Why don't Americans save?

Discussion in 'Economics' started by Debaser82, Dec 28, 2008.

  1. mogar

    mogar

    SandyBestDog, I did not have a change of heart. I did post the following in response to the central question of why Americans do not save.


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    When I was a teenager back in the late 60 early 70’s a welder at any old shop could own and pay for a house, have a wife and kids and he could make it. Also I was earning about 6 to 7% on a savings account.

    Today you need two good paychecks to make it. Savings accounts pay less then 1% today. It is no surprise to me that people don’t save because it’s a suckers bet today. You don’t get paid any thing if you do it. You are probably better off just sticking it in a safe somewhere then putting it in a savings instrument; at least you will get your money back. The inflation figures reported by the government don’t even pass the laugh test. They only apply to you if you live in an abandoned auto in a Kmart parking lot and you are on food stamps.

    So if you save it and can manage to make say 3% real inflation will eat more then that and to add insult to injury the IRS will tax you on it.

    Is it really any surprise that we don’t save when the entire system is geared to push people to burrow? The purchasing power of the currency is always going down. The rates paid to savers have all but vanished. I have savings but I view any dollars I have as a wasting asset and I am always on the lookout for hard assets to convert my savings out of the little green coupons.
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    However that does not mean that I can just hope and pray that things change and become more favorable for me. I have to work inside the reality I find myself in so I posted the following as I looked at more and more of your postings.
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    Sandy, I have been following this thread for some time and the only common theme I can determine with regards to your position is that you want the world to fair. Hard fact is Sandy the world is not, I repeat, not fair. It does not even know you exist. It’s nothing personal on its part it just does not care that you or I or any of the other people on this thread exist. Regardless of what you think would be a better system, a more fair system, is irrelevant to the fact that you don’t live in that fantasy, you live in this reality.

    It has always been my belief that a person’s happiness is directly correlated to how close his/her perceived reality is to objective reality. When these two diverge reality usually rears its head and slaps you up the side of your head. It’s natures way of telling us “Don’t do that it’s not going to work!” .

    You believe that your system would be better on many levels, I get that. Your moaning about the system which is here and now is time and energy wasted. There are whole lists of things that are wrong with this system. At the top of my list is the fiat monetary policy. I can bitch and moan all I like about it but I must find a way to deal with it, mostly protect myself from it by using it to my advantage.

    Deal with reality or reality will deal with you.

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    The problem you are dealing with is a messed up monetary policy, which is what is ultimately at the heart of the problem. You are not going to change that with some new cool business model where workers get more of this or that. I think first you have to acknowledge what the market wants from you as an employee and before you go investing a lot of time and money determine if you will recoup the cost and come out ahead.

    I started out as a chemist, had a degree that I sent myself thru college to get. I worked at that field for 15 years. It was not till I had been in the field for 10 years before I put some room between me and the tax monster that eats away at every raise you get. After 15 years I was let go because of a reduction in force after a merger. I got 4000.00 in a lump sum from my retirement. Being nowhere near retirement I went into computers after I completed a 6 month crash course which gave me the skills to get my foot in the door. I took a 25 % cut in pay took about 5 years to get back to the income I had been making.
    After a while I went into consulting because if there was one thing I had learned there is no security anywhere including a salaried position at a company. After 18 years I am in my mid 50’s and in between contracts, the economy is in the toilet, and contracts will be few and far between. I am not the least bit afraid of this situation because as long as I keep my eye on what is actually going on (reality) I’m going to come thru it some damn way.

    The point I am trying to make here is yea I know it’s hard out there. It’s been hard at other time too. The issues you are dealing with have been here for almost 40 years they are just becoming more acute which is the nature of the beast.

    I think in one of your posts I saw you were interested in programming. There is something you should consider however, all these jobs can be done overseas cheaper.
    One of the reasons I am moving on to something else.
    If I were a young man today I would go into the trades, a skill like carpentry or plaster work can never be taken away or off shored and will always have a market. You also have the chance to have your own business when working in the trades.

