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But at the same time an average person cannot afford to save any money! This assumption is stated and accepted around here uncritically but with zero supportin

by gbacon 8y ago

But at the same time an average person cannot afford to save any money! This assumption is stated and accepted around here uncritically but with zero supporting evidence. Four out of five Americans are not desperately hand-to-mouth poor as this figure suggests. Accepting the extraordinary 80% claim for the sake of argument, some of them must be in stable, full-time job situations — and some those have to be in two-income households — by law of large numbers. Having identified a segment of the 80% with at least decent incomes, that shatters a premise of the Reich piece. They can afford to save money but do not because consumption is too high relative to income. The balance goes on credit cards, home equity lines of credit, or other debt instruments. Of those who are living paycheck-to-paycheck with no emergency fund for contingencies, how many have written goals? How many are executing an intentional plan where they make and follow a budget each month? Those are important questions that go unasked.

danaris 8y ago
You seem to be operating on some unstated assumptions: one, that basic money management skills are just something that everyone should be expected to have, and two, that two stable full-time jobs make enough money for anyone to live comfortably on with those basic money management skills. First of all, I think it's worth noting that basic money management skills are no longer part of any curriculum with broad acceptance in America. They used to be taught in home economics classes, but those have been pared down to the bone in some places, outright eliminated in others. So expecting Americans to have basic money management skills at this point is, while not exactly unrealistic, at least not something that should be considered the obvious default. Secondly, there are plenty of places where a two-income household, with both earners making significantly above minimum wage, will still be just squeaking by, particularly in places with very high housing costs. That's not even taking into account other all-too-common situations, like large medical debts, or burdensome student loans. "But they should just move!" you cry. "They should have known better than to go to college!" you cry. (...I'm going to give you the benefit of the doubt that you wouldn't say they should know better than to get cancer or some similar costly illness, but Poe's Law applies here.) Moving, when you cannot easily save up money, is, at best, highly impractical. It costs mental energy that you probably lack if you are stressed from worrying about your poor financial situation, in addition to the time costs of finding someplace to move to that fits your needs better than where you are now, and the obvious financial costs of hiring movers and potentially putting a down payment on a house, depending on whether you're trying to buy or rent. College has been sold to every generation in America for some time now as not merely the way to better your situation, but to many as the only way to get a stable job—or even to be a worthwhile person, depending on your (parents') social circles. Just within the past decade or two has the country started to turn around and say, "But we're going to make you pay through the nose for it. For the rest of your life. So if you aren't already wealthy, you better not go for a degree that can't get you six figures within 5 years of graduation!" So...yeah, assumptions. They're a bitch, and they lead to an awful lot of the kind of moralistic labor-theory-of-value crap that keeps us in this terrible situation, instead of working together to find a way to make it better.
- gbacon 8y ago
  Yes, the labor theory of value is garbage economics, but I’m not sure how it fits into this particular discussion. Basic money management is not at all complicated. By the time someone completes fourth grade in a typical U.S. elementary school, she has mastered the necessary math for the subject. No, that person may not be able to explain exactly how municipal bonds work or how to compute an amortization table, but she will be able to lay out and follow a budget, with pencil and paper if necessary. “This month I expect to bring home this amount; food, housing, utilities, and transportation will cost so much; and that will leave this many dollars in expendable income.” Addition and subtraction is as complex as any of that gets. For people who want to learn more, Suze Orman, Clark Howard, Dave Ramsey, The Motley Fool, and Personal Finance Stack Exchange are just a few of many who produce affordable, accessible resources. We all have our respective circles of friends and acquaintances to learn from or at least to ask for pointers. This is not a high bar. Now, an entirely different question is whether people have learned to moderate their behavior around these basics. “I have so much money and want to buy this; can I afford it?” Prioritizing needs versus wants, setting goals, making a plan are also not heavyweight intellectual endeavors but do require a bit of discipline. Of course people do fall on hard times through no fault of their own. The disabled and mentally ill are examples or people who fall into bad health, either themselves or their children. (The American system of healthcare and particularly health insurance are terribly broken, but outside the scope of this thread.) Yes, these terrible situations do happen, but they are exceptions. Bad times, not necessarily this severe, will hit us all, so the smart course of action is to save up now for when the rainy day comes later. Living in a home that costs so much relative to one’s income that it leaves little in the way of disposable income or even to cover all necessities is known as house-poor. As with any other good, when it comes to housing, we all have to ask ourselves whether we can afford it. Yes, moving is stressful, uses mental energy, and costs money. I’m an instrument-rated pilot. An important part of the training is learning to guard against hazardous attitudes, one of which is resignation. Giving up and thinking ‘I guess I can’t do anything about it’ is dangerous in that it can kill you quickly in an airplane or in slow motion from the stress and anguish of living house-poor. They can do something about it, and their lives will be far better on the other side. Rent an apartment at first to allow cushion for saving money. I live in north Alabama, an area whose TV portrayals bigoted people sneer at. The median house price here is under $150k, and believe it or not we do have indoor plumbing! We’re on the same page about the bum deal many have been sold on college too. Just like everyone in college is not pre-med or pre-law material, not everyone in high school is college material. They are still human beings and therefore worthy of life, liberty, and the pursuit of happiness. The education establishment has done them a grave disservice by making vocational training out to be a last resort for the scum of the earth. People working the skilled trades make good money — in part because they are not competing with people who can walk in off the street and do the same job. Elsewhere you mentioned Home Ec being ground down to nothing, and it seems to be part of the same trend as with vocational training. No one should ever be forced into these programs because of someone’s backward ideas about certain people’s alleged place in society — that would be evil and wrong — but denying someone who’s mechanically inclined or who wants to be a homemaker the opportunity to be their very best at these worthy, honorable, necessary positions – again for the sake of mere political axe grinding — is likewise evil and wrong.

