I hate to break it to you, but once you get past a certain age, it doesn't matter what kind of crazy skills you have. It's tough to get a new job just because of your age.
Why did you not plan for retirement? You had decades to do a 401k, or at least a crappy savings account. Also, Social Security might not be much, but it's enough to not be homeless.
Also, let me reiterate that it's not just a story about those "stupid irresponsible people". We all participate in the same society and the same economy. The plight of those people can affect us in ways that are hard to predict. Even if we don't feel bad about them, their plight might cause us to face higher prices or tighter credit.
High prices and tight credit don't bother me because I live well enough below my means so that I won't lose anything unless the shit really hits the fan. If the shit really hits the fan, it's Mad Max time, so money no longer matters. I'm still asking for you to show me the people who are really having tough times, but were not living above their means. Don't give me anecdotes either. I want to see proper statistical evidence that people who were doing just fine before are now screwed, and it wasn't their own faults.
If we're living in an economy where McDonald's employees are all driving Ferraris, and then suddenly they all get repo'd, that is not a cause for concern. That is a cause for a sigh of relief as we return to reality.
Also, if renting a million dollar home in Santa Barbara is actually within my means, and I didn't realize it, then please point me in the right direction. I'm ready to move.
Their plight may also lead to more crime in the area.
Scott, you are still in your twenties and have yet to experience any form of age discrimination on the job. How long have you even kept the same job for? Have you kept a job for more than 24 months?
If you have a union job (as I do) you do have some security. As new equipment gets added to the telecom system my company trains me on how to operate and fix it. This training is conducted on a seniority basis. This works except when someone with seniority either does not give a shit or is planning to retire. Why train someone who is going to retire or leave the company soon?
In my local area this has not been a problem as the person with the least amount of seniority still has 8+ years working here. The top folks are in the 30+ year area. This is probably completely opposite to what you see in IT. Well, except for those Unix gurus with the beards...
So yes, in my case my specialized training is always kept current.
What if you are a secretary? What sort of job skills can you improve? Aside from shorthand and learning MS Office there is nothing else. So what does that person, who has been working the same job for 20 years, do when they find themselves out of a job? Who is going to pay extra for their "experience" when their experience does not mean much and is easily duplicated?
As to the overall problem of people living beyond their means... Yeah, they did bring that upon themselves but they had help in the form of ever increasing credit card limits. I think all of my credit cards have credit limits higher than my annual pay. I never ask for these "upgrades" they just come every year for having good credit.
If I were to lose my job I would be tempted to maintain my lifestyle on credit cards while looking for a new job. The reason is two-fold.
1. I like the level I live at. 2. I would not want to admit that I was broke.
I have known people who juggle balances waiting for that next "0% balance transfer" offer to come in the mail. It often start small with the person just trying to consolidate everything onto one low interest card and then it snowballs because they are short a few dollars here or a few dollars there. Suddenly they need some work done on their car. Before you know it they have $20K in debt and a monthly interest charge of several hundred dollars. It's all they can do to maintain the debt let alone pay it off.
Then they get an interview so they buy new clothes. Then they don't get the job or it does not pay enough.
At this point they are stuck. They can go bankrupt or they can keep trying. At the same time the credit card company keeps on increasing their credit limit! Even though their minimum payment is $500 a month only about $20 goes to principal! That's why the credit card companies keep increasing the credit limit it's because they are making a killing off of it.
On the housing side it is a bit different. A lot of speculators got burned on real estate and just walked away. I'm sure you have read the stories and seen the ads on TV for how to make millions in real estate by flipping houses. Some of those folks abuse the system by getting special loans that require you to live in the house, they don't. Instead these people buy a whole bunch of properties (little or no money down) and try to flip them before their first payment comes due. They don't care about the loan interest rate because they expect to have the house sold before any interest accumulates.
Those people got burned hard when the housing market collapsed. I have to wonder if they created that bubble on their own.
I have compassion for those who have tried to live within their means but something bad happened. I have no compassion for those who deliberately lived lives of bad finance. If someone lives in their house and has trouble making the payments and wants to fix their finances I'm all for giving them a grant or a low interest government "bail out" loan to help them get on their feet. Even something as small as a two month mortgage payment can be enough to get people back on track.
