Consumer economies fail, if consumers cannot afford to buy..It's just that simpl

[USA4ME]

SoCalDem

Consumer economies fail, if consumers cannot afford to buy..It's just that simple
 
It's common knowledge that consumer debt is at an all-time high, and that we have (and the rest of the world has) cut back in our spending.

Bailing out GM, Chrysler & Ford may be necessary, but it's like giving a piece of iceberg lettuce to a person dying of malnutrition.

"Consumers" get their "spending money" in very few ways..

1..earn it at a job
2..inherit it
3..steal it
4..borrow it

I know some will say, that many people live on interest from investments, but right about now, that's becoming less and less likely to continue, and really..how many people in your immediate circle are independently wealthy from "investments" that THEY made?..(cannot count "family money")

#2 accounts for the very tippy-top of our consumer base, and those folks do spend a LOT of money, but even they can only buy so much

#3 "works" for a little while, but eventually most of them end up getting caught, and their "consuming" days come to an abrupt end

#4 has become the modus operandi for many, if not most of us, for a long time, and has toxic "end-game" consequences for millions of "former consumers".


#1 is the only sustainable method for keeping an economy healthy, but if "things" cost more and more, and employers want to pay workers less and less, there is a "crash-point"..

If the numbers I have read are true, there is at least a $2 trillion debt in consumer spending. This is money owed to "someone", for "something".

Instead of giving cash to the people who are OWED, wouldn't a more sustainable "fix" be to "give" the money to the people who OWE, with the caveat, that it is for debt reduction to the entities that are owed.

The money ends up in the same place, but it has an added benefit, of paying OFF the debts at the same time.

This does NOT apply to obvious circumstances, such as land speculators, gamblers, etc...but to the rank and file 'consumers" who have been spinning those plates for decades, just trying to keep them from all crashing..trying to keep kids in school keep a roof over their heads, trying to buy food, keeping autos running..you know...USING all those "services" that make up our "service economy".

As all "good" bailouts go, this would have to have limitations and regulations , and would be a ONE TIME "pass go, and collect" initiative.

Part of the "deal" would be for ALL credit accounts to be closed for an interim period, while there is a true sorting out of which consumers would regain credit, and which would not.

Believe it or not, there WAS a time when banks did quite well without every customer having a wallet full of credit cards.

If a family had been paying several hundreds of dollars every month to credit card companies, that money would now be freed up to actually BUY stuff they needed. .. available to replace aging cars, repair "sick" cars, to pay college tuition, to maybe even take a vacation,and spur on economies of vacation-spots.

To get our economy moving, money has to be in the hands of the people who buy "the stuff".


There also needs to be a floor and a ceiling for mortgage debt and for credit cards, for the ones who actually qualify for credit..and for credit cards, there needs to be realistic LIMITS to credit offered and approved. It's lunacy to give an unemployed 18 yr old college student a credit card with thousands of dollars of "available credit"..and to give them multiple "brands" of credit cards.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4480873

"To get our economy moving, money has to be in the hands of the people who buy "the stuff"."

Huh!?!

Since when have liberals ever believed that "the people" could be trusted to to do the right thing with their own money?  They've been preaching that people need to pay more in taxes to the almighty gov't, and now all of a suddden "the people" need to have more money in their hands in order to "get our economy moving?"

These idiots flip-flop more than any group I've ever witnessed.

.

[DumbAss Tanker]

OK, that was brain-freeze stupid.  GM has such a diverse set of challenges (of course Dems will NEVER identify the "U" word as being at the core of them) that they'll piss their bailout money away, so it makes more sense to spread it over 100 million people with massively more diverse goals?  I don't think so, not that I support keeping those poor idiots out of Chapter 11, where they belong.  And BTW, 25 billion spread over 100 million is only $250 apiece, i.e. even less than the Obamessiah's freebie offer.

[JohnnyReb]

1..earn it at a job
2..inherit it
3..steal it
4..borrow it

Where is #5 ? I guess I'll have to add it.

#5..sucking the gummit tit.

[Chris_]

1..earn it at a job
2..inherit it
3..steal it
4..borrow it

Where is #5 ? I guess I'll have to add it.

#5..sucking the gummit tit.

meh.  "Sucking the gub'mint tit" comes under category 3: Steal it.  Except they have government bureaucrats take the money at gunpoint, instead of doing it themselves.

