World Turned upside down

[davelj]

[quote=Arraya]
But, to the idea of; if these people would “live within their means” and accept the fact that they are not “what ever consumption level” our economy would be better off, is not even a valid line of thought – if they did not open up the spigots of easy credit decades ago – we would not have the economy we have today – it would have ran into problems years ago – or the reality of our economy would have been exposed years ago and that is something nobody wants to face. [/quote]

We would not have the economy we have today… in fact, it would be much healthier (re: less leverage and risk), in my view, albeit at a lower level of GDP. If we had grown at 2.5% annually over the last 25 years instead of 3%, but we didn’t have all of the incremental debt that’s built up (which engendered that incremental GDP growth), we’d be in much better financial shape today, although, again, we would have left some GDP on the table, so to speak. Personally, that’s a trade-off I would make every single time.
[quote=Arraya]
Quite possibly, some of those living the good life, “within their means”, would not be where they are without those living above their means.
[/quote]
There’s undoubtedly some truth to this, although it’s all relative and the numbers are hard to gauge. That is, the folks running a successful consumer finance company – just to use an obvious example – might still be very successful, albeit not AS successful as the credit bubble has made them (for now – they still have to collect those outstanding balances!). But certainly there are a lot of folks worth $10 million (pick a number) that would be worth half of that without “the spenders/borrowers”.
[quote=Arraya]
Interestingly, a sudden rash of people being frugal and living within their means actually, in the short-term, is detrimental to social functionality because it increases unemployment, decreases tax receipts, etc… We all know wall street would boo and hiss consumer spending going down. Kind puts a new meaning on what it is to be responsible, eh?[/quote]
Indeed, Lord Keynes’ Paradox of Thrift raises its ugly head…

[CA renter]

[quote=davelj][quote=Arraya]
But, to the idea of; if these people would “live within their means” and accept the fact that they are not “what ever consumption level” our economy would be better off, is not even a valid line of thought – if they did not open up the spigots of easy credit decades ago – we would not have the economy we have today – it would have ran into problems years ago – or the reality of our economy would have been exposed years ago and that is something nobody wants to face. [/quote]

We would not have the economy we have today… in fact, it would be much healthier (re: less leverage and risk), in my view, albeit at a lower level of GDP. If we had grown at 2.5% annually over the last 25 years instead of 3%, but we didn’t have all of the incremental debt that’s built up (which engendered that incremental GDP growth), we’d be in much better financial shape today, although, again, we would have left some GDP on the table, so to speak. Personally, that’s a trade-off I would make every single time.
[/quote]

Could not agree more, davelj.

[CA renter]

[quote=davelj][quote=Arraya]
But, to the idea of; if these people would “live within their means” and accept the fact that they are not “what ever consumption level” our economy would be better off, is not even a valid line of thought – if they did not open up the spigots of easy credit decades ago – we would not have the economy we have today – it would have ran into problems years ago – or the reality of our economy would have been exposed years ago and that is something nobody wants to face. [/quote]

We would not have the economy we have today… in fact, it would be much healthier (re: less leverage and risk), in my view, albeit at a lower level of GDP. If we had grown at 2.5% annually over the last 25 years instead of 3%, but we didn’t have all of the incremental debt that’s built up (which engendered that incremental GDP growth), we’d be in much better financial shape today, although, again, we would have left some GDP on the table, so to speak. Personally, that’s a trade-off I would make every single time.
[/quote]

Could not agree more, davelj.

[CA renter]

[quote=davelj][quote=Arraya]
But, to the idea of; if these people would “live within their means” and accept the fact that they are not “what ever consumption level” our economy would be better off, is not even a valid line of thought – if they did not open up the spigots of easy credit decades ago – we would not have the economy we have today – it would have ran into problems years ago – or the reality of our economy would have been exposed years ago and that is something nobody wants to face. [/quote]

We would not have the economy we have today… in fact, it would be much healthier (re: less leverage and risk), in my view, albeit at a lower level of GDP. If we had grown at 2.5% annually over the last 25 years instead of 3%, but we didn’t have all of the incremental debt that’s built up (which engendered that incremental GDP growth), we’d be in much better financial shape today, although, again, we would have left some GDP on the table, so to speak. Personally, that’s a trade-off I would make every single time.
[/quote]

Could not agree more, davelj.

[CA renter]

[quote=davelj][quote=Arraya]
But, to the idea of; if these people would “live within their means” and accept the fact that they are not “what ever consumption level” our economy would be better off, is not even a valid line of thought – if they did not open up the spigots of easy credit decades ago – we would not have the economy we have today – it would have ran into problems years ago – or the reality of our economy would have been exposed years ago and that is something nobody wants to face. [/quote]

We would not have the economy we have today… in fact, it would be much healthier (re: less leverage and risk), in my view, albeit at a lower level of GDP. If we had grown at 2.5% annually over the last 25 years instead of 3%, but we didn’t have all of the incremental debt that’s built up (which engendered that incremental GDP growth), we’d be in much better financial shape today, although, again, we would have left some GDP on the table, so to speak. Personally, that’s a trade-off I would make every single time.
[/quote]

Could not agree more, davelj.

