Miss a Payment, Triple Your Interest Rate

October 14, 2003 8:13 AM

Americans are not going broke over lattes! Salon (warning: ad click-through required) interviews the author of a book who contends that American middle class overconsumption is a myth. This made me really think about how I relate to my $$$, and what I think is pushing me deeper into a hole. According to this author, kids are forcing people into bankruptcy, and it's not because we buy them gameboys and expensive clothes. The author also claims that credit card companies and mortgage lenders need to be regulated by the govt., as they are feeding off of middle class hardships. It's also making me wonder why real estate developers aren't building small homes anymore, at least in my state of the union.
posted by archimago (91 comments total)

This post is a hell of an interesting couterpoint to this thread.
posted by jacquilynne at 8:32 AM on October 14, 2003

This article describes perfectly the experience that my wife and I are having. If we stretch we can afford a modest condo in a town with a good school district. But that will leave us over-leveraged and vulnerable.

Add in the cost of daycare for five years (approx. $18K/year) and it becomes questionable whether we can afford to have a child. We wanted to have two children before we did the math, but now that's becoming increasingly questionable. If we do have two kids, there's a good chance one of us will quit work to stay home, raise the kids, and save the daycare cost. Of course, doing that means buying a cheaper place in a town with schools that aren't as good, etc, etc..

This is all in the context of being raised "middle class" and operating under the assumption that we'd be able to continue that life style.

And, yes, we have pretty much stopped buying lattes.
posted by alms at 8:36 AM on October 14, 2003

America Now: The Anthropology of a Changing Culture (or alternate title: Why Nothing Works: The Anthropology of Daily Life) by Marvin Harris discussed this in depth over 20 years ago. Get thee to a used bookstore.
posted by y2karl at 8:36 AM on October 14, 2003

Great article. I don't know if everything he says is true, but it does offer food for thought.

The data show, however, that today's families are actually spending less on consumption that their parents spent a generation ago: 22 percent less on clothing, 21 percent less on food, including eating out, 44 percent less on appliances, less on furniture, less on floor coverings.

Over the past generation mortgage costs have increased 70 times faster than a man's wages.

Wow!

The average family in the U.S. today lives in a house that is 6.1 rooms. That's larger than the average family in the early 1970s -- they lived in a house that was 5.7 rooms -- but today's family has hardly rocketed into McMansion status.

So it's not necessarily bigger houses.
posted by eas98 at 8:40 AM on October 14, 2003

This is a great interview and it makes some thought-provoking points:

Today's families are in financial trouble, because they're spending so much more on big fixed expenses -- mortgage, health insurance, car, preschool, after-school care and college.

Over the past generation mortgage costs have increased 70 times faster than a man's wages

In 75 percent of the metropolitan areas across America, a police officer cannot buy a house on one income. The same is true for a teacher or a firefighter. In other words, a one-income family in most of the United States cannot afford to be middle-class homeowners.

Virtually every civilized nation on earth has caps on interest that can be charged to consumers, except the United States.

My boyfriend and I constantly wonder how it is that our parents raised and housed and fed and clothed us on their small 1970's salaries, yet for us money is tight with a combined income of $50,000+ a year - and this article tells us exactly why. Its the mortgage. And the oil bills in the winter. And the deductible on the heath insurance. We would love to have a child, but I'm the primary wage-earner - how can we afford for me to take 12 or 16 weeks away from work? And then the cost of child-care - not to mention the fact that the idea of putting a 2 or 3 month old baby in daycare scares me to death. But what's our other option? Our mortgage is lower than rent on most 2 bedroom apartments in this area, and if we don't work our other option is pretty much living in a cardboard box....
posted by anastasiav at 8:48 AM on October 14, 2003

I just did a search on realtor.com to look at house prices in the town I grew up in (Doylestown, PA). Out of 174 single-family-home listings, the cheapest one is a 912 sq. ft. ranch home for $199,000. Only 14 of the 174 listings are under $300,000.

That's a lot of lattes.
posted by mosch at 8:54 AM on October 14, 2003

This is the second interview I've read with the author of "The Two-Income Trap" (the first is here, with supplementary stuff here), and it's the second one to give me (as a married homeowner with a daughter -- oh, look at this) a mild case of total dread. What a mess we have made for ourselves. I'm sufficiently white-collar for us to be functional on one income, but it's a very squeaky existence, particularly when I think about the discretionary income we used to have. I mean, I'm living happily and don't intend to complain, but the vagaries of the job market (my father was laid off in April and four others at my not-very-big nonprofit were laid off Friday) and inflated home prices are nervous-making, to be sure. And don't even get me started on health insurance.

Many days I feel like the whole system is about to implode.
posted by blueshammer at 8:54 AM on October 14, 2003

Very depressing article. I'm single, have a modest income, and am a homeowner, and I'm hoping to be in a position to apply to adopt a child in another two years - according to my math I ought to be able to do it, if barely. It blows my mind that there are couples out there earning so much more than me and in the same boat.
posted by orange swan at 8:58 AM on October 14, 2003

My boyfriend and I constantly wonder how it is that our parents raised and housed and fed and clothed us on their small 1970's salaries, yet for us money is tight . . . .

Right on -- and what's really heartbreaking to me is that our parents constantly wonder why we have troubles.


My parents did several things right: they had no car payments, a ridiculously low mortgage ($120/mo in early 70's), and kids spread out so oldest could babysit the youngest when necessary. They lived in an area with low cost of living and low property values (hence the low mortgage), but a good school (it was a small town in a low-population state).

But they also had incredibly good insurance, cradle-to-grave --- nobody gets that anymore.
posted by yesster at 9:00 AM on October 14, 2003

Builders around here build almost nothing but McMansions. The one subdivision built that sold houses under 90,000 sold like hotcakes. Go figure. My husband sells houses for a living and we rent. (Houses are a lot cheaper here than in many locations, but incomes are a lot lower too.)

By the way, one reason houses cost so much is the incredible amount of interest paid by builders. They are able to borrow money as each stage of a home is completed, and the longer it takes to build and sell the house, the more interest the bank swallows. And we are talking incredible amounts of money here. (I used to work for a builder and I saw the bills.)

One other thing that will peeve a few of you. I have to opine that houses started to grow bigger about the time women started into the workforce- people could afford a bigger house pay ment on two incomes , and who wouldn't enjoy having a larger home? (I have seen this hypothesis put forth somewhere else recently but don't remember where.)
posted by konolia at 9:01 AM on October 14, 2003

My partner and I don't even have kids and we struggle making combined over 70K/year. Granted, we live in the most expensive county in one of the most expensive states, in the least expensive town in that county, but it is largely due to debt and trying to dig out of debt. We are much better off than we were 3 years ago (thanks to things like 0% credit card balance transfer offers) but we are nowhere near financially stable, and there are always things like an ultrasound for a dog, or unexpected car problems, that inevitably goes onto the credit card. If one of use gets laid off, we are screwed.

