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Ask HN: What is really wrong with the US economy, really?

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Re: Ask HN: What is really wrong with the US economy, really?

#101

Post by maxerickson »

Mz wrote: post #95
maxerickson wrote: post #91

Earlier quoted context omitted.

I was sort of sloppily making two points. Gas prices are energy prices that 'we really feel', and they have only gone up some; qualitatively, gas is still cheap enough that (many) people drive around without thinking about it much. This shows residential energy as a percentage going down: http://www.eia.gov/todayinenergy/detail.cfm?id=10891 This shows gasoline roughly matching the other link: http://www.eia.gov/today…

Well, I have had two classes on Peak Oil and I really don't agree. To reiterate: The current U.S. economy/lifestyle is based on cheap oil. Cheap oil is gradually disappearing. It will only get worse from here. This is just the beginning. Since cheap oil is a foundation stone for our current culture, changes there will be felt wide and deep. But I guess this is the point at which we agree to disagree. Thank you for re…

Energy cost and availability are a real issue, it's just that if you look backwards, there isn't much of story about where we are right now.

(I would take this a step further and say that $4 is still cheap for gasoline; it isn't clear that the much higher fuel prices in Europe have been bad economically. And I'm someone who got to start driving in the '90s when prices fell below a dollar)

Re: Ask HN: What is really wrong with the US economy, really?

#102

Post by kevingadd »

sliverstorm wrote: post #96
kevingadd wrote: post #90

Earlier quoted context omitted.

I will agree that sharing larger accommodations (3br, 4br, etc) is a great way to cut costs, and that housing is much cheaper in other parts of the country. Will you still argue that housing + health care don't dwarf most other expenses? Cost of living is a sum of costs, not just the cost of rent or the cost of health care. That sum keeps going up. Also, for many people sharing a big apartment/house is simply not an…

Housing & health care are indeed the greatest costs, I'm just arguing that other costs are usually not so small in comparison that they can be waived in this discussion as negligible. If you rent a studio for $800 (as you could in this town), cutting your communication costs by $100-200 yield a moderate but real impact. I don't mean I live in the middle of nowhere and commute to the city, I mean it's a satellite town…

I guess my PoV is that saving $2k+ a year is nice, but not significant if that's still only ~2 months rent. It's better - much better than it being 1 month's rent - but to me, you have to focus on the expenses that are the biggest and are most likely to grow. You can definitely save a lot of money by chipping away at the tinier stuff, but if that's not growing, I'm not sure it buys you much.

I suppose from another point of view, it's better to start with the small things you have control over, and make some tiny but measurable improvements, so you don't despair at how big everything is. That's fair.

Re: Ask HN: What is really wrong with the US economy, really?

#103

Post by NTDF9 »

I personally think it is just "Expectation vs Reality".

The government is in extreme debt. Debts have to be paid back. The problem with debt is that it does not leave freedom to do constructive things (like upgrading infrastructure).

Also, what you are feeling is a pinch of inequality. Average and median wages have been stagnant despite record profits of corporations. Tax codes have been changed to favor investments rather than plain old hard work.

So, while our "expectations" have been to just work and earn a good life like our grandparents, the "reality" does not facilitate the same.

Also, you're living the life most people just dream of. You're richer than most others.

Re: Ask HN: What is really wrong with the US economy, really?

#104

Post by grecy »

kevingadd wrote: post #77
grecy wrote: post #63

Earlier quoted context omitted.

> He never said he's spending more than he's making, or that he's failing to save money. Which has nothing to do with anything. He doesn't feel financially well-off or stable, so obviously he's not happy with his earnings to savings ratio. > He asked about why things aren't better than they are And my perspective and advice is that things are better than he thinks they are, he just needs to adjust his attitude. > Tel…

He didn't complain about his wages, and he made it clear that he is not spending excessively. His lifestyle sounds fairly frugal by modern standards. He didn't even express discontent money-wise, as in 'I wish I made more money'. He's clearly expressing a general sense of uncertainty about why the economy is how it is, and why costs are how they are. Also, he asked about other people and you're saying he needs to adj…

> He made it clear that he is not spending excessively.

Of course he thinks that he as to. As others have pointed out, he's making $110k a year and not happy with how much he has, it's pretty likely he's spending too much, or he just has unrealistic expectations.

> His lifestyle sounds fairly frugal by modern standards

You mean modern standards that set the goal posts we should all own x,y,z ? If you didn't know already, those "modern standards" you refer to are the problem here.

> What does that do for everyone else? Do they all just need to adjust their attitudes and accept their lots in life?

Attitude and spending. And plenty more things too. Read the book I recommended.

> If those goalposts are essential (rent, health care, food)... what is he supposed to do?

If you're trying to say for one second that someone making $110k a year can't pay for those "essentials", you're not being productive here.