[CA renter]

[quote=davelj][quote=Arraya]
But, to the idea of; if these people would “live within their means” and accept the fact that they are not “what ever consumption level” our economy would be better off, is not even a valid line of thought – if they did not open up the spigots of easy credit decades ago – we would not have the economy we have today – it would have ran into problems years ago – or the reality of our economy would have been exposed years ago and that is something nobody wants to face. [/quote]

We would not have the economy we have today… in fact, it would be much healthier (re: less leverage and risk), in my view, albeit at a lower level of GDP. If we had grown at 2.5% annually over the last 25 years instead of 3%, but we didn’t have all of the incremental debt that’s built up (which engendered that incremental GDP growth), we’d be in much better financial shape today, although, again, we would have left some GDP on the table, so to speak. Personally, that’s a trade-off I would make every single time.
[/quote]

Could not agree more, davelj.

[CA renter]

[quote=sdrealtor]TV’s was just an example. My point was the same as yours. Technology has moved forward and societies expectations along with it. People consume alot more discretionary goods than before but because of globalization they are cheaper. Women weren’t forced into the work place, they demanded equal opportunity. I’m not one who beleives kids need stay at home Mom’s to be brought up properly. I beleive women workers are every bit as good as male workers. I also believe Dad’s can do a great job with kids too.

With less spent on consumer goods in todays society that freed up more money for long term/investment type expenditures. I understand the dangers of households having higher long term fixed expenses but beleive that is not worse (and maybe better) than people not being able to afford everday purchases. If housing is too expensive in a market like this, renting is a fine alternative.[/quote]

Options are always better than no options. While some may argue that SAHPs are not necessary, others can just as effectively argue the opposite. Elizabeth Warren was pointing out the fact that we no longer have the same options as we once did, and if you read “The Two Income Trap…” by Ms. Warren, you’ll better understand why two incomes have actually harmed us far more than they’ve helped, financially speaking.

Obviously, a woman’s ability to leave an abusive husband is a benefit of women entering the workforce, but, because so many families are dual-income, she is more likely to end up having less purchasing power and is more likely end up in poverty than a single/divorced woman in the 1960s or 1970s who held the same job.

BTW, Warren is not just talking about “housing prices around here,” she’s talking about housing costs, in general — that includes renting, even “over there.”

[CA renter]

[quote=sdrealtor]TV’s was just an example. My point was the same as yours. Technology has moved forward and societies expectations along with it. People consume alot more discretionary goods than before but because of globalization they are cheaper. Women weren’t forced into the work place, they demanded equal opportunity. I’m not one who beleives kids need stay at home Mom’s to be brought up properly. I beleive women workers are every bit as good as male workers. I also believe Dad’s can do a great job with kids too.

With less spent on consumer goods in todays society that freed up more money for long term/investment type expenditures. I understand the dangers of households having higher long term fixed expenses but beleive that is not worse (and maybe better) than people not being able to afford everday purchases. If housing is too expensive in a market like this, renting is a fine alternative.[/quote]

Options are always better than no options. While some may argue that SAHPs are not necessary, others can just as effectively argue the opposite. Elizabeth Warren was pointing out the fact that we no longer have the same options as we once did, and if you read “The Two Income Trap…” by Ms. Warren, you’ll better understand why two incomes have actually harmed us far more than they’ve helped, financially speaking.

Obviously, a woman’s ability to leave an abusive husband is a benefit of women entering the workforce, but, because so many families are dual-income, she is more likely to end up having less purchasing power and is more likely end up in poverty than a single/divorced woman in the 1960s or 1970s who held the same job.

BTW, Warren is not just talking about “housing prices around here,” she’s talking about housing costs, in general — that includes renting, even “over there.”

[CA renter]

[quote=sdrealtor]TV’s was just an example. My point was the same as yours. Technology has moved forward and societies expectations along with it. People consume alot more discretionary goods than before but because of globalization they are cheaper. Women weren’t forced into the work place, they demanded equal opportunity. I’m not one who beleives kids need stay at home Mom’s to be brought up properly. I beleive women workers are every bit as good as male workers. I also believe Dad’s can do a great job with kids too.

With less spent on consumer goods in todays society that freed up more money for long term/investment type expenditures. I understand the dangers of households having higher long term fixed expenses but beleive that is not worse (and maybe better) than people not being able to afford everday purchases. If housing is too expensive in a market like this, renting is a fine alternative.[/quote]

Options are always better than no options. While some may argue that SAHPs are not necessary, others can just as effectively argue the opposite. Elizabeth Warren was pointing out the fact that we no longer have the same options as we once did, and if you read “The Two Income Trap…” by Ms. Warren, you’ll better understand why two incomes have actually harmed us far more than they’ve helped, financially speaking.

Obviously, a woman’s ability to leave an abusive husband is a benefit of women entering the workforce, but, because so many families are dual-income, she is more likely to end up having less purchasing power and is more likely end up in poverty than a single/divorced woman in the 1960s or 1970s who held the same job.

