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Old 11-24-2008, 11:30 AM   #46
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Originally Posted by anitram View Post
Dude, if you think I want to be 65 and working 80-90 hrs a week, you've got another thing coming. I'm here because it should let me retire early.

But it also comes down to priorities. You don't have to give everything up to be obsessively saving. I love travelling, it is really the only thing I do spend and have spent a lot of money on. But I got to see the world and learned a lot from it. At the same time I drive a 7 year old 2-door Honda Civic which I plan on keeping for at least another 3 years and that's technically way below my means. So everyone has to decide for themselves what's important to them and what's not.
I totally agree. There's nothing wrong with travelling as long as you have a budget and a plan for retirement and travelling doesn't come at the expense of it.

If you laugh at working at the age of 65 then you seem to have a plan for that, but many people don't have that option. If you cut in other areas to allow for your lifestyle then you're doing fine. A lot of people have their head in the sand and don't want to look at their finances and are carrying credit card balances paying 19%. These are the people who don't have much confidence in spending because they over did it. They also don't have a retirement plan if they are doing that.

Having a cash budget is key and looking at planned big ticket item expenses as something you include in your budget to save for so you have the cash then and there to get what you need reduces stress. Most people are just looking in front of themselves on how they can pay the debt for this month. That's much more stressful.
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Old 11-24-2008, 11:32 AM   #47
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Thank goodness Ontario has pretty much damn near everything, if one likes nature, short of glaciers and deserts. I'd actually be able to live up to this, and not feel tremendously disappointed with my vacations!
Yeah Alberta has lots of things to see within driving distance and it's not Europe but it just about does it for me. I still have a plan for Greece but that will be when I have a house paid off. Until then it will be fields and streams.
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Old 11-24-2008, 03:12 PM   #48
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Originally Posted by melon View Post
I think if we want people to start saving on their crappy salaries, then we're going to start dealing with hard realities here. Pretty soon, if not already, it's going to be a matter of paying off debt and saving versus having children--and procreating will likely lose out, considering how tremendously expensive it is to have children and "save" for all those things that vastly outpace inflation like college education. I'm sure the "family values" crowd would just love for this to happen.
This is certainly my biggest worry most days. It took me 10 years to pay off all my school loans, and I can't imagine what my kids will be paying. My parents couldn't help me or any of my siblings with college and we never expected them to, but they were stunned by how high the costs were even then, and it only keeps getting worse. Indiana, believe it or not, has the most manufacturing-dependent economy in the country and several of my students' parents have been laid off recently, especially those from the northern part of the state which is Rust Belt. A couple other students have had to withdraw because family members are ill, and neither their family's insurance nor budget allows for anyone else to be at home enough of the time to provide adequate care. It's not just college of course, there are so many other expenses that add up fast with kids, but for many families that's probably the scariest thing looming on the horizon.
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Old 11-24-2008, 06:11 PM   #49
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Originally Posted by Vincent Vega View Post
The standard of living in Germany is lower than in the US? Sorry, but I tend to disagree. Having grown up in Germany, been around Germany, and having seen enough other countries and how it looks inside their houses, I cannot in any way share that conclusion.
I never seen any study that based a country's standard of living on one persons experience traveling or living in that country. The most accurate measure of this question is the annual human development index. Here are the countries in the top 30:


HDI Rank Country
1 Iceland 0.968
2 Norway 0.968
3 Australia 0.962
4 Canada 0.961
5 Ireland 0.959
6 Sweden 0.956
7 Switzerland 0.955
8 Japan 0.953
9 Netherlands 0.953
10 France 0.952
11 Finland 0.952
12 United States 0.951
13 Spain 0.949
14 Denmark 0.949
15 Austria 0.948
16 United Kingdom 0.946
17 Belgium 0.946
18 Luxembourg 0.944
19 New Zealand 0.943
20 Italy 0.941
21 Hong Kong, China (SAR) 0.937
22 Germany 0.935
23 Israel 0.932
24 Greece 0.926
25 Singapore 0.922
26 Korea (Republic of) 0.921
27 Slovenia 0.917
28 Cyprus 0.903
29 Portugal 0.897
30 Brunei Darussalam 0.894



Looking at the trends chart with the years 1975, 1980, 1985, 1990, 1995, and 2000, the United States has consistently ranked ahead of Germany in all these years although the gap has narrowed.
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Old 11-24-2008, 06:15 PM   #50
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Alright, economy experts. Have at this one:

I have two schools. One is a better school overall and in a better location. It would cost me a modest $24,000 a year to go there with room and board costs factored in, and with inflation, I probably end up with $100,000 total to pay off.

