Americans Are Still Spending Like There's No Tomorrow (wsj.com) 249
Consumers should be spending less by now. Interest rates are up. Inflation remains high. Pandemic savings have shrunk. And the labor market is cooling. Yet household spending, the primary driver of the nation's economic growth, remains robust remains robust. From a report: Americans spent 5.8% more in August than a year earlier, well outstripping less than 4% inflation. And the experience economy boomed this summer, with Delta Air Lines reporting record revenue in the second quarter and Ticketmaster selling over 295 million event tickets in the first six months of 2023, up nearly 18% year-over-year. Economists and financial advisers say consumers putting short-term needs and goals above long-term ones is normal. Still, this moment is different, they say.
A tough housing market has more consumers writing off something they'd historically save for, while the pandemic showed the instability of any long-term plans related to health, work or day-to-day life. So, they are spending on once-in-a-lifetime experiences because they worry they may not be able to do them later. "It's not a regret-filled, spur-of-the-moment decision," says Michael Liersch, who oversees a team of advisers as head of advice at Wells Fargo. "It's the opposite of that, where I would regret not having done it." Liersch cautions that it's too soon to say whether the spate of spending is a fleeting moment or a new normal. And consumers remain frustrated about inflation as the price of many goods remains significantly higher than a few years ago.
A tough housing market has more consumers writing off something they'd historically save for, while the pandemic showed the instability of any long-term plans related to health, work or day-to-day life. So, they are spending on once-in-a-lifetime experiences because they worry they may not be able to do them later. "It's not a regret-filled, spur-of-the-moment decision," says Michael Liersch, who oversees a team of advisers as head of advice at Wells Fargo. "It's the opposite of that, where I would regret not having done it." Liersch cautions that it's too soon to say whether the spate of spending is a fleeting moment or a new normal. And consumers remain frustrated about inflation as the price of many goods remains significantly higher than a few years ago.
carpe diem (Score:2, Insightful)
And half the passengers keep pouring on the gas.
Well they can't buy houses (Score:5, Interesting)
You saw that in Japan back in the 90s. "Lost Decade" they called it. Nobody could start families or get on with their lives. But they could afford cheap Chinese electronics and movie tickets.
Fun fact: Japan's economy is in a permanent recession. It's almost like abandoning the next generation for short term gains and quips about avocado toast doesn't pay long term dividends.
Re:Well they can't buy houses (Score:5, Interesting)
Japanese household savings are controlled by the woman of the house, and they traditionally save money at a 10% rate, which has resulted in decades of economic stagnation because the current economic model that insures constant growth involves households spending moire than 95% of their income, as we do in America
The entire American economy is hinged on consumer spending, it is time that we recognized out power and use self-limited spending to force the rest of our society to cater to our needs
A consumer can dream
Re: Well they can't buy houses (Score:2, Troll)
I don't know about you, but even in the days when my income was minimum wage like rsilvergun's, I still managed to stash away no less than 15% of my gross income every month. I always had plenty set aside for a rainy day as well.
You don't need to tell the masses to save money. Either they just do it, or they don't. I tell people to do this all the time, and hardly any of them ever do, but that's mainly because they don't want to live within their means. I've personally always lived well below my means. I th
Re: Well they can't buy houses (Score:4, Informative)
It takes two to tango. If you've got a dual income, that should well more than offset it.
Re:Well they can't buy houses (Score:5, Informative)
OK, you fucking nitwit, here is my citation, how about you come up with something to support your AC bullshit:
Causes of Japan's Economic Stagnation [stanford.edu]
Surplus in Savings: Japan has traditionally enjoyed an unusually high savings rate and a comparatively low consumption rate. During the decades of recovery and high-speed growth, this "savings surplus" supplied sorely needed capital to private industry in the form of bank loans. This money was used to build and expand Japan's industrial infrastructure and to achieve the rank of a world-class manufacturing power. However, during the 1990s, the "savings surplus", once the indispensable fuel for high-speed growth, became a serious, structural impediment, leading to a severe slump in demand and causing a heavy drag on Japan's economic recovery.
And just to stomp out further stupidity from you
Traditionally, Japanese women do the household financial organization, regardless of their employment status. Husbands transfer all of their income and other earnings to their wives and receive a monthly allowance as pocket money. [sciencedirect.com]
That's just an excuse (Score:2)
Fun fact Americans now work more hours than the Japanese.
