Personal observations of the economy

[tabs]

Originally Posted by jyl

I guess this should have gone in the Economy in Pictures thread but that one is moribund so here you are.

This is total consumer spending at retail, which excludes travel, health care, housing, etc. Essentially counts what is spent in stores (physical and online) and restaurants. Left chart is year over year growth for past couple of years. Right chart is monthly totals for all years since 2007, superimposed. This data is not seasonally adjusted.

And the population has grown by what factor? So a relatively flat line is in actuality a decrease in per capita spending.

[intakexhaust]

OK Pelicans, who's behind this Ponzi scheme?
http://forums.pelicanparts.com/off-topic-discussions/834469-when-will-911-bubble-pop.html

[Bill Douglas]

Obama's bin buyin' them up to sell back to the germins.

[techweenie]

The 'General fund myth' is addressed here:

Social Security History

[wdfifteen]

Originally Posted by techweenie

The 'General fund myth' is addressed here:

Social Security History

He's been told repeatedly over in PARF. The man (?) cannot be educated.

[jyl]

Originally Posted by tabs

And the population has grown by what factor? So a relatively flat line is in actuality a decrease in per capita spending.

During the period shown in the chart, US popln has been growing roughly 1%/yr. Immigration is down and so is birth rate. During the same period, CPI inflation has been about 1-2%. So if retail sales grow 3-4%/yr, they are barely keeping ahead of popln growth plus inflation. Which, when you think about it, isn't that surprising. The average person's income isn't growing much, and other categories of spending - new cars, travel, services, housing - are taking more "share of wallet". Online shopping is taking more share from physical retail stores. And the post-recession consumer is generally being more frugal and debt-averse than the pre-recession consumer. The retail store base grew a lot in the 2000's, responding to a consumer whose shopping was growing faster. So the country currently has an excess of retail stores, and the retail industry is being forced to actually close stores. Of course, the above applies to retailers focused on the bulk of Americans, from the well-off on down. Retailers focused on the very wealthy are in a different environment.

[intakexhaust]

Just the other day, some old pocket watch sold for $24 mil. 'Times' are good! haha

Henry Graves Patek Philippe Supercomplication Gets a New Owner - TickTickVroom - Car Blog and Watch Blog

http://www.sothebys.com/en/auctions/ecatalogue/2014/important-watches-ge1404/lot.345.html

BTW: What are those early Ferardee's changing hand for?

Also, seems to be no big deal when rare cars such as Aston's get crashed to smithereens in the ever growing and popular Historic race events. Might as well empty the museums and run them in some NASCAR type events. Some of these rich guys don't give a scheet unlike true gentlemen racing of years ago. Its not like joe racer on the podium at Sweat Palm Racetrack America will make the record books next to Juan Fangio. These guys bang these things around and so be it. LOL

[Porsche-O-Phile]

Originally Posted by jyl

Actually, total health insurance costs have not gone up as much as you perceive (although they are rising faster than inflation).



What is going up fast is YOUR portion of the cost.



Employers are shifting costs to employees, through higher employee share of premiums and (especially) through high deductibles.



This has nothing to do with the ACA. It is just another way that, overall, business (companies) are gaining ground while labor (employees) are not. In addition to holding wages stagnant for years, companies are saving money on benefits like healthcare insurance.

I appreciate the thoughtful post and I admit I'm guilty of a bit of speculation here with regards to the root causes of what appears on the surface to be an ever increasing burden on working people - me included. Yes I've seen my deductable go up a lot and the premiums go up some. I'm lucky they haven't gone up by as much as I've seen some others' go up.

I agree that there seems to be a growing disparity between "have" and "have not" which seems to correlate to "company" and "human being" more often than not.

Delving into your observation a bit more let's consider why companies are doing well why individuals are not - perhaps this is a result of less entrepreneurship (?) People assuming they can't compete against the behemoths out there? Maybe in some industries. In others it seems like "go into business, succeed and then sell off for a huge profit to a competitor" as a model is still alive and well (software, electronic doodads, financial institutions, etc.)

So is it simple greed? If so, why wasn't it this way previously (or was it?) Perhaps businesses are hoarding money miserly because they're still scared from the last 5-6 years? I suspect they might be scared of the thing businesses are MOST scared of historically and that's uncertainty. Uncertainty about political direction, tax policy, national unity, pretty much you name it... There seems to be a lot of that going around and I can see (and yes, speculate) that it's a major driver for businesses wanting to run as lean as possible - even to the point of what most would consider screwing over their "most valuable resources" for a few extra bucks in the jar.

