Update - 3/11/21 - America Rescue Plan Bill is signed!

[visionary]

 

[NoCalMike]

Going back to a point someone made on the previous page.  Our economy is now built on people spending, often times beyond their means.  Loans, credit cards, etc etc....those have been things supplementing actual incomes.  The purchasing power of the dollar has been decreasing.  For the tiny bit wages go up, expenses go up a lot more in the same time period. This has helped contribute greatly to the current situation where people are on the fringe after being out of work for a month.  A month.  Imagine when the next virus comes along that is actually killing folks regardless of how great (or not) our healthcare is and an even more drastic shutdown is suggested/implimented.

 

This covid19 situation feels more like a test run than anything else.  Not to imply anything nefarious behind it, just to point that if this is how our economy and government institutions are currently setup to handle this sort of thing, we need a much bigger overhaul than previously thought. 

 

 

[Supernatural24]

5 minutes ago, NoCalMike said:

we need a much bigger overhaul than previously thought. 

Bingo

The structures of the economy are not good at all.

[Springfield]

1 hour ago, twa said:

 

I don;t think they legally can, they can stop evictions(and many places have)

 

they have made money easier to borrow, and most will probably be open to negotiation if in good standing.

 

So... more debt?

 

I don’t think money is easier to borrow.  My wife and I just completed a HELOC.  It was more difficult than the refinance we did on our mortgage 2 months prior.

[twa]

22 minutes ago, Springfield said:

So... more debt?

 

I don’t think money is easier to borrow.

 

they are begging me to borrow, getting kinda annoying,

 

one day I'm gonna go wild and borrow to the limits and sell everything and then die on em. 😎

 

add

a extension on a mortgage or rent payment is not more debt, only the interest on it is.

I would imagine a HELOC soon after a refinance might make them cautious.

 

stay safe brother.

Edited April 17, 2020 by twa

[HOF44]

No stimulus for me,, Just the opposite I just transferred thousand to the IRS. 

[ShredSkins]

So student loans took my tax return. I filed after they eligiably put a stop to that. Looks like they are getting my stimulus check too. I'm making hazard pay so I'll be okay but still a bummer. Hopefully the company that owns my loans will use the money to help the economy. 

[PeterMP]

18 hours ago, No Excuses said:

 

Our economy for the most part is built on people spending beyond their means. Some people spend frivolously on cars. Others on electronics. Some on homes. Clothes etc, whatever. And this system works for the most part until there is a large scale financial collapse. There are very few people in this country whose jobs don’t rely on widespread consumer spending, that for the most part is financed by people taking on and living in debt.

 

We can argue the merits of such a system and most would agree that it shouldn’t be this way. But I also don’t see the point in dunking on people for consumer choices that in normal times sustain the jobs of millions of people. We’d probably be living in a shrinking economy if people truly started living within their means.

 

Yes, we would be living in a shrinking economy.  But isn't that an indication that we have a problem.  

 

If you don't do something about it now, then there's never a time to do something about it.  You can't say, "most would agree that it should be this way" and say this isn't a time to do anything about it.  If there's never a penalty for people living beyond their means (because when there is a crisis society/government steps into help them), then people will never stop doing it.

 

And maybe the penalty is that you have to sell your Hummer at a huge loss.

 

The idea that our economy (and society in general) needs an over haul, but we can never do anything to change it during an economic upheaval/collapse are contradictory.  An economic upheaval/collapse is the only time people are going to feel the pain enough to actually make the changes that need to be made.

 

(Then you have to find a way to sustain those changes when things improve.  That'll actually be the harder thing.)

Edited April 17, 2020 by PeterMP

[No Excuses]

14 minutes ago, PeterMP said:

 

Yes, we would be living in a shrinking economy.  But isn't that an indication that we have a problem.  

 

If you don't do something about it now, then there's never a time to do something about it.  You can't say, "most would agree that it should be this way" and say this isn't a time to do anything about it.  If there's never a penalty for people living beyond their means (because when there is a crisis society/government steps into help them), then people will never stop doing it.

 

And maybe the penalty is that you have to sell your Hummer at a huge loss.

 

The idea that our economy (and society in general) needs an over haul, but we can never do anything to change it during an economic upheaval/collapse are contradictory.  An economic upheaval/collapse is the only time people are going to feel the pain enough to actually make the changes that need to be made.

 

(Then you have to find a way to sustain those changes when things improve.  That'll actually be the harder thing.)

