Why is America living beyond its means?

I thought this would generate an interesting discussion....

Economists are furrowing their brows, scratching their heads and asking each other, Is the US deficit growing too large? Is the US dollar plunging too fast? Will the Chinese keep buying our bonds?

Meanwhile, the mainstream media is growing alarmed. A recent Newsweek cover-story outlined the very real potential of an economic collapse and dimly added that "if you think that some economist – or even Alan Greenspan – has a realistic solution, think again.” The New York Times ran an editorial criticizing President Bush’s “tax-cut-and-weak-dollar deficit-bloating ploys.” It warned that the US economy is precariously close to a meltdown.

On the other side, a number of economists are pooh-poohing the danger of a crash. David Levey and Stuart Brown insisted in Foreign Affairs that US economic hegemony is “solidly grounded” and the country’s financial stability is not under threat. Prominent former Salomon Brothers economist Henry Kaufman has also downplayed fears, confidently assuring the New York Times that “We have an economy that is performing far, far better than the other industrialized countries.”

But amid all this pro and con analysis, no one has yet asked the most obvious, common sense question of them all: Why are Americans living beyond their means in the first place? Why are residents of one of the richest countries on Earth spending hundreds of billions of dollars a year more than they earn? And then there's the obvious follow-up question: Why is the rest of the world subsidizing America's $420-billion a year military machine?

I'm not. Are you?

Me, personally, I dont own a television or a credit card, I have a paid for 94 work truck and a 96 mini van for my wife.

I dont spend what I dont have, Most of the writers I know are like that because not many of us buy into the whole American picket fence thing, but are you saying that Americans in general are not in Hock up to their necks? Because if you are , you need to go check the figures again.

And just in case you werent paying attention , credit is HUGE in america. And the average American is mega charge happy.

Am I wrong? You just like to argue with me dont you? ha ha!

Dawood, this is a subject upon which you and I seem to agree. I am very concerned about the extremely foolish practice of mailing credit cards to anybody and everybody. It's actually just an attempt to snare the foolish and the unwary into a web of debt. CONSUMER DEBT is the worst possible kind. Credit cards have high interest rates, and even if they start out at a more reasonable rate, if the cardholder is the slightest bit late with a payment, they jump the APR up to a much higher rate, sometimes as high as 24% interest.

I think people should not go into debt except for the most serious of reasons. Every person should have an emergency fund of three to six months' living expenses. Priorities go like this:

Food.

Shelter.

Electric bill.

Transportation to WORK. (Bicycle, bus, motorcycle, USED car.)

Emergency Fund savings account (3-6 months expenses)

Investment accounts

Retirement account

Kid's college account

Saving for down payment on your own home.

Most people aren't saving a cent. They spend every dime they make on unnecessary bullshit that will not make them happy.

I can think of a number of excellent principles to live by, whether one is an individual or a company, or a government.

1.) LIVE WITHIN YOUR MEANS.

2.) Start saving and investing with the VERY FIRST PAYCHECK YOU EVER EARN. Don't ever stop.

3.) Never quit a job until you have another job secured.

4.) If the economic situation you are in requires more money than you have, GET A SECOND JOB.

5.) Never accept a credit card from any company, no matter what.

6.) If you must use a card, use a DEBIT CARD.

7.) PAY CASH FOR WHAT YOU BUY. If you don't have the cash, you can't afford it, so don't buy it.

8.) Do not pass debt on to the next generation.

9.) dont be a drunk or a slave to your vices.

the consumer, throwaway culture of america is insidious

affecting and contagious, it threatens everyone's well being

a selfishness and sense of entitlement that seems to have arisen out of our very prosperity, i can only blame it on our obsession with money, status, and power

while i don't feel like i subscribe to these ideals, it seems most americans do

dooming ourselves with the gas guzzling, polluting SUV, impractical and obtrusive, it is a perfect symbol of the problem in the states

why don't people care about our plunge into debt

buying every thing we don't need

proabbly made in a far away land by poor we help enslave, polluting by it's production, then by it's existence amd finally it's disposal

i watched 'the corporation' the other night

wow

that shit is very scary

the corporation, with all it's rights as an 'individual'

is taking over while we all sleep

i agree with kabars points. while im guilty of buying a crap load of cd's books and the like, im mostly considered the most cheap-ass bastard around by people who know me.