The other school is good but not as good, and is in a violent section of a city. However, due to some scholarships, it would only cost me about $10,000 a year, with about $40,000 in total by the end to pay off.

Do I go for the better education offer or the cheaper education offer, based on the way the economy is going (i.e.: less and less reliable jobs)?
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Old 11-24-2008, 06:22 PM   #51
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Actually that post you used is talking about the fact that we already have social programs but everyone wants to increase them more. These programs for unemployment insurance, welfare and the food bank were supposed to wipe out poverty a couple of decades ago but didn't because people's choices are still important. I'm not against the government feeding people when they are out of food but it's a band aid. Even if done right as you say we still need the majority of the economy to revive and more taxes in the direction of make work programs leaves less wiggle room for average savers. If a school is in bad shape we should do something about that but No child left behind, and healthcare entitlements ate up much of the tax revenue and into a deficit. Can the U.S. continue to add to the debt? Obama would have to do more than quickly end the war to solve that problem. He will have to go into more deficit or increase taxes. I prefer cuts to social spending because there's always fat to be found there.

The government wants to do more than basic services and increase in size. In Canada we have more social programs and we still have people demanding poverty to disappear. I thought the 40% of the GDP in the hands of the government was doing that. I guess not. So the next question is how much is enough government? Taxes can only go so high before no one has the incentive to work. There has to be people paying for Obama's programs and not using them for the program to exist unless we let the printing presses go into overdrive but that would be a disaster. I don't think Obama is that far left to do that.

I mean if you get 10,000 from the government and I get 10,000 but you pay off some of your debt and I snort cocaine the social program is only as good as the person who uses it. That's why poverty is never erradicated. Yet social workers keep talking about those same solutions like it's a panacea in our country. The auto workers are getting a bailout in Canada and social workers started staging press conferences to mention "If auto companies get tax payer dollars why can't we get money for eliminating child poverty?" It's a moral hazard. Companies and lobbyists are lining up. There has to be a line drawn.

What Obama is doing is targeted (hopefully) and the main economy will still have to go through the natural recession to realign workers to the right areas. In the mean time if the majority of the people increase their savings they will naturally have more of a spending confidence because their spending is reasonable to their take home pay. A recession is simply a movement of workers from unproductive businesses that existed because of cheap debt to productive businesses that do better. The time lag inbetween is a shot of unemployment.

It totally sucks but why keep interest rates so low for so long over the Clinton and Bush Administrations? It's because any small recession is a political hot potato (especially during an election) and each administration likes to lower interest rates during elections to pass the buck onto another administration. That's why all administrations like to tackle a recession in the first two years of their term, because the last 2 are for gearing up for the election.

At some point consumer debt is so high and their wages can't keep up to the payments and consumers can't spend anymore so all those companies that were producing as if the consumer can go forever have a whole bunch of extra inventory. Eg. American Cars, and houses where people bought them to flip and not to live in them. Now there's a surplus of cheaper housing, especially in the U.S. If the interest rates were a bit higher during the last boom a lot of speculators couldn't get enough money to blow on oil futures and houses for flipping. Most economists say that 4% interest most of the time is not too damaging to the economy or too inflationary. I'm sure there's some debate on the right interest rate but it's probably not too far from that.

I believe the middle class is shrinking because of the lack of savings this past generation. It's hard to be middle class when you lose your job which in turn can lead you to losing your house and car. You get bad credit so when you need to have some credit you are forced to use cash only. Debt as tool has been abused by government, individuals, and corporations.

I want Obama to talk about fiscal responsibility of the individual but that would be counter to the Krugman attitude that consumer savings is a problem so he talks about projects. By saying less he can stay popular and when the recession is over he can claim that the projects he did are the reason for the recovery just like they do with FDR and the Great Depression.
I have no idea what your point is. You seem to want Obama to simply tell people to start saving. What the hell is that going to accomplish? His administration needs to take action and fix what's broken on a national level. There's no way that the government can get people to spend. What do you want him to do? Add a "savings tax" that gets taken by the government and put into the bank for the citizen? You seem so intent on Obama getting people to save, yet how is he to accomplish that without doing something like that?