I mean you can link to a paper if you want that doesn't mean I can't disagree with the findings of that paper. The paper is basically say
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Not looking for a fight, pretty much agree with everything that you are saying
Japanese leadership was working on changing the savings rates, and household savings rate was dropping steadily through the 2000's until COVID hit, at which point it skyrocketed. I suspect that deeply ingrained behavior stepped in as a fear response, and it is how I behaved during the shutdown in America as well.
But...
“Those who cannot remember the past are condemned to repeat it.”–George Santayana, The Life of R
Saving rate changes are a scam (Score:2)
Yes, the people of Japan could take their savings and blow them, which would temporarily get them out of the recession they're in.
It would also make them incredibly fragile. That's what the US did, and we "solved" the fragility problem by working an insane number of hours and getting second and 3rd jobs. The Japanese can't do that because they're already working too many hours.
What they're gov't is trying to do is introduce des
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Dude, I think that you are confusing China and Japan, because the are always more women being born than men
In Japan, the population sex ratio has seen slight changes over the past decades. In 2021, the number of men was around 94.6 for every 100 women, constituting a decrease from 96.1 in 1950 [statista.com]
So, there is an actual "surplus" of women in Japan, and the lonely otaku meme is largely self imposed, as opposed to being due to shortage of women.
Meanwhile, in China there is a significantly different situation, whic
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Problem is that poor people also usually have fairly poor education, so simply importing immigrants is not gonna cut it. Because people who can't do jack shit no matter what you need isn't something we need to import, we already have enough of them.
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How much longer do you think the world will send us their excess population when they're greying too?
No, relying on immigrants will work as a solution for a good while to come. At least until 2100 if our growth predictions prove correct.
The current population of earth is around 8 billion right now, by 2100 its due to be 10.3 billion https://en.wikipedia.org/wiki/... [wikipedia.org]. and you can see in the link all that growth is going to countries like India, Indonesia, Mexico, Pakistan, Nigeria and Brazil that already have problems supporting their current populations and nothing going on currently in any of these countr
Re:Um... have you seen singles rates in Japan (Score:5, Informative)
Being "rich" in quotes stops you having children, having a child in a poor country doesn't cost much, in fact they work and may make you money, in a rich country where you spend significant amount of money to raise child from https://www.investopedia.com/a... [investopedia.com] it cost $310,605 to raise a child to 18, that doesn't include College. So going over your 2 children that is replacement rate it will cost you $931,815.
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No https://www.statista.com/stati... [statista.com]
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and they're working 60-70 hours a week while living with their folks or 6+ roommates.
...and their budget is still tied up on rent, groceries, a car payment and gas.
The people doing all this spending aren't the ones who are stuck on the paycheck-to-paycheck treadmill. It's the folks who are driving around in Teslas and actually buying the houses starting in the low $400s who have the income levels driving all this spending. Believe me, the rest of us are just looking at the price of everything and thinking "WTF are people doing to get the kind of salary you'd need to afford that?"
what do you expect (Score:5, Insightful)
We are dumb, and when the party is over it will be $political party or $President 's fault and not personal responsibility
but at least you saw Taylor Swift before the bank forecloses on your mansion and takes your 100,000$ SUV
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but at least you saw Taylor Swift before the bank forecloses on your mansion and takes your 100,000$ SUV
If the cost of a concert ticket is all that stands between you and the repo man, you're in rather precarious financial shape to begin with.
Most of the increased demand for live entertainment is still due to shows that were canceled due to Covid. It's all money people would've spent anyway over a longer period of time, had the virus not done its thing.
Re: what do you expect (Score:3)
These aren't normally priced concert tickets.
Re:what do you expect (Score:4, Insightful)
but at least you saw Taylor Swift before the bank forecloses on your mansion and takes your 100,000$ SUV
If the cost of a concert ticket is all that stands between you and the repo man, you're in rather precarious financial shape to begin with.
Most of the increased demand for live entertainment is still due to shows that were canceled due to Covid. It's all money people would've spent anyway over a longer period of time, had the virus not done its thing.
Have you seen the price of tickets lately? The last couple concerts I perused when the tickets went on sale would have covered a few house payments. And I was looking at the damned cheap seats.