i do use credit cards. i think there is some good in them. if anything for an insurance policy, knowing that you will have that backup if you fall on hard times and need that car repair or what have you. the one of 2 that i have has a super low rate, with no annual fees. i usually charge all my gas, groceries etc etc on that card, then write one check at the end of the month. while i dont follow kabars principles exactly on this, the logic is the same. i only use it as a convience. i dont rack up 30,000 in debt, then start crying. i pay every bill off, completely every month. i havent been charged any interest yet. i guess they hate me.

i dont trust debit cards for some reason. perhaps its because my girlfriend uses her's all the time, and generally once every couple months, some one fucks up somewhere, and she is missing money in her account, after a series of aggravating phone calls, she gets it cleared up.

i max out my roth IRA's every year and save every spare penny. i think the 2 biggest areas one can save and be heads and tails better than most, is buying a USED car, not a new car, eating in, not at the outback everynight. one person can survive on 50$ a week in food, give or take, depending on your eating habits. that MIGHT cover one meal for you and your girl/wife/guy/husband at a resturaunt.

I do have some expensive things. however, those things that i buy that are expensive ATLEAST hold thier value or go up. things like my custom made flintlock for example, paid 2000$ for it, before the maker had a name. i could EASILY sell this for 5000$ just 3 years later. same goes for my guitars etc etc. the worst thing you could do is waste all that money on a new car. that 20,000 car turns into over 30,000 after you get done paying for it, and tags, title. if you drop 2000$ on a used honda for example, do preventive maintenance, take care of it, you will be saving tens of thousands of dollars in the long run, and the car will run forever. (unless the rear end RUSTS off...)

Originally posted by Dawood@Aug 3 2005, 05:34 AM

Me, personally, I dont own a television or a credit card, I have a paid for 94 work truck and a 96 mini van for my wife.

I dont spend what I dont have, Most of the writers I know are like that because not many of us buy into the whole American picket fence thing, but are you saying that Americans in general are not in Hock up to their necks? Because if you are , you need to go check the figures again.

And just in case you werent paying attention , credit is HUGE in america. And the average American is mega charge happy.

Am I wrong? You just like to argue with me dont you? ha ha!

Quoted post

I agree. I'm just a cheap bastard myself. I've never had a credit card or even a MAC card cause I refuse to for the same reasons Kabar was talking about. I do at least have a TV though, I aint tryin to live like a monk. :haha:

Originally posted by angelofdeath@Aug 4 2005, 08:31 PM

if you drop 2000$ on a used honda for example, do preventive maintenance, take care of it, you will be saving tens of thousands of dollars in the long run, and the car will run forever. (unless the rear end RUSTS off...)

Quoted post

:haha: :haha: I had a 82 Toyota years ago that the rear end (where the trunk closes) was litterally rusting off, I duct-taped the son of a bitch to keep the water out and spray painted all the rust spots with rusto. :haha:

That car ran like a champ too. RIP.

I had an 89 Honda Accord that looked like it was through a war. plus I used It for my sign business. I paint storefronts and I used to use the closed trunk as a table. LOL I got apint all over it. After awhile I just started writing on it and testing out paint on it...I got a picture of it somewhere ...I gotta find it...

SF...Monks dont have computers.....and TV's stupify you and make your kids hyperactive and fat. In my humble opinion

Originally posted by Dawood@Aug 5 2005, 12:25 AM

and TV's stupify you and make your kids hyperactive and fat. In my humble opinion

Quoted post

I can't argue with the stupifying part, but kids are naturally Hyper. If anything the TV keeps them on the couch. That's how they get fat. :yuck:

exactly, fat ass ren and stimpy greasy chip finger, red fruit punch lip havin ed, ed, and Eddie lookalikes....Kids without TV are much more eloquent, better mannered and generally have a better disposition than kids who sit in front of the tell-a-lie-vision all day.

Originally posted by Dawood@Aug 5 2005, 03:27 AM

....Kids without TV are much more eloquent, better mannered and generally have a better disposition than kids who sit in front of the tell-a-lie-vision all day.