It's just disgusting the way that lending institutions are feeding off of hardship. The people who have the least and need the most help are saddled with the highest interest rates. When i had terrible credit, credit card offers were plentiful at interest rates above 20%. Now that I have cleaned up my credit and i am not a credit risk, I get offers for 0% cards. There used to be a time when a bank wouldn't give you a mortgage if you were high-risk, now I have friends who have no business buying homes but are getting people competing for their money. Just because a bank will give you a mortgage, doesn't necessarily mean it is a smart thing to do, depending on your financial circumstances, of course.

Where I live, in CT, you just don't see small houses being built anymore. We consider ourselves extremely lucky that we found the 2-bedroom house we did, when we did, because now, in my same town, you can't buy an empty lot for what we paid for our house 2 years ago. And all the new development in town is huge houses. The people who have no need for large homes, the childless, their only options are condos or older homes that are a bitch on maintenance. Don't get me wrong, I love my house, it's from the 1930s, but damn if there isn't something falling off of something else every other day.
posted by archimago at 9:03 AM on October 14, 2003

I'd say I've experienced most of this firsthand- I see these sort of tradeoffs every day. We've got one kid, and one income, and can't afford the good school district, unless we wanted to live in 3 rooms. I've got a friend who's got two incomes, two kids, and they're renting in the good school district. I know another couple with a newborn, and single-income is pretty much out of the question, even to get by in the not-so-great school system. All three couples have college degrees, but that fall short for a very well educated metro area (Raleigh-Durham).

Hell, at one income, and making literally three times what I made before moving to the region, my family continues to qualify for city-funded moderate-income assistance programs, which have helped us improve our property.

We own, and have six rooms. We've don't have money for babysitters, or nights out or lattes, but we splurge by buying organic- it's important to us. We live in a good neighborhood with bad schools, as most of the neighborhood is professional families who can afford private school. We're hoping we get in the lottery for the charter schools in our system. And we're hoping that we're not the only young parents priced out of the good school districts, and we can ultimately bring up standards where we can afford to live, before we're priced out. And there are MacMasions being developed everywhere, but there are even more three-room-condos in the works.
posted by bendybendy at 9:03 AM on October 14, 2003

I make mid 40s, with a three bedroom house and an undeveloped basement. 1/3 acre, $850/month mortgage, first time home buyer. I am 37. We have a used 1999 minivan that cost $9000. We are just getting by. Three kids, one on the way.

There are homes in Eagle Mountain Utah in the 90s. In the middle of the desert, 40 minutes from civilization, so you pay in gas and commuting time each month. Oh, and you have to live in Utah.

The housing industry is a gigantic scam. If a non-profit developer bought land out here, subdivided, and sold the lots at their cost with manufactured homes, you could get a decent small home for $70k or less. Everyone out here is terrified that the low-cost homes are going to attract "the wrong type of person." Even as a good liberal, I somewhat share this fear.

/rambling
posted by mecran01 at 9:18 AM on October 14, 2003

> If we do have two kids, there's a good chance one of us will
> quit work to stay home, raise the kids, and save the
> daycare cost. Of course, doing that means buying a cheaper
> place in a town with schools that aren't as good, etc, etc..

If one parent is going to stay home anyway, consider home schooling.
posted by jfuller at 9:19 AM on October 14, 2003

And there are MacMasions being developed everywhere, but there are even more three-room-condos in the works.

Add home owner association dues. Any new homes w/o one?
posted by thomcatspike at 9:23 AM on October 14, 2003

Many days I feel like the whole system is about to implode.
posted by blueshammer at 10:54 AM CST on October 14

That's because it is going to implode. And it ain't gonna be pretty.
posted by *burp* at 9:24 AM on October 14, 2003

All this makes me very happy that my wife an I have no desire for children. No desire to own a house (we're pretty content renting a smallish two bedroom apartment), no desire for an expensive car ($20k Honda Civic).

With a combined $140k+ annual income it means we get to overspend on stupid stuff like crazy and still be socking it away to make sure we'll be able to stop working when we want to.

And say what you will about the shallowness of it, that makes for a pretty content lifestyle.
posted by obfusciatrist at 9:27 AM on October 14, 2003

All this makes me very happy that my wife an I have no desire for children.

Shit! My undo_Children button is greyed out. And where's the menu to adjust annual income to $140k+? Guess I need to upgrade.
posted by Stan Chin at 9:39 AM on October 14, 2003

I am right smack in the middle of that: two incomes (wife is a teacher), one kid in pre-school, mcmansion, good school district. And yes, it is tough. But it is not unmanageable. We have zero credit card debt; we refi'd our mortgage whenever we could, and overpay to knock down the principle every month. We save scrupulously, fixed amounts every month that we pay like a bill. We still go out once in a while, buy clothes and toys (for kids and adults) have cable (basic package, but hey, Sex and the City was shit this season), and do normal things. You just have to do a couple things: one, I work damn hard to make sure that the company I work for values me enough to give me 6% raises in down years when the average across the board raise was half that and for some zippo, while at the same time keeping my eye out constantly for new (and more remunerative) opportunities, and two, we keep an eye on income and expenses. Any time of the month, I know or can find out fast what the state of my household's finances are. I know when I can buy something for myself, and when I can't. It's boring, I know, and it's not a lot of fun to have to say "I can't get that [insert cool thing here] right now" to yourself, but believe me, it pays off in the long run.

If I had to sum it up? credit card debt is murderous. Get rid of it any way you can.
posted by UncleFes at 9:40 AM on October 14, 2003

obfusciatriast, I can relate. My wife and I occasionally talk about taking that route.

I think the real villain here isn't the builders, it's the growing wage gap and uneven inflation. Efficiency increasingly comes from capital improvements rather than labor practice improvements, which means that the benefits don't go to salary but to equity (and those who receive their salary in equity form). Meanwhile, the true growth in the cost of living for most Americans is masked by an artificially low inflation rate. And wage growth for most people is not even keeping up with that.

(I'd unpack that and create links, but gotta get back to work. me bad.)
posted by alms at 9:44 AM on October 14, 2003

I don't know about anyone else, but I do find that my lifestyle is a bit different from my parents. They didn't pay for cable tv and computers and the internet, and never made long-distance calls except maybe at Christmas. There wasn't as much out there in the way of gadgets, large or small -- I mean, when I was a kid, calculators were very exciting. I remember two cars, but that's only because I'm the youngest -- for years, my mother didn't even drive.

On the other hand, there are cost-saving things I have access to now that my parents didn't -- the market for used items has exploded in the last 20 years or so. There are more resources for groceries and growing your own food, too.
posted by JanetLand at 9:45 AM on October 14, 2003

> there are always things like an ultrasound for a dog, or
> unexpected car problems, that inevitably goes onto the
> credit card.

an ultrasound for the dog?

A lot of the things that seem to be necessities to us were not necessities to our parents because they weren't available at any price. They seem to have been able to have lives, even good ones, in spite of this.
posted by jfuller at 9:48 AM on October 14, 2003

They seem to have been able to have lives, even good ones, in spite of this.