However, those who apply for such aide must also agree to sit down with a financial counselor so that they can figure out where they went wrong so they do not do it again.
As for the older folks without marketable skills... Well, I don't know. If you've lived the last 40+ years of your life irresponsibly you are kind of screwed.
I hate to break it to you, but once you get past a certain age, it doesn't matter what kind of crazy skills you have. It's tough to get a new job just because of your age.
Why did you not plan for retirement? You had decades to do a 401k, or at least a crappy savings account. Also, Social Security might not be much, but it's enough to not be homeless.
Also, let me reiterate that it's not just a story about those "stupid irresponsible people". We all participate in the same society and the same economy. The plight of those people can affect us in ways that are hard to predict. Even if we don't feel bad about them, their plight might cause us to face higher prices or tighter credit.
High prices and tight credit don't bother me because I live well enough below my means so that I won't lose anything unless the shit really hits the fan. If the shit really hits the fan, it's Mad Max time, so money no longer matters. I'm still asking for you to show me the people who are really having tough times, but were not living above their means. Don't give me anecdotes either. I want to see proper statistical evidence that people who were doing just fine before are now screwed, and it wasn't their own faults.
Once again, I hate to break it to you, but not many people are going to be able to live exclusively on their 401K's or savings accounts, much less Social Security. Social Security is often not enough to be homeless. I have personal experience with homeless people that are receiving Social Security benefits. If you want to take the Scrooge position and say that those people are getting what they deserve, then that's outstanding. I'm not saying you should feel sorry for them (although I think that would be a proper response, but I'm not going to hold my breath waitng for anyone on this board to show any compassion for anyone else). I'm saying that they are the canary in the coal mine that should be telling us that it's time to watch out for ourselves.
Also, I know that you think you will never be affected by the world around you. Other, less fortunate types (such as everyone else in the world) are not so lucky.
High prices and tight credit don't bother me because I live well enough below my means so that I won't lose anything unless the shit really hits the fan. If the shit really hits the fan, it's Mad Max time, so money no longer matters.
If I were to lose my job I would be tempted to maintain my lifestyle on credit cards while looking for a new job. The reason is two-fold.
If I lost my job, I would live as cheaply as possible, cutting out ALL non-essential expenses until I was back on my feet. I doubt I would even eat out once in the entire jobless span. I'd probably tell everyone I knew that I was in trouble, and I certainly wouldn't be above borrowing money from a friend.
What if you are a secretary? What sort of job skills can you improve? Aside from shorthand and learning MS Office there is nothing else. So what does that person, who has been working the same job for 20 years, do when they find themselves out of a job?
The modern world requires that everyone be agile. Twenty-year jobs are a thing of the past. I've been out of uni for less than four years, and I've already had three career-jobs with radically different responsibilities. Anyone who counts on their exact same job being there for them more than a few years down the road at a time is asking for trouble.
Scott, you are still in your twenties and have yet to experience any form of age discrimination on the job.
There really isn't, as far as I've ever seen, age discrimination in the tech field. It might appear so, simply due to the fact that practically no one over the age of 30 has a modern technology degree. (A Bachelor of Science in Information Technology didn't even exist until 1993, and Computer Science is essentially an entirely different field now from what it was even a decade ago). Someone recently out of university is very likely to be more up to date on modern systems and business practices, and is also likely willing to work for less. It's not age: it's the skill/pay matrix. Why hire the 45 year old who demands $120k, when the 25 year old has better training AND is willing, nay, happy, to work for $60k?
The other conflating factor is the generally rapid depreciation of technology-related job skills. What was difficult or required a specialist in 1996 is trivial for any freshman at a tech university today. Many of the skills that longer-standing workers have developed have been made completely obsolete by modern automation. For example, professional system builders have been replaced by minimum-wage workers and intelligent disk imaging systems: the formerly valuable and rare skill of being able to build a computer is so trivial as to not even be a consideration in modern hiring.
What if you are a secretary? What sort of job skills can you improve? Aside from shorthand and learning MS Office there is nothing else. So what does that person, who has been working the same job for 20 years, do when they find themselves out of a job?
The modern world requires that everyone be agile. Twenty-year jobs are a thing of the past. I've been out of uni for less than four years, and I've already hadthreecareer-jobs with radically different responsibilities. Anyone who counts on their exact same job being there for them more than a few years down the road at a time is asking for trouble.