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but at least you saw Taylor Swift before the bank forecloses on your mansion and takes your 100,000$ SUV
If the cost of a concert ticket is all that stands between you and the repo man, you're in rather precarious financial shape to begin with.
It's all a matter of perspective. I don't think that a lot of people were taught to play the long game. And that's a problem, because unless a person gets lucky, the long game is the key to success.
I started life in poverty, defined my goals, got my first job, then picked out a place that would provide what I wanted, (University environment) and worked hard to get work there. Got it, then got married and started college on the college discount benefit. Took advantage of every savings setup, had three ret
Inflation does not remain high (Score:5, Insightful)
Inflation ended over a year ago. The most recent read was an annual rate of 3.2%, but even that is overstating the actual rate, as CPI lags housing significantly.
Note that the fact that prices are still significantly higher than 2020 does not mean there is still inflation. Inflation is the rate of change, and it is now completely normal.
Prices are not going to go back down to 2020 levels, and indeed, it would be a disaster if they did, and we don't want them to do that.
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This. While inflation was 3.67% on Aug 31, 2023 (latest numbers), it was 8.26% on Aug 31, 2022, and while it's higher than pre-2020, it's not "high". The Fed's goal is 2%.
Google: current US inflation rate [google.com]
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They don't really hide that though? They publish two different stats, U3 which is based on surveys and UE and U6 whihc includes people who stopped looking, disabled, back to school and part time/underemployed. We can call it playing games but all the data is in the open:
Alternative Measures of Labor Underutilization for States, Third Quarter of 2022 through Second Quarter of 2023 averages [bls.gov]
Why everyone uses U3 seems to be historical:
Even though the BLS produces six different rates, the focus typically remain
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You'd rather it be 8.26%? Inflation and wage growth are both generally heading n the right directions -- the former down, the latter up -- and they both can really only move so fast considering all the factors that go into them. So, not a shill, just a realist. Perhaps you're just spoiled from the artificially low interest rates of the recent past.
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if the trend is down, which it is, its absolutely disingenuous to say its no longer high. It is historically high! (inflation rate)
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That's the year-to-year inflation for July 2022 to July 2023. The year-to-year number for August is the latest, and it was 3.7%. Those numbers lag the annualized month-to-month inflation rate which, last I checked, is less than 3%. Inflation peaked near the middle of 2022, so the year-to-year number includes months with higher inflation than we
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it would be a disaster if they did, and we don't want them to do that.
There are billions of people suffering under high cost of living, but in a world filled with every calamity it's surprisingly hard to find many suffering from the disaster of falling prices.
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The hyperinflation in post WW1 Germany was driven by punishments levied on the old Weimar Republic, that situation is irrelevant to America in 2023
I think that we need to look back at the halcyon days of American growth in the 1950's to see what really needs to happen [wolterskluwer.com] in order to bring government deficits under control and support the American middle class to a degree that will improve our overall economy.
The very, very, very wealthy have spent a lot of money in the past 50 years to convince the American pe
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Considering most Americans are so deep in debt that they don't even see the 0-bar anymore, they should welcome a hyperinflation. Those 100 grand you owe? Tomorrow that's your daily wage with just enough hyperinflation!
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The hyperinflation in post WW1 Germany was driven by punishments levied on the old Weimar Republic, that situation is irrelevant to America in 2023
You are right about the situations being different, you are wrong about the cause of German's hyperinflation. Germany's hyperinflation didn't start until after they were paying less in reparations than they were taking in in foreign investment. It was political extremism leading to bad monitory policies that caused their hyperinflation but that doesn't make the right narrative for the end of WWI that people want so its blamed on the Treaty of Versailles. After WWII we were far more harsh to the German th
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Yeah, the reason for the hyperinflation in Germany after they lost WW1 was that people wanted living wages. Sure.
Dude. Please. At least try an example that's not so blatantly stupid.
There's no tomorrow. (Score:2)
's why.
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Tomorrow certainly is not guaranteed. But if you do survive, one thing that *is* guaranteed, is trouble coming your way. Your car will break down, you will need medical attention, you will have to replace things and make repairs. Whatever it is, some financial problem is guaranteed to come (assuming you do survive).
Those who understand this inevitability and plan for it, will be in much better shape than others, when the inevitable does happen.
