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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?

#61

Post by Mz »

maxerickson wrote: post #48
Mz wrote: post #2

1) Peak Oil 2) Our so called "health care" system is extremely fubarred. There's probably more, but those strike me as the big two. Edit: To elaborate a bit on point 1, Peak Oil is not the end of oil. It is the end of cheap oil. The current U.S. economy and (expected) lifestyle was developed in the era of cheap oil. That era is ending, which is likely part of what is fueling the depression. Our current infrastructure…

Energy spending as percentage of income has gone down. Also, the inflation adjusted price of gasoline hasn't really changed in a brutal manner: http://www.randomuseless.info/gasprice/gasprice.html It's twice as high as the 'typical' trend, but vehicles make better enough mileage to eat most of that. Edit: and if you drill into it, the shipping cost of the food at the grocery store is probably less than the gas cost o…

Please support your first statement. Because the link you give does not fit with your assertion. It shows price compared to 1979, once of the worst years in the U.S. for the price of gas. The chart shows a steady climb in recent years to a point where it now matches or exceeds the inflation adjusted price of 1979 -- again, one of the worst years for gas prices in the U.S.

http://en.wikipedia.org/wiki/1979_energy_crisis

Further, the theory of Peak Oil is rooted in actual history. After the Alaska oil pipline came online, oil prices steadily went down for a time. It came online in 1977 and the reduction was in the 1980's: http://www.api.org/oil-and-natural-gas-overview/exploration-...

So please explain to me how a chart showing that current prices are, in real terms, as bad as or worse than 1979 prices supports your first statement.

Thank you.

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

#62

Post by eqdw »

tedsanders wrote: post #12

I'm not sure if I agree that your grandparents were under less pressure in their jobs. Overall, I think life is far easier today than it was 50 years ago, at least for most workers. It sounds like you're doing better than 99% of people. Six figure income, no huge expenses. I think the question isn't 'what's the problem with the economy' - really the question should be 'what's the problem with our expectations?' I thi…

> Life is far easier today than it was 50 years ago, at least for most workers.

Whenever I find myself following the line of thinking that OP put forward, I try and remember: I'm the first generation in my family to be able to rely on the fact that any place I'm in (read: my car and my personal residence) has air conditioning

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

#63

Post by grecy »

kevingadd wrote: post #49
grecy wrote: post #47

Earlier quoted context omitted.

> Are you suggesting that he stop spending a single cent on discretionary things and just live on rice and beans? Of course not, don't be ridiculous. Stop being so black-and-white (as my friends always say to Engineer me) I'm suggesting he take a close look at how much he's spending on what , and if those things are actually making him happy. He needs Cut out or reduce spending on things that are not actually improvi…

He never said he's spending more than he's making, or that he's failing to save money. He asked about why things aren't better than they are, and whether things are that way for everyone else. Telling him to cut costs is absolutely absurd. He didn't ask for advice and he didn't say his costs are extreme.

> 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.

> Telling him to cut costs is absolutely absurd. He didn't ask for advice

Obviously you're welcome to your opinion and me mine. If you don't like my advice you can always down vote it. Cutting costs is actually extremely sound advice for someone that doesn't feel financially "well off" or stable. He admits elsewhere in the thread "I feel like the goalposts keep moving".

> He didn't say his costs are extreme

Nobody that's not entirely satisfied money-wise thinks their expenses are extreme. That's the whole point.

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

#64

Post by tedsanders »

benched wrote: post #39
tedsanders wrote: post #12

I'm not sure if I agree that your grandparents were under less pressure in their jobs. Overall, I think life is far easier today than it was 50 years ago, at least for most workers. It sounds like you're doing better than 99% of people. Six figure income, no huge expenses. I think the question isn't 'what's the problem with the economy' - really the question should be 'what's the problem with our expectations?' I thi…

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…

Thanks for your reply.

Maybe it has to do with WWII. After WWII, the US was the only great economic power left undamaged. Our industries supplied the world, and they boomed. That wealth trickled down to many people in the US. Now, decades after WWII, other countries around the world have developed their own industry, driving down global prices and wages. As a result, perhaps the average global worker is better off, but the average US worker is worse off. This may partly explain why median wages have been stagnant in the US since 1974ish.

I wonder how much of comfort is attitude or perspective. I also happen to be a single man living in a high-rent city (Palo Alto). My income is about $30,000. Rent is my largest expense by far, but overall I feel quite comfortable. I manage to contribute $5k each January to my Roth IRA. No doubt if I had children or medical expenses, my $30,000 income would be strained, but right now I feel relatively comfortable on it. My needs are met.

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

#65

Post by sliverstorm »

kevingadd wrote: post #34
MisterBastahrd wrote: post #16

What'd your great grandparents do for entertainment? Probably the radio, some TV, read some books, play cards. Speaking of TV, how'd they get it? Most likely over the air. Phone? Yeah, they had a land line, but they weren't dropping $100+ for a cell phone. Internet? Of course not. House? Probably about 1200 square feet or so, and they likely had more than 3 kids to occupy it. The rest of the world? A recovering war-t…

I think if you list cell phones and the internet before you list housing, your sense of scale is completely off. Even if somebody's spending $200/mo on telephone and internet connectivity, that still pales in comparison to the cost of rent in pretty much any part of the country. A fairly small studio apartment in the area where I live is approaching $2000/mo, minimum - to pay less than that I'd probably have to move…

Your local rental costs are whack, and not representative of most of the country.

