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Thread: Good Bad economy inspires Americans to resume wanton spending

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    Good Bad economy inspires Americans to resume wanton spending

    http://www.bloomberg.com/apps/news?p...rcQ&refer=home

    Brooke and Doug Sterenberg booked a seven-day, $2,800 cruise to the Bahamas on Carnival Corp.s ship the Conquest, with its three-deck-high Twister water slide. Its the familys reward for Doug keeping his job.

    He made it through the first round of layoffs at the Houston unit of bankrupt chemicals maker LyondellBasell Industries AF SCA, said Brooke, a 37-year-old mother of two. We feel like we cant control whats going to happen in the future. No matter what, our family deserves a week away.


    While the Sterenbergs are spending for their trip in November, theyre helping make up for it by forgoing a new car.

    The cruise is something we can afford to do thats a luxury, Brooke said.
    Not a used, but a new car.

    Ian Boyd, a 22-year-old resident of the Lower East Side of Manhattan, visited the P.C. Richard & Son Inc. on 23rd Street to treat himself to a 46-inch Samsung television for $1,300. His job as a disc jockey in New York clubs and conservative spending allowed the tattooed Boyd, bedecked in high-top sneakers and a sideways Yankees baseball cap, to pay cash for the high-definition unit.

    It has been a while since I bought anything nice for myself, he said.


    At the Apple Inc. store at 59th Street and Fifth Avenue in Manhattan, Phaeleau Cunneen, 48, splurged on a $30 AC adaptor for his iPod. He used his debit card so he wouldnt increase his debt.

    It was an impulse buy, said the physical therapist, who lives in Manhattans East Village. But Im definitely more aware of my spending, and I think its a good thing.
    $30 for an AC adapter? You are not aware of your spending Mr. Cunneen.

    Weve scraped off the froth in the economy, and we dont foresee it coming back, she said. People felt rich in 2005 and 2006. Some were living well beyond their means. It will be quite a while before they feel rich enough to overspend.
    The people in the article are still living beyond their means.

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    Quote Originally Posted by FL1134

    Not a used, but a new car.


    The people in the article are still living beyond their means.
    In their defense their current car is probably almost two years old!! Seriously though, the government actually thinks people have drastically tightened their belts already and are counting on them to save the economy by resuming the crazy spending. The reality is most people haven't really cut back that much yet compared to what's needed.

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    I wish I had the mentallity that even though my current job is laying off employees and I have no control over the future, I'm entitled to a $3000 vacation. I'd never have a care in the world; just do whatever I want without thinking about the risks.

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    man
    i don't understand this mindset

    in this state of flux where there's a higher than normal chance to be laid off, you'd think people would bunker down and either pay off debt or accumulate rainy day funds..

    im the biggest brandwhore ever, but ive like cut my luxury consumption down to pretty much 0

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    Quote Originally Posted by WillM
    In their defense their current car is probably almost two years old!! Seriously though, the government actually thinks people have drastically tightened their belts already and are counting on them to save the economy by resuming the crazy spending. The reality is most people haven't really cut back that much yet compared to what's needed.
    I was "splurging" when I replaced my 16 yr old (also bought used) vehicle with a used 5 yr old one. I think I'm doing it wrong.

    Look at the leadership coming from the federal government: small cuts with ridiculous deficits; free education + unemployment benefits, and soon to be free health care. Why save money when the all encompassing government will take care of you always? The only way to make people self reliant to to cut the "cord."

    People protesting for higher taxes:
    http://wcco.com/politics/budget.prot...2.1007251.html

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    Quote Originally Posted by red120%
    man
    i don't understand this mindset

    in this state of flux where there's a higher than normal chance to be laid off, you'd think people would bunker down and either pay off debt or accumulate rainy day funds..

    im the biggest brandwhore ever, but ive like cut my luxury consumption down to pretty much 0
    This coming from a guy (chick?) who contemplated a flight to the U.K. to buy an expensive bag? Please!
    Last edited by jase88; 05-13-2009 at 07:03 PM.

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    In many cases, buying a new vehicle is actually cheaper than buying a newer-used one. With this economy, financing incentives are better for new vehicles. And manufacturers are throwing in extras for free.

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    Should people stop spending due to the recession?
    I don't agree with that logic. Spending stimulates the economy. It keeps businesses afloat and people employed.

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    Quote Originally Posted by jase88
    Should people stop spending due to the recession?
    I don't agree with that logic. Spending stimulates the economy. It keeps businesses afloat and people employed.
    Of course hiding all your money isn't going to help the economy.
    Neither is spending money you don't have. Nobody is saying go back to the stone ages, just live within your means.

    Didn't anybody catch that episode of South Park?

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    Do we see anything in the examples cited that those people weren't living within their means?

    Vacation guy got a good deal for that cruise. And while his company isn't doing well, we don't know how much he's saved, or how "employable" he is. He may have the education and experience to be rehired quickly with another company.

    New York disc jockey's can earn a decent living. This guy saved for his TV and paid cash. He didn't go out and use a high-interest credit card to make his purchase. That seems responsible to me....

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    Living beyond their means? How?

    The first example went on a vacation instead of buying a new car. That's likely down payment money they used.

    The second example has been saving up to purchase said TV, and did so using cash.

    The third example spent $30.

    Surely there are better examples out there?

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    Just because you use cash and not a credit card to buy stuff doesn't make it a smart purchase. And a good deal on a vacation doesn't mean you take it, especially when your company is laying people off. You survive round one so you take a vacation?

    Americans save next to nothing and the Social Security system will be broke by the time those people mentioned reach forty let alone retirement age. The benefits your parents or grandparents receive is a thing of the past. It's something people can't comprehend for some reason. And $30 may not seem like a lot but a bunch of them add up over time.

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    Quote Originally Posted by jase88
    In many cases, buying a new vehicle is actually cheaper than buying a newer-used one. With this economy, financing incentives are better for new vehicles. And manufacturers are throwing in extras for free.
    Even with every single deal/price break/etc subtracted from a new car in this economy, the depreciation of driving off the lot is still greater than any savings.

    Quote Originally Posted by jase88
    Should people stop spending due to the recession?
    I don't agree with that logic. Spending stimulates the economy. It keeps businesses afloat and people employed.
    Employed doing what? Our entire economy is based on needless consumption. We have to ride bubbles for "growth;" it is not sustainable.

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    Quote Originally Posted by WillM
    Just because you use cash and not a credit card to buy stuff doesn't make it a smart purchase. And a good deal on a vacation doesn't mean you take it, especially when your company is laying people off. You survive round one so you take a vacation?

    Americans save next to nothing and the Social Security system will be broke by the time those people mentioned reach forty let alone retirement age. The benefits your parents or grandparents receive is a thing of the past. It's something people can't comprehend for some reason. And $30 may not seem like a lot but a bunch of them add up over time.
    What constitutes a "smart" purchase? Is spending money on a vacation ever a "smart" purchase? You don't get anything liquid out of it. That money could be better spent on just about anything else.

    SS will be broke regardless of how much Americans spend. We all know we can't put any faith in that system.

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    Quote Originally Posted by huskyfan23
    What constitutes a "smart" purchase? Is spending money on a vacation ever a "smart" purchase? You don't get anything liquid out of it. That money could be better spent on just about anything else.

    SS will be broke regardless of how much Americans spend. We all know we can't put any faith in that system.
    No, going on a vacation when your company is laying off and you were happy to survive round one is not a smart purchase. People know social security will go broke and they will never see the money they put in so you think they shouldn't bother saving?

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