The Economy

I want to start by saying that this is not a politically-oriented blog, nor is it about the news or current events.  And, I am not an economist, far from it, I’m one of those sorry Americans who doesn’t really know alot about how our government works.  (I’d be one of those people getting polled on Fox News, saying “uhhhhh, I don’t know!”)

But something struck me the other day when I was reading the news online.  Many people, when faced with losing their home, choose to pay off credit cards instead.  I am sure they have reasons that make sense to them at the time, but I don’t understand how a person will be able to stand underneath their Visa card when it’s raining and expect to stay dry.  Which brings me to my point:  how on earth did we get to this, in our society, where people have literally nothing?  I mean, people have huge houses full of stuff, yet have nothing.  Maybe I’m getting to the ripe old age now where I am saying “When I was a kid…” but when I was a kid, people didn’t have these issues.  If people had steady work, and weren’t poor to begin with, they had money in savings, I’m sure (because they are all retired now!).  We have so many huge, easily half million dollar houses in our area and we can’t figure out where these people are working.  Now, with the news of all the foreclosures, I am understanding why.  People have bitten off more than they could chew, and the results are disastrous.

What has happened to us as a society that we have to have more, more, more?  People buy over the top appliances, new furniture on a whim, redecorate their homes often to reflect changes in design for the year.  When I was growing up, my dad was a professor.  It was one of the better paying jobs in the area, yet we lived modestly.  We didn’t take expensive vacations, we had the same furniture forever, we didn’t replace appliances with the “latest and best” because the ones we had still worked.  It was the same with my friends – I did have some friends who were really in hard times, but the ones who weren’t, they didn’t do these things either.  When my parents got divorced, it was hard on my mom financially, and she was very good at being frugal.  But before that, we just didn’t toss money away like people seem to do now.  We lived within our means.  There was money in savings.  Mom and Dad owned their house and didn’t have huge amounts of debt.

A person can argue that prices of everything have gone up.  But, my dad told me a while back that his starting salary when he started teaching was $8,000 per year.  I know what professors start at now and it’s not that!  (This was back in the late 60’s.)  A person can argue that important things have gotten more costly – houses in general, insurance of all kinds, cars, fuel.  And this is true.  But, can we not take a little responsibility for the mess that we are in?   I think banks are at fault too, supposedly being “experts” that people trust, luring folks into very tempting home equity loans and mortgages whose payments can increase on a whim.  I got a phone call from our mortgage lender a few years ago, wanting us to sign up for a “checkbook”, where you could basically use your house as an ATM.  Kid need braces?  Write a “check”!  Want a vacation?  Write a “check”!  Want to redecorate?  Want new furniture?  A car?  A college education?  Food?  Write a “check”!  I asked if it was a fixed rate.  She said, no, it wasn’t.  I told her I didn’t think it was a good deal.  She became irate on the phone:  What did I mean, it wasn’t a good deal??  It was GREAT!  EASY!!  CONVENIENT!!!  What was bad about it?  Fast forward to 2008 where middle class people are becoming homeless!!  That’s how great it was!

So my answer to how people with regular jobs are affording houses that are $300,000.  The answer is, they aren’t.  It’s in the news.  And it’s very scary.  I have definitely noticed an increase in the prices of basic stuff like food.  It is costing more to transport it because of the cost of fuel, so we get to absorb it.  I am easily spending $40 more per week at the store.  That includes things like diapers, cat litter, over the counter medication and the like, but it seemed to be a big, SUDDEN increase.  Fortunately we live well within our means (modest, older home with small payment, no car payments, no credit card debt, old, hand me down furniture, etc.) and it’s not going to hurt us horribly.  But people are going to feel the pinch, and are slowly going to stop shopping for nonessential things.  Since shopping makes the American world go round, things WILL slow up.  It doesn’t take someone with a degree in economics to see that our debt-ridden society can’t continue living off air!  It’s bound to catch up with us at some point.  And unfortunately, we are starting to see it now.   Where we go from here, who knows.  The tax “refund” everyone is going to get this year (where THAT is coming from, I don’t know, since the USA is broke too) is either going to pay off debt or into savings, according to polls.  Not out into “shopping” like they are hoping.  (I’m wondering who is going to pay for this “refund” later on?  Us?)