I don't think the dog would agree.
posted by y2karl at 9:55 AM on October 14, 2003

I don't buy this article at all. I know a single mom who's supporting her son on her own salary. The father does pay child support, which she puts into savings for emergencies and, eventually, college -- all the basic expenses, including day care in the summer months, are paid for from her earnings. And she is not really making all that much. (Her biggest secret: she has a huge freezer and buys much of her food in bulk at Costco about once every six weeks. I spend probably ten times as much on food as she does and probably don't eat any better either.)

I have a very hard time believing that families with twice as much income can't do at least as well.

The biggest trouble I see young couples having today is thinking that that they must have it all right away. A couple kids, the minivan, the house in the suburbs. But my parents lived in an apartment when I was born. They lived in a mobile home when my sister was born two years later. They didn't buy a house until I started school and they didn't buy a house in the suburbs until I was in fifth grade. And they didn't buy a nice house in a good neighborhood until I was in college! That coincided with my mother graduating nursing school and entering the workforce. (Yes, they'd been paying for college for my mom for most of my high school.) The first car I personally remember them buying new was a 1985 Toyota Corolla. (I believe they may have also bought our 1971 Chevy Nova new, but I was three years old at the time. The Toyota was a replacement for a used 1982 Malibu, which had been the replacement for the Nova.) For a long time our family had only one car. When we started needing one, the family's second car -- and, of course, my car when I started college -- were always used.

There is absolutely no law that says you ever need to buy a house. There is no reason to buy a new car ever (aside from "I want one and don't mind paying much more," which is fine only if you don't have anything better to spend it on). And there is nothing that says you must have kids by a given date. If you do have kids, they don't need to be bought every video and toy that comes out. And no, you don't have to get them into the absolute best school district. Even the best public education is not worth the money you pay for it; your kids will learn despite going to school, not because of it. If they are attending a school where they are not physically in danger, your kids are probably doing all right. It becomes more important in high school, but you've got over a decade from the time they're born to get ready for that.

My dad was making about $40,000 a year when he retired. My mom, a little less than that. Keep in mind that my mom worked very little until I was a legal adult. For most of their two kids' upbringing, they relied on my dad's salary, which, remember, peaked at $40K. They are now comfortably retired, live in a house that is entirely paid for, and have enough to take care of themselves for the rest of their lives. Now, if a son of a farmer from southern Ohio and a poor Irish girl from a northern Ohio industrial town can pull this off, there is little excuse for today's parents. Sure times are different now, but the ones complaining the loudest aren't starting off below the poverty line, either!

Two words: delayed gratification. Learn it. Live it. I'm a firm believer in it after my own financial Waterloo. Perhaps this is something you must have a crisis of your own to learn, though.

One thing the article does get right on the nose is how the desire to get into a good school district has driven up real estate prices. And of course, taxes based on these inflated property vaules keep the same districts flush with cash and thus in the top tier of desirable districts. It's a vicious cycle. But consider this: If you have the money to buy an overinflated home in an expensive school district, you might also have the money to privately school your children while living in a house that's a much better value. Or even to homeschool them while only one parent works. And if you find yourself unable to continue to afford the alternative schooling, it's a lot easier and less disruptive to put the kids into public school next year than to move house. What needs to happen is for parents to think about what is best for their kids rather than following the herd. A common parental refrain is "I want only the best for my kids" but many spend shockingly little time figuring out just what that is, and too much time trying to keep up with what their neighbors are doing for their kids.
posted by kindall at 10:01 AM on October 14, 2003

I don't think the dog would agree.

He wouldn't disagree either, being a dog and thus incapable of agreement, disagreement, or understanding the proposition with which he is mean to agree or disagree.
posted by kindall at 10:04 AM on October 14, 2003

hm, interesting timing. this showed up in my amazon recommendations a few weeks ago.
posted by whatnot at 10:06 AM on October 14, 2003

> I don't think the dog would agree.

My dog agrees with everything I say, Y2. She could probably give you some pointers.
posted by jfuller at 10:10 AM on October 14, 2003

"I make mid 40s, with a three bedroom house and an undeveloped basement. 1/3 acre, $850/month mortgage, first time home buyer. I am 37. We have a used 1999 minivan that cost $9000. We are just getting by. Three kids, one on the way."

Other than the 'one on the way', mecran01 and I could be the same person, except that I know for sure that my job won't be here at this time next year. If the economy doesn't turn around and start adding some good-paying jobs here soon, I could easily become another bankruptcy 'statistic' just like the people in the article.
posted by mr_crash_davis at 10:19 AM on October 14, 2003

Kindall: Good comments. Harsh comments, but valid and true nevertheless. I was lurking on some Acura TSX forums the other day and came across a thread asking for owners' ages. I was *shocked* to see 19, 20, 21, 22, hell, even 23 year olds driving a $27,000 car. If they truly can afford, it, great. But somehow, I doubt it. I seriously doubt it.

I am just about finished paying off a mountain of debt from graduate school and couldn't be happier at the moment to be out from under it. The simple math is that this will permit me to stash away upwards of $15,000 per year by paying off all of my debt. Wow. That truly is a great thing.

Kindall makes some points that are a 'harsh reality' - if you want everything today, you're going to have to pay for it in some way. Remember, there ain't no such thing as a free lunch.
posted by tgrundke at 10:22 AM on October 14, 2003

But no one's actually refuted the author's points that people today spend less on extras than their parents did. I mean, some of her statistics are open to being questioned - a house with 6.1 rooms could still have the kind of enormous family room with a vaulted ceiling that wasn't popular a generation ago, and multiple bathrooms that don't count in the room count - but finding some kids with expensive cars that their wealthy parents probably bought for them doesn't really contradict anything she said. And every generation has more gadgets than the previous one, but we don't consider our parents profligate spenders for owning color televisions.
posted by transona5 at 10:37 AM on October 14, 2003

Over the past generation mortgage costs have increased 70 times faster than a man's wages.

And unfortunately, many homeowners don't see the rise as such a bad thing. Sure it sucks that the $200k home you wanted to move to up to is now $400k, but that means the $100k home you bought is now worth $200k. You made $100k for doing nothing! It's people coming onto the bottom of the ladder who are really screwed.
posted by Armitage Shanks at 10:41 AM on October 14, 2003

Remember that the so called Greatest Generation went to college on the G.I. Bill, bought houses with low interest VA loans and enjoyed full employment in unbombed factories while the rest of the world rebuilt. Harris, in the book above mentioned, pointed out that while women worked during World War II, they left the work force immediately thereafter, and raised their kids on one income. Harris notes the rise of feminism followed their re-entry into the workforce, as having children became too prohibitively expensive for that one income.

In terms of dollars, houses cost in dollars what cars cost now when I was in grade school, while cars went for the equivalent of a month or two's rent for a two bedroom apartment.

When two or three corporations produce, say, automobile tires--to cite an example Harris provides in the book mentioned above--there's every incentive for them to fix prices, not cut them. For similar reasons, while the costs of production fell by half or more with each new format of recorded music, the prices doubled--the manufacture of CDs cost a fraction of what vinyl records cost to make and yet the prices were set twice as high. As for lattes, well, when wholesale coffee prices go down, does that show up at Starbucks? The other word missing from the discussion here of why things cost so much now is oligolopoly.
posted by y2karl at 10:41 AM on October 14, 2003

Remember, there ain't no such thing as a free lunch.

i gotta call bullshit on this one. i just snagged a sandwich with one bite taken from the trash. looks free to me!

this one too ...