 

I don't disagree with you that change is necessary and I'm not saying that we shouldn't push for it. Consumer choices need to be re-evaluated in this country but I don't think shaming people for their behavior is really ever an effective strategy in changing habits (although all of us engage in public shaming to various extents, still doesn't change that its ineffective usually at changing minds).

 

Their has been wage stagnation in this country for decades at this point, while costs for essential and non-essential needs have all gone up disproportionately. The finger should be pointed at the economic system, backed by government policy (like dismantling labor unions that fought for better wages) and often government inaction (like not raising the minimum wage) that has for the most part, forced people to go into debt.

 

I mean we can say that since we are a democracy, people should have made better voting choices. But this is a country where in any given election, 50% of the eligible voters don't cast a vote, and a substantial majority of those who do cast votes are low-information voters. A better strategy than shaming is getting people to understand that voting has consequences and government policy is needed to fix the problems. Maybe the sudden of shock of record unemployment and bread lines will get people to think about why we are where we are and what role they have to play in this. Having people shame them for their past choices probably won't get the job done.

[PeterMP]

1 hour ago, No Excuses said:

 

I don't disagree with you that change is necessary and I'm not saying that we shouldn't push for it. Consumer choices need to be re-evaluated in this country but I don't think shaming people for their behavior is really ever an effective strategy in changing habits (although all of us engage in public shaming to various extents, still doesn't change that its ineffective usually at changing minds).

 

Their has been wage stagnation in this country for decades at this point, while costs for essential and non-essential needs have all gone up disproportionately. The finger should be pointed at the economic system, backed by government policy (like dismantling labor unions that fought for better wages) and often government inaction (like not raising the minimum wage) that has for the most part, forced people to go into debt.

 

I mean we can say that since we are a democracy, people should have made better voting choices. But this is a country where in any given election, 50% of the eligible voters don't cast a vote, and a substantial majority of those who do cast votes are low-information voters. A better strategy than shaming is getting people to understand that voting has consequences and government policy is needed to fix the problems. Maybe the sudden of shock of record unemployment and bread lines will get people to think about why we are where we are and what role they have to play in this. Having people shame them for their past choices probably won't get the job done.

 

Well, I'm generally not sure about shaming them, and my post didn't mention shaming them.   And neither did Mary's (her post was about getting people to reassess their priorities) and she's talked about people giving up their cars.  You mentioned dunking.  I guess maybe that's modern slang for shaming.  I wouldn't generally suggest standing outside of food pickups making fun of people driving fancy/expensive cars.  That probably wouldn't be very effective.

 

My post was directly related to making it so people change their behavior based on there being a penalty.  And yes, that penalty might be you have to sell your expensive car at a large loss and take/use other forms of transportation.  That's not shaming somebody.  That's making behavior have consequences.

 

There is an issue beyond people voting.  It goes to the financial decisions people make.  Inflation adjusted home prices before this happened were about back to where they were in 2006/7. 

 

http://infogram.com/1pmneqdzzlwwzqt391egdelvw1szzg9mdd2

 

We didn't really have much different voter turnout through the 1960s, 70s, and 80s, but people still seemed to have a sense of hey this is how much house I need (how big) and how much I can afford.  We just went through a crash in 2008, the graph I posted is public knowledge, but there still seems to be this disconnect between what people are willing to pay for a house and what is reasonable.  And a lot of those people are now going to be hurting and calling for help to pay their mortgages.  On a home that realistically by longer term historical norms, they should have never bought.

 

In 2008, there was a lot of help for people with their mortgages, for the "greater good" and that certainly helped us recover quickly.  But the problem didn't really get fixed.  And when things "recovered", people pretty went back to doing the same things (and the inflation adjusted prices of homes went back up quickly).

 

(And I'll point out in era where everybody knows that health care costs are going up to put a larger percent of your money to home makes less sense.)

 

(Though, I generally agree about labor unions and wages and more people voting based on their economic situations might improve the situation.  But if wages grow and home prices just grow that much more, you aren't really fixing the problem.  So I don't think that'll really fix the specific problem here.  What we need is people to look at situations and say, what do I need, what do I want, and what can I actually afford, including the possibility that there might be a significant economic down turn.  Now, maybe if enough people are doing that and then realizing they can't actually afford to buy a home, they'll worry about why and that might change their voting behavior/practices.  But to me, it seems you can't have the later without the first (people that can't afford homes might vote different).  Though I do think what you'd see happen in terms of homes is builders building small homes more a kin to homes built in the 1960s 70s, and 80s.). )

Edited April 17, 2020 by PeterMP

[ClaytoAli]

2 hours ago, ShredSkins said:

So student loans took my tax return. I filed after they eligiably put a stop to that. Looks like they are getting my stimulus check too. I'm making hazard pay so I'll be okay but still a bummer. Hopefully the company that owns my loans will use the money to help the economy. 