    I apologize if I offended with the bar people post but some of your posts suggest someone who is hopelessly dreaming. Bars are where I met most of the dreamers, that’s where I left them too. I bet they are still there. I wish you all the best and good luck.
     
    #141     Jan 8, 2009
  2. Skilled trades are definitely the way to go IMO. I just turned 24 and have a BS in Construction Management. However, I started out working as a helper for a mechanical (HVAC) contractor and moved up from there.

    You mentioned that many construction jobs in your area are filled by illegals. Perhaps you are looking into the wrong trade. HVAC, electrical, or plumbing requires a brain. Most illegals don't have the skills necessary to become licensed or attend a trade school/community college. Many of them stick to drywall, roofing, or painting.

    There are simply too many kids in college seeking a high paying desk job in front of a computer. Those days are over as the job market is saturated with them. They don't want to do any heavy lifting so they opt for something easy. This obviously raises the pay-scale and demand for skilled labor and diminishes the value of a BBA. With parents constantly pressuring their kids to go to college, I don't expect this to change anytime soon. College is the new high school.

    If you do want to get into programming, I suggest you get into the network security or computer forensics side. Those jobs obviously can't be outsourced for security reasons. There are plenty of fully (regionally) accredited online colleges and universities that offer this type of degree.
     
    #142     Jan 8, 2009
  3. This is exactly what I’ve been doing and saying that I’ve done, you just don’t want to hear it. I chose to start other non restaurant business’s instead. Unfortunately they didn’t work out. That’s the way it goes. You don’t think doing this day in and day out 60+ hours a week is paying your dues? I’m on my 3rd car doing this. Just because someone doesn’t succeed in doing something, doesn’t mean they didn’t work their butt off trying to get something. Failure happens, fine I’ll move on and keep trying until I get somewhere.

    I would say that at a bare minimum a restaurant requires at least 100k to start. An oven alone costs 40k. Not to mention you actually have to have a good product to sell. Financing will be required.
    I think there are some opportunities to advance in a corporate restaurant system. But most of them are selling out to the franchises. They don’t want to be in the management business anymore. They just keep the name going and come up with the new products and marketing and collect a percentage of the sales from the franchises.
     
    #143     Jan 9, 2009
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    #144     Jan 9, 2009
  5. Thank you for this. You are right, it is our monetary policy that is messed up. I contend that the creation of the Federal Reserve and Nixon taking us off of the gold standard is the single greatest theft in human history. There is little I can do about this, so of course the only way to hedge and profit against is by buying assets. But the only way to do that is to make a lot more than I spend, which is obviously not what I’m doing now. So I need to fix this.

    It certainly seems you worked hard in your life. My dad was a carpenter for about 25 years. About 10 years ago he went back to school and now works in computers, but still keeps his work van and does some side jobs in his spare time. He has great clients and does good work. When he made the transition, he asked my brother and I if we had any desire to take over the business (we were in high school), which we resoundingly said no. We don’t have any problem with hard work, that just didn’t seem to interest us. We saw how it dragged on him for so many years and now how he loves his new job. But he was paid on just the work he did. There was little opportunity to ever expand the business. I want something that can be expanded on.

    And I don’t know what bars are like, I don’t drink and have never seen what good could about from going to a bar. I don’t need to drink my problems away, just fix them.
     
    #145     Jan 9, 2009
  6. Isn’t it sad now that we now have to decide on a career not by what we like or may be good at, but what jobs can’t be outsourced? That’s really sad. Pizza delivery can’t be outsourced! I think you underestimate a little what illegals can do. Also it’s not just illegals that tighten the job market, but most immigrants. I’m not against legal immigration and I don’t want to get into a discussion about that, but it hurts the workers already here when new people come here and do what they’re doing for less. Insourcing immigrants to do jobs for less is not a free market, that’s manipulating the market. So we’re just going to have to work harder to get ahead and learn how to use the system.

    Also I don’t know about young people not wanting to do heavy lifting. Almost everybody under 30 I know all work in restaurants. Not pizza places, all kinds of restaurants. They do this because it’s the only way nowadays to get decent money anytime soon. Actually it has taught me that money is made not in hitting the jackpot, but in getting a few dollars from several people. The restaurants don’t end up paying them that much. They just get a few dollars from each customer. My brother was a realtor and we all know what happened there, now he is a bartender.
     
