Freedom & Frugality go hand in hand.

[maat55]

IMO, an society that values frugality and good personal finance is an society that would highly value freedom. If the majority of society were living below their means, they would not be open to socialistic engineering.

It seems that a vast number of americans live payday to payday, and dependent on some form of government programs. This has been exasperated by growing healthcare advances and large city population.

But, I believe that an independent society is still possible if it could retrain its thinking to an society that values frugality and proper financial skills.

The big question is, how do we do this? It is not enough for the very few with these skills to just train their own children, it needs to be a massive movement, like a new fad that could be instilled. I liken it to getting a junkie off drugs, only this is getting society off debt & consumption.

Any thoughts?

[jIM_Ohio]

Originally Posted by maat55

IMO, an society that values frugality and good personal finance is an society that would highly value freedom. If the majority of society were living below their means, they would not be open to socialistic engineering.

It seems that a vast number of americans live payday to payday, and dependent on some form of government programs. This has been exasperated by growing healthcare advances and large city population.

But, I believe that an independent society is still possible if it could retrain its thinking to an society that values frugality and proper financial skills.

The big question is, how do we do this? It is not enough for the very few with these skills to just train their own children, it needs to be a massive movement, like a new fad that could be instilled. I liken it to getting a junkie off drugs, only this is getting society off debt & consumption.

Any thoughts?

3 points

1) define examples of social engineering- we are all guilty of various forms of this if we take child tax credits or claim exemptions for our kids IMO.

2) "vast number" does not imply 33%, 49%, 51% or anything else- sure lots are living payday to payday, but those people will pay my social security, and if they didn't do that, my taxes would go up to pay the social security I paid in so I can collect what I paid in. Oh wait that is social engineering again.

3) How do you get people off the public assistance? Three fold I think

a) Require all people on any public assistance (paid by taxes) to submit a drug test each time they collect benefits. If this is 1X per month, works for me. This would create jobs in the drug testing industry too.

b) all benefits have limits. Yearly limits and lifetime limits. If healthcare companies can impose a lifetime max, then unemployment and foodstamps can too.

c) Opportunity is the american way- it is OK for the government to sponsor opportunity (like college tax credits or building roads) and for others to take advantage of that opportunity. The most important change which needs to be made is to turn USA back into a land of opportunity.

[Snodog]

Originally Posted by maat55

It seems that a vast number of americans live payday to payday, and dependent on some form of government programs.

I don't believe the vast number of people are dependent on government programs. Americans have this idea that we spend alot on welfare when in reality we are near the bottom in welfare expenditures for developed countries. Welfare state - Wikipedia, the free encyclopedia

As for wishing Americans saved more- Ever hear of the "Paradox of thrift"? Our savings rate as a country has gone from 0% to 6% in the last 3 years and the economy is in shambles. Imagine the strain on the economy if the savings rate went to 15 or 20%. What we need is for people to level off their savings and start spending again so the government won't have to. I'll admit I'm being hypocritical as I'm not doing my part to keep the spending up. Actually the best way for this to happen would be to VERY GRADUALLY increase our savings rate to 15% over the next 30-40 years so the pain is spread out.

[maat55]

[quote]

Originally Posted by jIM_Ohio

3 points

1) define examples of social engineering- we are all guilty of various forms of this if we take child tax credits or claim exemptions for our kids IMO.

As it stands today, our government is distorting the housing market(fannie & Freddie),retirement(social security), healthcare(medicare,medicaid,health ins.), welfare(federal housing,food stamps) and unemployment. This does not represent a free market Constitutional government.

2) "vast number" does not imply 33%, 49%, 51% or anything else- sure lots are living payday to payday, but those people will pay my social security, and if they didn't do that, my taxes would go up to pay the social security I paid in so I can collect what I paid in. Oh wait that is social engineering again.

Social security is not the small old age ins. it used to be, today it takes 12.4 of everyones earnings(up to 106k), that represents a large portion of the majority of americans discretionary earnings. In order to maintain the program, taxes will go up sharply. How will we be able to tell this country from any other socialitic country? Here is the annual report for SS/medicare. You find near the bottom how much of it is financed in the future through the general fund to hide its self sustaining inability. Last years report showed how large increases in the payroll taxes would be needed to maintain them.

Trustees Report Summary

a) Require all people on any public assistance (paid by taxes) to submit a drug test each time they collect benefits. If this is 1X per month, works for me. This would create jobs in the drug testing industry too.

It is not the duty of a federal government to do drug tests, provide food, housing, education, retirement or healthcare. These are personal issues to be left to the individual and the states.

b) all benefits have limits. Yearly limits and lifetime limits. If healthcare companies can impose a lifetime max, then unemployment and foodstamps can too.

