Why do some people have no savings?

[Warlord]

13 minutes ago, jonb2 said:

If you look at @zugzwang's post up-thread, you will notice the wealth of nations is also determined by making things for export. Rather than the same-old, same old 'balance the books' - it would be better to spend some money on an industrial and technology policy. You know, have a vision.

But I think the chances of this are extremely slim - when we have a bunch of entitled idiots, supposedly running things, with no hands-on experience and an inability to understand the human psyche.

Deficit spending and central banking destroys the value of currency over time making us all poorer. I agree we do need to produce more but with all the regulations (including the job killing  minimum wage) and taxes piled on by HMG over the last 20 years it simply isn't worth producing goods.

Cut taxes, cut spending, cut red tape and get back to sound money and we will prosper 

Edited May 8, 2020 by Warlord

[jonb2]

8 minutes ago, Warlord said:

Deficit spending and central banking destroys the value of currency over time making us all poorer. I agree we do need to produce more but with all the regulations (including the job killing  minimum wage) and taxes piled on by HMG over the last 20 years it simply isn't worth producing goods.

Cut taxes, cut spending, cut red tape and get back to sound money and we will prosper 

I agree the central banks are a major problem. This is because they are part of the wealth extraction cartel which has been going on for the past 50 years.

Minimum wage is not a jobs destroyer - you're reading the wrong media ?

https://www.economicshelp.org/blog/11503/labour-markets/effect-of-minimum-wage-on-adas/

https://www.businessinsider.com/britain-doubled-minimum-wage-with-no-effect-on-unemployment-2017-10?r=US&IR=T

The winding down of red tape and regulations is what cause the crash of 2008. Socialism for the mega-rich, capitalism for the rest of us. Tax cuts rarely do anything accept make the rich richer. Tax has been reduced drastically over decades for them. Announced tax cuts are a sleight of hand for Joe Public - particularly in the Anglo-Saxon countries where inequality has risen fast. You rarely find helpful innovation in nations where inequality rules.

Once you accept the man on the street is just a farm animal to be milked and shorn, things get clearer.

[Glental]

Crap pay and extortionate rent in my experience. I'm fairly frugal and have nowhere near enough saved despite working for the last 8 years. I think ~70k has gone on rent.

[Warlord]

25 minutes ago, jonb2 said:

I agree the central banks are a major problem. This is because they are part of the wealth extraction cartel which has been going on for the past 50 years.

Minimum wage is not a jobs destroyer - you're reading the wrong media ?

Min. wage kills lower skilled jobs by making them more expensive.

Schiff explains it very well:

 

[solentmuppet]

27 minutes ago, Warlord said:

Min. wage kills lower skilled jobs by making them more expensive.

Schiff explains it very well:

 

No, can't agree. There are people out there who, through no fault of their own,  will never be net positive to the general economy. If the low skilled can't earn enough to pay their rent, feed and clothe themselves, well, you either subsidise their rent, their job or their living costs. Pick two.....and THAT'S why you won't ever have a "balanced" book economy. Just my opinion of course.

[msi]

2 hours ago, Warlord said:

Min. wage kills lower skilled jobs by making them more expensive.

Schiff explains it very well:

 

Strange how people who have never been on minimum wage (or other benefits) suddenly feel so enlightened as to why they are bad for everyone.

 

[ucnvpe0]

Low interest rates!

[Habeas Domus]

20 hours ago, MARTINX9 said:

Our entire non contributory welfare and care system penalises you for having savings - own a £3m house but have no savings you can get pension credits, free council tax, free glasses and dental care, other income related benefits and free social care at home when you get frail or disabled. Rent a one bed flat but have £16,000 in savings and you get nothing

One point against this is that the owner of a £3m house will never be able to claim housing benefit.

The unemployed renter with £16K in savings will very quickly (within a few months) no longer have £16K as they will be spending it on rent. Once Housing Benefit kicks in that will quickly outstrip the cost of all those other benefits which you list.

So I'm not sure what you could do to improve this situation?

Pay benefits to people who have 10's of thousands in the bank?
Strip homeowners of the right to claim any benefits - forcing them to sell up, often in the midst of a recession?

