Recession on the loom

[Colleen27]

What did people do in the past? They lived with family, they grew their own food, they saved for small luxuries, they walked from place to place, they cooked at home, and they did without.

I think people are going to have to go back to those frugal lifestyles. For many people, the idea of a nuclear family living in it's own house is no longer going to be feasible.

But the world has changed since then. One of the big worries that I see coming is that we are already in a position where 1/3 of the population cannot afford health insurance (uninsured + medicaid + medicare) and that number grows every year. No amount of frugality is going to free up the $10K+ that a health insurance policy costs these days as more and more families find themselves living on minimum wage. When DH was a kid and his family was broke they bartered with the doctor for his services; now that same office won't even take uninsured patients.

And back then families didn't have to deal with the spectre of CPS involvement based on living arrangements, or code requirements limiting their ability to share smaller dwellings. Even growing your own food isn't the option it once was. My grandmother grew a huge garden, fully half of her backyard, and kept hens for eggs; my mother lives in that same community and has to abide by rules limiting food gardens to 1% of the total lot size and of course "livestock" is forbidden. Going back to the way things were only works if the rest of the world turns back the clock, and that's not going to happen. That's the big challenge facing American families now - how to somehow live like our Depression-era grandparents in this modern environment of rules and bureaucracies.

 

[Oglet]

But the world has changed since then. One of the big worries that I see coming is that we are already in a position where 1/3 of the population cannot afford health insurance (uninsured + medicaid + medicare) and that number grows every year. No amount of frugality is going to free up the $10K+ that a health insurance policy costs these days as more and more families find themselves living on minimum wage. When DH was a kid and his family was broke they bartered with the doctor for his services; now that same office won't even take uninsured patients.

And back then families didn't have to deal with the spectre of CPS involvement based on living arrangements, or code requirements limiting their ability to share smaller dwellings. Even growing your own food isn't the option it once was. My grandmother grew a huge garden, fully half of her backyard, and kept hens for eggs; my mother lives in that same community and has to abide by rules limiting food gardens to 1% of the total lot size and of course "livestock" is forbidden. Going back to the way things were only works if the rest of the world turns back the clock, and that's not going to happen. That's the big challenge facing American families now - how to somehow live like our Depression-era grandparents in this modern environment of rules and bureaucracies.

Couldn't agree more.

 

[ilovemk76]

What did people do in the past? They lived with family, they grew their own food, they saved for small luxuries, they walked from place to place, they cooked at home, and they did without.

I think people are going to have to go back to those frugal lifestyles. For many people, the idea of a nuclear family living in it's own house is no longer going to be feasible.

Bingo

 

[dvcgirl]

But the world has changed since then. One of the big worries that I see coming is that we are already in a position where 1/3 of the population cannot afford health insurance (uninsured + medicaid + medicare) and that number grows every year. No amount of frugality is going to free up the $10K+ that a health insurance policy costs these days as more and more families find themselves living on minimum wage. When DH was a kid and his family was broke they bartered with the doctor for his services; now that same office won't even take uninsured patients.
.

I agree with Mrs. Pete, but this is an excellent point. Healthcare is the achilles heel for many Americans, even those who are insured. One serious illness....with an 80/20 plan, and that 20% can wipe a family's savings out.

 

[OceanAnnie]

But the world has changed since then. One of the big worries that I see coming is that we are already in a position where 1/3 of the population cannot afford health insurance (uninsured + medicaid + medicare) and that number grows every year. No amount of frugality is going to free up the $10K+ that a health insurance policy costs these days as more and more families find themselves living on minimum wage. When DH was a kid and his family was broke they bartered with the doctor for his services; now that same office won't even take uninsured patients.

And back then families didn't have to deal with the spectre of CPS involvement based on living arrangements, or code requirements limiting their ability to share smaller dwellings. Even growing your own food isn't the option it once was. My grandmother grew a huge garden, fully half of her backyard, and kept hens for eggs; my mother lives in that same community and has to abide by rules limiting food gardens to 1% of the total lot size and of course "livestock" is forbidden. Going back to the way things were only works if the rest of the world turns back the clock, and that's not going to happen. That's the big challenge facing American families now - how to somehow live like our Depression-era grandparents in this modern environment of rules and bureaucracies.