While I disagree with federal provisions, at least limits would be astep in the right direction.

c) Opportunity is the american way- it is OK for the government to sponsor opportunity (like college tax credits or building roads) and for others to take advantage of that opportunity. The most important change which needs to be made is to turn USA back into a land of opportunity.

The free market is where opportunity exists. Building roads(that are national in nature)is an duty of federal government. Building bridges for a few is not.

What is prohibiting opportunity is over government regulations starting with minimum wage and an massive wasteful tax structure. Government by nature is intrusive and socialistic, if not apposed, you get what we have today.

My focus is on the benefits of a free people and a free market. This takes people being responsible for their own needs of healthcare, incomes, housing food etc. Instead many live on the edge and expect government assistance when life happens. If our culture was to live on less than you earn, the menatility that government is our provider would deminish sharply, leaving us a freer country and market.

[maat55]

[quote]

Originally Posted by Snodog

I don't believe the vast number of people are dependent on government programs. Americans have this idea that we spend alot on welfare when in reality we are near the bottom in welfare expenditures for developed countries. Welfare state - Wikipedia, the free encyclopedia

Welfare is not the only program the government performs to intrude into the market and create dependency. You have unemployment, Fannie and Freddie, SS/medicare, student loans. These all create distortions in the free market and dependency of americans.

As for wishing Americans saved more- Ever hear of the "Paradox of thrift"? Our savings rate as a country has gone from 0% to 6% in the last 3 years and the economy is in shambles. Imagine the strain on the economy if the savings rate went to 15 or 20%. What we need is for people to level off their savings and start spending again so the government won't have to. I'll admit I'm being hypocritical as I'm not doing my part to keep the spending up. Actually the best way for this to happen would be to VERY GRADUALLY increase our savings rate to 15% over the next 30-40 years so the pain is spread out.

I don't buy the idea that spending instead of good personal finance is the cure for our current problems. This mess was caused by imporper government intrusion into the housing market and an build of national consumer debt. Think about it, do we not have enough junk around our homes and storage buildings?

If I were an drug addict, I would not want an doctor to tell me it is best to back down off of my drug problem over an 30-40 year period.

IMO, when people start using common sense, the market and society will reflect prosperity naturally. As long as we are led by the nose, by government, our decay will continue. Today, our decay is affecting future generations.

[GrimJack]

Originally Posted by maat55

IMO, an society that values frugality and good personal finance is an society that would highly value freedom. If the majority of society were living below their means, they would not be open to socialistic engineering.

Do you have any data to support you idea? What the heck is 'socialistic engineering?

It seems that a vast number of americans live payday to payday, and dependent on some form of government programs. This has been exasperated by growing healthcare advances and large city population.

What is a vast number?

But, I believe that an independent society is still possible if it could retrain its thinking to an society that values frugality and proper financial skills.

The big question is, how do we do this? It is not enough for the very few with these skills to just train their own children, it needs to be a massive movement, like a new fad that could be instilled. I liken it to getting a junkie off drugs, only this is getting society off debt & consumption.

Any thoughts?

The US has never been an independent society - it has always been an interdependent society. Cowboys never made their own saddles, saddle-makers never killed their own cows, farmers never built their own tractors, et cetera.

What do you mean by 'independent society'?

[Debt Vigilante]

[quote=maat55;267223]

Welfare is not the only program the government performs to intrude into the market and create dependency. You have unemployment, Fannie and Freddie, SS/medicare, student loans. These all create distortions in the free market and dependency of americans.

I cant even remotely agree with student loans... the government offers a low interest rate on student loans - thats why people take them out. There is nowhere to go to collect unemployment other than the government, however there are plenty of institutions that offer student loans that are not affiliated with the government in the slightest.

[kork13]

Are you a student of Thomas Jefferson, maat? Just curious if you've read much written about/by him, as alot of your points (and posts in other threads) echo Jeffersonian ideas quite nicely... If not, I might recommend a study of him worthwhile.

Anyway... I do agree that much of what you're talking about would be a preferred course of action as compared to the current state of affairs. Back to Jefferson, he stated:

"I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."

However, in order for such changes to happen, I think most of Congress will have to be replaced by true fiscal conservatives. I suppose it's possible given today's tide of anti-incumbency, but I don't see it happening anytime too soon. There are 3 (possibly 4...though I don't see my generation, now in our 20s, having much faith in SS and other programs) full generations living today who are planning their later years (or in them now) around social security, medicare, and other such programs. The political capital required to overturn that tide will be enormous.

[GREENBACK]

I agree with what you say Maat. I think it will take quite a few generations for this to become reality if we started today. None of us would likely see the results. There are too many people on the goverment nipple and the weaning process would be painful and lengthy. Frankly, politicians of today are to spineless to make it happen. That's my .02. I think part of the allure of socialism is that it attracts those who don't want to do much but can get by with gov't handouts and really couldn't care less about the freedom they've taken for granted all their lives.