And there is nothing that says you must have kids by a given date.

how about the state of my girlfriend's reproductive system? that ain't gonna last much longer, ya know. just saying ...
posted by mrgrimm at 10:41 AM on October 14, 2003

i'm with you, y2karl, but it's an oligopoly. i call bullshit on "free markets" bringing prices down. who's with me! when is this revolution gonna get started anyway?

*slowly goes back to work as corporate tool to pay rent and make dinner*
posted by mrgrimm at 10:46 AM on October 14, 2003

It's still over-consumption if people are going into deep debt for cars and over-sized homes.

Don't forget that usury laws are practically non-existent in the U.S.. If you miss a credit card payment, they can extend the interest cost to over 100%. And it happens a lot.

My dad is a bankcruptcy lawyer so I've all of the stories. People get a second credit card to pay off the first one, and another to pay off that. Then they come crying to the government to bail them out and the taxpayers foot the bill. When corporations do it, it's on a completely higher scale.
posted by destro at 10:46 AM on October 14, 2003

And there is nothing that says you must have kids by a given date.

Other than, well, you know - biology.
posted by anastasiav at 10:50 AM on October 14, 2003

> I was lurking on some Acura TSX forums the other day and
> came across a thread asking for owners' ages. I was
> *shocked* to see 19, 20, 21, 22, hell, even 23 year olds
> driving a $27,000 car.

Who in the name of Ghod buys these cars? And how? I see them all over the place. Acuras, Lexuses, BMWs, Mercedes, Escalades. Late model, shiny. This is a small (~50000+) town in Georgia. What on earth do they do to make that kind of payment? I in fact make very respectable money but I still felt compelled to keep driving my 1978 Jeep CJ as long as I could still repair it. Now that I can't (cracked block) I got a used Dodge with 60,000 miles on it. My mind just can't process the idea of car payments bigger than ~$200 a month.

It may be that people aren't beggering themselves over lattes but I see them beggering themselves over cars.
posted by jfuller at 10:56 AM on October 14, 2003

> Kindall : One thing the article does get right on the nose is how the desire to get into a good school district has driven up real estate prices.

But consider this: If you have the money to buy an overinflated home in an expensive school district, you might also have the money to privately school your children while living in a house that's a much better value

The tradeoff, as I've seen it, is to rent in a good school district (and never get financially ahead) or own in a poor district (and hope that you're gonna gentrify the school system, and that your own parental attentiveness will outweigh the shortcomings).

> And there is nothing that says you must have kids by a given date.

There is. Biological clock, dude.
posted by bendybendy at 10:59 AM on October 14, 2003

Yeah the vet thought my dog may have had liver cancer, so I chose to pay for an ultrasound. I'm one of those crazy people that thinks of their pets as a living breathing being that feels pain and can suffer.

A necessity? For me, yes.
posted by archimago at 11:00 AM on October 14, 2003

Akbar: I can't afford to buy a house and raise kids.
Jeff: You shouldn't buy so many expensive lattes and such fancy cars. It's your own fault.
Akbar: I don't buy any of that. My car is ten years old and I make coffee at home to save spending a dollar for a cup of joe at Dunkin Donuts. The problem is that a two bedroom condo costs $400,000 and I only make $50K a year.
Jeff: You kids are so wasteful with your lattes and your expensive cars. I see it all the time. It's no wonder you can't afford to buy a house.

Is it possible for Jeff to get a clue? Sure, Akbar could just suck it up -- reality bites, live with it. But it's good to at least acknowledge that certain things are much more difficult in 2003 than they were just a few years ago, not to mention decades ago.
posted by alms at 11:04 AM on October 14, 2003

Crash Davis wrote: "Other than the 'one on the way', mecran01 and I could be the same person"

My hair is still long.

I forgot to mention I have $50k in graduate school debt.
posted by mecran01 at 11:13 AM on October 14, 2003

I'm sorry, something just doesn't add up here.

All but the smallest and wealthiest communities are experiencing pretty heavy immigration from Mexico & central America. These folks generally have twice as many kids and make less than a quarter of what the native born do, but they are managing to make ends meet and still have some money to put aside for a rainy day.

How is it that barely literate peasants are to to thrive where many of you are barely making ends meet on far more resources?
posted by Jos Bleau at 11:25 AM on October 14, 2003

A friend of my wife's was telling us the other night about people making $2500/month payments on a brand new H2.

Which doesn't sound right. Looking at the Hummer site, it looks like you need $2,600 for a downpayment, and then $685 a month for 72 months. Or, $610 a month with $21,000 due on the 48th month.

Now I understand what she was trying to tell us. Still, sweet Jeebus that's a lot of money!
posted by Irontom at 11:30 AM on October 14, 2003

Interesting thread. Unfortunately I wrote my comments on Prof. Warren's thoughts almost a month ago.
posted by ilsa at 11:41 AM on October 14, 2003

Now I understand what she was trying to tell us.

That she's no good with numbers?
posted by jalexei at 11:45 AM on October 14, 2003

I never have been one to assume that everyone who's up the creek financially got that way through poor management - I wait until I know something about their circumstances before I draw any such conclusions. It so happens that all the people of my acquaintance who are in serious financial trouble got that way through choices ranging from the unwise to the just plain stupid. But of course I realize there are other people who go bankrupt for reasons beyond their control, and this thread is a real education in those reasons. I'm also grateful that I'm a middle-class Canadian rather than a middle-class American - because of universal health care, less expensive post-secondary education and a better regulated mortgage industry. Those things alone can easily make the difference between survival and disaster for a middle-class family.
posted by orange swan at 11:46 AM on October 14, 2003

You guys buy cars on credit?

In my universe we pay cash for cheap old cars and discard them when they wear out.
posted by i_am_joe's_spleen at 11:48 AM on October 14, 2003

> Jos Bleau: How is it that barely literate peasants are to to thrive where many of you are barely making ends meet on far more resources?

If that's thriving, why not give me your excess income while you adopt the living conditions of the average immigrant? (Hey I'm doing fine, but if you're willing to be poor but happy, I'll help you out...)
posted by bendybendy at 11:50 AM on October 14, 2003

parents are putting more money into their homes because they want to be in a good school district.

Wow this is so true. Housing in the local high scoring district is freaking ridiculous. That's more than half a million for a two bedroom 950 sq. ft house. And there are tons of young families out looking at these every Sunday.
posted by soren at 11:51 AM on October 14, 2003

I'm sorry. I hear a lot of folks in this thread complaining with their mouths full.



Excuse me, I feel inspired to cruise over to savethechildren.org and sign up to sponsor another kid in addition to my heartbreaking, adorable little filipina. Another twenty eight bucks a month may keep me from remaining middle class, but hang the consequences.
posted by jfuller at 11:54 AM on October 14, 2003

How is it that barely literate peasants are to to thrive where many of you are barely making ends meet on far more resources?