If your car has no shock absorbers, then every bump in the road
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Oh I don't disagree, and I do have a cushion (several) to see me through hard times, and further I agree that not many understand your point, mostly younger people.
I guess I was making the point that there are people, perhaps a whole generation who are living in despair and see no hope of having a long and happy life. So they're throwing away their money on last minute gratification.
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Very true. Young people do tend to despair and rage against older generations. They see older generations as not having had to go through the same hardships they are facing, even if the reverse is actually true. They see "old boy" networks that were in fact the result of years of developing healthy relationships with people. They tend to have lower income than older people, because their careers are just beginning. So it's not surprising that young people would be in despair now.
On the other hand, the savin
A little early for Groundhog Day but... (Score:2)
There wasn't one today! [getyarn.io]
housing is a big one (Score:4, Interesting)
The giving up on buying a house is a big one, I think. I happen to live in San Francisco and make quite a nice salary but buying a house here makes no sense (even though I could afford it if I were willing to be house poor).
Right now it costs more than 2X to buy a house than to rent a similar property (largely because interest rates are up sharply, but prices are only down slightly).
So, I've come to accept I will never own a house and that's OK. So, that means I can spend more money (or invest it) in other areas.
I'm sure I'm not alone.
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I sold my Bay Area house about 1.5 years ago. It's now down 130k according to Zillow.
I took my down and profit, left the state, bought a much nicer house literally twice the size in a much nicer place for cash.
Thank you, Bay Area!
This was my plan since college.
Not really an exaggeration with the way things are (Score:4, Insightful)
Jokes aside, the economy has not finished fully processing the Covid stimulus money. On top of the fact that Americans effectively saved up a couple years worth of vacation money sitting in quarantine that they are now just starting to spend.
If manufacturing backlogs are any indication this is likely a temporary bump that will not meaningfully register on the trend lines for consumer spending.
Though there is a small, SMALL chance that Americans believe this may be their final chance to travel the world before it goes to the dumpster. WW3 would put a damper on my holiday plans for sure.
Re:Not really an exaggeration with the way things (Score:4, Insightful)
>On top of the fact that Americans effectively saved up a couple years worth of vacation money sitting in quarantine that they are now just starting to spend.
big doubt on that, i'd wager a good chunk of american's are putting gas and groceries on credit cards right now. all the pandemic and retarded stimmy payments did was line the pockets of doordash, amazon and bestbuy, and maybe cabelas. people spent their stimulus money as soon as they got it. And then some.
there's a few 'canaries' (so to speak)
>makeup/fashion products
>powerball/lottery jackpots.
>credit card balances
i'd wager we're looking at an incoming tsunami of bankruptcies in the very, very near future.
This is the central bank strategy (Score:5, Interesting)
The Fed is trying to bleed everyone's savings dry to keep inflation low so that they can restart the slow process of reducing interest rates. The smart will resist depleting their savings, most won't.
The whole consumer economy is based on a near-zero savings rate [stlouisfed.org] and active consumption. Take a look what happened when COVID set in and it all makes sense.
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The Fed is trying to bleed everyone's savings dry to keep inflation low so that they can restart the slow process of reducing interest rates. The smart will resist depleting their savings, most won't.
The whole consumer economy is based on a near-zero savings rate [stlouisfed.org] and active consumption. Take a look what happened when COVID set in and it all makes sense.
Yep. You're basically rewarded for living on credit, and punished for saving money now.
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You seem to have a funny definition of "reward" and "punishment."
Higher interest rates literally reward savers and punish borrowers.
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FYI, if the savings interest rate is below the inflation rate, then you are not saving a dime by putting your money into a savings account
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This is true.
And it's also true that higher interest rates reward savers and punish borrowers.
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Higher interest rates also punishes business development as the cost of money is higher and it can result in consolidation as vulnerable business fail and get bought up by companies that have access to capital without seeking loans
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This is true.
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Higher interest rates are generally in lockstep with real inflation, so there is no gain really. Just treading water, hopefully. And not even that the last couple of years, the savings rates tend to come up much slower than the discount rate or for that matter, loan rates. If you had significant savings, inflation eroded its value before higher interest rates became available.