If somebody wants unemployment insurance, they can buy it and pay the market rate. I certaintly don't want that added to the tax burden.

[Habeas Domus]

Schiffs arguments would make sense if the Min wage was somewhere above utter poverty, but in the USA that's not the case.

Also you can't separate out min. wage from in-work benefits, when low earners get a pile of handouts from the govt. then allowing companies to pay low wages is simply taking money from the govt and handing it to the likes of Wallmart.

Arguably if we got rid of all in-work benefits, then companies would be forced to raise wages (and pay taxes) as otherwise their workers would be starving and homeless.

[Ah-so]

6 hours ago, Warlord said:

You mean not the savings and loan crisis in the 80's, the recession in the 90's and the collapse of the banks in 08? Yeah, perfect isnt it..

 

And we're all still alive and have somehow seen a pretty steady constant rise in living standards over the past forty years. 

[Warlord]

9 minutes ago, Ah-so said:

And we're all still alive and have somehow seen a pretty steady constant rise in living standards over the past forty years. 

We're not better off. The central banking system is ripping us off.  50 years ago you could raise a family with one breadwinner in the house now two adults have to work to make ends meet.  £1 in 1950 is equivalent in purchasing power to about £34.49 in 2020, a difference of £33.49 over 70 years. We would all be so much richer in terms of purchasing power if we had sound money i.e backed by gold which was the situation back then. and will probably be so in the future.when the current unsustainable system collapses (it actually collapsed in 2008 but the government bailed out the banks which are still zombie's). All fiat systems collapse it's just a matter of when...

 

 

 

Edited May 8, 2020 by Warlord

[MARTINX9]

37 minutes ago, Habeas Domus said:

One point against this is that the owner of a £3m house will never be able to claim housing benefit.

The unemployed renter with £16K in savings will very quickly (within a few months) no longer have £16K as they will be spending it on rent. Once Housing Benefit kicks in that will quickly outstrip the cost of all those other benefits which you list.

So I'm not sure what you could do to improve this situation?

Pay benefits to people who have 10's of thousands in the bank?
Strip homeowners of the right to claim any benefits - forcing them to sell up, often in the midst of a recession?

If somebody wants unemployment insurance, they can buy it and pay the market rate. I certaintly don't want that added to the tax burden.

Don't disagree - its illustrative!

I don't want to chuck frail and elderly people aged 85 out of their home if they need pension credit etc. But perhaps 66 year olds who are fit and healthy should downsize first before getting benefits if they own a home worth say more than £500k? 

[MissOnAccomplished]

55 minutes ago, Habeas Domus said:

Schiffs arguments would make sense if the Min wage was somewhere above utter poverty, but in the USA that's not the case.

Also you can't separate out min. wage from in-work benefits, when low earners get a pile of handouts from the govt. then allowing companies to pay low wages is simply taking money from the govt and handing it to the likes of Wallmart.

Arguably if we got rid of all in-work benefits, then companies would be forced to raise wages (and pay taxes) as otherwise their workers would be starving and homeless.

+1

 

[frederico]

5 hours ago, Warlord said:

Min. wage kills lower skilled jobs by making them more expensive.

Schiff explains it very well:

 

Yes but what if the other costs are reduced or other benefits increased such that to an extent wages don't matter. 

For instance tax, transportation, communication, energy, skills. It's all part of a pie. Government needs to focus on enabling. If the business case works it will happen. 

[scottbeard]

6 hours ago, GregBowman said:

Got an mba and all that bull but the truth is until you have run a real business it’s just wooden dollars or numbers on a spreadsheet 

Nothing comes close to an education on money, markets or the economy until it’s your bank account, your employees and your cash flow 

Interesting take.

Certainly studying Economics isn’t going to allow someone to directly run a business, because running a business needs a much wider variety of people skills And creativity.  And an MBA is not economics at all, it’s business studies.
 

What I like about economics is It gives you the tools to not just observe like Ronald Reagan says what works in practice but drill into why it works.  Books like Freakonomics are a great way into that way of thinking.

Too often though economists are only on TV talking about forecasts which is only part of the story.

[frederico]

2 hours ago, Ah-so said:

And we're all still alive and have somehow seen a pretty steady constant rise in living standards over the past forty years. 