Well, here they pool their earnings.
posted by konolia at 11:59 AM on October 14, 2003

How many households have one phone today? I've seen kids in Plano, Tx with more than one. Point out that was when they were not home too.

Growing up, I would have said I was middle class, but we were not. Maybe my generation does not really realize their "class". It was common at my home to have small amounts; pocket money, clothes, toys and entertainment; yet I still thought we were middle class.
posted by thomcatspike at 12:08 PM on October 14, 2003

I spent half my childhood in a rural area in a home that had 7 people in a house of less than 600 square feet, we had electricy but no indoor plumbing, and I walked a mile to a one room schoolhouse for 4 years of grade school. This was in the early 70's, and there were kids in that school didn't have as much as we had.

I know a lot of folks 'back home' in bankruptcy, but they all spent their into it. And I don't think buying a house that's bigger than you can afford or a car that's bigger than you can afford is caused by anything other than misjudgement. Sure some people fall on hard times or get a bad break - but in my experience they usually aren't the ones who whine about how 'regular folks can't make ends meet'.

It's the poeple who make the bad descisions who always seem to complain the most about how its not their own fault.
posted by Jos Bleau at 12:16 PM on October 14, 2003

jfuller, you and many others are confusing the issue (well, that and the self-righteous routine is getting a little tired). The article is about the cost of living going up. I am thrilled to hear about what a great bunch of money managers we all are (or aren't), but that won't matter much if the trend continues.
posted by whatnot at 12:23 PM on October 14, 2003

> tomcatspike: Growing up, I would have said I was middle class, but we were not. Maybe my generation does not really realize their "class". It was common at my home to have small amounts; pocket money, clothes, toys and entertainment; yet I still thought we were middle class.

...this, I think, is the crux of argument. I remember during the LA riot, lots of um, commentators, saying "what's wrong with these people, they're not starving". It's the perception that you and yours are falling behind that destabilizes a society. And the perception that you're getting ahead that strengthens it. And most Americans get huffy as soon as they suspect they're not going to do as well as their forebearers. Most of us only have a sense of the rungs right above and below us, nevermind the ladders in other countries.
posted by bendybendy at 12:32 PM on October 14, 2003

But it's good to at least acknowledge that certain things are much more difficult in 2003 than they were just a few years ago, not to mention decades ago.

Perhaps that is true. Perhaps things really are tougher than they were, and they're going to get worse. In that case, maybe it's time to get a little more radical. Start making different kinds of choices. Say, for example, you want to have children and feel you can't afford it. Write down all of your possessions, and services you pay for like cable or internet, and say to yourself, "what would I be willing to give up in order to have children?" Figure out what things are *really* your priority (maybe it'll turn out you don't want children as much as you thought), and then start coming up with a plan to get there. It may involve uncomfortable things. You might have to move to someplace you don't really want to live in. Maybe live in a place where you don't have to have a car. Maybe live off the grid someplace in the middle of nowhere and grow all your food. Yeah, it stinks that we can't have everything we want, but sometimes life is trade-offs.
posted by JanetLand at 12:40 PM on October 14, 2003

> The article is about the cost of living going up.

But the ensuing argument is, what does "cost of living" mean? Is the price of the minimum necessities of life rising, or do we keep raising the bar on what we call the "minimum necessities?" It's my assertion that a lot of what is giving people trouble is the latter -- expecting more and more as "normal" and then being bothered that it costs more and more. Cut out the extras that your grandparents lived without because they hadn't been invented yet (air conditioning, television, jet air travel, imported fresh vegetables in the winter, CD collection, "media center" in your kid's school, broadband internet, MRI scans for you, ultrasounds for the dog) and you'll come a lot closer to running your life at your grandparents' cost of living. But if you don't want to give up these added things, don't complain that it costs more. You're getting more.
posted by jfuller at 12:54 PM on October 14, 2003

And there is nothing that says you must have kids by a given date.

how about the state of my girlfriend's reproductive system?

That merely means that if you have them, you must have them by a certain date. It still doesn't mean you have to have them! If your mate's biological clock runs out before you're ready to have kids, then you either adopt or do without. It is not the end of the world either way. It is far better to be ready for kids at 40 and not have them than it is to have kids at 20 before you're ready.
posted by kindall at 1:28 PM on October 14, 2003

In my universe we pay cash for cheap old cars and discard them when they wear out.

i used to be this way, until i really wanted to put my wife, 2 kids, and dog into something safe and reliable, and not miserably cramped. so i got a 4% e-loan on a dodge caravan. the height of luxury! for us, anyway. the payment is only 250$ a month, and i'm still driving the 12 year old saturn, and will do so until it dies.

i'm self-employed, so the income fluctuates but i'd guess it averages out around 50-60k a year, plus we kept the first house we bought (which was SIXTY THOUSAND DOLLARS, and yes, in the ghetto) and rent it to college kids. that's my retirement plan. my son goes to a magnet school, we live in a very affordable, pleasant neighborhood. my wife stays home with the baby.

is it perfect? nope. does it get tight every once in awhile? absolutely. but i've just got to place some reasonable percentage of the blame on people continuing to live beyond their means, and buying things they cannot yet afford to buy. i qualified for a 300k home loan. but I bought a 130k house. i qualified for a 35k car, but i bought a 14k minivan. i still get pants at the thrift store. i don't mean to be self-righteous, but we know LOTS of families wouldn't in a million years make those kinds of choices. and they're paying dearly for their debts.
posted by glenwood at 1:47 PM on October 14, 2003

various whiners say: cut out the extras

OK, let's try this again. I'm good at math. I plan. I've just gone through that process. Here are the options:

a. don't have children.
b. give up my current social network and commute 120+ minutes five days a week for work.
c. relocate altogether and both my wife and I get new jobs.

Giving up the 1 CD a month I used to buy does not make a difference. Giving up the 1 new computer every two years I used to buy does not make a difference. And yes, I am giving up those things (and a bunch of other things too).

Hey, I'm not going to go bankrupt. I can do the math. But I'm also downwordly mobile because of general social conditions not because I'm greedy or wasteful.
posted by alms at 1:47 PM on October 14, 2003

How I learned to stop worrying and love the bomb:
I'm just a paycheck or two away from bankruptcy. I realize that my previous inability to pay my credit cards down is why I am in this predicament. Oh well, hello there second mortgage. 2 kids, 1 house, 2 cars (used and paid for). There just isn't much wiggle room. A RIDICULOUS AMOUNT OF MONEY is spent on health insurance + deductibles. So I've basically decided, I don't need a retirement nest egg. If I don't win the lottery by age 65 (I plan to start playing when I turn 50), my son better have an extra bedroom.
posted by patrickje at 2:45 PM on October 14, 2003

> It's the perception that you and yours are falling behind that
> destabilizes a society. And the perception that you're
> getting ahead that strengthens it.