Which is another policy win for the Fed. They are basically compelling you to invest in either government instruments like bonds
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Higher interest rates are generally in lockstep with real inflation
Historically, interest rates have been higher than the rate of inflation, except for 2001-2002, and after 2008. So I don't think it's fair to say that there's "no gain."
https://www.gzeromedia.com/the... [gzeromedia.com]
Even if there is "no" gain, a healthy savings interest rate does encourage people to save, if for no other reason than to keep from losing their money over time.
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This makes no sense. It was *low* interest rates (which were held too low for far too long) that discouraged people from saving, because there was no return on investment. The COVID "free" money handouts, which the Fed had nothing to do with, is actually what triggered inflation, because people had money to burn and bought everything they could think of, driving up prices.
The Fed certainly behaved foolishly in the way it set interest rates, but it's way too simplistic to blame them for the economic situatio
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Explain the early 2000s then.
The Fed has actively discouraged savings for a very long time. It's an unstated policy goal. If everything is financed, that gives the central bank a great deal of control over economic activity. It makes their levers and by extension their job (minimize inflation, moderate interest rates and minimize unemployment, statutorily) easier, and also maximizes economic activity, because your actual access to assets does not impede consumption.
I don't actually blame them, but preten
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It's an unstated policy goal
You have no evidence for this, this is only an unsupported statement of your opinion.
I'm not sure what about the early 2000s you are asking for an explanation regarding. If it's specifically about discouraging savings, then yes, low interest rates do discourage savings and encourage borrowing. In your initial post, you seemed to be stating that today's *higher* interest rates were an attempt by the Fed to bleed everyone's savings dry, when the opposite is true, higher interest rates encourage savings, not d
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when the opposite is true, higher interest rates encourage savings
If you have access to investment instruments that track interest rates going up. Most people don't, or don't know how to shop for such products or how to manage a portfolio of them.
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It was free money handed out and supply crunch due to other covid policies at the same time that caused.
The big factor though was who go the money. You can't give the poor and lower middle classes money without causing inflation precisely because they spend it!
You can give it to the relatively wealth but than its not an effective stimulus because they don't spend it.
The right policy is actually to keep hiking rates. The higher the rates the more the modest incremental saver wins, the more the loss the rec
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>or finding out the airline industry isn't worth having etc
There really shouldn't be an airline industry between destinations that could be effectively served by rail. Especially places where you have long straight runs where climate doesn't interfere. Scrap the planes and go with high speed rail. Oh noes, it takes a day to cross a continent instead of a few hours. So what? We should be telecommuting for the time sensitive stuff anyway.
Dammit I got a raise (Score:2)
It's obvious why. (Score:2, Interesting)
It's quite obvious why.
People realize we are only a very short distance away, and probably only a very short time away, from one or more of the following:
* Hyperinflation. (Not inevitable, but the easiest way out for any debtor nation, never mind the most indebted nation in the history of the world.)
* Economic collapse, which to a degree is unavoidable due to grossly excessive governmental, corporate, and consumer debt, as well as the impending end of the dollar's Bretton-Wood
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The US inflation is pretty good and no way near hyperinflation in August at 3.7%, which a bit higher that in June when it was just 3.0%, but that is much better than June 2022 when it was 9.1%. For an international comparison of current inflation see: https://tradingeconomics.com/c... [tradingeconomics.com] Many countries have a higher rate than the US.
When one looks at national debt, it is the debt
Re:It's obvious why. (Score:4, Insightful)
Hyperinflation results when a government decides to print money in order to pay its own debts.
That hasn't happened yet. The inflation to date resulted mostly from the injection of COVID dollars into an economy that was not, at the time, producing anything.
But it will happen once the US government becomes unable to pay its debts any other way.
Source: the history of every other government that failed in exactly this same way.
Re:It's obvious why. (Score:4, Informative)
Not surprising (Score:3)
Duh. (Score:2)
no choice (Score:2)
Inflation on food, energy, and housing is far outpacing gains in income. Below a certain threshold, that goes higher all the time, you have no choice but to spend everything you make just to live. We keep shifting all of the income and assets to the top 1% and then wonder why we are all broke. Thank Reaganomics. How is that trickle-down working out? It has been a trickle-up for 40 years and now everyone is broke.
Prices are still too high (Score:2)
Americans are probably still physically spending at the same levels as they always were.
The only difference is prices are so much higher now.
