Is another recession coming?

[eliza61]

Sort of my opinion on this, when comparing this generation to past generations, its not so much the "everyone should own a home" mentality thats putting our country where its at, its the other stuff too.. comparing myself to my parents when they were my age:

Them- House payment, car payment, gas bill, electric bill, phone bill

Us- Same as above including larger house payment/income, PLUS internet bill, cell phone bill, cable bill, plasma TVs, Ipods, laptops etc..

We have greatly increased our standard of living, haven't really increased income, and we wonder why the middle class is struggling?

Not only that, some how all this stuff has become "necessary" for basic living.
Which leads us to the current budget crisis. No one wants to suffer. No one wants to cut social programs and no one wants increase tax revenue but we all want a balance budget.
That's like me being 50K in credit card debt but then saying I don't want to stop spending, I don't want my current comfort level disturbed and I dont want to get a part time job.

 

[Muushka]

Not only that, some how all this stuff has become "necessary" for basic living.
Which leads us to the current budget crisis. No one wants to suffer. No one wants to cut social programs and no one wants increase tax revenue but we all want a balance budget.
That's like me being 50K in credit card debt but then saying I don't want to stop spending, I don't want my current comfort level disturbed and I dont want to get a part time job.

E! You sound like me! (except for the tax increase)

Remember when I was practically crucified for suggesting a near homeless family
dump their $150 a month cell plan for a $30 no-frills one?

 

[ilovemk76]

This is so NOT true. H1B visa can't be approved if the salary is less than the prevailing wage in that area and field. No way can a company bring in an H1B at 1/2 the cost. High tech H1B employees get the same salary as everybody else. Now I know how all the rumor started. People who has no idea how something works will pretend they know everything about it and spread the rumor.

You are the uninformed one. I personally know many H1B engineers that are not paid prevailing wages. It is done by putting a second company between the H1B and Microsoft or the like. Microsoft pays the intermediary prevailing wages and then pays the H1B 1/3 of the salary and then make them work 60-80 hours per week for the 40 hour wage. If they don't, the company threatens to revoke their H1B and they have to go home. Many also us companies in India and China as the intermediary and they come to the US on an H1B but are under the control of the foreign company.

Prevailing wages are also subjective.

 

[ilovemk76]

Sort of my opinion on this, when comparing this generation to past generations, its not so much the "everyone should own a home" mentality thats putting our country where its at, its the other stuff too.. comparing myself to my parents when they were my age:

Them- House payment, car payment, gas bill, electric bill, phone bill

Us- Same as above including larger house payment/income, PLUS internet bill, cell phone bill, cable bill, plasma TVs, Ipods, laptops etc..

We have greatly increased our standard of living, haven't really increased income, and we wonder why the middle class is struggling?

Exactly. We have convinced ourselves that wants are needs and that all needs must be met right now. In older generations they saved cash for a want and they understood that even some needs had to be delayed.

 

[OceanAnnie]

Exactly. We have convinced ourselves that wants are needs and that all needs must be met right now. In older generations they saved cash for a want and they understood that even some needs had to be delayed.

I think that's a lesson we as a nation will soon be revisiting. I hope I'm wrong.

Not that I don't think that's the way to go. I just don't think many will be prepared for it. At all.

 

[fakereadhed]

Not only that, some how all this stuff has become "necessary" for basic living.
Which leads us to the current budget crisis. No one wants to suffer. No one wants to cut social programs and no one wants increase tax revenue but we all want a balance budget.
That's like me being 50K in credit card debt but then saying I don't want to stop spending, I don't want my current comfort level disturbed and I dont want to get a part time job.

While I feel like social programs will need to change, I would rather they cut ALL the unnecessary spending first- pork barrel stuff, NPR, PBS even. After they cut it to the bare bones, then consider the cuts that hurt most. Really, it will never happen. I am just tired of them threatening those cuts, when there are so many things are nice but not necessary. If we can dismantle the space program why not dismantle all the extra stuff in the budget first?

 

[Colleen27]

Sort of my opinion on this, when comparing this generation to past generations, its not so much the "everyone should own a home" mentality thats putting our country where its at, its the other stuff too.. comparing myself to my parents when they were my age:

Them- House payment, car payment, gas bill, electric bill, phone bill

Us- Same as above including larger house payment/income, PLUS internet bill, cell phone bill, cable bill, plasma TVs, Ipods, laptops etc..