So which is it now? In classical Marxism the proletariat isn't expected to be willing to risk revolt until it's been immiserated down to desperation and have literally nothing left to lose but its chains. On the face of it in the US there aren't enough people in enough hurt even to elect Democrats instead of Republicans, let alone make revolution.
posted by jfuller at 2:45 PM on October 14, 2003

Is the price of the minimum necessities of life rising, or do we keep raising the bar on what we call the "minimum necessities?"

I think you're missing Warren's point. She seems to have evidence that people are not spending more on things like clothes and eating out. So, according to her argument, even if a kid today has more things than a kid in the 50's, the total cost of those things is less. (Compare the price of a microwave in the early 80's to the price of one today, when you can probably get one at a yard sale.) It's things like mortgages and health insurance that are actually going up in price
posted by transona5 at 2:56 PM on October 14, 2003

immiserate. transitive verb. To make miserable; impoverish.

[New Latin immiserare, immiserat-(translation of German verelenden, to sink into misery  : ver-, causative pref. + Elend, poverty) : Latin in-, causative pref.; see in-2 + Latin miser, wretched.]

Cool, thanks for the new word.
posted by alms at 3:04 PM on October 14, 2003

> It's things like mortgages and health insurance that are actually going up in price

I can see mortgages. There obviously is a real estate bubble going on right now, in the US, Europe, most places; and as Armitage Shanks pointed out above it's first-time buyers who are hurt the worst by this. I hope it deflates gradually and not all in a pop.

I can see health insurance becoming costlier also in the US; this has several causes (insurance company greed certainly among them, but also an aging population that requires more and more expensive care, with a lot of this cost showing up as higher premiums for young people.)

But if there's also supposed to be evidence that people are not blowing obscene amounts of money on junk then this claimed evidence is not strong enough to make me doubt my daily experience, namely that I can walk into any mall in the country and witness an orgy of consumption that would embarrass a lamprey.
posted by jfuller at 3:25 PM on October 14, 2003

What I don't get as a long-term resident of both the US and Europe is why Americans refuse to subsidise at the federal level basic social services such as education and health care, whereas other industries get away with huge pork programs (defense, car, airline).

I believe that defense, health and education are the primary (I dare say the only) responsibilities of government. Yet Americans get only 1 out of 3 --and Europeans get something like 10 out of 3, but that's another story...
posted by costas at 3:50 PM on October 14, 2003

But if there's also supposed to be evidence that people are not blowing obscene amounts of money on junk then this claimed evidence is not strong enough to make me doubt my daily experience, namely that I can walk into any mall in the country and witness an orgy of consumption that would embarrass a lamprey.

But how much of this is teens with jobs that provide them with almost-exclusively discretionary income, or young professionals that aren't worried about mortgages and/or children? The author's point is that overconsumption is not an issue with respect to the families that are declaring themselves bankrupt. That people outside that demo shop at the mall is culturally meaningful, but not germaine to the trends that Warren is discussing. Also, I would wager that the average mall splurger is from a lower-than-average-income household.
posted by blueshammer at 3:58 PM on October 14, 2003

But wouldn't someone living in a $300 K house that they can barely afford count as overconsumption? How about spending $30K on a car that won't get them to work any faster or safer than a $20K car?

Doesn't the study really show that capital goods, thanks to easy credit, are being over consumed?
posted by Jos Bleau at 4:18 PM on October 14, 2003

jfuller: I hope it deflates gradually and not all in a pop.

I hope it goes kaboom, hurts like hell, and teaches people that central planning and runaway credit creation destroy people's lives.

What really makes the mortgage scramble so fun is that young people get to pay 15% of their income in Social Security taxes so "The Greatest Generation" can continue to live unfettered in their homes.
posted by trharlan at 5:18 PM on October 14, 2003

jfuller: I can see health insurance becoming costlier also in the US; this has several causes (insurance company greed certainly among them, but also an aging population that requires more and more expensive care, with a lot of this cost showing up as higher premiums for young people.)

Can't seem to get into the article. (Daypass link seems to be going nowhere on Mozilla) but another big factor is medical debt. Even if you have insurance, does not mean that one is not going to be crippled with crushing bills if faced with a catastrophic diagnosis. My own experience with kidney stones and a cancer diagnosis ended up with several thousand dollars unpaid due to crazy exemptions and limits. For example, while insurance was willing to pay to have part of my kidney removed, they were not willing to pay for the routine placement of a stent to protect the ureter during recovery. A $2,000 limit on radiology can be eaten up with a single contrast cat scan.

I've read somewhere that a huge member of bankruptcies involve some form of medical debt. I can believe it.

Jos Beau: But wouldn't someone living in a $300 K house that they can barely afford count as overconsumption? How about spending $30K on a car that won't get them to work any faster or safer than a $20K car?

Or even the $20K car? Even the interest on a $20K car is unreasonable for something that is not going to maintain value over time.
posted by KirkJobSluder at 5:22 PM on October 14, 2003

I hope it goes kaboom, hurts like hell, and teaches people that central planning and runaway credit creation destroy people's lives.
What really makes the mortgage scramble so fun is that young people get to pay 15% of their income in Social Security taxes so "The Greatest Generation" can continue to live unfettered in their homes.

There's the solution right there-- "C'mon kids. We're gonna go live at grandma's!"
posted by amberglow at 6:09 PM on October 14, 2003

What really makes the mortgage scramble so fun is that young people get to pay 15% of their income in Social Security taxes so "The Greatest Generation" can continue to live unfettered in their homes.

I can pay it to the government and have them pay it (plus more) to my mother, or I can pay it directly to my mother. In her last ten years of work, three of the companies she worked for went belly-up, one after the next. Pension plans gone, retirement medical care gone. Then, of course, what money she had in her 401K (invested very conservatively, I might add) also lost about half its value.

I don't begrudge for a second the money I pay to Social Security, even if I don't see a dime of it. It has worked for my family exactly as it was designed to do - as a safety net when a string of other things went catastrophically wrong.
posted by anastasiav at 8:40 PM on October 14, 2003

Pension plans gone
Dubious.

Then, of course, what money she had in her 401K (invested very conservatively, I might add)
Impossible.

You're welcome to support your mother as you see fit. Forcing working people who can barely pay their mortgages to support your mother (who has had a lifetime to save for her retirement) is theft.
posted by trharlan at 9:11 PM on October 14, 2003

This thread really hit home with me and I'd like to share a few of my thoughts on the matter.

When you have children (and if you don't you can probably skip over this post), your thinking about safety, security and living is radically different than when you're single. Here's what I have learned the hard way:

You want the best neighborhood to live in so your children are safe. Safety is the all encompassing be-all and end-all of parenting. Living in a sub-standard house in a neighborhood riddled with crime keeps you awake at night. You worry constantly that someone will break in, rob you, kill you or kidnap your children. Paying a bit more per month for a mortgage in a good neighborhood is worth it in terms of the peace-of-mind and security it provides. I'm not saying you need to drop $750,000 on a home to be safe. We all know our spending thresholds and try plan accordingly with the future and return-on-investment in mind.