    #146     Jan 9, 2009
  7. karol88

    karol88


    sure, sad, but it's a vicious cycle: the immigrants take away your job, yet you're happy that some things or services cost less (walmart etc)....right?
    It's a trade off. Look at Europe:
    many countries still have little or no immigrants, China imports are limited to 10-15% of all imported goods, pretty much no outsourcing.
    what you get is:
    lower wages while the cost of many goods (electronics/clothes for example) and services is higher than here.
    The sad truth is that without the immigrants and outsourcing we wouldn't have the 'illusion of wealth' in the US (until recently at least)...illusion, because most of the junk we buy isn't worth much anyway.
     
    #147     Jan 9, 2009
  8. Ok I’ll admit I like Wal-Mart. If I want to buy something and don’t know where the cheapest place to go will be, I just go there. Usually the best place is eBay or Amazon, but somethings can’t be bought online. But are Wal-Mart’s prices low simply because they import so much from China and pay their employees crap? I’ve never seen an employment ad for Wal-Mart, which would seem to suggest that at least for now, their employees are satisfied.

    But we forget one thing. Sure Wal-Mart imports a lot from China, but why are their prices still the best on things that are made here? Most of the food and milk and prescriptions and things like that are made in the US. But Wal-Mart’s prices are still the best. I would venture to say that it’s because of their volume. They are able to negotiate the best prices because they sell so much. Also they are able to simply manufacture under their own brand.

    Also compare Wal-Mart’s wages to that of its competitors. Does the grocery store across the street that is more expensive pay their employees any more than Wal-Mart? I doubt it. I’ll give you an example. A few years ago in high school I worked at the local union grocery store. On Sundays we got time and a half. I just met someone the other day that worked there and they said they only get $1 more on Sundays now. Have their prices come down to reflect this? I doubt it. That chain of grocery stores still has many old timers from the good ole’ union days who get $20 an hour plus benefits and pensions to stock shelves. They are gradually being replaced by new younger workers under new union contracts, that won’t even be paid anywhere close to that even at today’s grossly devalued dollar. When the labor force is recycled like this, do you think they’ll drop their prices? I didn’t think so.

    On your other note, I think last year was a big wake up call. Is there anybody here that listens to Bob Brinker’s Money Talk? It’s on on the weekend’s and for the past 5 years I’ve had to listen to him talk about his brilliant “major buy recommendation on March 11th of 2003 and the unprecedented level of growth we’ve seen since then.” I got so sick of yelling at the radio that I don’t really listen anymore. The entire so called boom between 2002 and 2007, we’ve come to learn was completely fueled through, deficit spending, a weak dollar, inflation, oversea’s profits, a fake housing boom, increased commodity prices, and war spending. Also the unemployment rate doesn’t take into account all the people that are underemployed. So yes we have come to learn that our wealth is not really wealth at all.
     
    #148     Jan 10, 2009
  9. Sandy, Wal Mart doesn't advertise employment because there are enough unemployed to always apply to them. Look at the millions of labor infractions Wal Mart has been doing to figure out that their employees are in fact pretty unhappy.

    Also Costco actually pays more than minimum wage and many workers there are happier.

    Wal Mart isn't even that cheap, it's just marketing. They force you to buy $200 worth of stuff every time, you can't walk out of a Wal Mart with $20 worth of stuff. They always overprice some items. They also usually undercut their nearest store by just a few cents to give the illusion of being cheap. And of course they're killed many small businesses and support outsourcing as much as possible because of their presence. Also good luck trying to get a union going in a Wal Mart, they'll fire all of you. Don't ever shop there.
     
    #149     Jan 10, 2009
  10. clacy

    clacy

    sandybestdog,

    It's very obvious that you will find an excuse or reason to fail for all possible suggestions, so it's pretty pointless continuing this thread, in regards to you. Keep on doing what you're doing, as it sounds like you've got it figured out better than any of us.

    Best of luck.
     
    #150     Jan 10, 2009