This is true, but is it sustainable?  I must admit I thought we would run out of the ability to borrow a long time ago. 

[frederico]

11 hours ago, gp_ said:

The UK's industrial sector is about 21% of GDP, which is fairly typical for a developed country. A few like Japan and Germany have noticeably higher (at about 28%) and have a bit less (like the US and France).

Ok current account deficit is directly related to your ability to borrow, yet borrowing pays for it. I can only think that this loss is counterbalanced by the country's seeming likelihood to remain stable and a safe haven. 

[PeanutButter]

Why don’t British people save? Either because they can’t afford to, because they haven’t been taught to, or because they don’t need or want to.

Many live hand to mouth, many are barely literate and unable to budget, and many see no need to save since nothing bad has ever happened to them from not doing so.

My parents were excellent savers despite being lower paid professionals. We were poor (old car, no holidays, cheap house) but never wanted for food or heating. They taught me to save, and I do it because I want to and can. And I diversify of course, my Beanie Baby collection will be sold one day. 

[Abstra616]

On 07/05/2020 at 16:04, shlomo said:

I am coming across lots of people that have no money at all, no savings at all, is this true or are people telling fibs.

I have savings because I am saving for a house, but I would have a float of £20k for the just in case scenario.

How can it be in the UK one if the richest countries so many people have no savings.

You read too much Daily Mail.  You'll end up thinking everyone owns a house and saves for a Pension.  Your mind is in a bubble.  Most people live paycheck to paycheck, its been like that for ever.   Your part of the 3% and you don't even know it.

[Mikhail Liebenstein]

On 07/05/2020 at 19:00, zugzwang said:

The Chinese have enormous savings. As do the Germans, the Japanese, the South Koreans and the Swiss.

They all have central banks and fiat currencies.

Try again.

I think the big issue in the UK is property costs.

My first house (bought in 2000) cost £132k, I sold in 2002 for £175k, and in 2017 it sold for £430k.   Given FTBer wages have barely risen, i think that is part of the anwer.

[Abstra616]

2 hours ago, frederico said:

Yes but what if the other costs are reduced or other benefits increased such that to an extent wages don't matter. 

For instance tax, transportation, communication, energy, skills. It's all part of a pie. Government needs to focus on enabling. If the business case works it will happen. 

Peter  Schiffs solution is to starve the population to death so he can employ the survivors at the minimum wage minus his costs of employment.  He's a nutta!

[Abstra616]

2 hours ago, frederico said:

Ok current account deficit is directly related to your ability to borrow, yet borrowing pays for it. I can only think that this loss is counterbalanced by the country's seeming likelihood to remain stable and a safe haven. 

Bang on.  Investment goes to stabillity and Security.  Wages are much lower in Bikini Faso.  See any car £50 Billion car factories being built there?

[Sour Mash]

5 hours ago, Ah-so said:

And we're all still alive and have somehow seen a pretty steady constant rise in living standards over the past forty years. 

 

A lot of the rise in living standards (principally the amount of 'stuff' you own) has been down to globalisation - make the goods in less developed countries with essentially slave labour - and of course the widespread availability of credit so you don't actually need to have the money to buy stuff right now.  It's now got to the point where more expensive items like cars are mostly leased.

 

[shlomo]

15 minutes ago, Sour Mash said:

 

A lot of the rise in living standards (principally the amount of 'stuff' you own) has been down to globalisation - make the goods in less developed countries with essentially slave labour - and of course the widespread availability of credit so you don't actually need to have the money to buy stuff right now.  It's now got to the point where more expensive items like cars are mostly leased.

 

Off subject: if we have a trade war with China the benefits of globalisation will  disappear and we will be stuffed, i can see another winter of discontent.  

[Sour Mash]

2 minutes ago, shlomo said:

Off subject: if we have a trade war with China the benefits of globalisation will  disappear and we will be stuffed, i can see another winter of discontent.  

Clearly the prices of all the cheap electronic things that we currently get from china are going to go up, if only due to constrained supply, never mind if relations deteriorate.  Not to mention the inflationary effects of printing massive amounts of money (again) to give away to everyone in the financial industry (again).