NY Times sob journalism

I really hope that's a typo in your second sentence.

 

So a woman who owns a modest condo, bought a cheap car and lives fairly frugally you have no sympathy for, but IJAGs parents you do?

I have credit card debt, but if I get lucky and a rich relative dies, I'll be clean and you can have sympathy for me then if things go bad after that.

 

Why are we cranking on the lady in the article? Yes, she refinanced. But until she lost her job, by her reckoning she was well within her means. Her house payment went from $600 to $1,000. She used money to pay off credit-card bills. She fixed the roof. She bought a car. She didn't take it to Vegas.

A lot of economists will tell you that having everyone hoard pennies can be just as big a disaster as everyone spending beyond their means. The recessionary problems we're having now are exacerbated because people who do have the money to spend aren't spending it. Not that they have to, or that they should. But if all anyone is doing with their money is spending it on a few cans of pork and beans and stuffing the rest in a mattress, it's not being used for good and services that, you know, keep other people employed.

No doubt, a lot of people made a lot of mistakes. But Rick and Pete, you're coming off worse than reformed smokers here. Congratulations that you turned around your financial ship. Yes, others can, and should, do it. But this blanket moral judgment isn't helping. And even if you find these people repugnant, they're still dragging down your economy, your home value, and your ability to hold onto the job you have. Your home ain't an island, to bastardize something someone much smarter than I once said.

 

I feel sorry for all of them, I really do.

But here's the deal: If your monthly income is X, and your monthly expenses are Y, and Y is more than 85-90% of X at the most, then it is all going to fall apart eventually. Some day, something will go wrong, and you will be in deep doodoo. It sucks, but it's true.

 

You are seeing moral judgment where there is none. There is *no* moral judgment here. None. There is simply reality. If she had credit card debt, then she wasn't living within her means.

But I don't blame her, or anyone, personally. As a country and a society, we let usury laws get repealed for credit cards, we stood by and did nothing while banks and lenders learned how to prey on a weakness in human psychology and pretended like it was just a rational market function. That's not this lady's fault, and that's not IJAG's parents fault.

I'm not saying everyone should try to live on $25k/year. Of course people who can afford to can and should spend money. I'm not advocating poverty vows or hoarding for everyone. Telling people to live on 75% of their income still means that people who make $80k/year are spending $60k of it. Heck, even 90% would be a lot better than the 101% we peaked at for awhile.

But we had a fundamental misunderstanding of what "can afford it" means in this country.

If you can afford it only if you never lose your job, never need to do major household repairs, never have major medical expenses, etc., then you can't really afford it. Even 30 years ago people understood that. But we've lost that lesson, and until we re-learn it, things are going to look a lot like they do now.

There's signs of this turning around, though. Our savings rate is closing in on 5%, which is a huge improvement.

 

I contend the economy is backwards. We should goof off and live off the government/taxpayers until we're 35 then work till we die.

 

I'm almost to 35, and I'm not ready to work yet.

 

I like the way I do it. Learn to live on almost no expenses, so you can accept a crap-paying job where no one expects you to work very hard.

 

Yes. It is. I was dashing out the door to a story.

 

The government can provide scholarships to folks who are really good at slacking. Or maybe get you a job in the post office or something.

 

Off-topic, but I can't even get a job at the post office!!!

 

Hell, I can't get a job at the mail room at the Plain-Dealer.