Indeed. Challenges abound.

 

[mpls_mm]

Interesting, very interesting indeed. That is a very similar situation to what we are in at the moment.

Granted we would be giving up living next door to WDW but the reduction of stress from the cost of living/wages down here would offset it IMO.

Something to think about.

The ironic thing is that I am from Florida but left before I got married. We save a lot of money on everything here, from utilities to school fees and everything in between that we have been discussing buying a second home in Florida now that the market has tanked there. We do have a different situation since we own our business and make the same wherever we go, but we do better when utilities, expenses, warehouse rent etc are cheaper. So we might end up having another place where we thought it was too expensive years ago but only becaise we moved someplace cheaper.

 

[PatriciaH]

I am very concerned with how this is going to handle the middle to lower class people. Families who are already living on the edge, people who struggle to keep a roof over their head, electric on and a working car to get back and forward to work.

I fear we are going to see a massive explosion of homeless people/families in this country.

What did people do in the past? They lived with family, they grew their own food, they saved for small luxuries, they walked from place to place, they cooked at home, and they did without.

I think people are going to have to go back to those frugal lifestyles. For many people, the idea of a nuclear family living in it's own house is no longer going to be feasible.

I think we are going to see a massive explosion of crime, looting, violence, etc. like the UK. People are angry and it is not going to be pretty. This happened in the past too.

 

[TyTysMommy]

There are 36 homes in my neighborhood that are "For Sale Bank Owned." A few months ago we counted 49 of them. Why are they selling? Because the banks are taking a huge loss just to unload all these foreclosure homes. Ohio has the 2nd largest foreclosure rate.

My neighborhood is only 5 years old and the homes are selling at half the price they were purchased from the builder at. We considered moving to a more thriving community but the realtor said we'd take a $91,000 loss if we sold it right now. I'm not paying the mortgage company 91K to get rid of my house. I'll just stay here and hope things improve. Unfortunately HUD is buying a lot of these homes and very trashy people who don't care about keeping it nice are moving in all around us. Five years ago this was the place to live.

 

[luvdzny]

I really do feel as there is another recession just around the corner, even though the first one hasnt probably ended. This may be a depression. It is so sad how the economy is not getting any better.

I find it interesting that you are worried about a recession yet you are working on scamming your credit card companies out of money. Don't you think that if people actually paid all of the debts that they owe that it might help the economy?

 

[momx2]

I agree with Mrs. Pete, but this is an excellent point. Healthcare is the achilles heel for many Americans, even those who are insured. One serious illness....with an 80/20 plan, and that 20% can wipe a family's savings out.

It has happened to my family year after year. My DH has a reoccurring illness. He had to leave his much higher paying, but physical job for piece-meal jobs that pay less than a 1/3 of what he was earning before. Good point is that we no longer have child care, but we are close to not needing it anyway. But, the co-pay every year to the tune of several thousand dollars has wiped us out, just as our kids are becoming more expensive. I would love to trade child care for year-round soccer!

We have spent so much in health care that he actually got over $100K "free"a few years ago for a surgery! Even thought I work for the state and have the best health care money can buy in the state (and I pay $610+ per month for family plan) we still pay out several thousands of dollars every year. Something has go to give!!!

 

[OceanAnnie]

"The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances...".

http://www.nytimes.com/2011/09/05/b...uggles-to-stay-solvent-and-relevant.html?_r=1

 

[dvcgirl]

"The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances...".

http://www.nytimes.com/2011/09/05/b...uggles-to-stay-solvent-and-relevant.html?_r=1

Well, they've been struggling for years, but now they're on the brink of collapsing unless they severely cut back. The Postmaster General has been asking for cutbacks for years, but of course, that will be mean laying off 120K people. Not exactly what the government wants to do right now.