Quoted post

I don't know, that sounds like a stereotype. I remember this kid shawn when I was a kid didn't have a TV cause his fam was mad broke. This kid was a HELL-RAISER!!! I tagged along with him while he robbed houses (for cigarettes and whatever money was lying around), beat kids up at random and other random nonscence. Shit, me him and this other cat Ian even had a b-b-gun fight in my house resulting in my dads bong accidentally getting merked (that was an ASS-WOOPIN!!!). This was all when we were 8 or 9. I credit him with me never picking up smoking though cause he tried to get me into that shit and (being so young...8) I was like "cough...cough... WHAT THE FUCK IS THAT!?!? PEOPLE PAY MONEY TO GET HOOKED ON THIS SHIT??? cough...cough). :yuck: :sick:

You need not have a super great job to be a successful investor. Online, there are many "investment calculators", and you can use them for free to see what will happen to your investments in the future. If you are young, and not making a lot of money, and you can only afford, say, fifty bucks a week EVERY WEEK to invest, what would the outcome be?

(To put this in perspective, in 1975, when I was 25 years old and had a shitty job as a bill poster for a billboard company making $3.85 an hour, my weekly "budget" for alcohol and grass was $40 a week. WHAT AN IDIOT I WAS. I was drinking up and smoking up nearly 25% of my income.)

$50 per week, invested at 6% return:

1st year---$2,678

2nd year--$5,521

3rd year---$8,541

50th year--$826,562

This assumes that you won't ever get a better job, and that you won't ever be able to invest more than $50 a week. Obviously, this is not the case. So at some point, you might be able to invest $200 a week, OR MORE, especially if you are debt free.

LIVE FRUGALLY. WORK TO CREATE A FUTURE FOR YOURSELF AND YOUR FAMILY.

Guys, I know LOTS of tramps that could EASILY invest $100 a week. Every week. If they didn't drink/drug it up.

Originally posted by KaBar2@Aug 5 2005, 02:25 AM

Guys, I know LOTS of tramps that could EASILY invest $100 a week. Every week. If they didn't drink/drug it up.

see my point number 9.

1) stop crying

2) get money how you live

3) keep it up, like a machine.

no time to rely on an investment that isnt worthwhile until 25 or 50 years down the line, nothing is promised, including time. but.....

4) invest

bumped up

is it really why?

because i'm thinking it's why not?

everyone figured out that they can get whatever they want

it just might require carrying debt

and since we are all so conditioned from birth for consumption

it is paramount.

this nation would rather have instant gratification, and be mired in debt,

than work for what it wanted

because it wants everything, and it wants it now (regardless of what gets in the way, and with as little effort as possible)

beautiful fucking country we have here.

i can't wait until this pisspot implodes

is it really why?

 

because i'm thinking it's why not?

 

everyone figured out that they can get whatever they want

it just might require carrying debt

and since we are all so conditioned from birth for consumption

it is paramount.

 

this nation would rather have instant gratification, and be mired in debt,

than work for what it wanted

because it wants everything, and it wants it now (regardless of what gets in the way, and with as little effort as possible)

 

beautiful fucking country we have here.

 

i can't wait until this pisspot implodes

Exactly.

The whole SUV thing sums up this country's fucked up power structure and attitudes.

A bunch of years ago, American carmakers were forced to deal with making cars more fuel-efficient. They didn't want to. The requirements they were going to be forced to meet did not apply to certain categories of vehicle. One such exempt category was the sport utility vehicle, or SUV, which at that time meant stuff like dune buggies. Rather than go through the bother of making cars more fuel-efficient, the companies said "Let's make a vehicle that is technically in the SUV class, but is as much like a car as we can get away with without invoking the new efficiency restrictions, then hype it up to the public." That's what they did. The American public bought these gas-guzzling behemoths hook, line, and sinker, back when gas was a buck and change for a gallon, oblivious to the past, the future, the environment, the economy, everything.

Back then, I thought to myself, what a fucking dinosaur this SUV is. They're going to be real unhappy if oil prices go up, and gasoline as a result. (I wanted to invest in crude oil back in '99 when it was ten bucks a barrel, but I didn't have any money. I'd be rich today if I had.)