Sounds like you need to go to work for a 503C and apply for student loan forgiveness.

[TheGreatBuzz]

I think you can point to our education system and its failure for why people suck at how they spend or save/don't save their money.

[twa]

1 minute ago, TheGreatBuzz said:

I think you can point to our education system and its failure for why people suck at how they spend or save/don't save their money.

 

along with their parents.

[The Evil Genius]

5 minutes ago, TheGreatBuzz said:

I think you can point to our education system and its failure for why people suck at how they spend or save/don't save their money.

 

I'd point more towards their parents. I know I learned **** from mine (and that's not knocking them...just being real).

 

That said...i think home ec, shop, and financial planning type of courses would be beneficial again in secondary education. I didn't take them and wish I would have. 

Edited April 17, 2020 by The Evil Genius

[ClaytoAli]

6 minutes ago, The Evil Genius said:

 

I'd point more towards their parents. I know I learned **** from mine (and that's not knocking them...just being real).

 

That said...i think home ec, shop, and financial planning type of courses would be beneficial again in secondary education. I didn't take them and wish I would have. 

Financial literacy isn't taught in the public school system, but you can learn how to use a condom in health class.

[PeterMP]

11 minutes ago, TheGreatBuzz said:

I think you can point to our education system and its failure for why people suck at how they spend or save/don't save their money.

 

I don't think the education system has changed in terms of how we teach people to save/spend in the last 60 years. 

 

People aren't spending a larger percent of their income on things like homes because of a change in how the education system changed what it teaches about saving and spending.

 

Society and what people consider to be important is what has changed.  

[Larry]

27 minutes ago, TheGreatBuzz said:

I think you can point to our education system and its failure for why people suck at how they spend or save/don't save their money.

 

23 minutes ago, twa said:

 

along with their parents.

 

Just observing, at least in terms of mortgages and home prices, . . . 

 

That was absolutely the Gold Standard path to the Good Life for the Boomers (my parents):  

 

As soon as possible, buy the biggest house you can make the payments on.  (If you have to, get your parents to help with the down payment.)  

When you have to move, take the money you get from the appreciation of the house, and use it as the down payment for the biggest house the bank will approve you for.  

Repeat for 40 years.  

 

It was simply a Commandment that had come down on stone tablets.  When my parents were 70, complaining every few days about how pissed they were at the banks who held the two mortgages they were paying $2000/month interest on, it took me a year to convince them that the way to really screw those banks they hated would be to take some of the $2M they had in their checking accounts, and pay the mortgages off.  (You want to punish the bank that's making $2000/month interest off of you?  Pay them off.  What a concept.)  

 

[Dr. Do Itch Big]

26 minutes ago, PeterMP said:

 

I don't think the education system has changed in terms of how we teach people to save/spend in the last 60 years. 

 

People aren't spending a larger percent of their income on things like homes because of a change in how the education system changed what it teaches about saving and spending.

 

Society and what people consider to be important is what has changed.  

Not to mention the increased inflation in the cost of living compared to the raise in salaries. 

[PeterMP]

10 minutes ago, Dr. Do Itch Big said:

Not to mention the increased inflation in the cost of living compared to the raise in salaries. 

 

Inflation goes up because demand outstrips supply.  Demand outstrips supply because more people are buying more of it.  People are buying more of more (expensive) things because of changes in society and what we value.  The two are connected.

 

Inflation of home prices is going up because more people are willing to spend more money on a home.  If you increase wages and more people just put that extra money into homes, then home prices go up that much more.

 

(That's what we've seen in terms of household income (not exactly wages, but the same principles apply).  This is Elizabeth Warren's "two income trap".  When (more) families became two income families that should have created a lot of income flexibility for families, but in reality what happen is things like the price of homes went up.  Much of that income was eaten up by people buying bigger and more expensive homes.  But when the economy tightens or in general anything really goes bad, then you have 2 incomes that get hurt instead of 1 and there are big problems.)

