Monday, November 26, 2007

We're broke

Sorry my fellow proletarians, Christmas is going to be a bummer this year. Why? We're getting poorer.

I went home for Thanksgiving Thursday (a somber one, my grandmother passed away that morning after a long, long decline), and, as usual, my father was complaining about how bad the economiy is getting. The thing is, I usually have to take my dad with a grain of salt. He has a tendency to exaggerate when he's frustrated about something (a family trait I think), and he can and does fly off the handle at things. But this was different.

It was different partially because, right out of law school, I am making almost the same as my father who has been in the granite industry for over thirty years. That's great for me, I guess, but the bills are what is really striking. Between my rent, phone, groceries, and credit card debt, I'm saving next to nothing. Pretty soon, when all my student loans come due, I'm going to be proper fucked. Thing is, I can't imagine how my dad has been getting along with three kids, a mortgage, car payments, grocery bills, and some of my student loans. And that's not all. Our money is worth less nowadays. Every dollar we get is worth less than the year before.

It doesn't take a genius to realize that this is the real 800-lb gorilla in the room. What can we do?
Consider this a call for ideas. Discussion in the comment thread...


SayHey Kid said...

First off- My condolences for your loss of your grandmother. Its never easy losing a family member.

I am scratching my head the same as you are. My ladyfriend and I make about double what my folks made when I was a kid and we have trouble saving for even a cheap dinner date.

I cannot explain it. my mother always grills me about my debt. "your father and i never had CC debt". I try to explain that things are different now than they were then. But when you really think about it. Back then there was a severe oil shortage, an unpopular war, a dumbshit president.....what's so different now than then??

I like this topic DC& curious to read other peoples take on this.

SayHey Kid said...

But to go into more details in my theory, CC companies for the past few years have targeted college students. An 18 year old with 4k to spend will do just that. Once they graduate they enter the world with a terrible credit record, coz come on, who gives a shit about debt when you 18-22? CC companies go in for the kill, while the rest of us scrounge to pay off a finance charge.

Dews said...

Can also relate to the disparity between what I've been making and a lot of my own family, though its not totally the economy's fault here.

Granted, the money is worth less, costs are going up, fuel is ridiculously expensive, so that all takes a serious chunk out of all our lives, but I blame both Credit and societal norms for most our budgetary issues.

We live in a world today where it is extremely important to own X, Y and Z, not only to keep up with the "Joneses", but to exceed them in every way. We are a nation of mass consumers that gobble up more then we could possibly need because we think we should.

I'm just as bad if not worse, mind you. I have the big screen, two computers, etc etc, all that crap, but I convinced myself I "needed" it because, well, other people have them, so why not me? I'm making good money, so damnit, here I go!

Combine that with our horrible addiction to credit (again, me included), and we find ourselves in financial holes pretty easily. Why save for something when you can just get it on credit and worry about paying for it later?

Dewey, Cheatem, & Howe said...

I feel you on the credit card bills. When I was in college, I used the federal work study thing and loans to get by. Law school was different: couldn't sit in a weight room or art gallery with my books and study at a bullshit work study job. I had to use my credit cards to get by, and I did. Thousands of dollars later, I'm doing my best to get rid of the debt before my loans start to come due in March.

I think that the problem is pandemic though. Americans are carrying a ton of debt, and it seems like there's not a better way to live. Wages suck, benefits are down, and to top that, inflation is growing. Sounds like we're about to get slapped with a recession. I know I'm thinking of cutting my spending seriously.

We need to really grow the economy, not just make sure certain statistics like the unemployment rate are down. I think that workers in the U.S. are chronically underemployed, meaning that they don't get paid enough.

Dewey, Cheatem, & Howe said...

Dews - your comment reminds me of a Tyler Durden quote from Fight Club, something about the things you own coming to own you.

SayHey Kid said...

If anytime period could support your argument regarding x,y,z's; it would be the 1980's and that era's credit crunch doesnt come close in comparison to the crisis going on now.

The problem is that our society has no self control and lending institutions have unlimited funds to feed those addictions.

Dews said...

DC&H, totally right.

I know this deep down, but honestly you think that makes any difference? :)

I'm a good consuming American damnit! :)

Dewey, Cheatem, & Howe said...

Dews, just keep telling yourself that when they cart you off to the debtor's prison.

Is there still debtor's prison?

SayHey Kid said...

Yeh, good quote from a good movie.

Your right DC&H- We are staring at a recession smack dab in the face. The only difference between this and the crash of 1987 is that the housing market didnt have much of an effect then. Add a slumping housing market, we could see a depression in the horizon.

SayHey Kid said...

lol yeh, debters prison is refered to as the "do not accept a check from this guy" wall at the liquor store.

Dewey, Cheatem, & Howe said...

My worry is that we've not restructured our economy sufficiently to quickly rebound from a big shock like a housing market correction or tightening in the credit market. If people aren't buying, building, and fixing homes, what else are we going to do? How do we grow?

I don't think we've laid the groundwork for a 21st century economy. Which sucks, cause we hit the 21st century a while back in case you hadn't noticed.

SayHey Kid said...

The problem is that the real estate market blew up to quickly. It was only a matter of time before that nitch was over-tapped. Developers and banks wont pay for an empty house, John Q. Asshole flips that bill.

There really is no logical solution, unless you wait for the younger generation to grow up and buy vacant houses. OR you fix the source. Get congress involved and reform lending institutions. Did you know they can jack up your rates and changes your fixed payments without telling you??

That or add some kind of oversight. If there was some checks and balances, im sure this problem would have been discovered before it was even thought up.

Citycat said...

I think there are significant lifestyle differences as well. When I worked for the government, I made more money than my parents did when they were raising me. However, my parents lived in a suburb of Cleveland, OH, I choose to live in a very expensive city. My mother stayed home and cooked and cleaned and starched my dads's shirts- when I worked and went to school, I had groceries delivered or ate out and I use a dry cleaner. My mom clipped coupons and shopped at discount stores, I like organic food from Harris Teeter. The point is (besides the fact that I am apparently very spoiled), you still can live for a lot less money than we blow through. But location, activities, and other life choices all eat away at our money until we feel far more "poor" than we actually are.

SayHey Kid said...

Agreed, but the idea of credit was also rather new when our folks were in college. They learned to live within their means and make purchases with money in the bank, not money in someone elses bank.

Our generation never learned to do that. Instead, we spend spend spend without consequence. Sure our folks would tell us repeatedly to save but who listens to their parents advice?? Hell, I wish I did!

CC- You couldnt be more right. My folks penny pinched; Ironed clothing, coupon clipped, bought generics, etc. Hell, I cant even leave Whole Foods or "the Teet" without dropping a mint!