We have greatly increased our standard of living, haven't really increased income, and we wonder why the middle class is struggling?

Maybe it is because I'm not in the typical DISer tax bracket but I don't know anyone who has all of those things and thinks they are necessary. My kids are in the minority among their friends by having internet access at home, and none of their friends have iPods or laptops. One got a plasma TV and all the neighborhood kids were over there for days watching movies because they were just SO impressed. Cell phones have become standard, but the cell phone bill has replaced the home phone bill. Cable is the luxury most people don't want to part with, because without it you get no channels in my area.

The people around me are struggling because they haven't had a raise in years and in many cases have taken pay/schedule cuts but see their health insurance go up 10% a year, because they've been laid off and had to take new jobs making a fraction of what they were earning when they bought their home (and can't sell in this market; we bought our current home for <20% of what it sold for in '01), etc. Not because they've greatly increased their standard of living.

 

[OceanAnnie]

While I feel like social programs will need to change, I would rather they cut ALL the unnecessary spending first- pork barrel stuff, NPR, PBS even. After they cut it to the bare bones, then consider the cuts that hurt most. Really, it will never happen. I am just tired of them threatening those cuts, when there are so many things are nice but not necessary. If we can dismantle the space program why not dismantle all the extra stuff in the budget first?

I wholeheartedly agree.

We are in dire straights.

 

[punkin]

You are the uninformed one. I personally know many H1B engineers that are not paid prevailing wages. It is done by putting a second company between the H1B and Microsoft or the like. Microsoft pays the intermediary prevailing wages and then pays the H1B 1/3 of the salary and then make them work 60-80 hours per week for the 40 hour wage. If they don't, the company threatens to revoke their H1B and they have to go home. Many also us companies in India and China as the intermediary and they come to the US on an H1B but are under the control of the foreign company.

Prevailing wages are also subjective.

This. I don't know about Microsoft in particular, but I do know this is fairly common in certain industries.

 

[Arielle22]

You are the uninformed one. I personally know many H1B engineers that are not paid prevailing wages. It is done by putting a second company between the H1B and Microsoft or the like. Microsoft pays the intermediary prevailing wages and then pays the H1B 1/3 of the salary and then make them work 60-80 hours per week for the 40 hour wage. If they don't, the company threatens to revoke their H1B and they have to go home. Many also us companies in India and China as the intermediary and they come to the US on an H1B but are under the control of the foreign company.

Prevailing wages are also subjective.

If the employee is an exempt employee then they receive a salary and work as many hours as needed. This is no difference from a US exempt employee.

The H1B visa employee can file a complaint with the government if they are not receiving prevailing wage.

 

[cats mom]

Not only that, some how all this stuff has become "necessary" for basic living.
Which leads us to the current budget crisis. No one wants to suffer. No one wants to cut social programs and no one wants increase tax revenue but we all want a balance budget.
That's like me being 50K in credit card debt but then saying I don't want to stop spending, I don't want my current comfort level disturbed and I dont want to get a part time job.

Absolutely. I'm amazed at the entitlement attitude so many people have.

I have to share what I witnessed just a couple of days ago. True story, I promise, and it's been driving me crazy wondering if I'm being too negative about it.

A family that lives down the street made a bunch of signs, gathered a few neighborhood kids, and aggressively tried to stop every car driving by. Why? They weren't selling baked goods, or lemonade, etc, etc, they were flat out asking for money. OK, again not completely unheard of. Plenty of folks get involved with charities and ask for donations.

So what was their cause? They want to adopt a baby from China. I understand that can be very expensive, and I guess I can sympathize with their plight. ....Except I know they paid $1,040,454 for their house just a couple of years ago.

We live in a very expensive part of the country, so it's not the mansion some people might be imagining at that price point. It's a tract house. But it's a nice tract house in a nice neighborhood; 3,000+ sq ft, on a large lot (by So Cal standards), swimming pool, 3 high end cars in the driveway (and the family is mom, dad, and 1 son who is nowhere near old enough to drive yet) I don't know these folks personally, so I can't say for sure whether they have all the "stuff" mentioned in the posts above. I'd venture to say it's probably safe to assume the answer is yes though.

Seriously? I may be known as the neighborhood grinch from now on, but I stopped, I didn't donate a dime, and instead I strongly suggested that they keep the kids on the sidewalk and not let them run out into the street in their attempt to stop cars.

