Whoa, have vs. have-not {money geek talk}
 

The Big Picture - Household Cash vs. Debt

It must be nice being tabs, eh? ;)

I've heard of the debt to wealth plan, but this is going overboard.

Can I interest you in any big bank stocks or perhaps the stock of one of many 'check cashing' companies? With annual interest rates above 40% you can't lose.

This was interesting:
"Let's look at the nitty gritty: In 2006, the US savings rate was minus 1%. The previous year in which the US "enjoyed" a negative savings rate was, well, the previous year -- 2005. Prior to that loathsome twosome, we have to go wayback to the Great Depression (early 1930s) to find one single negative savings rate year."

that's because sleazy politicians and corporate america have a found a way to take more money from our pockets and into their pockets.

it's simple economics. either the money stays on Main St. or it goes to Wall St.( ie. the elite). for example, look at the high cost of health care. It's so expensive because they need higher profits.

the middle class will disappear in about 5 years. this country will become a 2 class system, the poor and the elite.

the USA is now an aristocracy. Gold Bless America.

Why would you expect the ultra wealthy to have any debt at all? Seems like a question with a foregone conclusion.

Our tax structure, while onerous in my mind, is not the cause:Tax Rate

As well, a large part of health car costs can be tied to our tort system...

There it is, the smoking gun: "profligate spending".

We as a society are so tied to immediate gratification and spending money we do not have that blamming politicians and "big business" for negative savings is absurd.

Yes, the wealthy have low debt compared to their assets.

What I found more interesting was the top 1% hold assets 5 times as great as the entire bottom half of households. Wow. That's staggering.

It would not surprise me if the top 1% have assets equal to the bottom 90%. I'd like to see the numbers.

john70t, the personal savings rate is negative while corporations are sitting on record cash levels. Disappointing, but reality in a capitalist society.

I am not suggesting reallocation of wealth. I'm just saying.

this goes well beyond capitalism, into territory we haven't witnessed historically. .. and the damage will be profound on various levels.

Wow, hit like a ton of bricks from behind. Who would have seen it coming...?:rolleyes:
The last Great Depression was solved by socialist government projects, massive industrial spending due to a little overseas strife, and winning that war, of course.

I won't argue with you there, but where would big bidness be if not for the ever-growing consumer spending? Reverse the negative savings rate and see what happens to the economy. In this game, the players have an enabler, and both parties are necessary. The masses need only pick up pitchforks to end the game.

Question is, though, are we prepared to end the game?

The masses can't afford pitchforks:)

Most people in debt in this country have no one to blame but themselves.

During tax season I volunteer on the base to do taxes for young enlisted families. The variance in the debt to earning ratio between familes is astounding.

There are some folks (usually young, single males) that will never get out of debt unless they dramatically change their spending behaviors.

Others, generally young married couples where the wife runs the budget, have very enviable asset portfolios. They may be driving a nine-year old minivan, but they have begun to take very positive financial journey.

The old rules concerning %'s of gross and net income to debt service on large expenditures is as true today as it was fifty years ago...problem is few people in the US follow the rules but feel compelled to blame others.

+1 to that.

Most of the wealthy people I know are wealthy for a reason. They are smart and responsible. Not only with money, but in all aspects of life. Get good grades, go to college, work hard and graduate, get a job and do well instead of partying every night, move up the ladder.

Most of the poor people I know are poor for a reason, they make stupid decisions based on emotion rather than logic, and they are irresponsible. Drop out of school, get a meanial job, call in sick, show up late, get fired, get another low pay job, barely make it on just enough effort to get by, blame it on the man or who ever.
It's never their fault, (as is demonstrated in pitchfork comment).

Now which one of those groups would you expect to have higher debt?

Wealth is not the cause of a lack of debt, but lack of debt and wealth have a common cause.
If you have a financial clue, you will be better off than the guy down the street wearing the wife beater and drinking beer.
You will also have less debt than him.

Now obviously these two examples are extremes to make a point, but the point is still valid when looking at hte middle class.
Some of the wealthiest men I have ever met were misers who pinched a penny like they had vice grips for fingers.

Some of the poorest people I know can't have a $20 bill without it burning a hole in their pockets. Gotta spend it NOW!
That's why they are poor, that's why they have excesssive debt.

It sounds like you have the typical misconception about the economy thinking that it is made up of "producers" and "consumers" and that there is some "adversarial" relationship between the two. This is not the basis of economics.

The economy is made up of producers trading with other producers.

Money is a tool used in that trading. People can trade with other producers and consume before they have produced any wealth equal in value to that which they consume. They do this by using the tool of money taking on debt with the expectation that they will produce wealth at some later date and complete the "trade" they've begun with their consumption.

The disparity in wealth that we can see in our economy is a consequence of the fact few people are prolific producers, while many people are not only extremely poor producers, but are willing to take on debt consuming wealth they have not produced.

We all profess to love freedom, but true freedom must also include the freedom to fail. Why are we offended when free adults make willfull decisions that result in economic failure?

If you want to "level the playing field" by improving the educational prospects for the poor I'm all for it. The problem is that too many people view poverty and debt as some sort of stigmata foisted upon the poor by the wealthy. It is not.

[1] It's more that they buy votes w/ tax dollers, though they certainly are not above feathering their own nests.

[2]Health care can be blamed as much on the legal envoironment in this country as much as the expensive technical advances in medicine.

[3]It's been an ongoing process since the '50s

[4]In fact if not in name, there is some movement up/down the economic ladder but it' less prevalnt than in previuous eras.

Not onerous, but certainly designed to benifit the haves at the expense of the almost haves

agreed

agreed again

and again

I read a very interesting comparison between the era leading up to the French Revolution and the current times, As w/ most analogies there were some big stretches of the imagination needed but it was interesting nevertheless.

The French peasants did not have food to feed their familys. The modern American 'peasant' has a DVD player, microwave oven and a car. What are they going to do? Riot because their cable got cut off?

Now if you will excuse me, I need to go polish my AK47.......

So what you're saying is capitalism is a *****, right? ;)

I'm thankful to be in a country that allows me to get ahead in life economically, but the Robert Nardelli's of the world convince it is far from perfect.

edit: for context

As I said, analogies are never exact, but anyhow, if you think that there is no real hunger and poverty and need in this country, you are a part of the problem.