by gbacon 8y ago

danaris 8y ago

You seem to be operating on some unstated assumptions: one, that basic money management skills are just something that everyone should be expected to have, and two, that two stable full-time jobs make enough money for anyone to live comfortably on with those basic money management skills. First of all, I think it's worth noting that basic money management skills are no longer part of any curriculum with broad acceptance in America. They used to be taught in home economics classes, but those have been pared down to the bone in some places, outright eliminated in others. So expecting Americans to have basic money management skills at this point is, while not exactly unrealistic, at least not something that should be considered the obvious default. Secondly, there are plenty of places where a two-income household, with both earners making significantly above minimum wage, will still be just squeaking by, particularly in places with very high housing costs. That's not even taking into account other all-too-common situations, like large medical debts, or burdensome student loans. "But they should just move!" you cry. "They should have known better than to go to college!" you cry. (...I'm going to give you the benefit of the doubt that you wouldn't say they should know better than to get cancer or some similar costly illness, but Poe's Law applies here.) Moving, when you cannot easily save up money, is, at best, highly impractical. It costs mental energy that you probably lack if you are stressed from worrying about your poor financial situation, in addition to the time costs of finding someplace to move to that fits your needs better than where you are now, and the obvious financial costs of hiring movers and potentially putting a down payment on a house, depending on whether you're trying to buy or rent. College has been sold to every generation in America for some time now as not merely the way to better your situation, but to many as the only way to get a stable job—or even to be a worthwhile person, depending on your (parents') social circles. Just within the past decade or two has the country started to turn around and say, "But we're going to make you pay through the nose for it. For the rest of your life. So if you aren't already wealthy, you better not go for a degree that can't get you six figures within 5 years of graduation!" So...yeah, assumptions. They're a bitch, and they lead to an awful lot of the kind of moralistic labor-theory-of-value crap that keeps us in this terrible situation, instead of working together to find a way to make it better.

gbacon 8y ago
Yes, the labor theory of value is garbage economics, but I’m not sure how it fits into this particular discussion. Basic money management is not at all complicated. By the time someone completes fourth grade in a typical U.S. elementary school, she has mastered the necessary math for the subject. No, that person may not be able to explain exactly how municipal bonds work or how to compute an amortization table, but she will be able to lay out and follow a budget, with pencil and paper if necessary. “This month I expect to bring home this amount; food, housing, utilities, and transportation will cost so much; and that will leave this many dollars in expendable income.” Addition and subtraction is as complex as any of that gets. For people who want to learn more, Suze Orman, Clark Howard, Dave Ramsey, The Motley Fool, and Personal Finance Stack Exchange are just a few of many who produce affordable, accessible resources. We all have our respective circles of friends and acquaintances to learn from or at least to ask for pointers. This is not a high bar. Now, an entirely different question is whether people have learned to moderate their behavior around these basics. “I have so much money and want to buy this; can I afford it?” Prioritizing needs versus wants, setting goals, making a plan are also not heavyweight intellectual endeavors but do require a bit of discipline. Of course people do fall on hard times through no fault of their own. The disabled and mentally ill are examples or people who fall into bad health, either themselves or their children. (The American system of healthcare and particularly health insurance are terribly broken, but outside the scope of this thread.) Yes, these terrible situations do happen, but they are exceptions. Bad times, not necessarily this severe, will hit us all, so the smart course of action is to save up now for when the rainy day comes later. Living in a home that costs so much relative to one’s income that it leaves little in the way of disposable income or even to cover all necessities is known as house-poor. As with any other good, when it comes to housing, we all have to ask ourselves whether we can afford it. Yes, moving is stressful, uses mental energy, and costs money. I’m an instrument-rated pilot. An important part of the training is learning to guard against hazardous attitudes, one of which is resignation. Giving up and thinking ‘I guess I can’t do anything about it’ is dangerous in that it can kill you quickly in an airplane or in slow motion from the stress and anguish of living house-poor. They can do something about it, and their lives will be far better on the other side. Rent an apartment at first to allow cushion for saving money. I live in north Alabama, an area whose TV portrayals bigoted people sneer at. The median house price here is under $150k, and believe it or not we do have indoor plumbing! We’re on the same page about the bum deal many have been sold on college too. Just like everyone in college is not pre-med or pre-law material, not everyone in high school is college material. They are still human beings and therefore worthy of life, liberty, and the pursuit of happiness. The education establishment has done them a grave disservice by making vocational training out to be a last resort for the scum of the earth. People working the skilled trades make good money — in part because they are not competing with people who can walk in off the street and do the same job. Elsewhere you mentioned Home Ec being ground down to nothing, and it seems to be part of the same trend as with vocational training. No one should ever be forced into these programs because of someone’s backward ideas about certain people’s alleged place in society — that would be evil and wrong — but denying someone who’s mechanically inclined or who wants to be a homemaker the opportunity to be their very best at these worthy, honorable, necessary positions – again for the sake of mere political axe grinding — is likewise evil and wrong.