If they were buying X amount of widgets for $10k last year, but prices for widgets are 2x .but it's for the same
times higher this year then, yes, they're spending record amounts . . . .
amount of widgets.
There are some things you can cut back on but, when the basics and everyday staples are
that much higher, you don't really have a whole lot of choice. It's not like you
Post-traumatic stress disorder (Score:2)
After the pandemic, people have discovered their own mortality, and have decided to spend more while they can than saving to spend when they're old and feeble. I might die of COVID or some other terrible disease soon, might as well buy that stupid lamp shade I don't need.
The other thing is, consumerism has been weaponized by platforms like Temu, where they literally have created a Casino interface to Alibaba. I have met several people who are addicted to buying cheap shit on Temu, because you gain points an
Opinion (Score:2)
Economics says the smart move is to load up on long term fixed-rate debt for assets that maintain their value or appreciate in value if you project high inflation for the long-term future.
The logic behind it is you'll be paying off the debt with dollars that are worth less than when you spent them. The risks of this approach are that appreciation and wage inflation adjustments will not outpace your interest cost or you'll be unable to service the debt.
Inflation remains high? (Score:2)
Re: Boomers (Score:3, Insightful)
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No https://www.statista.com/stati... [statista.com]
Re: Boomers (Score:5, Informative)
The folks with higher balances (age 40-49) are generally making higher than average incomes.
Age 29 and below, smaller balances -- but also, generally, much smaller incomes. The lowest earners are between 18-25.
The stats you provide don't contradict NoSleepDemon statement.
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There is also the fact that generations have been grown up with different memes. The boomers were raised with heroes that showed good triumphs over evil every time, that the cops get their man, that one can make a difference, and that one can have confidence in their abilities. They were raised where a minimum wage job was a stepping stone, working their way through college was doable, and they could graduate with no debt and a job which would be a meal ticket for life.
Now, lets see what the people from m
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https://en.wikipedia.org/wiki/... [wikipedia.org]).
"In 1938, the Fair Labor Standards Act established it at $0.25 an hour ($5.00 in 2022).[6] Its purchasing power peaked in 1968, at $1.60 ($13.00 in 2022)[6][7][8] In 2009, it was increased to $7.25 per hour, and has not been increased since.[9]"
I am pretty sure you could never support a family on the equivalent of $5/hr. Where did you get that idea?
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I am pretty sure you could never support a family on the equivalent of $5/hr. Where did you get that idea?
Costs haven't increased linearly. In 1938, cable TV wouldn't exist for another 12 years. Cellular phones wouldn't exist for another 45 years. The Internet wouldn't exist for another 31 years and wouldn't start becoming broadly available to the general public until Eternal September, some 55 years later. By itself, for a family of four, that's $85 for cable, another $40 for Internet service, and $45 per line for each of their four cellular phones, for a grand total of $305 per month. So instead of $5 per
Re: Boomers (Score:5, Informative)
You can't make comparisons like that.
For example, a 1938 house is much smaller than one built today. Do a cost per square foot comparison if you want apples to apples.
You can't make a comparison like that, either, because you need a roof over your head. It's not like you can say, "There aren't any apartments small enough for me to afford, so my wife, my kids, and I are all just going to live in this cardboard box."
So if the cost of the cheapest available houses/apartments are too expensive for people making minimum wage, they get together and have multiple people share a home. And although that drives down the cost per person, there's more money available per unit as a result, so there's less incentive for landlords to keep the prices low. That, in turn, drives housing prices up. And because more people in an apartment likely require more space, the size of homes increases. Over the long term, it ends up being a vicious circle, and that's likely at least part of the reason why housing prices have shot up by somewhere around 2.5x the average rate of inflation since 1970.
But as soon as you get a family, the split-the-bill approach suddenly doesn't work so well anymore unless both parents are working, so the net result is that over time, it gets harder and harder for a family with a single breadwinner to pay for housing.
And yes, I know that using median prices inherently results in an imprecise comparison, because obviously that isn't the average of the cheapest house in every market, but those numbers don't exist, to my knowledge, so it's the best I can do. :-)
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Not sure if you're aware, but you can still buy houses that were made in 1938. And prices on those have gone up along with all of the rest of the housing inventory.
Re: Boomers (Score:5, Insightful)
Yeah, no, get fucked.
