Comment by colechristensen | Hacker News Reader

Comment by colechristensen | Hacker News Reader

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colechristensen

80% of people live "paycheck to paycheck" whatever exactly that means. (count me among them)

Very few of them actually need to. It is possible at any income level to spend less money than you make. People don't tend to make those choices though and unfortunately prices reflect this - for a lot of things, especially housing, prices rise to whatever people will pay – if everyone is willing to pay so much for housing that they can't save much at all, well the price of housing raises so everybody does that.

You can choose to not live paycheck to paycheck but it means making different choices about where you live, how you entertain yourself, and how you acquire things. This is applicable at the highest and lowest income levels.

People should be thinking that in order to afford a car they likewise need to be able to afford its repairs, but instead of buying a cheaper car and saving some for eventual repairs or maintenance, people just consider the acquisition cost and buy their max.

I am among these people despite a tech job in the bay area I live mostly paycheck to paycheck as a result of several choices I've made, and I don't necessarily regret all of them but at the same time the situation definitely frustrates me.

This is a very american thing. I'm french and live in China, what you're describing is really foreign to me.

I'd say "most people" save a lot for retirement and their first house buy, "most people" live way below their salary max, "most people" would slap you for considering a consumer loan.

What happened to you guys to go so deep in the hellhole to not even see it's madness to live that way...

The culture is really different, and frankly, it's not a clear cut 'this is simply better' thing. China had trouble expanding their domestic market because people just save the money they earned instead of spending it on things.

If, in aggregate, people are saving more than they're earning, your economy is necessarily shrinking on a per-capita basis (or your central bank is injecting money into the economy and your "savings" is being inflated away). If you're not investing in some creative act, you're taking capital away from everybody else.

Exactly, as much as loans and savings go, they don't physically alter the currently available resources to be consumed, which really has nothing to do with money at all. A society can't just collectively save most of its income for it to be magically available at a later date. It's just suffering deflation while exporting inflation into the future. It's some sort of prisoner's dillema that high-saving countries usually run into.

> or your central bank is injecting money into the economy and your "savings" is being inflated away

This classical macroeconomic principle does not work any more [0]. Today inflation is not directly related to central bank actions.

[0] https://www.economist.com/special-report/2019/10/10/inflatio...

Meh, I think it has more to do with central bank actions being so far removed from buying eggs at the grocery store that the macroeconomic effects are just not very tightly coupled with specific actions. People aren't making different decisions w.r.t. the cost of capital and banks giving loans aren't giving riskier loans when interest rates are lower - the risk and the interest have little coupling at all. So central bank actions are only having effects inside the very navel-gazing financial industry that is moreso playing its own game than interacting with the outside world.

That is, central bank actions' effects are being hidden by complexity that will take time to shake out. Interest rates and bailouts and the like are only affecting a certain tier of society and it will take a while for those waves to spread to the rest of us.

If over time, you change the way you measure inflation[0], to manipulate government bond rates and Social Security payouts[1], then it's not surprising you end up with a world where inflation is not directly related to central bank actions.[2]

[0]http://www.shadowstats.com/alternate_data/inflation-charts

[1]https://www.businessinsider.com/if-people-knew-the-actual-in...

[2]https://www.investopedia.com/articles/07/consumerpriceindex....

Looking at the numbers, it seems French household debt to income has actually surpassed American (both around the 100% of disposable income) in just the last few years. French ratios have been gradually increasing for the last 25 years and American has been falling for the last decade.

One factor is Americans have significantly higher disposable income and can service more debt.

https://data.oecd.org/hha/household-debt.htm#indicator-chart

Thank you, people don't acknowledge that simple point of logic often enough -- debt is a mindset.

Really what we need is a culture of saving, but a part of me feels that many people in our culture find that extremely difficult because billions of dollars are spend every year on propaganda designed to try to get us to spend more (read: advertising).

For an economy, too much saving is as much a problem as too much debt. We're all just paying each other to do things and acquiring capital just to have it past the point where you need it kills jobs and concentrates wealth away from people less fortunate.

> Very few of them actually need to. It is possible at any income level to spend less money than you make.

My anecdata certainly doesn't back this up, so I'm going make you cite.

Most of the people I know who are in trouble are generally there due to medical costs. If we had universal healthcare in the US, I would be more receptive to your statement.

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