive, seed varieties, isn’t sustainable except for a small elite among the world’s population. But continuously improving scientific agriculture can go on and on supporting billions. Some others will say the opposite.
Some say that lower population would be more sustainable. I’d say that continuously having small cohorts of young people caring for large cohorts of elderly would create great poverty. One result of such poverty would be less money spent protecting the environment. In conditions of low-population density poverty, even a small number of people are liable to inflect terrible damage on the environment, as in this example:
I think you’re right. Space invites stuff. Hard to say it’s stuff we really don’t need. We don’t need anything except food, water, and shelter. In my state we have 145 general aviation airports which is about 1 airport for every 800 sq kilometers. That doesn’t include commercial airports or private airports. It’s easy to own an airplane or an ultralight as a hobby because the space available keeps the price down. The same applies to boating. We have lots of lakes so a modest back yard allows people to store boats and avoid docking fees. People who like to tinker on cars only need a garage to restore or modify them.
Higher population density raises the price of space-sensitive commodities exponentially.
Fair enough: I encourage diversified portfolios. I was just saying that paying down debt is a form of savings, especially when the loan paid for an actual asset.
Well, not zero economic sense. Real estate provides benefits in the form of foregone rent and expected capital appreciation (no guarantees there, but the same could be said for the stock or bond market). And savings accounts have low average returns and are susceptible to being eaten by surprise inflation. Basically you should game out the numbers.
I was highly dubious about the economics embedded in the OP, as shortages of aggregate demand are highly solvable when the federal government can borrow cheaply. Which they can: 10 year inflation adjusted rates actually turned negative for a while last month.
But I can get behind monstro’s last comment. Walmart and the rise of China made a wide variety of consumer crapola pretty inexpensive and Americans had a party for the last 20 years. I suspect the screws will tighten somewhat moving forward, though not by a lot. Anyway, many of us have taken the path of least resistance: it may very well be that some of us could be happier if we shifted our resources in other directions. I understand that there’s actually been some research recently regarding what makes people happy: apparently experiences tend to be underrated while material stuff is overrated. YMMV.
I’ve got to ask, so what’s the goal Monstro? What are you aiming to do with your savings? Just accumulating money like Scrooge McDuck makes little sense. Do you intend to retire early? travel the world? set up a charity? You can’t take it with you after all. While I agree that we should redefine what “middle class” means to something more modest, I don’t see any reason to frown on the choices others make with their income provided they are not on the public dole. I own five guitars. Do I need more than one? Nope. I don’t even NEED one; but I’ve accumulated them over 16 years, and they didn’t hurt my wallet unduly. I decided to invest in my own entertainment and enrichment rather than saving that couple of thousand. What’s the issue?
Paying off your mortgage IS saving for retirement - because its one less bill you will have in retirement. I wouldn’t plan on selling it for capital gain - that might or might not happen. Although if you have it paid off, your chances of being able to sell it and find something smaller for less money in the same area are pretty good since real estate prices tend to move as a whole.
I really don’t get people who are 40 and take out 30 year mortgages - and DON’T pay them off. The last thing I want in retirement is a house payment.
Personal insecurity and liberal guilt. And the need to assuage the latter.
Isn’t that obvious?
In a closed system, yes.
But if imports/exports aren’t balanced, and you’re consuming the things that (for example) the Chinese are producing, then consuming less can actually keep wealth ‘local’, right?
I don’t know about all that, surely there could be a deeper motivating factor.
Take homes for example. Nashiitashii and I are a couple of DINKS and rent a nice 2/2 in a good neighborhood with a decently sized fenced in yard. We *use *the space. I could do without a second bedroom, but then I wouldn’t have an office to do my art and record music in. Those activities provide some supplemental income for us. Everything would have to live in the living room, and that wouldn’t be a pleasant place to entertain guests or relax any longer. There is an issue of utility that a couple who simply own a huge home and fill it up with crap that they rarely use are not subject to. Still, while I could say that ethically I have a bit more entitlement to an extra room then they guy who collects gold-plated dinosaur turds, I couldn’t say that he shouldn’t have that space if he can afford it.
I don’t know about monstro, but I suffer from a serious medical condition and although it’s been stable for several years I could easily wind up in a “you must have this expensive operation or you will die horribly” situation. It’s happened to me twice already, once at 18 and once at 22. I was covered under my mother’s (excellent) health insurance at the time. I have my own health insurance now through my job, but a major procedure would probably involve significant out of pocket expenses. If I were to lose my job then just paying for my regular medication and testing would be difficult if I didn’t have money stashed away.
For me (we save something close to 30% of our take home income), liberal guilt, absolutely not. If that were the motivation to save, I’d give more of it away. Saving for yourself (and your loved ones) is pretty darn selfish and conservative.