The problem isn't teachers, it's the persistent undermining of the lower and middle class by the ultra-wealthy. It's the destruction of unions and the lowering of taxes on the wealthy.
I work a job in tech with a good salary and I can afford to own a home even in BC, Canada, despite exorbitant prices.
My grandfather was an immigrant pipe-fitter for Texaco who retired at 55. He owned his own home, a boat, a camper, a car, an SUV for hunting, a Bobcat ATV and he had 3 kids who all went to University. My grandfather was skilled and worked hard, but he wasn't more skilled or harder working than me.
And I was lucky! As a GenXer, my university education was easily paid for by my TA and RA jobs for professors over the summer and during the year. Rent was cheap. I ended up with $10k in student loans because I was hit by a car and needed to pay some un-insured dental bills.
But minimum wage used to be a wage you could live on. You could afford a place to live and food and you'd be able to make savings.
Go look for the comparisons of wages during the Great Depression (assuming you could get a job) compared to now. You'll probably be surprised to find that rent and food took up less of a monthly budget for a single mother back then than they do now.
Our politicians have sold us all down the river. It's not a matter of working hard to get ahead and hasn't been for decades. How dare you blame this on *teachers*, a category of worker who are remarkably underpaid and often cover for school shortfalls out of their own pockets. And all of that stuff that you're heaping scorn on--the self esteem movement, follow your passion--that was all stuff that the boomers came up with and taught to us, because they were our teachers! They were the legislators making our curricula! If you want to criticize it, you're still looking a particular demographic square in the face.
Regan and Thatcher, ultimately, are to blame for 95% of what's killing the working class right now. I hope they're in hell.
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I'm curious if you really think that kind of comment is insightful, and if you do, how you've come to think this way ?
- mrclevesque, posting anonymous to not lose my moderation (I haven't moderated Dixie_Flatline's or your comments).
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GenX here, I don't pay everything in cash, but I know what money I have and how much I can spend.
It kinda puzzles me that people have to use cash for the false security of only spending what they have. Banks routinely still give you cash long after your account has run dry.
Re: Boomers (Score:4, Insightful)
The main reason to try to stick to cash is participation in psychological warfare. "Swiping" is a meme because the idea of "minimizing friction of payment process and obfuscating the amount being actually paid" work as psychological tools when deployed against humans.
Notably, ALL humans. This is biological circuitry that functions regardless of you knowing about it being deployed against you. The effect becomes somewhat muted, but it's still there.
Essentially, giving something away physically caused a very specific psychological reaction that is biologically wired and always works and tracks how much you're physically giving away, hitting areas like status tracking in the process. This is why shopping can be an actual biological addiction, the feeling of acquiring things while giving nothing away because you pay with a card. Because swiping your credit card removes the tracking of "giving things away", as card remains in your possession, and process of swiping the card remains the same regardless of sum spent.
It's one of those things where people like to believe they're too smart, intelligent or experienced to get caught, not understanding that you can no more permanently subvert your biological circuitry than you can tell you intestines to stop processing food. It's not under your conscious control. Evolution has judged you entirely too stupid to be able to control many things about your body and mind. And trillion-grade research has gone into figuring out exactly what mechanisms are like that, how they work and how they can be deployed against you.
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non pay-walled https://www.cardrates.com/advi... [cardrates.com]
Anyway they are close in 2022 $5,649 millennials boomers $6,245, and given how much richer boomers are supposed to be its no proof at all.
Credit card debt only shows the level of debt though, it maybe that millennials are spending on necessities, or it maybe boomers are the level of debt says nothing.
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It's not the boomers doing it over here though, they already have all their shit - cars, boats, house paid off, summer holiday at camp or whatever. It's the millennial generation being fucking idiots buying everything on credit because it's what the influencers are doing.
Agreed, to a certain extent. There are some purchases that are heavily influenced by interest rates, like houses and cars that are financed. Grocery, retail, and non-discretionary spending are not influenced by interest rates. Furthermore, the unemployment rate has not gone up, so incomes for the most part haven't dropped. And the stock market hasn't tanked yet, so people don't necessarily feel poorer.
There is an age factor in some of these buying decisions (such as for houses), but most of the purchase
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Grocery, retail, and non-discretionary spending are not influenced by interest rates.