So what would you tell that lady in the CNN article? Tough luck? Sucks to be you? Go back to school (at 67)?
So what would you tell that lady in the CNN article? Tough luck? Sucks to be you? Go back to school (at 67)?
Why there a stigma that people are too old to go back to school? I think ideally people should be attending classes all throughout their life in some form or another.
So what would you tell that lady in the CNN article? Tough luck? Sucks to be you? Go back to school (at 67)?
Why there a stigma that people are too old to go back to school? I think ideally people should be attending classes all throughout their life in some form or another.
It's not the stigma. It's how do you continue paying for bills (like rent, prescriptions, electricity, water, and so forth) when you're in school? Get a loan? You're already too much in debt and your credit rating is shot.
Let's say you could pay. Have you ever been 67 years old? At 67, you're grateful when you can use the bathroom effectively, much less take classes and effectively learn a new skill. The stress of taking classes is negligible when you're in your 20s. Its a whole different ball game when you're in your 60s.
I took some electrical engineering and some chemistry course at the University of Louisville when I was in my early 40s. I was working full time as well. It was a much, much different experience than when I was in my 20s.
You also have to look at life expectancy. At 67 do you think spending four years in college is going to pay out in the long run? Do you want to be working into your 90's?
Who is going to hire someone who is fresh out of college AND 71 years old?
You also have to look at life expectancy. At 67 do you think spending four years in college is going to pay out in the long run? Do you want to be working into your 90's?
Who is going to hire someone who is fresh out of college AND 71 years old?
OMG, I just felt the earth move. I'm in total agreement with Steve.
So what would you tell that lady in the CNN article? Tough luck? Sucks to be you? Go back to school (at 67)?
Why there a stigma that people are too old to go back to school? I think ideally people should be attending classes all throughout their life in some form or another.
At the very least, the Internet exists. There have been very few days in the past decade where I haven't learned something new and valuable. Take into account that I haven't had any formal schooling or training in 3 or 4 years. There is no excuse in our society for not learning constantly. It's not like there ever was an excuse, libraries have been around for a long time. The difference now is that our society demands that you constantly keep up, whereas before it was just helpful, not mandatory, to do so. We live in a world where it is harder to avoid learning things than it is to learn. If you aren't constantly building your skills, you have only yourself to blame for the results.
What do I tell the woman? Tough shit. You screwed up before, and therefore put yourself in a situation where you have little to no way out. What comes before determines what comes after. She was stupid with her money, and now she has to face the consequences. If you focus only on her present situation as someone with no way out, it's not hard to understand how you could be sympathetic, especially if you blame the cause of that situation on outside forces beyond her control against which there is no defense. The reality is that she made her pot, and now she has to sit in it. She rented a house she could not afford, and she couldn't pay for it with money. Now she has to pay for it with suffering. Her misery is of her own making.
There are people in this world whose misery is not of their own making. These Santa Barbara homeless are not those people. You are right that these people are canaries in the coal mine. They are a warning to other people living above their means that such inflated unrealistic lifestyles are no longer going to be tolerated, and if they continue in their irresponsible ways, they will be ruined. For the rest of us, who aren't coal miners, there's nothing to worry about.
You also have to look at life expectancy. At 67 do you think spending four years in college is going to pay out in the long run? Do you want to be working into your 90's?
It's called continuing education. She had 20 years to take advantage of it.
What do I tell the woman? Tough shit. You screwed up before, and therefore put yourself in a situation where you have little to no way out. What comes before determines what comes after. She was stupid with her money, and now she has to face the consequences. If you focus only on her present situation as someone with no way out, it's not hard to understand how you could be sympathetic, especially if you blame the cause of that situation on outside forces beyond her control against which there is no defense. The reality is that she made her pot, and now she has to sit in it. She rented a house she could not afford, and she couldn't pay for it with money. Now she has to pay for it with suffering. Her misery is of her own making.
I sincerely hope those words don't come back to haunt you.
Tell her to get in her car, drive to Arizona where rent is cheaper, and look for a job there. There's no reason listed in the article why she has to stay in a high-rent area of California. Or tell her to drive to Ohio, where the average house price is more like $200,000 instead of $1 million.