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

#66

Post by humanrebar »

bargl wrote: post #27
grecy wrote: post #18

As Beached says [1], this is all about your attitude, and how you're choosing to live in the world. Remember, you live in the consumption capital of the world. More than ever, you're being bombarded from all sides at all times with ingenious advertising designed for the sole purpose of separating you from your money. Even your friends, family and colleagues are constantly encouraging you to spend more and more, even…

@grecy, do you follow Mr. Money Mustache? He is all about cutting costs in ways I'd have never thought of. His goal was to retire early, but it could be anything. This requires quite a bit of "badassitude" as he would say. http://www.mrmoneymustache.com/ I'd also agree that taking some time off is very helpful. I took 1 year off to do some volunteering. It taught me to live a simpler life and respect for the dollar (…

I like frugality, but rushing to live on a fixed income seems like a big mistake. People on fixed incomes are especially sensitive to externalities such as assuming their investment returns will outpace increases in prices and taxes.

For example, if increasing capital gains taxes or introducing a consumption tax become popular, people living frugally on modest investment incomes will be hard-hit. Considering that someone in his thirties could easily live another 50 years, it's hard to adjust retirement savings goals to match that sort of risk.

On top of that, careers are the biggest investments of most people. The idea of abandoning that investment and assuming the risks of a fixed income lifestyle seems half-baked to me.

Anyway, that being said, I like his attitude and tips on spending, at least when he isn't spending inordinate amounts of time on something to save a few bucks.

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

#67

Post by mikeyouse »

RealGeek wrote: post #52

I recently moved to US (from India) and I was shocked to see how the "free market" economy is structured to bankrupt the middle class and poor. Indians have far less income than Americans but are somehow able to save more. Here are some basic problems I see with economy: 1) Rent: When people are paying half their paycheck to rent a studio apartment, there is something seriously wrong. The monthly rent in most areas i…

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.

3) Find a credit union, no fees, no shenanigans.

4) Call around and get a deal, my phone plan is $65/month and my cable (25mb internet + digital 'starter' TV) is $65/month

5) Agreed.

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

#68

Post by kevingadd »

giantrobothead wrote: post #35
BlackDeath3 wrote: post #24

Earlier quoted context omitted.

How is that? Again, I don't really mean to press you too far with the questions, I'm just a young guy who hears $110,000 and thinks "gee, that's a lot of money".

Hey, I'm an old(er) guy and I think 110K is a lot of money.

It totally is a lot of money. Unfortunately, everything seems to cost a lot of money these days...

Ten years ago I wouldn't have believed you if you told me I'd be spending nearly $10k a year just to get adequate health care, or over $20k a year just to have a reasonable place to live. I was thrilled when my first salaried job paid $35k/year, and couldn't understand why that barely covered my expenses! $35000 is a lot of money! $110000 is a truckload!

(Thankfully, I'm in the OP's position this year, and I earned more than I spent on essential expenses... not so much last year, though.)

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

#69

Post by brianpgordon »

humanrebar wrote: post #26
gavanwoolery wrote: post #8

Well, things have changed since our grandparent's generation. A college degree used to be a guaranteed ticket to a decent job, and even many blue collar jobs were much better paying and less abusive. Now being 30 years old and living with your parents is not that odd. Now, debt, unemployment and inflation are soaring (if you want to see how bad it really is, visit cities like Detroit or the non-wealthy areas of Chica…

Defense is a decent-sized portion of government spending, but entitlement spending (especially when you consider state budgets) is much larger. If you would like to see the government spend money more wisely, focusing on making entitlement costs tractable should be the top priority. That's not to say that government contracting isn't grossly dysfunctional.

The difference is that defense is an unnecessarily expense. There is no credible military threat to the United States in the world right now. We would be just as safe if we stopped maintaining such a gigantic standing army and stopped interfering in overseas conflicts.

In contrast, spending for healthcare, education, and welfare measurably makes Americans' lives better. Cutting funding for these programs looks attractive for those who don't use them anyway (the rich), but would ultimately widen the class divide and be harmful to the country.

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

#70

Post by kevingadd »

sliverstorm wrote: post #65
kevingadd wrote: post #34

Earlier quoted context omitted.

I think if you list cell phones and the internet before you list housing, your sense of scale is completely off. Even if somebody's spending $200/mo on telephone and internet connectivity, that still pales in comparison to the cost of rent in pretty much any part of the country. A fairly small studio apartment in the area where I live is approaching $2000/mo, minimum - to pay less than that I'd probably have to move…

Your local rental costs are whack, and not representative of most of the country.

They don't need to be representative of the entire US. We know where he lives, and I know what the layout of that area is like. If his job is in Seattle he doesn't have access to many low-rent housing options and the same is true for many other people in that area.
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