Then there are other concerns.  Why people who work their asses off aren’t getting health insurance?  Why people with college educations cannot find work and cannot make ends meet?  Why people are not being paid what they are worth?  Why people cannot afford a decent life even if they are working their butts off?  I know plenty of folks who do not have money in savings and have debt because their needs still exceed their income!  I know people who work their tail ends off and are trying to support families and struggle so much, and I think, it shouldn’t be this way.  I think if you work hard, you shouldn’t need to worry about being in the hole for something as simple as, say, an appendectomy.

I can hear the words of generations gone by echoing in my head, “We are going to hell in a handbasket.  What is WRONG with people today?”  Now I am that generation.  Funny how things change.

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6 thoughts on “The Economy

  1. ITA!!! You really hit the nail on the head there Liz. It isn’t JUST (*ducks*) your age, I’m 10 yrs you younger than you and I think the same way.

    I guess Tim and I were lucky enough to get the more irresponsible with money stage over with quickly. We had a few cards in our late teens and we didn’t rack them up until we moved here to Midland and some of our moving expenses and living expenses wound up on them because Tim didn’t have work right away. Sadly we declared bankruptsy but we learned out lesson. Our income was under 10,000 a year for more years than I care to count but we made it. We now have our own house, a newer car, and just our living expenses. When we got our tax return we paid off a medical bill (from last year when I thought I was going to bleed to death), a Target bill from this past Christmas, our Meijer bill (that we racked up when we moved down here), Lowe’s (from fixing stuff to move into the house), our Discount Tire card (a no interest for 90days one we used to get tires in Jan so I could get to and from college safely). We paid the girls’ life insurance a year ahead, paid off our line of credit at the bank, and our past due Consumers.

    We did buy a new gas stove because the old one wasted so much gas and was nearly impossible to bake in because it was 100 degrees off and lost more heat than it held in. This one is a convection so it uses less gas. In the end that went towards lowering our bills. The other thing we got was a new refridgerator. The last one was apartment size and was not Energy Star and it ruined more food than it preserved. This also went to lowering our monthy bill.

    It sucked spending all that money on bills and not getting things that we really needed like shoes and clothes for all of us and bath towels but getting our debts paid were more important in the big picture of things.

    I did buy a laptop with my financial aid for college because some of my assignments wouldn’t operate on our old dinosaur. Now that I can make business cards and flyers for my puppies and my grooming business that will help the bottom line too.

  2. Hi Liz! There is so much in your text that is very equal to the situation in Finland as well. People have more money, but at the same time mental problems are increasing, because people are stressed and not feeling well and content.

    If you check my blog, there is a small surprise for you. Just check and see if you want to do it, if not, I don´t feel bad about it. ; ) Mirka

  3. Hey Liz,

    Your blog about economics really wound me up. But now I think a short concise response is in order. WTO. United States Government. We go where we want, do what we want, write the rules, break them when they apply to us, intimidate and bomb those who won’t play ball our way….this is the global economy…this is why there are SO MANY PLACES TO SHOP. Yeah Liz for resisting the ‘call of the marketplace’. You see it for the trap it is. Change starts with one person at a time. Every time someone doesn’t shop, it helps break down their system.

  4. AMEN, sister.

    As you know, Liz, I am part of your parents’ generation. When I was a teen, my parents didn’t buy me a car…I had a horse. Mom cut my hair and made my clothes. We raised, slaughtered, and processed all of our own meat. My mother had a garden big enough to feed half of Beltrami County (MN). Yes, I realize that not everyone can live in the country and live as we did. BUT…we did for ourselves…didn’t pay to have someone clean the house or mow the lawn…did it ourselves.

    There were no credit cards …just your good name with a banker or shop owner. Today, credit cards are taking away a person’s good name and are turning him into what used to be called a deadbeat. Plastic is today’s drug of choice to self-medicate an inability to face reality.

    We didn’t have TV…too far to get reception worth watching. We do have TV today, but not a gazillion channels that couldn’t all be watched even if that is all we did in our lives. Because of no TV back then, we didn’t know about all of the things that we are told today that we just MUST HAVE. Instead of buying rooms full of toys, my mom often said “Go out and get the stink blowed off.” In other words, go outside and play…with whatever you can find out there.

    There is a song, popular on country stations right now, that hits things right on the head. It tells of everything we didn’t have/do as kids….but we turned out just fine. Some of us still are just fine, but unfortunately there are far too many who belong to the MUST HAVE generation who, like alcoholics or those hooked on drugs, are going to have to hit rock bottom before they realize that they are killing their future and really hurting their children’s future.

    So much for the soap box. I just know that there is no way on earth that I would want to go back in time and have a “do over” of my early child raising life…too scary a thought.

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