You want to adopt a baby from China and it's prohibitively expensive? So sell the big house and downsize, get rid of a fancy car or two, etc, etc. Honestly I was appalled at what they were doing.

But I think that type of attitude is prevalent. This is what I want, so this is what I should have, and without personally sacrificing anything to get it. Entitlement.

Sorry it's so long, but my story seems to lend itself so well to the discussion here, and I really have been bothered by it for days. Thanks for letting me share. I think I feel a bit better now.

 

[eliza61]

E! You sound like me! (except for the tax increase)

Remember when I was practically crucified for suggesting a near homeless family
dump their $150 a month cell plan for a $30 no-frills one?

Yep!

 

[MrsPete]

Remember when I was practically crucified for suggesting a near homeless family
dump their $150 a month cell plan for a $30 no-frills one?

Not by me! I thought you were spot-on.

I definitely see people who wouldn't be in trouble if they didn't have their priorities wrong. For example, my cousin who came into some money after being unemployed for several months . . . what'd he pay first. Cable TV. He "needed" it turned back on. And I see plenty of kids at school who drive their own personal cars, have all the same "extras" that other kids do, yet they get free breakfast and lunch every day.

 

[RNtheRN]

Things are definately tough, and will probably get tougher. But things in this country have GOT to change. We have to loose the mentality that we can take care of eveyone in every capacity. We can't keep troops deployed around the world and like someone stated earlier, we can't keep living off borrowed money(credit cards). I don't want to sound like a grouch, but I'm tired of 45% of my paycheck being gone before I see a dime of it.

 

[eliza61]

Maybe it is because I'm not in the typical DISer tax bracket but I don't know anyone who has all of those things and thinks they are necessary. My kids are in the minority among their friends by having internet access at home, and none of their friends have iPods or laptops. One got a plasma TV and all the neighborhood kids were over there for days watching movies because they were just SO impressed. Cell phones have become standard, but the cell phone bill has replaced the home phone bill. Cable is the luxury most people don't want to part with, because without it you get no channels in my area.

The people around me are struggling because they haven't had a raise in years and in many cases have taken pay/schedule cuts but see their health insurance go up 10% a year, because they've been laid off and had to take new jobs making a fraction of what they were earning when they bought their home (and can't sell in this market; we bought our current home for <20% of what it sold for in '01), etc. Not because they've greatly increased their standard of living.

Remember Colleen, we are talking "in general" and over the last 30-40 years. As a general rule in our country, our standard of living has gone through the roof. Only recently has it flat lined. Remember, the market conditions and economic conditions that you're describing have only come about since 2007 when the housing market fell. Prior to that people where seeing 20-30 even 50% growth in their houses and we all thought it would last forever. Remember the tv showm "flip my house"? people were buying houses and immediately "flipping" them for huge profits.

As a whole we're are a society that got use to playing "kick the can" both individually and with our government. credit became free and easy and like kids on a sugar high, we dove in!!

Please don't ever think that I don't see or empathize with those that are suffering. I 1000% do. I work my churchs food bank/ job center, I see and hear the stories 3X's a week. I see who is coming in and I like to think I am extremely concious of the fact that "there but by the grace of God, go I".

What I think we are saying is the fundementally our society has shifted and whether we like it or not we've been "living la vida loca" for the last 3-4 decades on phoney, unsustainable conditions. Now the problem is we've got to fix this problem but unfortunately no one wants "their" situation to change.

 

[OceanAnnie]

E! You sound like me! (except for the tax increase)

Remember when I was practically crucified for suggesting a near homeless family
dump their $150 a month cell plan for a $30 no-frills one?

Not by me either. I remember that thread. (Shudder)

So many thought they "deserved" those cell phones.

Scary stuff. And exactly why we are where we are today.

 

[eliza61]

Not by me! I thought you were spot-on.

I definitely see people who wouldn't be in trouble if they didn't have their priorities wrong. For example, my cousin who came into some money after being unemployed for several months . . . what'd he pay first. Cable TV. He "needed" it turned back on. And I see plenty of kids at school who drive their own personal cars, have all the same "extras" that other kids do, yet they get free breakfast and lunch every day.

But once again, remember MrsPete, he got that message because that's the message we let get broadcast. Kids who drive cars do so because the tv blares the message "no money down, no credit check" walk in with 99 bucks and you can drive a car too. Rarely will you see the message about what it will cost and rarely do they get the message, hey if you save the money it takes to own a car, 10 years down the road you'll be better off.