Edited April 17, 2020 by PeterMP

[No Excuses]

1 hour ago, PeterMP said:

(Though, I generally agree about labor unions and wages and more people voting based on their economic situations might improve the situation.  But if wages grow and home prices just grow that much more, you aren't really fixing the problem.  So I don't think that'll really fix the specific problem here.  What we need is people to look at situations and say, what do I need, what do I want, and what can I actually afford, including the possibility that there might be a significant economic down turn.  Now, maybe if enough people are doing that and then realizing they can't actually afford to buy a home, they'll worry about why and that might change their voting behavior/practices.  But to me, it seems you can't have the later without the first (people that can't afford homes might vote different).  Though I do think what you'd see happen in terms of homes is builders building small homes more a kin to homes built in the 1960s 70s, and 80s.

 

This is a topic too complex to be hashed out on this medium, because many cultural and policy issues intersect here. It's not surprising that people spend themselves into debt on housing and transportation in America when the options and cultural values promoted to them continuously push them towards it. And government policy is heavily tilted towards promoting the idea of home ownership, where not being a home owner puts you at a significant disadvantage compared to people who are (on everything from safety to the quality of local public schools). And then we have an entire culture of bipartisan NIMBY'ism that protects the interests of existing home owners, which leads to policies that further increase housing prices.

 

If we had tenants rights laws like they do in some European countries, where home ownership doesn't put you at a significant advantage over your peers, I'm sure you'd see less people making the financially risky choice of investing in things they aren't financially stable enough to afford over the long run.

 

People typically aren't going to wait for policy change, when they are actively trying to get ahead and improve their lives in a market economy. And we see time and time again that millions of people are making risky choices to do this and bad government policy/risky bank behavior always has a role to play in driving it. There is a real chicken or the egg issue here, whether the fault is with the consumers or the with the institutions that promote and thrive on rampant consumerism and we will go in circles forever about who shares the burden of the blame.

 

Also, I think the poor person who buys a house they can't afford with a Hummer in the driveway isn't necessarily representative of the very real demographic that is people who are not poor but not financially stable enough to afford the American lifestyle that is pushed towards them from the moment they start earning a paycheck. People in food bank lines are probably in debt and can't survive an economic downturn even if they make the economically less risky choice of buying a used Toyota.

Edited April 17, 2020 by No Excuses

[techboy]

1 hour ago, ClaytoAli said:

Financial literacy isn't taught in the public school system, but you can learn how to use a condom in health class.

 

At least in the state of Virginia, there is a required Economics and Personal Finance class in order to graduate, and you can opt your children out of the various elements of sex education should you really wish to.

 

 

[PeterMP]

45 minutes ago, No Excuses said:

Also, I think the poor person who buys a house they can't afford with a Hummer in the driveway isn't necessarily representative of the very real demographic that is people who are not poor but not financially stable enough to afford the American lifestyle that is pushed towards them from the moment they start earning a paycheck. People in food bank lines are probably in debt and can't survive an economic downturn even if they make the economically less risky choice of buying a used Toyota.

 

I don't disagree much of what you're saying, but I think in this paragraph, especially, you under sell the problem.  The problem isn't just some poor people.  You don't see increases faster than inflation or wages for average and median home values because of some poor person that's over bought.  It is a general systematic issue that then affects the vast majority of Americans and therefore affects the possibility and probability of the vast majority of Americans ending up in food bank lines in the time of an economic downturn.

 

The vast majority of the evidence indicates the median American is living beyond their means as compared to previous decades and that does affect their savings and their ability to buy food during an economic down turn.  It isn't just some or a subset of poor people on the edges.

Edited April 17, 2020 by PeterMP

[EmirOfShmo]

So....about those loans to small businesses. I just talked to a friend of mine who owns a restaurant here in Richmond. He said he filed his paperwork within hours of the loans being offered & he's still waiting to hear if he's getting money. He said it's been approximately 2 weeks & no word. People he's talked to (not at the bank) have told him the holdup is at the SBA. For now, he's trying to drum up business, pay his employees & pay his bills. **** show. 

[No Excuses]

2 minutes ago, techboy said:

At least in the state of Virginia, there is a required Economics and Personal Finance class in order to graduate, and you can opt your children out of the various elements of sex education should you really wish to.

 

Is this new? Wasn't taught at FCPS when I graduated in the 2000s.

[GhostofSparta]

1 hour ago, ClaytoAli said:

Financial literacy isn't taught in the public school system, but you can learn how to use a condom in health class.

Or your parents could shove you into a 12th rate private school, and you don't learn either. It's fun!