My point is that Obama cannot get people to save. No one can. That's a personal thing. That's a choice. All Obama can do is work on a national level to fix what's broken in the system. He cannot force people to save. There's no way to go about that.

A change in attitude is all well and good, as I said, but that's not the only thing that needs to happen. And it's not something you can bank on, either.

We still seem to be talking about two different things: I want Obama to fix what's broken, you want him to change people's views on finances. One is possible, one is not.
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Old 11-24-2008, 06:26 PM   #52
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Originally Posted by purpleoscar View Post
Actually I'm talking about people changing their attitudes also because people are putting unrealistic expectations on Obama because of the shiny campaign.

I prefer the government finding ways to cut spening in government so they can believably reduce taxes so foreign investment and businesses come in instead of go out. I also was hoping Obama would continue with the Columbian trade deal but his meeting with Bush (if the media is to be trusted) showed that the deal will be nixed. At least the G20 agreed not to raise barriers for at least 12 months. A lot of jobs hinge on importing and exporting.
But Obama can't just say "OK, guys, start saving." It won't accomplish anything.

We're clearly not doing nearly enough exporting at this point, and that's one of the big issues to be tackled. Americans need more jobs, and they're getting less. I think job creation is a place to start, though in the long run, with good planning, foreign investment in American business needs to be a goal.
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Old 11-24-2008, 06:42 PM   #53
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I never seen any study that based a country's standard of living on one persons experience traveling or living in that country.

You haven't? Well, I'm shocked!

The HDI is derived from a multitude of measures that make up the actual figure. It sure has its relevance, I won't argue that.
My point was rather that if you go to Western European countries and take a look at how people live their, how their actual houses look like, what they have available for consumption etc. it's not that much different. The differences are more to be found in detail.
And I would rather be poor and live in Germany or a Scandinavian country than be poor and live in the States.
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Old 11-24-2008, 06:45 PM   #54
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Alright, economy experts. Have at this one:

I have two schools. One is a better school overall and in a better location. It would cost me a modest $24,000 a year to go there with room and board costs factored in, and with inflation, I probably end up with $100,000 total to pay off.

The other school is good but not as good, and is in a violent section of a city. However, due to some scholarships, it would only cost me about $10,000 a year, with about $40,000 in total by the end to pay off.

Do I go for the better education offer or the cheaper education offer, based on the way the economy is going (i.e.: less and less reliable jobs)?
Make yourself competitive and go for the school which address looks better on the application.
Economically, you could try to evaluate the payoff with the method of net present value: Net present value - Wikipedia, the free encyclopedia

The school that yields the higher NPV wins.
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Old 11-24-2008, 07:48 PM   #55
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You haven't? Well, I'm shocked!

The HDI is derived from a multitude of measures that make up the actual figure. It sure has its relevance, I won't argue that.
My point was rather that if you go to Western European countries and take a look at how people live their, how their actual houses look like, what they have available for consumption etc. it's not that much different. The differences are more to be found in detail.
And I would rather be poor and live in Germany or a Scandinavian country than be poor and live in the States.
On sort of a different topic, why do you think Germany has such a low birth rate? It has the lowest birth rate in the world with the exception of Japan.
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Old 11-24-2008, 08:30 PM   #56
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That's a long story. Bottom line, however, is that there is low incentives and many obstacles for starting a family. There is vast space for improvement.
Overall, Europe is pretty divided over that. You can draw a line between the welfare regimes employed. Germany, France, and the conservative countries of Italy, Spain, Portugal and Greece all have low birth rates. The Scandinavian countries have rather high birth rates. The UK is doing better than the continental countries, but worse than the Scandinavian ones.
France is doing much better out of the continental countries since they support couples with children much better and because employment opportunities for women with children are much better. The other countries still have that view of the wife staying home and taking care of the children. Day care provisions are very bad. And it's harder for them to stay in a career, except it's very well paying so that they can afford someone who is taking care of the children.
In the southern European countries, where the Catholic tradition is much more ingrained in society, it is even more of a problem. Of course, Catholicism also teaches to procreate. But you need the means to support a family.
A little bit has been done in Germany to increase the birth rate. Now it's easier for the husband to stay at home with the new-born. Before, that was almost impossible. Funding for kindergartens and day-care places is to be increased, so that there are more places for children to go to without the parents having to pay for it. There is a so-called parent's money. For every newborn child parents get a couple thousand bucks. It helped a little bit, but most parents no that the overall costs are higher than can be covered. Further, the child's allowance is proposed to be increased. Next year they want to give some bucks more, but I forgot about the actual figures.