[franksolich]

1..earn it at a job
2..inherit it
3..steal it
4..borrow it

Where is #5 ? I guess I'll have to add it.

#5..sucking the gummit tit.

Damn, I forgot that one, number 5, and usually that's my own bete noire.

Thanks, sir!

[JohnnyReb]

meh.  "Sucking the gub'mint tit" comes under category 3: Steal it.  Except they have government bureaucrats take the money at gunpoint, instead of doing it themselves.

I thought he was referring to honest thieves.

[BlueStateSaint]

I thought he was referring to honest thieves.

Honset mistake.

[Peter3_1]

Actually, what the consumer can afford being a limiting factor is PARTLY true. We can DECREASE the costs and we can INCREASE the consumer's finances.

Henry Ford reduced the cost of a Model T to a low of $345 as economies of scale were realized. Whil;e the cost of a model T dropped from $870 in 1909 to that $345 he INCREASED wages from some pittance to (GASP)  $5 A DAY! Other manufacturers warned Ford that these wages were RUINOUS! Ford said at his proces, every worker could  buy a car, he was creating CUSTOMERS as well as employees.

Remember a DUSENBERG rolling chassis cost $8-9,000 , then you had built a body on that for a few thousand more.

In the '50's and 60's main frames cost hundreds of thousands of dollars, were as big as a small house, required minuite to miniute maintance. Today, the computer I'm typing on cost (box, no printer, no keyboard, no screen) about $400 and can do more than any computer at any price  could  in 1965 and requieres some minimal housekeeping once a week (sweep those cookie crumbs out) and we replace them every couple of years with mild aplomb.

Economics are dynamic, not static, and also not a zero sum game.

[Carl]

More wisdom from the minds of people that can believe opposite things at the same time.

If a family had been paying several hundreds of dollars every month to credit card companies, that money would now be freed up to actually BUY stuff they needed. .. available to replace aging cars, repair "sick" cars, to pay college tuition, to maybe even take a vacation,and spur on economies of vacation-spots.

The things mentioned require anywhere from short to long term debt so what exactly would be any different except to make the current debt load a person has disappear.

This no doubt is from a person that has not used debt as a responsible tool and tries to hide that by claiming they HAD to use their card(s) to get by.

[JohnnyReb]

More wisdom from the minds of people that can believe opposite things at the same time.

The things mentioned require anywhere from short to long term debt so what exactly would be any different except to make the current debt load a person has disappear.

This no doubt is from a person that has not used debt as a responsible tool and tries to hide that by claiming they HAD to use their card(s) to get by.

When it comes to what to do with money, have you ever notice that the DUmmies never mention "save some for a rainy day"?

[Vagabond]

Let these fools have their way.  It will change nothing at all.  In another month after they have their checks they would be clamoring for another larger government payout.  All while not realizing they were merrily looting somebody.

TINSTAAFL.

[Peter3_1]

Eventually, treasury will loot everyone with inflation, by simply printing up more and more money. This cannot happen, nor can we alow it to happen.

[JohnnyReb]

Eventually, treasury will loot everyone with inflation, by simply printing up more and more money. This cannot happen, nor can we allow it to happen.

When it comes to the national and world economies, I'll admit, I'm dumb as dirt. I've always wondered why the government keeps piling on debt instead of trying to pay it off. It's to a point now where the only way I see they can pay it off is through hyperinflation. Our money becomes so worthless and they will be so much of it in circulation that paying off a few trillion will be no problem at all.

Remember that those dollars were worth something when they were borrowed. The ones they pay off the debt with will be worth a lot less or in other words worthless. You loan them $1 worth 27 cent(?) and they pay you back with one worth a penny.

[rich_t]

Eventually, treasury will loot everyone with inflation, by simply printing up more and more money. This cannot happen, nor can we alow it to happen.

It has been happening now for about 70 years.  How do you propose we stop it?

[Duchess]

"To get our economy moving, money has to be in the hands of the people who buy "the stuff"."

Huh!?!

Since when have liberals ever believed that "the people" could be trusted to to do the right thing with their own money?  They've been preaching that people need to pay more in taxes to the almighty gov't, and now all of a suddden "the people" need to have more money in their hands in order to "get our economy moving?"

These idiots flip-flop more than any group I've ever witnessed.

.

These idiots also come up with more ideas to scam "free" money, that some poor sucker has to fork over as "taxes". They spent themselves into debt, and someone who didn't, should bail them out?