[frankthetank]

Doomed

$this->bbcode_second_pass_quote('', 'P')ersonal incomes increased 0.3% in July, while spending soared ahead by 1%. As a result, the personal savings rate tumbled to negative 0.6%, the lowest since monthly records began in 1959. Read the full report.

Quarterly data show negative savings rates for several quarters during the Great Depression. The savings rate was negative 0.2% in October 2001 and was 0% in June.

[newdamage]

I saw this same article on CNNMoney. It's mind boggling, are people really in that bad a shape financially? I make a little above average for the US home and I manage to save about 40% of what I make. Granted I also have a budget that I follow, and I don't bother with things like Cable TV, designer clothes, and other "necessities".

[ozkrenske]

Newdamage,
<Humour>

You commie traitor you, It's people like you who stop the economy from accelerating. It is your responsibility man to go out their and spend spend spend the country to a glorious future.

</humour>
Damn good thing I am in Oz. By the way I do as you do. Live modest, act generously, enjoy life.


Edit added humour tags

[falser]

It absolutely is mind boggling that is so widespread. What I can't figure out is, if they are in the negative RIGHT NOW on a monthly basis, then at some point in the future they expect to be in the positive for a very long time to pay off their debt. The thing is, this is about as good as the economy will ever be for the next 10 years. We are careeing toward a massive recession and if people can't save money in this environment, then they have no hope of doing so in the future.

And I don't need to see government numbers to know it's bad. Absolutely none of my peers have any savings to speak of. The ones who own homes put every spare dollar into new furniture or a new car. None of them have been out of work for any real length of time and expect things to always bee good like is now. I keep trying to explain how deep a hole they're digging and it just rolls off their shoulder - "oh if I lose my job I'll just sell it", or "but I financed it for only $60 a month", and my new favorite is "my old cell phone works fine, but I want one with a camera". WTF?

[Snowrunner]

$this->bbcode_second_pass_quote('falser', 'A')nd I don't need to see government numbers to know it's bad. Absolutely none of my peers have any savings to speak of. The ones who own homes put every spare dollar into new furniture or a new car. None of them have been out of work for any real length of time and expect things to always bee good like is now. I keep trying to explain how deep a hole they're digging and it just rolls off their shoulder - "oh if I lose my job I'll just sell it", or "but I financed it for only $60 a month", and my new favorite is "my old cell phone works fine, but I want one with a camera". WTF?

[spudbuddy]

wow do I feel old-fashioned.
archaic, even.

Used to be that a house was a family home. Somewhere you'd stay put for a long time.
Now they seem to have become something as disposable as a BIC lighter.

I can see what's changed, and I think I know why it has changed.
A house is an ATM machine.

I wonder...does a negative savings factor mean that what America owns collectively (assets, real estate equity) doesn't add up to as much as it owes?
Amazing.
Appears that America can't afford itself anymore.
Considering that most of the wealth that could have bailed it out now sits offshore somewhere...

Will the old homestead (whatever it is, wherever it is) go the way of the family farm?

[rogerhb]

We must be living like the 1930s, one income earner, small house, country town, mortgage to be complete in five years max. Feels good to know we'll be out of the woods soon.

Then we'll enter the dark forest of the unknown.

[rogerhb]

What would be great is a table for each country showing the national debt against tax-paying population.

Then we can see who is liable for the big underwritings.

Incase you don't know us tax-payers are like "Lloyds Names" for the Government Debt.

[ubercrap]

$this->bbcode_second_pass_quote('rogerhb', 'W')e must be living like the 1930s, one income earner, small house, country town, mortgage to be complete in five years max. Feels good to know we'll be out of the woods soon.

Then we'll enter the dark forest of the unknown.

[rogerhb]

$this->bbcode_second_pass_quote('ubercrap', 'T')his keeps me indebted to the same degree relative to my income as the person in Atlanta. What they really mean is that the standard of living where I live is lower. Were I to try to live like the employees in suburban Atlanta, I would find that my similar living standard here would start to approach the same cost.

[Ludi]

I work very little and make a relatively small amount of money, but my household always pays our credit bills in full each month, our only debt is our mortgage which we recently paid down by about 30% and refinanced for a much lower rate. We don't save much in $$ but instead invest in our land, tools, and our home businesses. I think it is the drive to "keep up with the Joneses" that gets people in so much trouble in our economy, I can't think what else would cause people to buy new things when they can't afford them. I've always been frugal but I come from a very unfrugal family that's been close to bankruptcy a couple times. I vowed I would never be like them!

[rogerhb]

Yes it's time to dig out the Charles Dickens books again. If you can ignore the silly character names the stories are very well written and gritty. I liked the idea of the family that lived in a boat on the seashore (er, Nicholas Nickleby). I think the modern equivalent will be the family living in the SUV.

[FireJack]

I have been making very little money lately but I have saved up over $4000 so far. How, living with my parents and biking to work. I have been paying $40 a week for groceries and helping around the house. My main source of entertainment is my computer (im a loner) so I live real cheap. I really hate living with my parents though, but I need to find a way to live on my own that would not be expensive or worse than living with my parents.

Just this morning for some reason I really feel its time to start that process. Time is really running short.

[rogerhb]

$this->bbcode_second_pass_quote('FireJack', 'I') need to find a way to live on my own that would not be expensive or worse than living with my parents

[spudbuddy]

If you can bike or walk to work, you're in great shape.
I'd say small cities and towns of various sizes have the best chance of weathering the storm.
A criss-cross of light-rail transit across a half dozen square miles is more workable than linking the dozen or more bedroom communities to each other and to an urban downtown. (across 750 square miles and counting.)

As far as fundamental lifestyle choices (like leaving home) well, imagine how silly you'll feel if that's a viable choice for the next decade or so? (or longer)

I would say it's a pretty good idea to consider how rooted (or rootless) you are in your community. People are going to have to co-operate, and pull together.
Every man for himself will go over like a lead balloon. (or a housing bubble.)

I can dream too. I'd love to see Congress one day kick some corporate butt. Pay up (taxes) or ship out. Who needs ya? (except a few shareholders.) Another 10% or so would sure pay for a lot of changes to the general infrastructure, transportation choices in particular.
There is a lot of wealth kicking around paying for nothing but party favors.

As far as not cashing in on the housing bubble...which would you rather?
Live in something that you can keep on affording, or something that loses half its value or more?
Houses aren't just ATM machines or commodity futures....they're homes where people live, raise families, and establish themselves within a community.

As far as the 30's....we're all looking at it from this side.
It was entirely a money thing, not an energy thing.
(ironically...as someone posted here said...in the 30's people could afford gas, not food.)
We have resources now unimagined then.
Most of us have parents or grandparents who lived through it.
Last time I checked, I don't recall hearing stories about Mad Max scenarios. In some ways, socially...it was a very stable time.

On the surface, it looks like we'd do a very poor job handling something like that again.
But I wonder....
The surface after all, is nothing more than media-fed pop culture.
That stuff can dry up and blow away in short order.

From where I'm looking at it...there are many things about the modern world I fundamentally disagree with. I never accepted the changes, never thought they were a good idea in the first place, so I wouldn't mind in the least seeing us as a society, tackle the system we've set up, and change it. Doesn't have to be a change for the worse.
Corporatists may have an all or nothing mentality. I don't.