 

[nunzia]

I agree with Mrs. Pete, but this is an excellent point. Healthcare is the achilles heel for many Americans, even those who are insured. One serious illness....with an 80/20 plan, and that 20% can wipe a family's savings out.

That is my biggest fear also..and I keep wondering..how on earth did we get here??
My daughter is getting a couple chickens and 2 miniature milk goats..this may be a good idea. Luckily in NM there aren't that many regs about what you can't do with your property.
As far as early retirement, I think that will be seen as a little blip in history. My grandfather was blackballed from the railroads for making a claim (he was injured in a train wreck and had a hole in his skull..he was a train fireman)and was a San Jose bus driver well into his 70's. ..my parent's generation...the depression and war era was the first that really had the deal where you could work with "Ma Bell" (my dad) and retire young...some in my generation also..mainly gov't workers, education..fell into these pension plans. It's become more than obvious these plans are changing and will continue to do so as they just aren't sustainable. I think careers are beginning to correct from being overpaid..the gal my age who managed to make 80K for a job not 'worth' near that. I'm not working in my degreed field and make 24K..I do it for my own reasons and frankly..that's probably about what it's 'worth'. Expectations really need to be reset. I have a friend who was like the other gal..she managed to make 70K at what was really a lower skill no education job..and then when let go came back to NM and got unemployment (making more than I make working) for 2 years where she turned down several jobs making about 40K..now she has one at about that rate..and complains about the low pay and gets to work from home in her jammmies..OK..expectations need to be reset a bit I think.
The sky is not falling, but we are in for a long, difficult adjustment.

 

[nunzia]

"The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances...".

http://www.nytimes.com/2011/09/05/b...uggles-to-stay-solvent-and-relevant.html?_r=1

..did I read that they are so underwater because of employee pension and health plans? I think so

 

[dvcgirl]

..did I read that they are so underwater because of employee pension and health plans? I think so

Well, that's a *part* of the problem, but their biggest problem is a huge drop in the number of pieces of mail that they deliver. On-line billing, e-mail and all the rest of technological advances have made their services less of a necessity than they once were.

Also, they are restricted by laws that their competitors are not held to....for one, they can only raise the price of stamps when inflation rises. That's a huge disadvantage.

Still, DH and I have said that we'd be fine with 3 days of mail. I would say that at least 90% of the mail that we get is junk mail and goes right into the trash. I think that the only bill that we actually send out by mail is our municipal water bill. And if I really wanted to...I could walk the two blocks to our municipal building and just drop it off. This is the way the world is going....

 

[dvcgirl]

That is my biggest fear also..and I keep wondering..how on earth did we get here??
My daughter is getting a couple chickens and 2 miniature milk goats..this may be a good idea. Luckily in NM there aren't that many regs about what you can't do with your property.
As far as early retirement, I think that will be seen as a little blip in history. My grandfather was blackballed from the railroads for making a claim (he was injured in a train wreck and had a hole in his skull..he was a train fireman)and was a San Jose bus driver well into his 70's. ..my parent's generation...the depression and war era was the first that really had the deal where you could work with "Ma Bell" (my dad) and retire young...some in my generation also..mainly gov't workers, education..fell into these pension plans. It's become more than obvious these plans are changing and will continue to do so as they just aren't sustainable. I think careers are beginning to correct from being overpaid..the gal my age who managed to make 80K for a job not 'worth' near that. I'm not working in my degreed field and make 24K..I do it for my own reasons and frankly..that's probably about what it's 'worth'. Expectations really need to be reset. I have a friend who was like the other gal..she managed to make 70K at what was really a lower skill no education job..and then when let go came back to NM and got unemployment (making more than I make working) for 2 years where she turned down several jobs making about 40K..now she has one at about that rate..and complains about the low pay and gets to work from home in her jammmies..OK..expectations need to be reset a bit I think.
The sky is not falling, but we are in for a long, difficult adjustment.

Well, I understand your point, but there's another side to this argument. Real wages for the middle class haven't increased in 10 years. I just read an opinion piece by Robert Reich, and yes, he's a liberal...but this isn't political, just pointing out some numbers that he brought up that piqued my interest.