As any good drug counselor will tell you...Junkies only get off drugs when they reach rock bottom and decide for themselves to kick it.

[Mjenn]

I disagree - i live in a nanny state at the moment, but am American. I recently had a kid here and went back to the US for the first time. I can tell you there is a huge difference between the way parents consume here for their kids vs. the US. I was shocked.

That said, I am currently fully benefiting from 'socialistic engineering' I am on month 6 of 18 months of parental leave, paid at 80% of my salary from the government and my kid gets 150 dollars a month in allowence from the state. I live in a rental appartment that has a set rent - based on the governments limit, despite being privately owned. And I had no health care costs to deliver said child because it was all paid for by the government.

However, very few families here have nursaries for their babies. Young babies live in bassinets in the parents room. There are very few toys purchased, only essentials like clothes, diapers, strollers are the norm. I have never seen a shopping cart cover, or expensive baby gadgets.

Many families continue to live in small apartments until the children are school age and they want a backyard.

I don't see a lot of out of control spending here, especially not in comparison with my shopping trips to the states. People here like clean design, without a lot of 'stuff'. The stuff they buy does tend to be more high end (or Ikea) and that is because they expect it to last a long time and not need replacing.

In the beginning I didn't believe much in the system here, now I have to say I think it is great. And yes, that probably is because I am benefiting from it in some way - I also paid into it a great deal before hand and will continue to do so when I go back to work.

So in proportion to the amount of social programs here vs. the US one would expect that here people would be even less frugal. And I'm saying I don't think that is necessarily the case.

[elessar78]

Originally Posted by maat55

IMO, an society that values frugality and good personal finance is an society that would highly value freedom. If the majority of society were living below their means, they would not be open to socialistic engineering.

It seems that a vast number of americans live payday to payday, and dependent on some form of government programs. This has been exasperated by growing healthcare advances and large city population.

But, I believe that an independent society is still possible if it could retrain its thinking to an society that values frugality and proper financial skills.

The big question is, how do we do this? It is not enough for the very few with these skills to just train their own children, it needs to be a massive movement, like a new fad that could be instilled. I liken it to getting a junkie off drugs, only this is getting society off debt & consumption.

Any thoughts?

I see where you're coming from and I'm not going to take a knee-jerk approach to my response. Not that others have.

We have to change our "stories," our mythology.

One story we tell ourselves is that a good American works hard, so he/she can provide for his family.

"Provide" has become severely distorted and we're a nation of consumers. We're told we're consumers, we're treated like consumers which makes it hard to live frugally. The "danger" is that if we change this aspect of our society then we severely limit the economic engine, which I think benefits everyone.

In our capitalist society, business works hard to identify what everyone wants and provide it for them. What happens when a parent identifies whatever a kid wants and provides it to them? I think it's fair to say, in most cases that child doesn't grow up well adjusted.

[Mjenn]

I'd like to add that despite a broad safety net - most people carry very little debt here in nannycountry. I'm the only one I know with a credit card that isn;t tied to work travel expenses andI keep mine to maintain us credit. Also, there are no overdrafts on your bank card, so most people do live within their means. Debt is either your mortgage or student loan. The housing crises hasn't hit here - despite the controlled rent the housing market is booming....

[FrugalDad123]

"Can I afford it?" That's the question that many people mis-answer just before spending money. I think most people answer that question simply by looking at their current balance. One's current balance needs to always be compared to a budget plan.

Someone may look at their balance today and see that they have x. The question is how does x compare to the plan? Is x high? low? If x is high, then maybe yes, they can afford it.

Too many people only compare x to the price tag of the item they want. If x is greater than the price tag, they simply make the purchase. That's where the problem starts.

[disneysteve]

Originally Posted by FrugalDad123

Too many people only compare x to the price tag of the item they want.

Even worse, many people don't even do that. They don't look at the price tag. They look at the payments over time. If they can afford the payment, they feel they can afford the item. That's where people really get into trouble. They go into debt to buy things they don't need and can't really afford.

[FrugalDad123]

So true.

[creditcardfree]

Originally Posted by maat55

IMO, an society that values frugality and good personal finance is an society that would highly value freedom. If the majority of society were living below their means, they would not be open to socialistic engineering.

It seems that a vast number of americans live payday to payday, and dependent on some form of government programs. This has been exasperated by growing healthcare advances and large city population.

But, I believe that an independent society is still possible if it could retrain its thinking to an society that values frugality and proper financial skills.

The big question is, how do we do this? It is not enough for the very few with these skills to just train their own children, it needs to be a massive movement, like a new fad that could be instilled. I liken it to getting a junkie off drugs, only this is getting society off debt & consumption.

Any thoughts?