I'm not sure if I'm reading you correctly, but if you haven't noticed that the price of groceries has gone way up, you must be on one hell of a crash diet.
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Anything you buy new today will have been built with planned obsolescence and being impossible to repair so when it breaks you need to buy a new.
Re: That's not true (Score:2)
Either prices will drop as boomers die off, or private equity will snap them up and make Millennials and Gen Z a nation of renters. Probably some of both.
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And nobody is freer than someone who has nothing to lose.
That's why GenZ and Millennials are way, way harder to blackmail into putting the nose to the grind stone. What kind of threat do you want to hang over their head if you fire them, that they can't pay off their mortgage and lose their house? They have no house to lose!
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maybe so they have something in retirement?
The alternative is what burning the carbon copies of 30 years worth of rent checks for warmth in their old age?
Housing is really expensive no matter how you go about securing it for yourself, and that has mostly to do with
1) Immigration policy
2) post 60s social policy that is hostile to house hold formation and retention
3) post 70s economic policy that is hostile to house hold formation and retention
The bigger question is how are we going to fix. Because someones
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The idea that your house is your retirement nest egg is entirely what created this mess in the first place. Anything that could possibly threaten the value of their "investment" is strongly opposed by the homeowner class, and that has lead to all sorts of zoning and code laws which prevent less expensive forms of owner-occupied housing from being purchased. Modular and manufactured housing is significantly less expensive to construct than site-built housing, but good luck finding any land not out in BFE w
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house is your retirement nest egg
Right a house is not a piggy bank its a roof over you head. Something everyone needs. Your goal should be own something, and own something you PLAN TO SAY IN by the time you retire (if not much sooner).
what created this mess in the first place
No not at all.
What got us into this mess is
1) cheap available debt the support high prices. Interest rates should never have been allowed to go near zero
2) demographics, you only need more housing with an expanding population, we only have an expanding population because of immigration!
2a) demographics, few
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2) demographics, you only need more housing with an expanding population, we only have an expanding population because of immigration!
That presumes people only have primary residences, and no weekend houses, snowbird getaways, or rental properties which might be vacant due to condition or outrageous rent, etc.
You also ignore attrition as homes are lost to floods, fires, multi-family housing being converted into single-family...
Re: So what happens (Score:2)
BFE is a much better place to live than the city.
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BFE is a much better place to live than the city.
It usually comes with its own set of caveats which tends to negate most (if not all) of the potential savings. One of the biggies is not being able to buy a smaller parcel, so you end up priced out of the market when the only thing available is million dollar multi-acre lots. Then there's the costs of improving the land, which can be significant depending on how far out in BFE you really are. Finally, unless you're doing the WFH thing or are retired, chances are you're going to have to deal with a longer
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Anything that could possibly threaten the value of their "investment" is strongly opposed by the homeowner class, and that has lead to all sorts of zoning and code laws which prevent less expensive forms of owner-occupied housing from being purchased.
That isn't the real reason. Building more housing doesn't make existing housing less valuable. The real reason for NIMBYism is people don't want their towns/neighboorhoods crammed with more people/traffic/crime. If building more and more housing made existing housing lose value, then places like New York, San Francisco and Los Angeles should have depressed housing prices, yet the opposite is true.
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when these muppets get closer to retirement and have nothing to show for it? Are they still going to blame boomers for all their ills, or will they accept that they were the fucking idiots all along? People over here are falling over themselves to buy houses at ridiculously inflated prices, with mortgages they can barely afford (at interest rates not even at historic highs). Why? Just why?
I'm closer to boomer than zoomer, but it's pretty easy to understand why. These people have spent their entire lives being told that the Earth is going to crumble beneath their feet and there literally will be no future. They've been told, from the moment they're born, or, at worst, when they reach school, that older generations took everything, destroyed the planet, and left them with nothing. So, of course some of them are going to assume it's absolutely 100% true and the only thing they can do is spend w
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Krugman? When he says something about the future, bet the opposite to win.
Inflation is fucking high. That bullshit 4% number does not include food or energy, which when included raises the real inflation rate significantly.
This has nothing to do with virtue signal crap about political parties or 2024. This is real people getting hurt every time they buy food or get in their car to go to work. And people on fixed incomes such as the disabled and elderly are super fucked.