Americans need a new way of thinking about money

  • Article by: ANDREW KLINE
  • Updated: January 26, 2013 - 5:29 PM

We need savings. We need to be free of debt. And we need a financial system that encourages this. (We don't have one now.)

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pumiceJan. 26, 13 6:12 PM

From the article: "Our individually funded defined-contribution plans will only deliver a familiar standard of living if each of us saves roughly 15 percent of our salary from when we start working in our 20s until when we hope to retire in our 60s. This requires discipline." This also requires a job which pays a living wage.

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simplicity1Jan. 26, 13 6:22 PM

Yes, that's right... start thinking that you work for free and the money was never yours to begin with. The government knows best what to do with your money.

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pumiceJan. 26, 13 6:25 PM

Louis Hyman: "Don't ask just why Americans borrowed; ask why our financial institutions lent!" For those of us old enough to remember: (1) We used to have a "financial services" sector. (2) Banks loaned money to qualified borrowers who were willing to take a risk and invest in their community as a service. (3) Mortgages were awarded to qualified applicants as a service. (4) Banks/mortgage companies held on to a mortgage for its life. Thus, they did not approve bad mortgages and bundle them together with good mortgages. Nor did they sell the contract for a short-term profit the day after it was signed.

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pumiceJan. 26, 13 6:44 PM

From the article: "[Debt] is merely the consequence of not knowing how to distinguish wants from needs and thereby resist slavery. The real solution, after we have paid down our debt, is to reform ourselves and our institutions so that we make it as easy as possible to remain free." For the underemployed, debt is all too often the consequence of not being able to pay for basic needs.

The author's umbrage with payday lenders is well taken. The institution of payday lenders cries out for reform, as do vulture venture capitalists, as do the institutions of lending which once helped small businesspeople--whether sole proprietors or family businesses--get loans to stay open or expand. Sometimes, in the words of Janis Joplin, "Freedom's just another word for nothing left to lose."

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dibblegonJan. 26, 13 6:44 PM

This also requires a job which pays a living wage.--- this also requires individuals to educate themselves and skill up and not expect others to pay them what they want for skills that society does not value

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ciamanJan. 26, 1310:47 PM

Pumice and Dibblegon get to the right stance but by taking a different curve to arrive at the right point. A few points that all of us should know: 1. Most middle/class people do have about $100,000.00 dollars when they retire. Not for all but that is the correct thing. 2. $ 100,000.00 dollars is no longer what it was. It is still poor in our current time but it is better than $35,000.00. All of us were urged to spend and spend and spend. And to keep on spending even when we had no money. Thanks to credit cards. After 2008 the party was over and the wages have been on a downward spiral since 1986. That is a fact and pick up any economic book and it will illuminate this for all of you. It did for me. 3. The new thrift is some illusion and will go no-where. People just do not have the money to pay for their current bills and forget about thinking about nursing home care 30 years down the road. That is a gravel road and it has many twists and turns. I do not trust anything like that one. 4. The baby boomers are going to be the last generation that will receive lots of money from their parents. Once they spend that money, which most of them will do, then their kids will be hobbled from the start. Sad but true. And whom to blame? Try the banks which urged us to spend past the stratoshere and the loans that were given to people whom had no right to get those loans. And do not forget the wolves of Wall Street. Many of them now are out of jobs. I like that one.

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SorghastrumJan. 27, 13 9:14 AM

Let us not forget that our capitalistic system encourages everyone, whether or not they have the means, to accumulate materialistic possessions that are in the end quite worthless to the quality of life. Except for our most impoverished, all of us possess too much trash that we have been encouraged to "require" psychologically in order to give us an "empty meaning" to our lives. Money cannot buy true happiness, but if saved wisely can act as a safety net in our dotage. This is contrary to the system that exists in our society today.

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jimjimjimjimJan. 27, 13 9:34 AM

Savings are up and debt is down in middle class America. Read the reports.

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fjbarrowsJan. 27, 1312:47 PM

One very important point the writer left out: people are inherently lazy, and saving money is work. Society in this country is becoming conditioned to believe that government will take care of them without the consequence of personal choice, so why do the work of saving? The real answer is society needs to make the hard choice of removing government involvement in their lives. I understand why people are liberal; it's the easy choice. It's easy to choose to not work or save for your future; it's easy to buy a new flat screen instead of adding to your 401K; it's easy to let government pay for your health care instead of paying for it on your own; it's easy to take a loan that you really can't pay for and aren't sure how you will pay in the future, because you satisfy your immediate gratification itch; and on and on and on. Get government out of everything other than securing our borders, transportation infrastructure and civil engineering, and public education, and you will change society back to being self-reliant.

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fjbarrowsJan. 27, 1312:55 PM

pumice Jan. 26, 13 6:12 PM "This also requires a job which pays a living wage." A living wage is whatever an individual decides he/she is worth working for. You don't like your wages, improve your skill set or your contributions to your company. The living wage argument is for lazy people only. Living wage is determined by the individual and market forces, not simply your desire for higher wages.

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