My contention is that, if you teach a person to be a thief don't get mad when they turn around and steal.

Remember that famous line when we were told the "economy is sound, take your kids to disneyworld". Well no where did anyone say, hey you should only go if you can afford it. Our economy is based on consumerism but instead of letting it grow naturally at a normal slow rate of growth, we inject free and easy credit and then lost our minds. Sort of like a baseball player on steroids. We got use to the exponential profits which were/are unsustainable.

My favorite TV commercial is for a store called "Raymour and Flannigan". It's a furniture store and they always advertise that "you deserve a dining room full of new furniture". You can buy now and make no payments until 2015!!!
by the time 2015 rolls around I'll need new furniture and I haven't even paid for the old. Yet, that is teh American way.

 

[C.Ann]

Cutting social security, disability payments or military pensions is NOT the answer. It is a drop in the bucket compared to other spending. If government had NOT borrowed from social security in the huge amounts it has in the past, OR if they would have re=paid the money it took, there would be NO problem maintaining payments.

The elderly, our servicemen and our disabled veterans all worked and paid into the system. Lets start cutting where it is deserved and stop spending where it doesn't need to be spent.

Lets also all take equal responsibility.

1) Flat tax. No refunds. Pick a % and every paycheck is taxed that percentage. Period. If the amount is 17%, everyone pays that amount. This includes welfare recipients to board directors. This also includes congress, representatives, lawyers and yes, even you Mr. President.

2) No more cushy, for the rest of your life retirement checks and medical for congress and house. That would save many a dollar right there.

3) If the balanced budget is not passes, no paychecks for our representatives until it is.

4) Welfare recipients have to work for their checks. Kind of like the programs during the recession, job works type program. Build houses, clean streets and government buildings, parks and city streets. Provide care at schools and after school day care programs. Cook and serve meals for homeless, shut ins, etc. There are a million things that need to be done and a whole army of people to fill the needs.

5) End all unneeded spending immediately. Who cares about the yellow bellied snapping tree mite, if we no longer have a government? Invest in America first. Not China, Iraq or anywhere else in the world.

6) End EIC. I can see subsidizing school lunches, medical care for children, even housing for children. What I find offensive, is taking a portion of citizens, that pay little to no taxes, that receive the greatest amount of money in subsidies, and giving them a tax return that is 3 or 4 times the amount of taxes they paid in for an entire year.

If someone is below a certain income level and the government says they don't have to pay taxes, that's great. But giving them back EXTRA, doesn't make sense.

There are many more things. I realize my opinions will not be popular, but equate this to your family budget. What do you do when you only have enough for the barest items you need? You cut down and budget your $$$$. Shouldn't the government of the US be that smart?

I am in a 27% tax bracket. That is killer. It seems impossibly hard to deal with. I worked very hard, as a single parent, to support my children and make it through school. There was no EIC, government paid daycare, food stamps etc. I made it through, with a lot of hard work and sweat. I would like to see everyone have the chance to be educated, have a good and stable life, but when it means that our country is in a recession, soon to be in a depression, something needs to give!!

I couldn't agree more! And should those checks not go out? What does everyone think is going to happen? The welfare offices, food stamp offices, and Medicaid offices are going to be overwhelmed with people who have absoutely nothing to live on.. Zip.. Zero.. Where is an 85 year old person going to get a job at the drop of the hat? Or the serviceman/woman - who returned from war with injuries so bad that they're bedridden? Who is going to take care of those people - while our country is so heck-bent on taking care of everyone else in the world? I don't want to hear about a space shuttle launch; sending money to "victims" of disaster in other countries; or any of the hundreds of other ridiculous things that money is being wasted on when some 90 yr. old woman is cowering in fear - crying her eyes out - because she has just heard on the news that her only source of income may be cut off in a matter of days.. Even if it doesn't come to that (right now) it absolutely infuriates me that the news media and "others" have chosen to terrify defenseless people who have no other options at this point in their lives.. Shame on this country!!

Sort of my opinion on this, when comparing this generation to past generations, its not so much the "everyone should own a home" mentality thats putting our country where its at, its the other stuff too.. comparing myself to my parents when they were my age:

Them- House payment, car payment, gas bill, electric bill, phone bill

Us- Same as above including larger house payment/income, PLUS internet bill, cell phone bill, cable bill, plasma TVs, Ipods, laptops etc..

