Should I spend or should I save?
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#1 Mar 9, 2009
"The government wants you to spend, and spend now -- witness all the incentives Washington is dangling before prospective home and car buyers."
Spend with what? Consumerism is dead. You can only sustain an economy for so long with cheap items made in China sold at Walmart. After all the jobs leave our country, what can people buy without income?
#2 Mar 9, 2009
If the government wants us to spend so much then maybe they should give us the bailout money instead of feeding it to the zombie banks and zombie businesses.
Oprah was right. Give everyone $20,000.00. Screw the idea that some institutions are "too big" to fail.
#3 Mar 9, 2009
Must be a sure kill to say spend when folk don't even have the money to make ends meet. WTF.
#4 Mar 9, 2009
Wonder if that Daryl McGee made it safely out of the lehigh valley mall park'in lot. All kind of freaks out there.
#5 Mar 9, 2009
I am an economist and investment banker and I have been advocating this, but not at $20,000 per capita. I am advocating at $7,000 per individual tax filer and $14,000 joint tax filers.
As for question of should I spend or should I save? I advocated for all to save 30% of gross income, every year all years, and then you are never faced with problem of overconumption. This is essentially how east Asians have been able to survive downturns through, 70s, 80s, 90s, and this current downturn. Their recessions can continues such as Japan, but large parts of population were able to survive withou relying on government support because of aggregate savings and investment withdrawls.
Boils down to this:
1. If you trust government, you spend.
2. If you do not trust government, you save.
I do not trust this stimulus plan as written. I know Geithner is inadequate for the job. I see the such a basic understanding and grasp on international economics of Obama.
I like Obama. I am a Democrat, but I know they are way off course and doing too little, too late, and directing money to the wrong types of programs to make a difference for this depression.
#6 Mar 10, 2009
In the U.S., saving 30% of gross income is unnecessary and unrealistic. Of course, we still have to save enough and have a good reserve. But itís different with many Asian countries because many of them do not have a meaningful social safety net.
And it is consumption that keeps the global economy humming. The very US consumption helped fuel global prosperity. Now that the U.S. consumers have pulled back the world suffers. But it is the very evil U.S. consumers the world has produced all the goods and services for, and the world to lend and invest that encourages even more consumption. At the very least, the world should spend some of their savings so they could turn the table and lift their own economies out of recession.
If no one spends no one consumes then there is no work and reduced employment Ė simple demand and supply. Of course there is a balance. I advocate spending within your means and donít overextend. After all, we work to feed our family, give them a better life, and improve our standard of living. Why toil and turn around to live in misery constantly.
Incidentally, unless one lives off inheritance or at the top 5% of high income, typically tax alone takes 20~30%, roof over your head another 20~30%. If you want to save 30%, then youíve got to cut back on food, and donít ever think of rewarding yourself with that occasional ďliving it upĒ. Life would be so meaningless and miserable.
Obama is doing what he can. This is the time for the government to step in and take the place of Joe-six-pack and triggers consumption. There will never be perfection, but the stimulus plan is fine. We can all second guess and debate till the cows come home. Though Iím waiting to see what Geithner will do with banking. The republicans are playing politics and snubbing any plans from the administration. Unfortunately the bad mouthing created more anxiety and fueled more negativity in the masses.
Personally, I am OK. I donít have a mortgage to worry about and my house is not underwater. But I know this is not the time to dwell on those who made mistakes with their finances or helped create the mess. For that same reason, I donít even want to think how we ever allowed Bush and Greenspan to get us into this mess. Whatís done is done. Weíve got to put out the fire.
Bottom line is that weíre going through a rough patch now. I donít think we can afford to around to wait for the house to burn down then go pick up the bones. Support the government, believe and be positive.
#7 Mar 10, 2009
If people are smart, they will start to save. Since most people don't save and spend way outside their means, people really need to start accumulating savings.
#8 Mar 10, 2009
When your shoes have holes in the soles, buy a pair.
When your tires get to be worn smoothe, buy a pair.
When you need food, but it at the grocery store, bring it home and cook it.
(Where you won't get hepatitis from restaurant food and some pimple-faced Punk won't spit pee and blow snot into your food)
Save all the other money you can.
You WILL age, you WILL grow old and you WILL be happy you saved when you've arrive alive at 65.
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