Now, I know people who are frugal on the whole “low carbon footprint” sort of mentality. But they don’t seem to be driven by guilt as much as doing what they feel is the best thing for them. And they don’t tend to be huge savers. Being frugal on the “low carbon footprint” mentality tends to be more expensive than being frugal on the “I don’t give a damn how far my food is trucked in as long as its cheap” and “who cares how little the Chinese laborers are paid to make my clothes” program. Its a low consumption lifestyle, but it doesn’t seem to me to be an inexpensive one.
Personal insecurity - precisely. I’m HUGE on financial security. I don’t know if my job will be here next year. I don’t know if my husband’s job will be here next year. I don’t know how long I will live or if I’ll have a medical emergency. I’m pretty sure I’ll be able to spend it tomorrow, I’m not certain I’ll be able to earn it tomorrow. And who knows if the government safety net, or the private safety net of severance, that have existed to date will be there to catch me. So, to me it makes sense to save much of it today - its a personal self sufficiency thing. That seems to be the definition of conservatism.
I can’t speak for monstro, but there are valid reasons. The global economy is collapsed and we are probably going to enter a second recession which means further wage cuts and layoffs. Plus I know from personal experience it is extremely hard for me to find a good job. I have no idea if I will have a job this time next year and if I don’t, I don’t know how long it’ll be until I have one again. I have a good work ethic, good education, good references, good interpersonal skills, etc. But it is hard as hell and lots of people are out for 2-3 years now. If I had a good job I liked working at that was ecure, and lived in a city I liked, I probably wouldn’t save as much.
I know if I face a year long period of being unemployed, even if I don’t have UI, I could make ends meet at this point. I have no debts (so I am not paying anyone else interest) and I was able to afford a cruise recently w/o the cost causing me any stress.
But if you aren’t saving for something, then it is somewhat pointless. I remember an NPR story where they interviewed the author for the book ‘dough’
His uncles were total misers who owned a day old bread store back in the 40s. They had suits that were 20 years old, drove a car that had been rear ended, they worked 7 days a week w/o holidays or vacations. The author ended up going to night school and taking on second mortgages to make ends meet himself. When his uncles died he inherited their forture, which turned out to be 7 million which they had saved over their lifetimes and the author had no idea they had that kind of money. They never got to enjoy it and nobody else in the family enjoyed it except the author, they just saved until they died. To me that is a good example of saving for nothing. But most people will never be int hat situation. Supposedly the uncles were from Russia (I believe) where pogroms against the jews were common, so they must have had some deep seated insecurity issues about being thrown out of their homes or not being able to afford lodging or food which I’m sure was a valid fear in Tsarist or Soviet Russia. I haven’t read the book yet but you feel sympathy for the uncles if that was their motivation.
A huge drawback to me about saving money is how messed up our health care system is and it makes saving seem pointless at times. I can put money in the bank but the reality that no matter how much I have in the bank (unless it is several million, which won’t happen unless I am saving Korean Won), if I get one serious illness that insurance chooses not to cover I will lose it all. It doesn’t matter if I have $400 in the bank or $200,000. A serious illness will probably eat it all up and I’ll end up on medicaid.
Aw, that’s just liberal guilt.
What Dangerosa said. I have no illusion that I will never join the ranks of the involuntarily, long-term unemployed. I would feel irresponsible if I lost my job and didn’t have a decent fall-back, because I feel like I make too money for me not to be saving a ton of it. I’ve learned a lot from watching others suffer.
(Admittedly, I’m a boring person. So 30% is not hard for me because I don’t recreate. But I wasn’t using myself as a poster child for anything. Just sharing how current events have shaped my lifestyle and finances.)
As far as a “goal” goes, I don’t know why I should have one. I want a secure retirement…I’m hoping my pension plus deferred comp plus savings will take care of that. If I decide to buy a house, well, I’ll have the money in the bank for a good down payment. But I don’t want to buy a house right now. I rather like renting. And I like driving my beater. I guess my goal, in addition to having some security, is just having enough money available so I can use it when I eventually do want something? I don’t want anything now, so I might as well save. I’m not going to make myself want something just because someone says I should.
I don’t think I’m being real judgmental on anyone else’s choices. If you want eleventy-billion guitars, go for it. It’s not my money; it’s yours.
Perhaps I’m surrounded by the wrong people, but I know several people who “collect” things. One collects clothes. Another collects expensive shoes. Another collects houses (fixer-uppers that he tries to flip). And all of them are constantly talking about how broke they are. Or how they feel entitled to more in salary. And I can’t stop myself from thinking, “I know exactly why you are broke and no, you don’t deserve any more money. Quit complaining and stop living like a crazy person!” Yes, it is judgmental, but when people are complaining to me about messes they have created–they are inviting me to secretly judge.
But no, I don’t judge people for buying a lot of stuff as long as they are responsible about it and not feeling entitled to a life that is not based in reality. I’m wondering why you would think I believe otherwise.