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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?

#81

Post by grecy »

kevingadd wrote: post #54
grecy wrote: post #32

Earlier quoted context omitted.

> It honestly feels like the goalposts keep moving That's a really great quote and I'm happy to see the honesty. This gets to the heart of the matter. You're stuck playing "keep up with the Jones'", which by very definition you can not win. You need to define your own goalposts, then they won't move, and you can actually get there. What makes you happy? How do you want to spend your limited time on this earth? What d…

This is a fair point of view, and I kind of agree with it, but you overlook a very important question: Is he setting all the goalposts? If the 'goalposts' are 'live in a studio apartment, pay for health/dental care, have heat and light and hot water', and the costs of THAT keep going up, what is he supposed to do about that? Will he be happier and better off if he gets an inferior health plan to save money? Obviously…

> If the 'goalposts' are 'live in a studio apartment, pay for health/dental care, have heat and light and hot water', and the costs of THAT keep going up, what is he supposed to do about that?

That's a very good point. If the world changes under your feet and makes it impossible to live with the quality of life you had or were aiming to have, I think your only option is to adjust your internal thinking so that you don't become unhappy.

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

#82

Post by eqdw »

Beached wrote: post #3

I wouldn't necessarily say this is related to the economy (The economy has other issues), but more related to our culture. Our entire culture is focused around consuming, buying the next thing, having the nicest stuff, etc. Heck our high schools even teach us how to properly consume, and how to acquire things we cannot afford. However in life you will have to pass up some things you want in order to maintain living w…

I'm a Canadian expat in San Francisco, and one of my favourite cultural-tourist hobbies is comparing my public school experience with my (American) girlfriend's

> Heck our high schools even teach us how to properly consume, and how to acquire things we cannot afford.

I'm curious as to what you mean by this. Could you elaborate, for someone who never went through your highschool system? Thanks!

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

#83

Post by dangrossman »

mikeyouse wrote: post #67
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…

> 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.

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

#84

Post by grecy »

humanrebar wrote: post #66
bargl wrote: post #27

Earlier quoted context omitted.

@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 som…

> Rushing to live on a fixed income seems like a big mistake

And you've missed the entire point.

The point is to live on a fixed income if you want, for however long you want. If you don't want to, just pickup some work and supplement that fixed income.

Choice and options is the point.

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

#85

Post by kevingadd »

tedsanders wrote: post #79
kevingadd wrote: post #37

Earlier quoted context omitted.

He made it clear he's not complaining about his situation and is asking about others', in general - or more precisely, 'My situation is fairly okay, but why isn't it great on my income? Why do other people have it so much worse when it seems like they should be okay?'

Sorry, I didn't mean to accuse him of complaining. It's a perfectly fair question - if $100k income is not enough to cause happiness, then what is? I suspect that even $1 million might not be enough to cause happiness. Or even $10 million. I remember reading that income stops being a predictor of happiness after around $75k per year. Here is the first source I googled: http://www.inc.com/news/articles/2010/09/study-s…

I agree completely. To me, the most concerning question is whether eventually, his $110k income won't even be enough for the essentials - housing, health care, taxes, food, etc. Costs keep going up; will they stop? Will his income go up automatically? Where's the money going to come from? Most of the profits and growth in this economy seem to be going to people who are already rich, while jobs keep evaporating.

Things sound like they're OK for the OP right now, and he doesn't sound incredibly troubled, just perturbed. And that's probably the right point of view; no use freaking out. But I genuinely worry for a big chunk of the US - people my age and younger - because I don't know if they'll be able to afford anything, or get jobs, 10 years from now.

Once you're able to pay your expenses and put enough money away to have piece of mind, I think the intangible things matter most. If all my friends have to move into the wilderness to afford their rent, though, I'm gonna be pretty lonely :)

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

#86

Post by humanrebar »

justizin wrote: post #45
jseliger wrote: post #21

My question is, what is the problem, really Take a look at Matt Yglesias's The Rent Is Too Damn High ( http://www.amazon.com/dp/B0078XGJXO); many "fun" municipalities like Seattle have restricted development to the point that housing is extremely expensive. If you move from Seattle to, say, Houston or Dallas, you'll probably see your effective rent shrink by 35 – 50%. Secondly: see Tyler Cowen's books The Great Stagn…

"If you move from Seattle to, say, Houston or Dallas, you'll probably see your effective rent shrink by 35 – 50%." Right. If you don't own a car already, you would almost definitely have to, and your job options in the $110k range will put you on an oil rig if you have a master's degree in mechanical engineering, if you can even reach that. My ex father in law made about $110k at 60 working as a geological consultant…

I don't know why pushing back on licensing requirements invented last century is alarming. We already see it with the rise of PAs and nurse practitioners. People who aren't doctors are prescribing medications and performing routine procedures.

Also, making $110k in Texas as software engineer is very doable without working on an oil rig. Of course, salaries vary a lot when you start factoring in benefits like healthcare and 401k matching.

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

#87

Post by RealGeek »

mikeyouse wrote: post #67
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…

1) My uncle lives in a suburb in New York. He was paying $900 per month to rent a small 2 bedroom apartment. He bought a 3 bedroom house for $130,000; it is much bigger, nicer and monthly payment (including taxes and insurance) is less than his previous apartment. Moreover, he is not just giving that money away; it is contributing towards the equity. At some point, he will have no rent and own the house out right.

2) How about the cost of Insurance? Let's add that to the expenses as well. Thanks to Obamacare, we are now able to get healthcare; Insurance company previously denied our treatment due to pre-existing condition despite charging $1,500 per month.

3) I am exploring that option, but most people still use big banks.

4) Of course, I got deals. I own my phone outright, and pay $50 per month for pre-paid data plan. My 50 mbps internet + digital TV (mid-package) is $55 per month. No contracts. But most people are still paying $100 for phone and $100 for cable.

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

#89

Post by jandrewrogers »

Something does not add up here or, at the very least, I am missing something important.

I live in Seattle proper, rent an apartment that is relatively expensive by Seattle standards, have a ten year old car, no dependents, etc and have lived that way on a similar income. I am not frugal but I also don't buy much "stuff" which probably has the same effect as being frugal. It would be hard to argue that my life is not comfortable.

Somehow I managed to save tens of thousands of dollars per year after taxes which, invested sensibly and lazily, accumulates pretty quickly into a substantial chunk of change. This is not because I am a great saver or a financial wizard, it was kind of a default outcome.

How much do you think you should be saving every year such that saving tens of thousands every year is not enough?

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

#90

Post by kevingadd »

sliverstorm wrote: post #80
kevingadd wrote: post #70

Earlier quoted context omitted.

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.

You said: that still pales in comparison to the cost of rent in pretty much any part of the country. Do you actually know what the cost of rent is in the rest of the country? Not long ago I paid $450/mo to split a 3br apartment with two friends in a moderate town 1 hour from a major city. Compared to that, $200/month on connectivity is indeed quite a lot.

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 issue - having kids, having health issues, or a simple lack of available large housing. I've definitely shared places here in the past to cut costs, but that comes with all sorts of hidden costs built into it, and it's riskier.

Living 1 hour from a major city already imposes significant costs. I hope you're not an hour from the nearest hospital or fire station (I used to live that far from the nearest hospital, in an area with no fire coverage. Not the greatest...)

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