Look, personal finance is easy. Spend 10 percent less than you make and put the rest in a savings account. Never touch the savings account. Don't buy anything with a credit card that you can't pay off immediately. Conversely, buy as much as you can on a credit card and pay it off immediately to build your credit rating. Fund your 401k to the max. Negotiate for a job that offers 401k matching. Fund your IRA to the max. Put whatever else you can afford in a six-month money market. Buy a house if you can afford it so that you're building equity instead of paying rent -- and if you buy, don't get the best house you can get financed. Drive your car into the ground until it is either unsafe or monthly repair fees approach a monthly payment. Never buy a new car -- always buy last year's trade-in model. Grocery shop on a budget, using a menu and a list. Don't pay for cable, satellite, or cell phone services that you don't need (I hate driving by Section 8 housing complexes with satellite dishes rigged all over them). Don't buy clothes, shoes, purses, decorations, gadgets, or other shit that you don't need. Don't have children early. Itemize your tax returns. Don't play the lottery. Make a monthly budget and don't spend outside of it. Buy term life insurance. Make a will.
Sometimes in life you can be trapped with no way out. It can happen. However, for the vast majority of things in life, there is a way out. It might not be a pleasant way out, but it exists. If you refuse to take it, you have only yourself to blame. Also, many of the ways to be trapped in life are entirely and easily preventable. If you didn't work to prevent it, when you had every chance to do so, that is also your own fault.
If you want sympathy find people who got trapped, with no way out, and no way to prevent the trap. One good example is a child with cancer. Another good example is an orphan in North Korea. People living in mansions they could not afford getting kicked out onto the street is not an economic crisis, it is the return of sanity.
You also have to look at life expectancy. At 67 do you think spending four years in college is going to pay out in the long run? Do you want to be working into your 90's?
Who is going to hire someone who is fresh out of college AND 71 years old?
OMG, I just felt the earth move. I'm in total agreement with Steve.
Yeah. It is a strange, strange feeling. Go Steve and Joe!
You can rant about personal responsibility all you want. You can take the Scrooge approach and say that people get what they deserve. But, as I said earlier, everyone (except Scott, who's special) participates in the same economy and the same society. If people in California begin to get in trouble and not have the ability to pay their bills, businesses in California will fail. If businesses in California fail, banks in California might fail. If banks in California fail, my bank might fail. If my bank fails, it doesn't matter how smart I've been with my money. That's just one chain of consequence. I don't get why you want to bang on about personal responsibility and ignore this, that I've continuously posted about in this thread.
Maybe you could make a "Scrooge" thread where you could rant all day about how smart you are with money and how anyone who isn't as smart as you deserves ruin.
"All mankind is of one author, and is one volume; when one man dies, one chapter is not torn out of the book, but translated into a better language; and every chapter must be so translated...As therefore the bell that rings to a sermon, calls not upon the preacher only, but upon the congregation to come: so this bell calls us all: but how much more me, who am brought so near the door by this sickness....No man is an island, entire of itself...any man's death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee." - John Donne
If you really believe in that crazy slippery slope is going to result in your personal ruin, then what are you doing complaining in a forum? Shouldn't you be out teaching these people to be financially responsible so that their stupidity doesn't result in harm to yourself? Maybe you should be shielding yourself from the harm they will cause you. Fill that basement with canned food, water, and gold.
Also, as I've said before, if there isn't ultra-economic ruin, then big deal. It's not a false dichotomy. If the banks are still working, then people who are prepared for a hardship will be ok. If the banks go under, it's a great depression and money no longer matters. All that will matter are things like food, fuel, water, and skills that are useful in the here and now. I can see why an old man might fear a Mad Max sort of situation. Personally, such a catastrophe actually makes me a little excited. It would be an escape from mundane desk jobs into a daring life of action and adventure. It would be a chance to grab the exposed beating heart of a ruined society with my bare hands.
"All mankind is of one author, and is one volume; when one man dies, one chapter is not torn out of the book, but translated into a better language; and every chapter must be so translated...As therefore the bell that rings to a sermon, calls not upon the preacher only, but upon the congregation to come: so this bell calls us all: but how much more me, who am brought so near the door by this sickness....No man is an island, entire of itself...any man's death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee." - John Donne
. . . except for Scott.
