American Spending Spree Over

[NaphtaliPress]

Doesn't sound good.
Spending spree over as Americans walk without safety net


By Ambrose Evans-Pritchard
Last Updated: 11:59pm GMT 06/02/2007


Americans are drawing down their personal savings at the fastest rate since the depths of the Great Depression, suggesting that US household finances may be more fragile than they look.
The savings rate fell to minus 1pc in 2006 and has now been negative for 21 consecutive months, according to Commerce Department data. Such a rate was last seen in 1933, when a quarter of the American workforce was unemployed and whole families were kept alive by charitable soup kitchens.
... the full article is here. And also more likely acessible for longer term here.

 

[No Longer A Libertine]

A nation of debters, the difference between now and the depression era is that global economy will continue to buy our debt, so long as America is a super power she will be in the red and get away with it. When the republic collapses one day there will be hell to pay however and the world will feel it.

 

[Anton Bruckner]

Keyenesian Economics. The increase in a nation's debt should and always coincide with a proportional drop in the value of the dollar. Genius. Such an economic policy could only get developed by fallen man In other words,the money that we owe, when the maturity date comes, it will be worthless. The wheel barrow that fetches the billions of american dollars a hundred years from now will be worth more than the dollars.

The only danger about such a policy is if there is something that happens suddenly that upsets the economy.

What I am more concerned about is what you initially hinted at is the $1 trillion dollars of credit card debt regular americans have. This credit card debt, coupled with the inflation (lost of value of the american dollar), and the stagnation of wages is a doomsday clock in the making. I would not like this nation to suffer a recession any time soon.

 

[No Longer A Libertine]

Keyenesian economists have not been in favor or largely in power since Gerald Ford was president, they really fell out of favor during the Carter years.

Reaganomics has been the mainstream choice of the past century, it probably wouldn't create deficits if the federal government wasn't so monstrously obese.

 

[bookslover]

What I am more concerned about is what you initially hinted at is the $1 trillion dollars of credit card debt regular americans have.

Tax cuts are nice, but what you'll probably never see is politicians doing something much more basic and systemic. For example: credit card companies and other financial institutions are allowed to charge 18% and higher interest on credit cards because...why, now? Oh, that's right: because said industry pretty much owns Congress.

A few years ago, Congress was actually considering a bill that would have required credit card companies to put a statement on people's monthly bills saying, "By paying the basic rate every month, it will take you X number of YEARS (which can run into decades in some cases - RZ) to pay off this card."

Naturally, the industry was successful in having this bill quashed.

 

[No Longer A Libertine]

Tax cuts are nice, but what you'll probably never see is politicians doing something much more basic and systemic. For example: credit card companies and other financial institutions are allowed to charge 18% and higher interest on credit cards because...why, now? Oh, that's right: because said industry pretty much owns Congress.

A few years ago, Congress was actually considering a bill that would have required credit card companies to put a statement on people's monthly bills saying, "By paying the basic rate every month, it will take you X number of YEARS (which can run into decades in some cases - RZ) to pay off this card."

Naturally, the industry was successful in having this bill quashed.

What credit cards are you using? You would have to have some bad credit to get 18%, no offense and I hope that you do not, my Visa is 7% and I have a lousy income and am 23 but I have excellent credit thank the Lord.

 

[George Bailey]

Back to the Law

The basic problem with American consumerism, and thus debt, is the violation of the 10th commandment. Simple as that.

I love the law! It's so brilliant in it's simplicity. Every facet of human behavior can be analyzed against it. It is the perfect mirror!

 

[smhbbag]

For example: credit card companies and other financial institutions are allowed to charge 18% and higher interest on credit cards because...why, now?

Because people are willing to borrow at that rate?

Interest rates, in part, act as the price of money. If someone is willing to pay me $1000 for a pencil, they should have the right to be stupid and do that. And I should have the right to sell it at the exhorbitant price.

 

[Ivan]

Because people are willing to borrow at that rate?

Interest rates, in part, act as the price of money. If someone is willing to pay me $1000 for a pencil, they should have the right to be stupid and do that. And I should have the right to sell it at the exhorbitant price.

True...but I won't buy it.

I have been on a personal campaign to reverse my economic woes by saving, saving, saving. And I have. In about a year, the LORD willing, I will be completely out of debt and I intend to keep it that way!

 

[Augusta]

True...but I won't buy it.

I have been on a personal campaign to reverse my economic woes by saving, saving, saving. And I have. In about a year, the LORD willing, I will be completely out of debt and I intend to keep it that way!

Way to go!! We also made the same decision years ago. We have never regretted it. Cash flow every month will cover most incidentals. It's a far better way to live.