We need more World Cups. There was a sharp rise in births around nine months after the World Cup in 2006.

East Germany had an extensive birth program. They developed a good system of day care and such for their children. Of course, the entire program was filled with ideology and set up out of the sheer necessity of new workers for the future. Unfortunately, after the reunion the West saw only the bad of it and got rid of it entirely. East Germany used to have a very high birth rates, now it's way lower than in the west. And starting a family in the East? Forget it.

Family policies are a weird thing in Germany. Up until the last government you heard of that only once every four years for a few weeks. After that people were asking if there was such a thing as family policy, or a minister for family politics (this job is always included in a department for a multitude of things).

The only good thing so far coming out of the Grand Coalition is that this has changed a bit. The minister, von der Leyen, raises seven children herself and got quite some changes through. She was facing harsh criticism especially from the Catholic church for her proposals regarding day care places with one Catholic bishop liking her policies to the Nazi Lebensborn programme and using some Nazi-language.

But we have a long ways to go to prop up our birth rate. Currently it's around 1.4 children per family. 2.3 is needed to maintain the current size of population, leaving out migration. Maybe we will get to a rate around 2. But it will be regionally highly diverse. For the eastern part of the country it will be a tough job to keep the rate around 1.4 (right now it's slightly lower). However, that would mean that the West would need birth rates of well over 2.
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Old 11-24-2008, 08:34 PM   #57
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Originally Posted by Strongbow View Post
I never seen any study that based a country's standard of living on one persons experience traveling or living in that country. The most accurate measure of this question is the annual human development index. Here are the countries in the top 30:


HDI Rank Country
1 Iceland 0.968
2 Norway 0.968
3 Australia 0.962
4 Canada 0.961
5 Ireland 0.959
6 Sweden 0.956
7 Switzerland 0.955
8 Japan 0.953
9 Netherlands 0.953
10 France 0.952
11 Finland 0.952
12 United States 0.951
13 Spain 0.949
14 Denmark 0.949
15 Austria 0.948
16 United Kingdom 0.946
17 Belgium 0.946
18 Luxembourg 0.944
19 New Zealand 0.943
20 Italy 0.941
21 Hong Kong, China (SAR) 0.937
22 Germany 0.935
23 Israel 0.932
24 Greece 0.926
25 Singapore 0.922
26 Korea (Republic of) 0.921
27 Slovenia 0.917
28 Cyprus 0.903
29 Portugal 0.897
30 Brunei Darussalam 0.894



Looking at the trends chart with the years 1975, 1980, 1985, 1990, 1995, and 2000, the United States has consistently ranked ahead of Germany in all these years although the gap has narrowed.
Germany is among the most obviously prosperous of any country I've visited. I would seriously question their measurement criteria here.
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Old 11-24-2008, 09:35 PM   #58
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The minister, von der Leyen, raises seven children herself and got quite some changes through. She was facing harsh criticism especially from the Catholic church for her proposals regarding day care places with one Catholic bishop liking her policies to the Nazi Lebensborn programme and using some Nazi-language.
What was it they didn't like about her proposals?
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Old 11-24-2008, 09:40 PM   #59
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[QUOTE=purpleoscar;5629531]

I'm totally against unions [QUOTE]

This should say "not" totally.
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Old 11-24-2008, 09:44 PM   #60
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But Obama can't just say "OK, guys, start saving." It won't accomplish anything.

We're clearly not doing nearly enough exporting at this point, and that's one of the big issues to be tackled. Americans need more jobs, and they're getting less. I think job creation is a place to start, though in the long run, with good planning, foreign investment in American business needs to be a goal.
I know I understand what you're saying. I'm including more than one topic. One for the general population which Obama can't put a gun to the head to save and one of my last posts on what Obama can do to increase incentives:

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Originally Posted by purpleoscar View Post
I prefer the government finding ways to cut spening in government so they can believably reduce taxes so foreign investment and businesses come in instead of go out. I also was hoping Obama would continue with the Columbian trade deal but his meeting with Bush (if the media is to be trusted) showed that the deal will be nixed. At least the G20 agreed not to raise barriers for at least 12 months. A lot of jobs hinge on importing and exporting.
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