You Are What You Spend

[rayofreason]

WITH markets swinging widely, the Federal Reserve slashing interest rates and the word “recession” on everybody’s lips, renewed attention is being given to the gap between the haves and have-nots in America. Most of this debate, however, is focused on the wrong measurement of financial well-being.

http://www.nytimes.com/2008/02/10/opinion/10cox.html?ex=1360299600&en=9ef4be7de32e4b53&ei=5090&partner=rssuserland&emc=rss&pagewanted=all

[nightrider767]

1. What sophistry

Seems like a load of bull to me. In the last ten years the rich got way richer and the poor got way poorer. Period.

How many ways can you slice that?

[Warpy]

5. The rich only got richer on paper

because when you look at real wealth, they've taken a real beating as the dollar has fallen in value.

The rest of us sure as hell got a lot poorer.

[katsy]

2. Right...

the poor have color tvs so all is well.

:sarcasm:



from the article:

" Globalization extends and deepens a capitalist system that has for generations been lifting American living standards — for high-income households, of course, but for low-income ones as well. "


See trickle down works - cellphones have trickled down. Teevees and washer/dryers and air conditioners have trickled down.

:sarcasm:

Not the opportunities to invest in the future - affordable education, healthcare, home ownership, savings. Nah - this free marketeer thinks the measure of wellbeing for the country is how cheaply toys can be bought.

Article makes for great toilet paper. <- - - - - - - - F L U S H

[jody]

3. We have always had some who look for a free lunch, whether wealthy or poor, and the working class

supports both extremes. :shrug:

[DaveJ]

4. Humans really aren't necessary given this equation

If wellbeing is measured by consumption, as long as the wheels keep turning, we could just be like mindless organisms inside a petri dish and their statistics would say everything is great.

I mean, I thought humans desired things like peace and freedom, but if it's all about consumption then screw all that.

[comtec]

6. If that case then I really am a €uropean

because I make and spend €uros for about 4 years now.

I think one thing that would HELP the economy is a law we have here, that ALL POSTED prices MUST be complete. That is, including tax!
Party I think is because sales tax is 20%! LOL

But I find it a lot easier to fork over exactly what the price is as opposed to having to calculate the sales tax of the day (as it tends to fluctuate with location and weather LOL).

Also the buying power of the €uro is very strong!
And by buying power (for the unenlightened) that means WHAT I can buy for ONE €uro.
For example milk is 70 cents per liter (quart) about. The price varies, as long-term boxed milk is 50 cents, and fresh is more.
bread, I can buy a nice loaf of German Bread (in Germany sometimes too!) for under 2 €uros. Thats a LARGE ROUND bread loaf from a baker.
tobacco is lower (of course, because 1 in 3 people smoke!) and alcohol is far more (nearly half price in Germany than Holland)

Before the €uro came along, The old guilder had as much buying power as a dollar , roughly, for basic things. guilder bread is now a €uro, and so on (the currency conversion has not been kind for Holland as everything has doubled in the last 5 years)

BUT the economy is strong BECAUSE there are tough, ENFORCED labor laws, and mandated, REGULATED insurance!

Sadly the health insurance is still by company, NOT government, but it's regulated, the government sets what they are allowed to charge, and that's UNDER 100e a month for decent insurance! The doctors, ironically, here are the stumbling block to getting stellar care, not the insurance companies (Calvinists anyone?)

[fasttense]

7. Boy Cox and Alm are idiots.

"The bottom fifth earned just $9,974, but spent nearly twice that — an average of $18,153 a year. How is that possible? A look at the far right-hand column of the consumption chart, labeled “financial flows,” shows why: those lower-income families have access to various sources of spending money that does’t fall under taxable income. These sources include portions of sales of property like homes and cars and securities that are not subject to capital gains taxes, insurance policies redeemed, or the drawing down of bank accounts."

So because the poor are able to eat their retirement savings, and anything left of value once they fall into poverty, then we should consider them rich? Just wait a few years their spending will catch up with their poverty. Eventually they move into cardboard boxes under the overpass and are no longer counted.

Don't Cox and Alm know that this eating away at savings, insurance policies and anything of value is what accounts for the NEGATIVE savings rate in America. The lowest rate since the Great Depression is something these two idiots who call themselves journalist think is a sign of wealth.

Talk about spin. So don't worry, if you lose your job and can only find a McJob or two to replace it. You too can eat up your retirement savings, sell your car, cash out your life insurance policy and clean out any investments you may have. You can live like a king while you eat up your family's future.

[Igel]

8. Nobody's saying to consider them rich.

That's hyperbole that forestalls any real conversation or discussion of the issue.

I'll take two examples. The first is my parents. They're retired. 80 years old. They have a 2600 sq ft house and each buy a new car very 5-7 years (I got my ma's old car in '02, a '92 Taurus with 35k miles on it, her new car has 5k miles on it). They have just about no taxable income, yet they tend to eat better than my family does, with taxable income pushing $60k. They retired with low pensions, get some social security, and have my father's lump-sum retirement (which put him in the top 1% of wage earners in '89). On the other hand, they don't buy hardly anything these days, the last trip they took was a two-week China cruise in '03 or '04 (before that, a similar trip each year).

They're eating up their retirement savings, but they're forced to: They're retired. That helps to account for the negative savings rate, and with more baby boomers retiring the savings rate is going to plummet (it'll be interesting to see what pulling all that money out of the stock and bond markets will do). That, coupled with a very low savings rate for people not yet retired would push the savings rate negative; I suspect that increased credit card debt helps, as did the big push for new mortgages. But those are questions that can be answered with fact.

The second example is an old roommate's mother. She was deep in poverty, her son made twice or three times her income. But her rent was heavily subsidized and she got some government support. He couldn't afford to not have a roommate, she preferred to have an apt. the same size as ours without a roommate. In addition, she got help from her church--not needed, but it helped a bit. She was dirt poor, but nowhere as poor as her gross taxable income would have indicated: Her taxable income figure was a poor guide to her actual economic state just as my parents' doesn't say much about their lifestyle.

This isn't true for many, but that there are such people is pretty much the point of the article. (Note that in calculating poverty rates in the US non-taxable income is excluded; in calculating poverty rates in many countries non-taxable income is included.)