Right now, in our country, the top 5% of earners consume 37% of the goods. That's a huge number, and it wasn't always this way. In 1977, the top 5% consumed 11% of the goods, because their wages were much lower percentage-wise than they are today. The gap between the middle class and the uber-wealthy has widened by extraordinary leaps and bounds in the last 35 years.

And I believe his argument when he says that we as a nation are much more vulnerable with this kind of set-up. Because, when the stock market plunges, or real estate prices dropped as they have.....those people at the top spend less. I know this because I'm in this group. When the markets plunge, we're much more likely to hold off on major expenditures, to make sure that DH's job is secure. Those who are small business owners in that group are much more likely to hold off on hiring until things look better....on and on it goes. When things get rough, the wealthy move to the sidelines....and wait. That's what's happening now.

And then Reich brings up a very good example of a country who has done things differently....and it's not a tiny country like Norway or something. He brings up Germany....population of 81 million. Yes, a bit under a third of our size, but still....we're not talking tiny here. Their top 5% is more in line with that 11% figure of consumption that we had 35 years ago. And during this latest financial crisis....they have not experienced *any* increase in unemployment. I know Europe is in big trouble and that Germany being tied to their fiscally irresponsible EU family members is going to sting...but they've held up extraordinarily well. Much, much better than we have.

And listen, the top 5% is even a bit disingenuous. I really think that you need to look at the top 1%. The top 1% of earners in this country have seen an incredible rise in their wealth over the rest of Americans.

I'm not saying that unions are the answer either, because I think that they can do a lot of harm. But we can't continue on this path where we're headed.....where the top 1% gets wealthier and wealthier. They'll reach critical mass....because they can't continue to see their wealth explode without a financially healthy middle class.

 

[Oglet]

The USPS has been struggling for a very very long time.

I remember saying to my wife almost 15 years ago that the USPS is in for some tough times. Email and Internet advertising have always been a major problem with the USPS, who writes hand letters and sends them anymore? It's cheaper and faster to just write a email, actually I very rarely even write email anymore, a facebook or IM message is usually what is sent.

Companies are going "green", they now send bills via email which no doubt saves them a large amount of money.

Also dealing with the USPS has become somewhat a pain at times, lines can be long, slow moving and some staff are less than what I would call friendly. I sent a package via the USPS, printed the label at home and took it into our local post office (less than a mile from our house) the lady at the post office gave me a hard time because the zip code being used was the one from our home address and not the zip code of the post office, not to mention their tracking system seems very outdated and can take forever to be updated.

When we moved into this house a couple years ago, we forgot we had to notify the USPS of this, we notified the companies of our new address (we still had out PO box) and just assumed that our mail would arrive as it was sent to our new address, after about a month we found out that we needed to notify them of all people getting mail at our address, well 2 years later we still get mail for the previous person who lived here, yet they wouldn't deliver our mail.

The USPS to me is a Dinosaur trying to make it in the modern world, it's never going to succeed unless it adapts and changes.

 

[OceanAnnie]

The USPS has been struggling for a very very long time.

I remember saying to my wife almost 15 years ago that the USPS is in for some tough times. Email and Internet advertising have always been a major problem with the USPS, who writes hand letters and sends them anymore? It's cheaper and faster to just write a email, actually I very rarely even write email anymore, a facebook or IM message is usually what is sent.

Companies are going "green", they now send bills via email which no doubt saves them a large amount of money.

Also dealing with the USPS has become somewhat a pain at times, lines can be long, slow moving and some staff are less than what I would call friendly. I sent a package via the USPS, printed the label at home and took it into our local post office (less than a mile from our house) the lady at the post office gave me a hard time because the zip code being used was the one from our home address and not the zip code of the post office, not to mention their tracking system seems very outdated and can take forever to be updated.

When we moved into this house a couple years ago, we forgot we had to notify the USPS of this, we notified the companies of our new address (we still had out PO box) and just assumed that our mail would arrive as it was sent to our new address, after about a month we found out that we needed to notify them of all people getting mail at our address, well 2 years later we still get mail for the previous person who lived here, yet they wouldn't deliver our mail.

