How to get out of this financial mess.

[Ted King]

mattkime wrote:


Not all spending is the same. Investments are a productive use of capital, simple consumption is not.

True enough, not all spending is the same. But there needs to be balance between capital investment and consumption of goods and services. If people don't buy the goods and services that entrepreneurs put their investment capital into then that investment will not be effective (it could go completely down the drain).

[Black Landlord]

Ted King wrote:
[quote=Black Landlord]


Is that the best thing to do with one's savings though?
Go to Best Buy and buy a Tiawanese-made electronic of some sort?
Who does this really benefit?

That definitely is a valid point. I was speaking too broadly. More specifically, to give the greatest aid to the American economy it would be most helpful to buy goods produced here and/or buy services provided by American wage earners. My wife and I are looking to put new windows on our house - American made windows installed by American labor. It should save energy in the future and increase the value of the house close to the amount invested. I'd love to be able to take savings to put solar panels on the roof but we will probably be moving in a few years and the return on the investment would less than with replacing the windows and, unfortunately, our neighbor has really tall redwood trees that would block the light to the solar panels (they look great and help keep shade the house on hot summer days, but they make solar panels somewhat impractical).
Here's a local Chicago window maker. Good, hard working employees. I almost feel like I know them.
http://www.nytimes.com/2008/12/08/us/08chicago.html?em

Ted King wrote:
[quote=Black Landlord]

Serious question-- what about taking savings and investing in a new small business startup? Pros/cons? (personal situation)

Sure, that would be good as long as the business you foresee starting offers goods and/or services that have a big enough market and demand to make it viable. If so, it would provide jobs and should give you a decent return on your investment. Win- win. But I'm not sure starting a business that doesn't have a good market and demand would make sense for the economy as a whole and certainly doesn't seem like it would be good for you as an individual unless you needed to do one of the weird tax write-off schemes.
Thx. It's a bike shop in a part of town where there's kind of a dearth.

[Go To Top]

Dakota wrote:
[quote=kj]
I agree with rog. We're going to have to get used to having less. I don't think that's such a terrible thing, myself. kj.

I am always amazed at how some people are so predisposed to the idea of going small and doing with less. Looks across America and see for yourself if thinking small could have made the country what it is today. Thank God our forefathers weren't thinking like this. We'd be living in huts, riding mules and burning wood. All signs of small and frugal living.




Read Thoreau sometime. Prophetic guy.

[Mac1337]

Black Landlord wrote:


Is that the best thing to do with one's savings though?
Go to Best Buy and buy a Tiawanese-made electronic of some sort?
Who does this really benefit?

A certain notion is beginning to take shape that unless a product is made in USA, buying it does not help the US economy. I hear that all time, often in reference to Walmart. We have to work with what we have. Most consumer goods are imported. Buying them surely will help someone here. What is accomplished by not buying if you have the money, and of course the need or want?

[Black Landlord]

Dakota wrote:
[quote=Black Landlord]


Is that the best thing to do with one's savings though?
Go to Best Buy and buy a Tiawanese-made electronic of some sort?
Who does this really benefit?

A certain notion is beginning to take shape that unless a product is made in USA, buying it does not help the US economy. I hear that all time, often in reference to Walmart. We have to work with what we have. Most consumer goods are imported. Buying them surely will help someone here. What is accomplished by not buying if you have the money, and of course the need or want?
It actually wasn't meant as a rhetorical question, even though it looked like one.
Who exactly is helped buy running to Best Buy and buying a chinese DVD player? Take the need or want out of it and assume it's something I can easily do without.

[kj]

>>Thx. It's a bike shop in a part of town where there's kind of a dearth.

Sounds cool. I wish I had the guts to do something like that.

Dakota, I wasn't really thinking "living simply" in terms of environmental impact (although there's nothing wrong with taking that into consideration). I was thinking more in terms of rediscovering what's really important in life. What does it cost to sit around and play cards with the family? A lot less than a movie, and it's better for us. That kind of thing.

Those are interesting points Ted makes. I hadn't really considered the big picture. I like Swampy's idea since it's always bothered me it's cheaper to buy new things than fix the old. I feel like repair work is more fulfilling than sales anyway. kj.

[Black Landlord]

kj wrote:
>>Thx. It's a bike shop in a part of town where there's kind of a dearth.

Sounds cool. I wish I had the guts to do something like that.

So do I :-)

[Bill in NC]

There's been little incentive to save over the last decade or so.

Americans responded logically to the incentives they were presented.

Earn 3% annually in a taxable account.

Or buy the bigger house, use it as an ATM for consumer toys, and walk away if the mortgage adjusts upward (or your home's value drops below the mortgage balance)

There is less and less creditors can do about borrowers who are unable or simply unwilling to service their debts.

Most credit card companies are about to find out just what the word "unsecured" means.

[Mac1337]

kj wrote:
I like Swampy's idea since it's always bothered me it's cheaper to buy new things than fix the old. I feel like repair work is more fulfilling than sales anyway. kj.

I am not sure this is something that should bother you, at least for the following reasons. One of the signatures of 3rd world economies is that it is always far cheaper to repair things than to replace them. The reason is that human labor is cheap and production not nearly enough. This breeds poverty. Here, it is the opposite. Labor is not cheap and we have an abundance of production. I am not sure what the right balance is but the market place should find us an equilibrium.

[kj]

Dakota wrote:
[quote=kj]
I like Swampy's idea since it's always bothered me it's cheaper to buy new things than fix the old. I feel like repair work is more fulfilling than sales anyway. kj.

I am not sure this is something that should bother you, at least for the following reasons. One of the signatures of 3rd world economies is that it is always far cheaper to repair things than to replace them. The reason is that human labor is cheap and production not nearly enough. This breeds poverty. Here, it is the opposite. Labor is not cheap and we have an abundance of production. I am not sure what the right balance is but the market place should find us an equilibrium.
That's interesting. I tend to focus on the wage disparity between us and China (for example) as being the reason we can afford to buy piles of disposable stuff. I don't know if that's a great way to be prosperous, because eventually we're going to run out of cheap labor to exploit. I'm also fond of the idea of buying really nice things, maintaining and keeping them for a long time, but I suppose it's just my preference, rather than a rational thing. kj.