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Opinions and Rants #20: Money, Money, Money


My grandparents weren't especially well off, but they didn't have a penny of debt when they passed away.  They lived fairly frugally and paid for everything with cash.... they couldn't conceive of the world we live in today.  Pretty much everyone is up to their eyeballs in debt. Whether it's credit card bills or car and mortgage - pretty much everybody owes way more than they're worth.  And our federal government is the worst perpetrator of all. Where once we had a gold standard, now we print money with abandon, and have no problem with sending an IOU to China for a gazillion dollars. Ugh!

Who's to blame? We are all perpetrators in this mess for electing greedy morons into office.  President Clinton left office supposedly with a surplus, but then George W. spent us into oblivion. Now, Obama is one-upping Bush.... where does it end?  As I write this, we are 12.5 trillion dollars in debt.  How will our economy look when we're 25 trillion in debt... any different? How about 100 trillion?




Once upon a time, you could work at the local Walgreen's selling aquarium gravel and make a decent wage. Nowadays, most families have to have two income earners to make ends meet, and they're still living paycheck to paycheck.  I get really disgusted listening to douchebags like Dave Ramsey preaching the "no debt at all cost" mentality when a huge segment of our jobs don't pay a living wage.  Tell me how you can live without debt working at Wal-Mart - your employer doesn't provide insurance, so when you deduct that from your minimum wage, there's not enough left to even cover the lowest of mortgages, let alone groceries, etc.

But then, when you're in the game of competing with countries (and US companies who make everything overseas.... I'm talkin' to you Wal-Mart) who pay their employees with rice and thread, it's hard for a business to justly compensate their employees and remain competitive..... it's quite the mess we're in.


So, what's the solution? Well, I don't think you need a Harvard Economics Ph.D. to understand that we can't just keep bailing out banks and companies whilst crossing our fingers that the economy will improve. I think you need look no further than the 1950's when the US was prospering to see the solution to what ails us.  I don't have time to spell it all out; perhaps, I'll elaborate in another post.  For now, suffice it to say, it will involve tightening the belt.... several notches.

I'd be interested to hear anyone's opinion on this issue. Leave a comment and tell me where I'm wrong (or right). 

9 comments:

  1. Things are bad, there's no question, but our country was founded on debt.

    Alexander Hamilton, as the first Secretary of the Treasury, saw to it that the new government obsorbed the war debt of all thirteen original states after the Revolution in an effort to wrest power from the states and consolidate it with the Federal government.

    While some presidents that followed George Washington really tried to balance their budgets, the country has not been "solvent" since before the Civil War.

    Does historical precedent make it OK? No. But sometimes perspective helps.

    I'll climb back in my history geek box now.

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  2. This is true. We've been in debt for a long, long time. However, what about the gold standard? Is that just an antequated notion? And how many trillions does it take to put this country under? I can remember when we hit 1 trillion (not that long ago) and was disturbed. Now we're about 13 times that! When is it a cause for alarm? When it reaches a quadrillion?

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  3. You are right. The answer to buy less crap. Or not think you need all this crap.

    I miss the days when most adults could have a job that paid a living wage, but, part of it is look how much more (foreign made) junk we buy. My grandparents lived in 1300 sq ft for over 50 years, and raised three kids in that house. Still live there in fact.

    My wife and I are debt free except for the house. And she doesn't work and I'm just a librarian. We make choices that enable us to do this. We rarely eat out, we don't have to pay child care, we don't have cable, we still have a cathode-ray tube-TV, don't have any video games, things like that. Most of the junk I own and post I've had since I was a kid. And I've weeded out a ton of it. I don't really purchase things to collect they just seem to find there way to me. I do buy music at garage sales, but I don't pay over $1 an album.

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  4. I think what's more disturbing is your salient point, that we need two incomes and debt to have what one income provided 30 years ago. And much of what we buy is built cheaply and rarely lasts as long as a "durable good" ought to. Perhaps that has something to do with the enormous conglomeration of wealth at the top, and why CEOs make 271 times the salary of their employees nowadays; they used to make 30x as much, back when one salary could raise a family.

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  5. retro hound- Kudos to you. And I'm sure your standard of living is still greater than that of our grandparents, despite your cutbacks. The Feds could learn a lot from the Retro Hound homestead.

    Tommy- The gap between the upper class and middle class has monstrous. It's hard to feel sorry for companies when they claim they can't pay their workers a living wage because of foreign competition when their CEO's are making billions. There's actually execs at GM who make $3000 per hour... and their business is tanking! Wonder why.

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  6. I stopped using credit cards and paid them off over five years. I've been fortunate enough to keep a good job through this economic downturn. Even though (or becasue of)the fact that I don't use credit cards, I now have actually savings, and am still occasionally able to buy nice things. What I can't do is get every new gadget or game that comes out.

    People need to rediscover the value of living below one's means, and saving.

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  7. I stopped using credit cards and paid them off over five years. I've been fortunate enough to keep a good job through this economic downturn. Even though (or becasue of)the fact that I don't use credit cards, I now have actually savings, and am still occasionally able to buy nice things. What I can't do is get every new gadget or game that comes out.

    People need to rediscover the value of living below one's means, and saving.

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  8. Cutting back on personal credit and spending is a good move for individuals, but unfortunately won't make much difference with the structural problems with your economy. The reality is you guys are going to have to radically cut government spending AND dramatically raise taxation on all levels of government. If the experience of California is anything to go by, well I wish you all the best luck:-(. (BTW I hear that the C.A credit rating is now lower than Borat's home country!)

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  9. The best advise - "Never a borrower nor a lender be."

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