Let's go with the case of someone earning $30k who's can't afford those - which I think is a realistic scenario. In that case, then the only option is to adjust ones expectations and personal goal posts to fit reality. Hypothetically, if the economy completely dies tomorrow (a la Germany, USSR or Argentina every ~10 years) will you be horribly unhappy you can no longer own your own car and are forced to take public transport, and must downsize your house to a small apartment, etc. etc.?

If you are unhappy with that, then you're basing your happiness on external factors outside your control (the economy) and you're setting yourself up to be a very unhappy person.

Re: Ask HN: What is really wrong with the US economy, really?

#105

Post by lupinglade »

dangrossman wrote: post #83
mikeyouse wrote: post #67

Earlier quoted context omitted.

1) Those are false choices. If rent is $2,000/month, a mortgage would be far more than $1,500. Just an example, my rent is near $2k in SF, an equivalent sized unit on my block just sold for $700k. If you could put 20% down (just save $140,000!), a 30-year mortgage would be $3,500/month -- 75% more than renting. 2) Get a new healthcare plan through Healthcare.gov. The out-of-pocket maximum is $12,700 for a family plan…

> If rent is $2,000/month, a mortgage would be far more than that Typically, the rent is covering an existing mortgage + taxes + insurance + maintenance + profit. If the mortgage were higher than the rent, the building owner wouldn't be making any money renting it out.

And they aren't always making money. Its about investment.

Re: Ask HN: What is really wrong with the US economy, really?

#106

Post by bduerst »

Mz wrote: post #25
mikeash wrote: post #23

Where is all your money going? Living in a studio apartment making $110k, you should be able to save thousands of dollars a month. Sounds like a budgeting problem.

He says: "I live in a studio apartment near Seattle. ... My biggest expenses in the last couple years have been rent, medical, and dental in that order." Medical and dental can be really pricy. So can big city rents. Last I checked, an SRO in San Francisco was $1000/mo or more. Most areas, higher average income correlates quite closely to higher local living expenses. So I wouldn't be so quick to judge.

Location is everything.

SRO was $1250 for me in SF when I was slumming it a couple years ago. That's a shared bathroom and shower for the entire floor.

Re: Ask HN: What is really wrong with the US economy, really?

#107

Post by afterburner »

apsec112 wrote: post #43
afterburner wrote: post #36

The problem is the rich are getting richer, and the middle class is shrinking. Actual inflation-adjusted pay for most people hasn't risen in 30 years, while for the top of the top it's skyrocketed. Meanwhile, everything is more expensive, and unemployment is high thanks to the apparent political impossibility of introducing stimulus spending in a time of lowered demand and zero interest rate (cutting interest rates i…

"debilitating austerity measures" http://www.leftfootforward.org/images/2011/05/Government-spe... (United Kingdom) http://multiplier-effect.org/files/2012/10/Eurozone-Governme... (Continental Europe) Yup, that's some real bone-cutting austerity right there...

As % of GDP? Gee that mightn't be because the GDP and revenues plummeted would it? And aside from automatic raises in spending for social security, what do those graphs say about cuts in other areas? These are very misleading.

There's no actual debate on whether or not austerity measures were implemented. They were, and the governments of said countries brag about it, or are pressured into it. And suffer for it.

Re: Ask HN: What is really wrong with the US economy, really?

#109

Post by benched »

sliverstorm wrote: post #93
benched wrote: post #39

Earlier quoted context omitted.

Well, I can't really know my grandparents' state of mind. But my grandfather drove trucks locally, and my grandmother worked in a supermarket. Try to imagine affording a single family house and two cars with jobs like that today. They always seemed like they enjoyed their jobs. My grandfather kept working long after retirement age. I never heard them complain about their jobs or give any indication they didn't like t…

Think about where your grandfather & grandmother lived, and what the place was like when they lived there. Silicon Valley, for example, was pretty cheap before the tech booms. Speaking to people who moved there in the late 70's and early 80's, there were still orchards and fields everywhere. What I'm getting at is it's easy to get by on simple jobs like that when you live in Nowhere, WY. Then, later, when the town bo…

They lived in a small house 6 miles from downtown Boston, in a nice middle class residential neighborhood. I couldn't afford to buy that house now. This is the sort of thing that suggests to me a big picture issue.

Re: Ask HN: What is really wrong with the US economy, really?

#110

Post by badsock »

The IMF recently released a discussion note which makes the argument that inequality (which we have certainly seen an increasing amount of in the last several decades) can lead to economic stagnation (PDF, also sorry for the link shortener):

http://goo.gl/z264OE

What I find interesting is that the IMF used to be very committed to the austerity ideal, and this is in quite the opposite direction. It makes sense to me: most businesses lack customers with money (the 99%), not people with investment capital to spare (the 1%).

If this is true, then expanding progressive taxation might be the answer for economic growth right now. Not sure that idea would go over well in the current intellectual climate of the anglosphere :)

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