BTW, Warren is not just talking about “housing prices around here,” she’s talking about housing costs, in general — that includes renting, even “over there.”

[CA renter]

[quote=sdrealtor]TV’s was just an example. My point was the same as yours. Technology has moved forward and societies expectations along with it. People consume alot more discretionary goods than before but because of globalization they are cheaper. Women weren’t forced into the work place, they demanded equal opportunity. I’m not one who beleives kids need stay at home Mom’s to be brought up properly. I beleive women workers are every bit as good as male workers. I also believe Dad’s can do a great job with kids too.

With less spent on consumer goods in todays society that freed up more money for long term/investment type expenditures. I understand the dangers of households having higher long term fixed expenses but beleive that is not worse (and maybe better) than people not being able to afford everday purchases. If housing is too expensive in a market like this, renting is a fine alternative.[/quote]

Options are always better than no options. While some may argue that SAHPs are not necessary, others can just as effectively argue the opposite. Elizabeth Warren was pointing out the fact that we no longer have the same options as we once did, and if you read “The Two Income Trap…” by Ms. Warren, you’ll better understand why two incomes have actually harmed us far more than they’ve helped, financially speaking.

Obviously, a woman’s ability to leave an abusive husband is a benefit of women entering the workforce, but, because so many families are dual-income, she is more likely to end up having less purchasing power and is more likely end up in poverty than a single/divorced woman in the 1960s or 1970s who held the same job.

BTW, Warren is not just talking about “housing prices around here,” she’s talking about housing costs, in general — that includes renting, even “over there.”

[CA renter]

[quote=sdrealtor]TV’s was just an example. My point was the same as yours. Technology has moved forward and societies expectations along with it. People consume alot more discretionary goods than before but because of globalization they are cheaper. Women weren’t forced into the work place, they demanded equal opportunity. I’m not one who beleives kids need stay at home Mom’s to be brought up properly. I beleive women workers are every bit as good as male workers. I also believe Dad’s can do a great job with kids too.

With less spent on consumer goods in todays society that freed up more money for long term/investment type expenditures. I understand the dangers of households having higher long term fixed expenses but beleive that is not worse (and maybe better) than people not being able to afford everday purchases. If housing is too expensive in a market like this, renting is a fine alternative.[/quote]

Options are always better than no options. While some may argue that SAHPs are not necessary, others can just as effectively argue the opposite. Elizabeth Warren was pointing out the fact that we no longer have the same options as we once did, and if you read “The Two Income Trap…” by Ms. Warren, you’ll better understand why two incomes have actually harmed us far more than they’ve helped, financially speaking.

Obviously, a woman’s ability to leave an abusive husband is a benefit of women entering the workforce, but, because so many families are dual-income, she is more likely to end up having less purchasing power and is more likely end up in poverty than a single/divorced woman in the 1960s or 1970s who held the same job.

BTW, Warren is not just talking about “housing prices around here,” she’s talking about housing costs, in general — that includes renting, even “over there.”

[briansd1]

I believe that sdreator brought up some good points.

If people were happy to live in simply ulitarian 1500sf houses, they would have more money to spend on other things. Housing be be cheaper also.

But people want to live ornate houses, with community amenities and HOA. But the want to replace their cars and durables more frequently.

Since clothing, electronics, food now represent a smaller portion of income than in the past, then more could go to savings. But in general, we go out to eat more and we get fat and stressed out. People get stressed out keeping up with their peers.

As dave pointed out, the paradox of thrift would result lower economic growth.

[briansd1]

I believe that sdreator brought up some good points.

If people were happy to live in simply ulitarian 1500sf houses, they would have more money to spend on other things. Housing be be cheaper also.

But people want to live ornate houses, with community amenities and HOA. But the want to replace their cars and durables more frequently.

Since clothing, electronics, food now represent a smaller portion of income than in the past, then more could go to savings. But in general, we go out to eat more and we get fat and stressed out. People get stressed out keeping up with their peers.

As dave pointed out, the paradox of thrift would result lower economic growth.

[briansd1]

I believe that sdreator brought up some good points.

If people were happy to live in simply ulitarian 1500sf houses, they would have more money to spend on other things. Housing be be cheaper also.

But people want to live ornate houses, with community amenities and HOA. But the want to replace their cars and durables more frequently.

Since clothing, electronics, food now represent a smaller portion of income than in the past, then more could go to savings. But in general, we go out to eat more and we get fat and stressed out. People get stressed out keeping up with their peers.

As dave pointed out, the paradox of thrift would result lower economic growth.

[briansd1]

I believe that sdreator brought up some good points.

If people were happy to live in simply ulitarian 1500sf houses, they would have more money to spend on other things. Housing be be cheaper also.

But people want to live ornate houses, with community amenities and HOA. But the want to replace their cars and durables more frequently.

Since clothing, electronics, food now represent a smaller portion of income than in the past, then more could go to savings. But in general, we go out to eat more and we get fat and stressed out. People get stressed out keeping up with their peers.

As dave pointed out, the paradox of thrift would result lower economic growth.

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