You need a good, stable car that won't need repairs so you can haul ass to the grocery store and blow $130 a week on food, laundry detergent, dish soap and diapers. If you don't have someone to transport your kids to school and playdates, you need a reliable car. Nothing sucks more than having your car held hostage in a garage for 72 hours. My windshield wipers on my old shitty car gave way during a rainstorm *on the highway* while the children angelically napped in the backseat.

You must pay costly health insurance premiums every month because one of your kids might develop a respiratory virus that winds up costing you $16,000. Or your kid develops a cough that requires a bottle of medicine that costs $103 (true story)! I tried to rough it without medical insurance for many years and it is simply to much of a gamble. That's the only way I can keep those premium payments in perspective - it is pure gambling to eliminate risk.

And lastly, you want your children to have a top-notch education because you love them with every shred of your being and can't bear to think you might be failing them in some way if you don't provide them with the best possible learning environment. School is a kid's job for 13-17 years and you want to make it a worthwhile experience for them.

It is an endless circle to maintain this lifestyle but it always comes down to the fact that you have to make sacrifices when you have children. There is no turning back.

As far as I am concerned, I don't blow wads of cash on new clothes, lattes and high-end electronics. But oh what I wouldn't give to have a nice fancy dinner with adults and follow it up with a drink at the bar, watch the evening news uninterrupted while I lie sprawled out on the sofa or take a nap on a Sunday afternoon.


And that concludes my rambling on the subject.
posted by argus at 9:39 PM on October 14, 2003

That's about as good as it can be said, argus.
posted by mr_crash_davis at 10:06 PM on October 14, 2003

Why are you guys complaining so much? How hard is it to move to Canada?
posted by VeGiTo at 10:55 PM on October 14, 2003

Exactly what I was thinking, VeGiTo. Cheap property, safe and sane neighbors, health care for everyone... if those commie's can do it, why can't we?
posted by Civil_Disobedient at 1:24 AM on October 15, 2003

i_am_joe's_spleen: You guys buy cars on credit?

In my universe we pay cash for cheap old cars and discard them when they wear out.

Hey, I live in that universe too. But head on up to, say, Karori and ask yourself how many of the CR-Vs and S4s driving around up there still have money owing on them. I'd say pretty much all of them...

This kind of credit overreach is by no means limited to the US.
posted by Sonny Jim at 2:41 AM on October 15, 2003

Canada. Oh, Ca-na-da. They don't take migrant academics.

You need a good, stable car that won't need repairs so you can haul ass to the grocery store and blow $130 a week on food, laundry detergent, dish soap and diapers. If you don't have someone to transport your kids to school and playdates, you need a reliable car. Nothing sucks more than having your car held hostage in a garage for 72 hours.

Amen. My inherited 88 Golf is a nice little car (but really wants a cd player) that just spend four trips to the garage to get a minor transmission cable repaired properly. After all of that uncertainty, bumming rides (no bus out here) and wrangling with the garage (it had to be towed) I am ready to either become a mechanic or spend $200/month on a new small car. Every other member of my family has poor-person car troubles, constantly, so they always keep a barely running junker in the yard as a backup vehicle and refuse to tow non-working cars because they sometimes need only a $500 repair.

I hope the mortgage industry crumbles into the sea and is replaced with truly affordable housing instead of gross speculation.
posted by mecran01 at 5:40 AM on October 15, 2003

You want the best neighborhood to live in so your children are safe. Safety is the all encompassing be-all and end-all of parenting. Living in a sub-standard house in a neighborhood riddled with crime keeps you awake at night.

But there's a whole universe of excluded middle there. There are plenty of houses in perfectly good neighborhoods that aren't in the best neighborhood in town, and that don't have the highest prices in town.

And lastly, you want your children to have a top-notch education because you love them with every shred of your being and can't bear to think you might be failing them in some way if you don't provide them with the best possible learning environment.

The same logic applies here. There are huge numbers of houses whose school districts, while not the best in the state or area, are easily Good Enough for any reasonable definition of that. You'd probably do better for your child's education by taking time off, reducing your salary and maybe moving to a second-tier school system, and using that time to be more involved with your kids' education.

I'm not saying that you don't actually feel what you're feeling. I'm just saying that your brain, and those of other parents, are so addled by lovey-dovey PROTECT THE CHILD hormones that you've lost the capacity to think clearly about it, wink wink.
posted by ROU_Xenophobe at 6:31 AM on October 15, 2003

trharlan, sorry you don't believe me, but its all true. There is a lawsuit pending over the pension plan from the employer (a trucking company) where she spent 22 of the last 30 years of her working life, and if you think its impossible that a 401K could have lost a substantial percentage of its value as compared with, say, five years ago ... well, you've been living on the moon.

If you think that Social Security is theft, feel free to support the opt out movement - but bear in mind that Social Security does much more than simply support people "who has had a lifetime to save for {their} retirement" - it also provides benefits to help support children whose parents have died, as well as to workers who become disabled and to their families. It will also be the primary retirement income for millions of Americans who have spent a lifetime working at minimum or low-wage jobs (like this woman) and who are simply unable to save any kind of meaningful amount towards the time when they are no longer able to work. In addition, it is becoming increasingly common for people to outlive their retirement savings - primarily because of the ever increasing cost of healthcare. Even if you manage to put aside $100,000 or more, its fairly easy for that to disappear quickly if you live even a moderate healthy life through your mid-80's.

Social Security was never designed or intended to be a "pay in-pay out" pension plan. It was designed to be - and still is - an insurance plan. Like all insurance, it is possible that you'll pay more in premiums than you'll ever collect in benefits. And, truthfully, I hope that you never find yourself in a situation where you need Social Security as your only source of income - I hope you never become severely disabled, that your pension plan is not underfunded, that you don't die unexpectedly leaving behind children in need of financial support. But to say that a program which recognizes the possibility that these things might happen equals theft seems to me a bitter, narrow and restricted view of the world. Perhaps you believe that a civilized society has no implied contract to help those who - through lack of skill or plain bad luck - cannot help themselves. You're certainly free to believe that. I just hope, for your sake, that you never end up in the pool of those who you so clearly think are not worth helping.
posted by anastasiav at 7:15 AM on October 15, 2003

I'm just saying that your brain, and those of other parents, are so addled by lovey-dovey PROTECT THE CHILD hormones that you've lost the capacity to think clearly about it, wink wink.

You hit the nail on the head, ROU Xenophobe. I am addled by love hormones but don't know the cure. I'm not shocked by this -- I am 100% responsible for bringing my children into this world and was fully aware of life-altering implications involved when I was pregnant with both of them. And sometimes, those "lovey-dovey PROTECT THE CHILD hormones" give you a sense of purpose to keep you focused on your family goals for the future.

You'd probably do better for your child's education by taking time off, reducing your salary and maybe moving to a second-tier school system, and using that time to be more involved with your kids' education.

My kids are young, just 5 and 2, so homework review is not yet an issue but there is always teaching, guidance and learning opportunities every day.

As it stands now, we wake at about 6:30 am every morning and eat breakfast, brush teeth, arrange backpacks, shoes, coats and the like and prepare for the day ahead. We spend a lot of time together every morning and I can't discount how important this is even if it is consumed with mundane tasks along the way. A good start in the morning helps the children stay balanced and emotionally stable throughout the day.