I do not think the ACA is going to prove to be helpful to more than a lucky few however... But I'll defer that to a separate discussion.

[tabs]

Originally Posted by techweenie

The 'General fund myth' is addressed here:

Social Security History

Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget.

[jyl]

Main reason is a weak employment market. Companies in some (many) fields don't need to give raises or bonuses to keep employees, so they sure don't need to give "generous" healthcare benefits. When's the last time you quit a job because the medical deductible was too high?

I think companies are also just getting smarter about managing costs. They hire consultants, issue RFPs to health plan providers, push for every bit of savings.

Companies (generalizing here) don't want to provide health insurance, just as they don't want to provide pensions. So defined benefit plans are mostly gone, instead the employee gets the opportunity to save for his own retirement via 401k and maybe the company pays a little match, maybe not. I suspect in 10 years the employer provided health coverage will be going away too. It already is, for many people.

[patssle]

I do not think the ACA is going to prove to be helpful to more than a lucky few however

The ACA forced insurance companies to not leave those with pre-existing conditions on the side of the road to die unable to afford healthcare without insurance. There are plenty of those - not just a few. It'll add to the costs of healthcare significantly for the rest of us but that's expected given those types of people are high risk high cost.

[wdfifteen]

Originally Posted by jyl

I suspect in 10 years the employer provided health coverage will be going away too. It already is, for many people.

I believe that is true, and removal of that burden will result in more economic activity, more entrepreneurs, and higher employment. It never made any sense for employers to buy health insurance for employees - unless you were an insurance company. What better way to surreptitiously cherry pick the healthiest clients that to insist that they be healthy enough to hold a job?

[wdfifteen]

Originally Posted by patssle

The ACA forced insurance companies to not leave those with pre-existing conditions on the side of the road to die unable to afford healthcare without insurance.

Except they weren't left to die, they were given health care. The rest of us were forced to pay for it indirectly through cost-shifting and bankruptcy. It's going to take a long time for the benefits of fewer health-care related bankruptcies and less shifting of costs from the uninsured to the insured to appear. It may also take pressure on the health care system to actually lower costs across the board once everyone is insured.

[BE911SC]

I've been wondering when the credit card debt shoe is going to drop. We Americans have been piling debt onto credit cards for three decades as we make up for stagnant wages and an unwillingness to do without certain things, material and otherwise (food, vacations).

If the big banks and related businesses (A.I.G., etc.) were so far upside down when things crashed in 2008 then the credit card companies can't be any healthier?

[nostatic]

Originally Posted by Porsche-O-Phile

So is it simple greed? If so, why wasn't it this way previously (or was it?)

I think it is expanded greed. Over the past few decades it seems that becoming rich is a sport that is taken to the extremes. There have always been the uber-rich, but conspicuous consumption has spread more broadly and there is now a huge industry that makes money off of making money (instead of making things or ideas). Probably tracks back to the 80's when getting an MBA turned into the desired goldmine path and the economy moved away from manufacturing things and into manufacturing "wealth."

So with that mindset, of course business is going to try and maximize profit, and leverage every advantage they can.

[wdfifteen]

^^
Very well said. That, in a nutshell, is the problem.

[Tilikum Turbo]

1 in 6 people now in America is now on Food Stamps...clearly, something at a fundamental level is not right.

[Tilikum Turbo]

Originally Posted by nostatic

I think it is expanded greed. Over the past few decades it seems that becoming rich is a sport that is taken to the extremes. There have always been the uber-rich, but conspicuous consumption has spread more broadly and there is now a huge industry that makes money off of making money (instead of making things or ideas). Probably tracks back to the 80's when getting an MBA turned into the desired goldmine path and the economy moved away from manufacturing things and into manufacturing "wealth."

So with that mindset, of course business is going to try and maximize profit, and leverage every advantage they can.

Adding another zero to the bank account is akin to my friend who owns a buffet restaurant(and they serve excellent food).

MANY patrons wind up going to the parking lot to puke their guts up...they simply cannot control their intake and ingest so much food to the point of exploding.

For those who truly love money...they will NEVER have enough.

[Lothar]

"Good evening, Mr. Creasote. How are you this evening?" ...

[techweenie]

After dinner mint, Mr Creosote?