I think it comes down to educating people on all facets of money, particularly compound interest and investing. Many people have no idea how much buying things on interest adds to the price of something. Recent credit card legislation has likely opened many people's eyes to how much they are paying in interest in dollar terms and how long it will take to pay the balance off.

Investing education just gives people the confidence and knowledge to make their money work for them. So many people don't even know what the DOW really is. Just ask 10 people on the street and see how many people could explain it. If you don't understand investing you are less likely to do so, or if you do, you may make some costly mistakes.

[maat55]

Originally Posted by Debt Vigilante

I cant even remotely agree with student loans... the government offers a low interest rate on student loans - thats why people take them out. There is nowhere to go to collect unemployment other than the government, however there are plenty of institutions that offer student loans that are not affiliated with the government in the slightest.

Ever wonder why the cost of higher ed is so high? If free market forces were in play, prices would likely be lower allowing an individual to pay as you go. I have no problem with private entities loaning for college. But, passed in the health ins. bill, the government now controls all student loans.

[maat55]

Originally Posted by kork13

Are you a student of Thomas Jefferson, maat? Just curious if you've read much written about/by him, as alot of your points (and posts in other threads) echo Jeffersonian ideas quite nicely... If not, I might recommend a study of him worthwhile.

Anyway... I do agree that much of what you're talking about would be a preferred course of action as compared to the current state of affairs. Back to Jefferson, he stated:
However, in order for such changes to happen, I think most of Congress will have to be replaced by true fiscal conservatives. I suppose it's possible given today's tide of anti-incumbency, but I don't see it happening anytime too soon. There are 3 (possibly 4...though I don't see my generation, now in our 20s, having much faith in SS and other programs) full generations living today who are planning their later years (or in them now) around social security, medicare, and other such programs. The political capital required to overturn that tide will be enormous.

I haven't specifically studied Jefferson, but I have read many of his quotes. I've read books and quotes pertaining to the Constitution. Most founders and many of the authors I read believe that a Constitutional government is very limited in size, much smaller than we have today.

IMO, we would have a much smaller government if not for social programs, many of the issues like: healthcare, retirement, education, food and housing are individual based issues and not the business of the federal government.

It is typical for government to add new socila programs during depressions and recessions, when the people are most vunerable. We should be focusing on better personal finances and not social programs. It is the old teach a man to fish, not give a man a fish. Government only gives a man a fish.

I look at SS for what it is, it is an horrible product handled by a horrible management company, no intellegent person would go to the government for their retirement investment. Secondly, it is forced and not voluntary, that makes it unconstitutional. It and medicare will not only bankrupt the country, but they will also destroy its freedom.

[maat55]

[quote]

Originally Posted by GrimJack

Do you have any data to support you idea? What the heck is 'socialistic engineering?

I'll let the national debt and unfunded liabilities speak for themselves. Not to mention the longevity of unemployment.

What is a vast number?

Defining Paycheck to Paycheck
I don’t know that an official definition of “living paycheck to paycheck” exists, but since I’ve been there myself I can sum it up by the example of checking your balance the day before payday and breathing a sigh of relief that you are not overdrawn, even though the $1.81 left in your checking account doesn’t leave much breathing room. Your credit cards are nearly maxed out, you have nothing in an emergency fund, and your wallet is empty. Kind of reminds me of my own soggy hotdog story.

The Numbers
The survey revealed some interesting statistics:

47% of workers live paycheck to paycheck to make ends meet
21% of those earning over $100,000 also live paycheck to paycheck
25% of all workers reported they save nothing each month
33% do not participate in any retirement programs (employer-sponsored or otherwise)
Living Paycheck to Paycheck

The US has never been an independent society - it has always been an interdependent society. Cowboys never made their own saddles, saddle-makers never killed their own cows, farmers never built their own tractors, et cetera.

What do you mean by 'independent society'?

Independent from the federal government for personal needs like, food, housing, healthcare, education and income.

[maat55]

Originally Posted by GREENBACK

I agree with what you say Maat. I think it will take quite a few generations for this to become reality if we started today. None of us would likely see the results. There are too many people on the goverment nipple and the weaning process would be painful and lengthy. Frankly, politicians of today are to spineless to make it happen. That's my .02. I think part of the allure of socialism is that it attracts those who don't want to do much but can get by with gov't handouts and really couldn't care less about the freedom they've taken for granted all their lives.

As any good drug counselor will tell you...Junkies only get off drugs when they reach rock bottom and decide for themselves to kick it.

I have to agree that reverting back to a constitutional government would be difficult. It cannot happen in Washington, it has to start in the private sector. Americans have slowly gotten used to socialism and do not remotely understand what the Constitution was designed to do.

It was not just intended to protect freedoms for the individual from government, but visa versa as well. It takes a people willing to accept the responsibilities that come with freedom to keep freedom.