Posted on 09/21/2005 6:35:44 AM PDT by Maria S
Just my opinion, and I know zilch about economics. I am old enough, however, to know that you save in the good times so when the lean times show up, you're prepared.
When I see this statement I can't help to see poor analysis. The statement is true for anything under the FDIC (like banks). What is left out of the picture is credit unions and 401k plans. A HUGE amount of money being saved that is not tracked by these traditional numbers.
President Bush inherited a handsome budget surplus. It could have served as a cushion for the near future, when retiring baby boomers put extra strain on the Treasury. But as the swingers say, "Cash is trash." Our so-called conservatives slashed taxes and spent wildly, turning the surplus into a deep deficit.
No he didn't. There was still a massive deficit even with the few unexpected years of a yearly budget surplus due to the dot.com boom. It wasn't going to last no matter how you sliced it. As for spending wildly, some truth and wars for our freedom are expensive...
I always think of the old adage "make hay while the sun shines", myself....
LQ
Why bother to save and be prepared for the unexpected? The biggest grasshopper of them all, Big Daddy government, is there to bail you out if things go bad.
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as rising interest rates sink a people floating on debt
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How can this be Bush's or any president's fault ? Whatever became of personal responsibility ?
If you borrow more than you can pay, I don't see how this becomes the fault of the president.
I always though it was "Be Repaired"
Americans ARE smart enough, I think, to realize a liberal "government is the answer to every problem" solution isn't the way to go. So while we ought to be concerned about the economy, we needn't panic.
The criticisms of Bush's domestic spending seem to be well-founded, but if that spending is for Homeland Security--and I think much of it is--then I don't have a problem with such an increase. I heard Bush say last year that his NON-DISCRETIONARY, NON-HOMELAND SECURITY increases in budget were around 4%.
Additionally, Bush's tax cuts have increased revenues into the treasury by about $112 Billion. Unfortunately for the budget hawks, most of that will probably go to Katrina Relief; but it is impolitic to say the feds shouldn't help that area rebuild in some ways.
So, there is my 2 cents in this discussion.
In a nutshell, God wants us to be INDIVIDUALLY responsible. This writer wants us to depend more and more on government for our needs - even when we are willing;y, by choice being irresponsible.
That "fable" is taken from the Bible. When it is convenient then the other story pops up form the "Good Book" because THAT fits the agenda of the person writing this dribble - MORE government taking care of people but notice how the ant "fable" actually a parable doesn't apply. It is GOD that wants us to be prudent and uses the parable, in the "good Book", not a "fable" to illustrate what He wants us to do.
(1) The alleged housing bubble.
There is no housing bubble. There are more people living in America and jobs are becoming more and more concentrated in a handful of states and urban centers.
Therefore, in many housing markets prices have gone up considerably - this is not a bubble, it is a natural outcome of the law of supply and demand.
In my town, housing prices have gone up 50% in the past two years. This is due to a combination of two factors that are being replicated over much of the country: (a) my town is conveniently located within an hour of NYC by train, bus, ferry and highway, (b) zoning laws limit the amount of land in my town that can still be developed.
Demand has grown and supply has remained relatively static.
This leads me to point
(2) America's savings rate is berated as low compared to high-savings countries like Japan.
However, most of Japanese savings are held in postal accounts - the US equivalent of passbook savings accounts. They pay minimal interest and are about the least profitable investment imaginable.
A very large number of Japanese and European people rent all their lives and never own a home.
In contrast Americans save their money in their homes, which are a good and profitable investment with a higher return than passbook savings accounts.
Yes, there are plenty of Americans who save nothing in a bank or in a home and live off maxed-out credit cards and from paycheck to paycheck. These peopel are not the majority and there are plenty of them in every developed country, not just the US.
Well, I did have, until I built a new house last year, LOL! We, however, did get a fixed rate 20 year note and have been doubling up on the payments. We are currently paid 3 months ahead and now the extra payments go towards the principle. And, of course, we are trying to rebuild our savings. I had my share of lean times in the past raising my kids as a single mother...never want to go there again. But then, I have already warned my kids, I am leaving them all the money they owe me, I will enjoy myself now.
401K isn't savings. It's investment.
An interesting analogy, particularly considering that ants are inherently socialist, and specialized to the point of absolute interdependence. No single ant can survive alone.
This is what they mean by savings. With the penalties you get for early withdrawal from 401K, not to mention the basic fact that it's intended use is as a retirement investment, not as rainy day savings, you can't consider it saving for rainy days ahead.
I invest 20% of my paycheck in 401K, but I also have 6 months of income tucked away in CDs, staggered so that some of it is always available if trouble strikes, plus I keep a decent amount of cash in a passbook savings for immediate access, plus what's buried in the yard. THAT'S savings.
Just kidding about the buried in the yard part.
That's not savings, it's an investment. You don't sell your house to buy groceries when you lose your job. You need to do both: invest wisely AND have plenty of available cash for hard times.
It's not an "analogy".
Here's the classic form of this parable:
The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool, and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed. The shivering grasshopper has no food or shelter, so he dies out in the cold.
"An interesting analogy, particularly considering that ants are inherently socialist, and specialized to the point of absolute interdependence. No single ant can survive alone."
They may live together but they are not pushers of socialism as you suggest. No single animal can survive alone. You need a male and a female to procreate.
Well, that, and help the TRULY needy (which most on welfare really are not). And the type of help should tend toward the "hand up, not hand out", if at all possible.
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