We have greatly increased our standard of living, haven't really increased income, and we wonder why the middle class is struggling?

Exactly - although my past generation may be one back a bit further than yours because they didn't have "house payments" or "car payments".. They built their homes as the money became available - week to week, month to month - or they lived with their parents until they had saved enough money to pay cash for a reasonably sized home.. Most people who purchased cars (and many, many did not), saved up until they could pay cash for a used one and then saved again - while running that one until it just wouldn't run anymore - before paying cash for a new or "newer" one.. And two car families??? Yeah - the rich and the famous.. Appliances were repaired when the need arose - not replaced on credit.. Furniture was replaced when it wore out - not because someone wanted a different color, different style, the newest design.. Rarely did people use credit to purchase things - and certainly not for the gadgets that so many today insist are "necessary"..

Somewhere along the way this country became a "throw-away" society that won't settle for anything less but instant gratification - the biggest and the best - regardless of the cost.. (And that includes our government..)

Absolutely. I'm amazed at the entitlement attitude so many people have.

I have to share what I witnessed just a couple of days ago. True story, I promise, and it's been driving me crazy wondering if I'm being too negative about it.

A family that lives down the street made a bunch of signs, gathered a few neighborhood kids, and aggressively tried to stop every car driving by. Why? They weren't selling baked goods, or lemonade, etc, etc, they were flat out asking for money. OK, again not completely unheard of. Plenty of folks get involved with charities and ask for donations.

So what was their cause? They want to adopt a baby from China. I understand that can be very expensive, and I guess I can sympathize with their plight. ....Except I know they paid $1,040,454 for their house just a couple of years ago.

We live in a very expensive part of the country, so it's not the mansion some people might be imagining at that price point. It's a tract house. But it's a nice tract house in a nice neighborhood; 3,000+ sq ft, on a large lot (by So Cal standards), swimming pool, 3 high end cars in the driveway (and the family is mom, dad, and 1 son who is nowhere near old enough to drive yet) I don't know these folks personally, so I can't say for sure whether they have all the "stuff" mentioned in the posts above. I'd venture to say it's probably safe to assume the answer is yes though.

Seriously? I may be known as the neighborhood grinch from now on, but I stopped, I didn't donate a dime, and instead I strongly suggested that they keep the kids on the sidewalk and not let them run out into the street in their attempt to stop cars.

You want to adopt a baby from China and it's prohibitively expensive? So sell the big house and downsize, get rid of a fancy car or two, etc, etc. Honestly I was appalled at what they were doing.

But I think that type of attitude is prevalent. This is what I want, so this is what I should have, and without personally sacrificing anything to get it. Entitlement.

Sorry it's so long, but my story seems to lend itself so well to the discussion here, and I really have been bothered by it for days. Thanks for letting me share. I think I feel a bit better now.

An excellent example of what I was trying to say above - but it frustrates me so I just can't illustrate my point as eloquently as you have..

Everyone knows what's coming - how many more "warning signs" do we need? But are people really changing their ways - or their mind set? Only if forced to because suddenly no one in the household has a job anymore - and no hopes of finding a job any time in the near future..

The people that are going to be hit the hardest by this are those who are too old or too disabled to do anything about it - and those who have never learned how to live like those before, during, and after the depression - having learned how to live (and be satisfied) with just the basics.. As long as they had their health, a roof over their heads, and food on the table they considered themselves darn lucky - and actually enjoyed their lives..

I shudder to think what will happen to those who don't know how to live any other way..

 

[eliza61]

I I shudder to think what will happen to those who don't know how to live any other way..

Actually this is where I'm most optimistic. Really. the fact is we're Americans, if there is one thing we have and we have it in spades is tenacity. I actually think if the birdbrains in Washington would stop posturing and make some tough choices, John q. public would get their act together. We always have.

Now don't get me wrong, you're absolutely right, it's going to hurt but historically we are at our greatest when we face adversary.

 

[fakereadhed]

Cats Mom- I must be grinchy too. I think people get sucked in by feel good causes, like adoption. I have had the same thoughts about parents of kids with cancer that are fundraising-not for treatment- but so BOTH parents can quit their jobs to care for the child. I guess that makes me Super Grinch.

Hopefully this recession will teach at least some people that life doesn't have to be easy to be fulfilling.

Edited: just want to clarify that I was referring to financial hardships not being easy. The folks in my community with the fundraiser wanted to stop working, but continue to pay for the large new home and 2 new car payments.