I currently have a sitter 9-4 M-Th but I really only work 20 hours a week. I spend about 8 hours every week picking up kids, dropping off kids, carpooling kids, having pb+j sandwiches with kids, driving kids to park district tumbling classes, and hauling ass to the grocery store so I can feed kids.

After I get off work, I make dinner, read or color with the kids, clean the dishes, put laundry away, bathe the kids, read to them again and then sing them to sleep. Then I haul ass down to my basement office and work 4-5 more hours each night. Then I am with the kids non-stop Friday through Sunday. Monday rolls around slowly but surely and we start the whole process all over again.

Basically what I'm trying to say is that I DO spend time with these kids. If I move from one place to another, I am still going to be riding this mommy track until both kids are in grade school full-time. Time-off is a sad, unobtainable myth for me but there is light at the end of the tunnel - I'm counting on it.
posted by argus at 7:46 AM on October 15, 2003

argus, when do you sleep?
posted by anastasiav at 8:05 AM on October 15, 2003

sleep? what is that exactly? oh, i know...that's what other people do.
posted by argus at 8:30 AM on October 15, 2003

What became of the daddy in all of this?
posted by jfuller at 9:31 AM on October 15, 2003

argus, I am on the same page. I have actually used sick leave from work just to have a two-hour nap.
posted by whatnot at 9:46 AM on October 15, 2003

You hit the nail on the head, ROU Xenophobe. I am addled by love hormones but don't know the cure.

I don't mean that it's really some giant problem or anything. People's emotions WRT to their kids sometimes lead them to make decisions that are more emotionally-satisfying than actually rational, that's all.

And the cure is easy -- hire a clear-Minded, steely-eyed entity such as myself to find you the optimal neighborhood in which to live, and so forth. Trust Xeny. Xeny is your friend. Write Xeny the check today!

You would if you loved your kids, you negligent monster\ldots
posted by ROU_Xenophobe at 10:50 AM on October 15, 2003

It is far better to be ready for kids at 40 and not have them than it is to have kids at 20 before you're ready.

Hmm, if you ask the kids, they might disagree.

(okay, okay, I'm guessing you meant financially better)

But oh what I wouldn't give to have a nice fancy dinner with adults and follow it up with a drink at the bar, watch the evening news uninterrupted while I lie sprawled out on the sofa or take a nap on a Sunday afternoon.

Babysitter? Grandma? Exchange a Sunday afternoon of childcare with another busy mom?

Respite care is something people need to function well. Never getting a break has marked deleterious effects on caregivers.

On the face of it in the US there aren't enough people in enough hurt even to elect Democrats instead of Republicans, let alone make revolution.

Let the pot simmer a while longer. I think we're so fat and happy that the "misery" threshold has shifted, and when it gets to a certain threshold of consumer debt never getting repaid, we'll see some... interesting things.

How is it that barely literate peasants are to to thrive where many of you are barely making ends meet on far more resources?

Yeah, but how many of them live in a single house? How many live in a single bedroom? How many native-born people of middle-class upbringing are willing to go this route?
posted by beth at 10:51 AM on October 15, 2003

There is a lawsuit pending over the pension plan from the employer

If she doesn't get her share through litigation, the PBGC will step in.

and if you think its impossible that a 401K could have lost a substantial percentage of its value as compared with, say, five years ago ... well, you've been living on the moon.

In fact, I've been working in the securities industry-- trading, valuing, buying, and selling investments. It is impossible for a conservatively invested portfolio to lose its value over the past four or five years. In fact, the past few years have been fantastic for conservative investors. As interest rates have dropped, bonds have returned well in excess of their coupons.

Social Security... was designed to be...an insurance plan.

And it would be much less insidious if it were means-tested-- if it actually worked like insurance.

And, truthfully, I hope that you never find yourself in a situation where you need Social Security...I hope you never become severely disabled, that your pension plan is not underfunded, that you don't die unexpectedly leaving behind children in need of financial support.

As utterly cheap as term life insurance is, there is absolutely no excuse for leaving a destitute widow or orphan. And disability insurance, while slightly costlier, is widely available. As for retirement, I will have had forty-five years to save. And you can be damned sure I'm not relying on any one company or government to provide for me.

But to say that a program which recognizes the possibility that these things might happen equals theft seems to me a bitter, narrow and restricted view of the world.

I think it's quite compassionate to believe that money belongs to she who earns it. And I'm certainly not bitter.

Perhaps you believe that a civilized society has no implied contract to help those who - through lack of skill or plain bad luck - cannot help themselves. You're certainly free to believe that. I just hope, for your sake, that you never end up in the pool of those who you so clearly think are not worth helping.

I hope you never find yourself in that situation, either. And I think individuals do indeed have that responsibility, morally. But charity ought not to happen at gunpoint.
posted by trharlan at 5:59 PM on October 15, 2003

If she doesn't get her share through litigation

Ah, yes, but litigation takes time. SS is providing the means to live while we fight the good fight. Without it, many involved in the litigation would have been forced to settle for pennies on the dollar.

I hope you never find yourself in that situation, either.

I've already been in a situation where SS helped me and my family, many times - when my father died in the early 1970's, it helped support us while my mom got back on her feet. When my Grandfather outlived his savings (died at the age of 95) that income was the difference between my Grandmother having to sell her home and move them both into a less familiar surrounding and staying put. And, today, SS makes up about 50% of my mom's monthly income - without which I'm not sure where we'd be.

it would be much less insidious if it were means-tested-- if it actually worked like insurance

It works exactly like insurance. You pay your premiums and you get the benefit when the insurance is triggered. If I insure my house for $100,000,000 and I pay the premiums, I'm going to get the benefit if my house burns down - regardless of my income or 'means'. I pay my SS premiums, and the insurance is triggered by a qualifying event (death, disability). Simple.

As utterly cheap as term life insurance is

Not everyone qualifies for term life insurance - at cheap rates or at any rates. And recall that not every death will trigger the insurance - some types of death void the insurance, in fact.

As for retirement, I will have had forty-five years to save. And you can be damned sure I'm not relying on any one company or government to provide for me.

No one is arguing that you should. What the program is saying is that you must be forced to have a back-up plan. Given the crazy ways that people invest their money (Llama farms, dot-coms) and the strange things that can happen in the world, I'm not sure why mandating a back-up plan isn't a good idea.

If you've never done so, I suggest you read some stuff (can't find any web links, but I can cite books if you wish) on the state of affairs prior to the implementation of SS. Not everyone is as smart, well-educated, lucky, and/or fore-thinking as you and I.
posted by anastasiav at 6:27 PM on October 15, 2003

It is an endless circle to maintain this lifestyle but it always comes down to the fact that you have to make sacrifices when you have children. There is no turning back.

That sounds like an excellent reason not to have them.

Life in the city with no mortgage and no kids: it's the New American Dream. Funny how it's the Old American Dream that gets you into trouble these days...
posted by Mars Saxman at 11:03 PM on October 15, 2003