I was right all the way, simply because I apply intelligence to reality, a skill most Americans seem to lack these days.

i buy everything on credit.

im not really a bad american as much as i am a bad motherfucker.

i think it's genetic though, my mom was a bad motherfucker as well.

i dont know where she got it from though, cause my grandma is pretty chill.

oh well.

everyone should read this... well maybe its just because im a pessimist that i like this book, but still...

and once if you understand this article and who the real "gougers" are... step to the front of the class.

Gasoline at 10 Cents a Gallon and****Falling

by George Reisman

************************

Does gasoline at 10 cents a gallon and falling sound impossible in today’s world?

Well, if you think it’s impossible, you’re wrong. Because that’s where gasoline actually is, and it looks like it’s going even lower.

Of course, it’s not 10 cents a gallon in today’s paper money. But it is 10 cents a gallon in the Constitutional money of the United States, which is gold coin and bullion.

Gold is now at $700 per ounce, and rising. To the right is a picture of a $20 United States gold coin known as a Double Eagle. If you look carefully, at the bottom of the coin, you can actually see where it says “Twenty Dollars.”

This coin contains approximately one ounce of actual gold, which means that at today’s market price of gold, it’s worth $700. And this means that one gold dollar is worth $35 of today’s paper dollars. And that means that one gold dime is worth $3.50 in today’s paper money. This last, of course, is roughly what a gallon of gasoline costs in today’s paper money. Which means that a gallon of gasoline costs just 10 gold cents.

So why does a gallon of gasoline cost $3.50 in the paper money? Well, one explanation is that we’re expressing the price of gasoline in terms of a money that is itself very cheap and getting cheaper. Just think: if $20 gold dollars are worth $700 paper dollars, one paper dollar is worth only one thirty-fifth of a gold dollar. That’s less than three cents. It shouldn’t be surprising that buying things with three-cent dollars is going to require a lot of such dollars.

The key point here is that our money is getting cheaper and that’s why prices are rising. Don’t be surprised if in the future, gasoline is a lot more expensive in paper money than it is today and, at the same time, cheaper than it is today in our Constitutional gold money. Look for $5 per gallon gasoline in paper and seven cents per gallon gasoline in gold. That’s a real possibility.

May 12, 2006

i wouldnt be suprised to see a sudden drop in our economy.. maybe not a complete economic depression, but i do see a rough time ahead as a possibility

granted this is kind of unrelated, but seeing as you guys were talkin about it before, whatd you recomend investing in? mutual funds? i'm 18, so im not rakin in too much money, but i should probably start looking into it

whats the point of being rich when your old. id rather be young, spend my money on what i want, then be poor and old, or even better, poor and dead.

you dont have to be old for the whole invest/save your money idea to benefit you.. sure, right now spending all your money seems pretty cool, but when your 30 and broke im sure it wont be too pleasant.. you'll change over time, or so im assuming, and being financially secure will be pretty nice

"whatd you recomend investing in"

anything but paper money.

buy gold. as much as possible. when the dollar collapse's you'll be a real popular guy. when the "price" of gold is low, just go and count your coins then sleep easy knowing you have the most stable, valuable money in the world, that even governments cant control.

Complete the following:

"Gold is to angelofdeath as guns are to ______"

kabar.

the answer to the question is yes...........its the truth and everyone knows it but only a few do anything about it and a few also abuse it so yea we are and i believe the only way i can make up for it is to one day by land and cultivate it and live off it and make what i need and live a non materialistic life as much as i can so that i can give back what i took ......

Listen to this heinous shit: theory I heard today.

George Bush wants to bankrupt the government because that means:

a. No Welfare

b. No Social Programs

c. No Shit

that would basically hurl us back so many hundreds of years to Feudalism.

I have been thinking about this and the more and more I think about it, the more and more I think maybe Bush isn't dumbe, he's just evil.

I'm GLAD america is fucking stupid with it's money. It means more dough for me. Sure, this country would be the greatest nation on the planet if every single citizen voted, used every cent to invest instead of consumer merchandise.

We could actually control the fucking planet if we did that. Fuck wars, if we were responsible for every other country's economic stability, NOONE could fuck with us. But that would never happen, so best we can do is keep on living the "good life" in front of the rest of the world, and turn everybody else into retarded consuming vegetables, all the while picking up billions/scraps in the marketplace.