Comments on: Charting a Path to Renewed Frugality http://toughmoneylove.com/2009/01/27/charting-a-path-to-renewed-frugality/ The Hard Truth about Money and Personal Finance Fri, 24 Feb 2012 15:57:47 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: picker http://toughmoneylove.com/2009/01/27/charting-a-path-to-renewed-frugality/comment-page-1/#comment-2355 picker Wed, 04 Feb 2009 05:31:46 +0000 http://toughmoneylove.com/?p=1358#comment-2355 Increase the federal tax on gasoline (currently 18 cents a gallon) to 25 or 30 cents a gallon. Use the money to subsidize social security, medicare and/medicade or build and/or repair bridges and roads. The money will put people to work, reduce carbon emissions and dependence on fossil fuels and encourage the use of efficient transportation. Increase the federal tax on gasoline (currently 18 cents a gallon) to 25 or 30 cents a gallon. Use the money to subsidize social security, medicare and/medicade or build and/or repair bridges and roads. The money will put people to work, reduce carbon emissions and dependence on fossil fuels and encourage the use of efficient transportation.

]]> By: Curt http://toughmoneylove.com/2009/01/27/charting-a-path-to-renewed-frugality/comment-page-1/#comment-2287 Curt Wed, 28 Jan 2009 02:10:39 +0000 http://toughmoneylove.com/?p=1358#comment-2287 The low savings rate is not all our fault. The government has keep interest rates lower then inflation for decades, which means that savers lose money year-after-year. The government’s monetary policies created incentives against saving. The low savings rate is not all our fault.

The government has keep interest rates lower then inflation for decades, which means that savers lose money year-after-year. The government’s monetary policies created incentives against saving.

]]> By: Sarah http://toughmoneylove.com/2009/01/27/charting-a-path-to-renewed-frugality/comment-page-1/#comment-2285 Sarah Wed, 28 Jan 2009 00:16:15 +0000 http://toughmoneylove.com/?p=1358#comment-2285 Nice article, but I think the sentence "If you are mad at baby boomers for all of this, rest assured that we have been and will continue to be punished" is worded in a contradictory way. It pretty much shows that baby boomers still have the wrong mindset. Nobody's 'punishing' them. They're merely seeing the consequences of their actions. To convey that they're really taking responsibility for their actions, I wouldn't say they were "being punished". Maybe they're experiencing a disproportionate amount of the effects, but as they have more exposure to the market than the younger generation, perhaps that's expected. Nice article, but I think the sentence “If you are mad at baby boomers for all of this, rest assured that we have been and will continue to be punished” is worded in a contradictory way. It pretty much shows that baby boomers still have the wrong mindset. Nobody’s ‘punishing’ them. They’re merely seeing the consequences of their actions. To convey that they’re really taking responsibility for their actions, I wouldn’t say they were “being punished”. Maybe they’re experiencing a disproportionate amount of the effects, but as they have more exposure to the market than the younger generation, perhaps that’s expected.

]]> By: MoneyMateKate http://toughmoneylove.com/2009/01/27/charting-a-path-to-renewed-frugality/comment-page-1/#comment-2283 MoneyMateKate Tue, 27 Jan 2009 16:34:34 +0000 http://toughmoneylove.com/?p=1358#comment-2283 I just don't see us making a lasting move to becoming a nation of savers. We tend to be very reactive - a quality that has as much upside as downside. If nothing else, hopefully most of us will take from this a lesson about taking responsibility to managing our our own money and not buying into the hype (e.g. we should all be homeowners! everyone is making a fortune in the stock market! there's gold in them there hills!). I just don’t see us making a lasting move to becoming a nation of savers. We tend to be very reactive – a quality that has as much upside as downside. If nothing else, hopefully most of us will take from this a lesson about taking responsibility to managing our our own money and not buying into the hype (e.g. we should all be homeowners! everyone is making a fortune in the stock market! there’s gold in them there hills!).

]]> By: TMN http://toughmoneylove.com/2009/01/27/charting-a-path-to-renewed-frugality/comment-page-1/#comment-2282 TMN Tue, 27 Jan 2009 16:31:56 +0000 http://toughmoneylove.com/?p=1358#comment-2282 I tend to think that the concept of frugality never really left in the first place, at least not entirely. What these studies never show is the distribution around the average. I would guess 10-20% of the country is doing very well, 50% are doing decently well, not saving a ton, but saving some, and the remaining 30% are in debt up to their eyeballs to the point that they drag down the total average. Turns out I'm wrong though. From this link: http://www.federalreserve.gov/BoardDocs/Speeches/2004/20041006/default.htm "Interestingly, the Fed's study of this issue shows that the decline in the saving rate of households at the top 20 percent of the income distribution accounts for virtually all of the decline in the aggregate personal saving rate since 1989, the first year for which estimates on saving by income quintile are available. That is, the saving rates of the bottom 80 percent of the income distribution have fluctuated in a relatively narrow range and importantly have shown no secular decline since 1989." The study cited was published in 2004, so for a 15 year period the decline in savings rates was due entirely to the top 20% of households. The story goes on to speculate about what this means, but it seems reasonable to think that the recent increase is also due largely to the same demographic. And it suggests that for the bottom 80%, nothing has really changed in the past 20 years. I tend to think that the concept of frugality never really left in the first place, at least not entirely. What these studies never show is the distribution around the average. I would guess 10-20% of the country is doing very well, 50% are doing decently well, not saving a ton, but saving some, and the remaining 30% are in debt up to their eyeballs to the point that they drag down the total average.

Turns out I’m wrong though. From this link: http://www.federalreserve.gov/BoardDocs/Speeches/2004/20041006/default.htm

“Interestingly, the Fed’s study of this issue shows that the decline in the saving rate of households at the top 20 percent of the income distribution accounts for virtually all of the decline in the aggregate personal saving rate since 1989, the first year for which estimates on saving by income quintile are available. That is, the saving rates of the bottom 80 percent of the income distribution have fluctuated in a relatively narrow range and importantly have shown no secular decline since 1989.”

The study cited was published in 2004, so for a 15 year period the decline in savings rates was due entirely to the top 20% of households. The story goes on to speculate about what this means, but it seems reasonable to think that the recent increase is also due largely to the same demographic. And it suggests that for the bottom 80%, nothing has really changed in the past 20 years.

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