The USPS to me is a Dinosaur trying to make it in the modern world, it's never going to succeed unless it adapts and changes.

I agree with you. The same can be said about many of our systems. More money isn't the answer. Streamline. Budget.

 

[crisi]

And then Reich brings up a very good example of a country who has done things differently....and it's not a tiny country like Norway or something. He brings up Germany....population of 81 million. Yes, a bit under a third of our size, but still....we're not talking tiny here. Their top 5% is more in line with that 11% figure of consumption that we had 35 years ago. And during this latest financial crisis....they have not experienced *any* increase in unemployment. I know Europe is in big trouble and that Germany being tied to their fiscally irresponsible EU family members is going to sting...but they've held up extraordinarily well. Much, much better than we have.

Germany is a nice model for a lot of things (and a terrible model for others - they haven't handled their immigrant issues any better than we have). They do have intergenerational households. A friend lives in the home her family has had for four hundred years. The family also owns an apartment in the city. At any given time, three (sometimes four) generations are living in these two homes in whatever configuration works best for the family. Family size is small - one or maybe two children. No car - trains in Germany are excellent still, and you walk or bike or bus where the train won't get you.

They took a hit integrating East Germany, and that hasn't worked its way through completely yet, but they pulled together.

 

[Oglet]

Well, I understand your point, but there's another side to this argument. Real wages for the middle class haven't increased in 10 years. I just read an opinion piece by Robert Reich, and yes, he's a liberal...but this isn't political, just pointing out some numbers that he brought up that piqued my interest.

Right now, in our country, the top 5% of earners consume 37% of the goods. That's a huge number, and it wasn't always this way. In 1977, the top 5% consumed 11% of the goods, because their wages were much lower percentage-wise than they are today. The gap between the middle class and the uber-wealthy has widened by extraordinary leaps and bounds in the last 35 years.

And I believe his argument when he says that we as a nation are much more vulnerable with this kind of set-up. Because, when the stock market plunges, or real estate prices dropped as they have.....those people at the top spend less. I know this because I'm in this group. When the markets plunge, we're much more likely to hold off on major expenditures, to make sure that DH's job is secure. Those who are small business owners in that group are much more likely to hold off on hiring until things look better....on and on it goes. When things get rough, the wealthy move to the sidelines....and wait. That's what's happening now.

And then Reich brings up a very good example of a country who has done things differently....and it's not a tiny country like Norway or something. He brings up Germany....population of 81 million. Yes, a bit under a third of our size, but still....we're not talking tiny here. Their top 5% is more in line with that 11% figure of consumption that we had 35 years ago. And during this latest financial crisis....they have not experienced *any* increase in unemployment. I know Europe is in big trouble and that Germany being tied to their fiscally irresponsible EU family members is going to sting...but they've held up extraordinarily well. Much, much better than we have.

And listen, the top 5% is even a bit disingenuous. I really think that you need to look at the top 1%. The top 1% of earners in this country have seen an incredible rise in their wealth over the rest of Americans.

I'm not saying that unions are the answer either, because I think that they can do a lot of harm. But we can't continue on this path where we're headed.....where the top 1% gets wealthier and wealthier. They'll reach critical mass....because they can't continue to see their wealth explode without a financially healthy middle class.

I agree with everything you said. You can now expect replies from people who believe that people should be able to make as much money as possible because that is the American way.

No CEO is worth 200 Million dollars, especially when the wages of the people they are paying are being subsidized by government programs such as food stamps and other welfare payments. There is something seriously wrong when people have to rely on government payments because even working 50+ hours a week they still qualify for these kinds of programs, I am not taking about people who have a tribe of children either.

You have people getting back $7000 - $8000 tax refunds when they paid less than $1000 tax for the year, if any at all. No matter what side of the fence you are on that is a redistribution of wealth, why should the government and tax payers be picking up the tab for this? Why shouldn't the burden of paying a responsible wage be on the companies who are making all the money?