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Comment by ClumsyPilot | Hacker News Reader

> sensible/frugal ones who minimize their debt and accumulate some amount of savings

What if this is wrong and being frugal is not sensible?

What happens when one gets laid off, disabled, changes careers, or faces some other circumstances that cause incomes to fall below what’s needed to service debt payments? That’s why living below one’s means and saving the rest is prudent.

Unfortunately high inflation penalizes savers by eroding the purchasing power of savings, and it forces all workers on a treadmill where it seems that the cost of living rises faster than many people’s ability to catch up. The only way to beat inflation it seams is to invest in assets such as real estate or stocks, but those squeezed by inflation have little to invest, and these assets are increasingly difficult to obtain due to inflation. I find being on the wrong side of inflation highly demoralizing and upsetting.

"Paradox of thrift". Economic version of losing weight by cutting off your toes.

Even if it's good for GDP to have everyone spending every penny, it's not good for you.

Two economists were walking down the street. One saw a dog shit on the ground, and told the other: “If you eat that, I’ll give you thousand dollars.” Other guy looked at it, thought “It’s bad, but I’ll get $1000”, and ate it. His friend paid him, although he still regretted it because it was really bad. After some time, they encountered another dog shit. This time the guy who ate it before, seeking revenge of the foul taste in his mouth, offered $1000 for eating it to his friend. He accepted, thinking “I’ll gain the $1000 I lost”. He ate it and got paid. After some time, they stopped for a while, and one said to other, “I feel like we just ate shit for nothing”, his friend replied: “Oh, come on! We just contributed to the GDP by $2000, it can’t be for nothing!”

(Commented this exact commenting the past, but relevant so doing it again.)

Obviously one can post-hoc rationalize "sensible" as whatever worked best given the circumstances that occurred.

Absent government intervention in the functioning of markets, being frugal would have paid off way more than it has.

> Absent government intervention in the functioning of markets, being frugal would have paid off way more than it has

Why do you believe that to be the case? I think you are going with a gut feeling that the world should reward frugality, but if you actually examine that belief, there is no solid science behind it - but he world does not appreciate moral virtues, it does not reward kindness, and other things either.

It depends on the knowledge you have. Most people aren't aware that unless they are getting a 7%+ return on their savings, they're actually getting poorer every year.

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