I recently read that the majority of the country has almost no money in the bank and lives from paycheck to paycheck.
Its worse than that, our country has a negative savings rate. As a nation we spend more than we earn. Deficit spending is as American as apple pie.
I’m the complete opposite. I *hate* debt. I had to put about 10k on my credit card last year to get all my dental work done. I’m basically living like a hermit this year to get that paid off ASAP.
And I would rather spend my life renting than get shackled to a toxic mortgage product
What most people don’t understand is that consumer credit is basically a consumption tax. Instead of paying $400 for an iPhone a year from now you purchase it today on credit and spend $500 over the course of two years paying it off. Thats $100 of purchasing power ultimately lost.
The gotcha with our current situation, I think, is that many of those folks blowing money as referenced in the opening post have no intention of ever paying back what they are borrowing to fuel their consumption binges. Or are working jobs thats are financed by the self-same binging.
I think you can see signs of the recession if you look hard enough. The wine bars are less crowded and people are ordering cheaper stuff (ask the bartenders!). When I returned my digital cable box to Cox there were at least 100 people in line ahead of me returning equipment. Costco is almost empty during the week.
One a lighter note, I heard a new recession metric on the radio today. We are officially in a recession when there is no wait to get into the Cheesecake factory!