Personally, such a catastrophe actually makes me a little excited. It would be an escape from mundane desk jobs into a daring life of action and adventure. It would be a chance to grab the exposed beating heart of a ruined society with my bare hands.
I am amused at the thought of you actually getting your hands dirty in the post apocalypse. I understand that, so far in life you have been very successful. I'm very happy for you. I have a strong suspicion though, that your success depends heavily on computers. If the post-apocalypse lacks computers, I think you would be in big, big trouble.
"All mankind is of one author, and is one volume; when one man dies, one chapter is not torn out of the book, but translated into a better language; and every chapter must be so translated...As therefore the bell that rings to a sermon, calls not upon the preacher only, but upon the congregation to come: so this bell calls us all: but how much more me, who am brought so near the door by this sickness....No man is an island, entire of itself...any man's death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee." - John Donne
. . . except for Scott.
So what are you trying to tell me chicken little? People living in mansions who could only afford houses are now living on the street is a sure sign that the sky is going to fall on my head? Give me a break. If anything, that's better for me as I suspect it will cause house prices to go down further. Thus, I might be able to get one of those houses, and actually be able to afford it.
Also, remember, the economy is a representation of what people think. If people are worried like you, they save. If people are optimistic, they spend. Being worried is what causes the economy to go bad. In other words, your pessimistic attitude that the end is near is actually the cause of the end being near. If everyone thought like you, we would be worse off than the great depression already. If you are really worried about bad times coming, you should be spending to prevent those bad times.
Also, Jason, Rym, and Andrew seem to agree with me.
Personally, such a catastrophe actually makes me a little excited. It would be an escape from mundane desk jobs into a daring life of action and adventure. It would be a chance to grab the exposed beating heart of a ruined society with my bare hands.
The truth is out!
Being worried is what causes the economy to go bad. In other words, your pessimistic attitude that the end is near is actually the cause of the end being near. If everyone thought like you, we would be worse off than the great depression already. If you are really worried about bad times coming, you should be spending to prevent those bad times.
So what are you trying to tell me chicken little? People living in mansions who could only afford houses are now living on the street is a sure sign that the sky is going to fall on my head? Give me a break. If anything, that's better for me as I suspect it will cause house prices to go down further. Thus, I might be able to get one of those houses, and actually be able to afford it.
Also, Jason, Rym, and Andrew seem to agree with me.
I don't know where you get this "mansion" idea. The lady in the article I cited lived in a condo. The statistics article I cited didn't say anything about mansions. Also, I'm not trying to tell you anything because I know that it's useless to try to persuade you on this topic. You've made up your mind that you've figured it out and that's the end of it. Good for you. I hope it all works out for you.
Lastly, I don't know about Rym and Andrew, but Jason could stand in the middle of a burning building on the brink of collapse and convince himself that everything was okay.
If my bank fails, it doesn't matter how smart I've been with my money.
If my bank fails, the feds bail them out as per the FDIC. If I had more money than the FDIC insures in a bank account, I'm already being stupid with my money, and furthermore an already in a position to cover my butt.
If the feds somehow can't bail the banks out, then our problems are far deeper than anything I could have prevented or planned for on my own. In that horrible case, it's Mad Max time.
Maybe you could make a "Scrooge" thread where you could rant all day about how smart you are with money and how anyone who isn't as smart as you deserves ruin.
There's a difference between noting whose fault it is and leaving them entirely to their fate. It's very easy to put the blame squarely on these peoples' shoulders for not managing their lives responsibly, and that's where the majority of the blame should lie.
The hard part is figuring out what to do with these people. We need a way to punish them enough to teach them responsibility, yet not so much that we remove them from society or unduly ruin their lives. Justice is about making things right, not punishing the wicked in some misguided attempt at revenge. Letting them fend entirely for themselves will only exacerbate the problem, but bailing them out entirely will ensure that they continue to make the same mistakes, if not more of them on the knowledge that the government will always have their backs.
I'm generally of the mind to offer some form of voluntary government subsidy to these hard-hit people. The government will bail them out, but in return they have to do what the government says. Lost your house due to a ludicrous negative-amortization loan? They'll pay for half of your new home... in Montana or Detroit. Need a new car to start working again? They'll guarantee your loan... for a used Kia. We should do whatever we must to prevent these people from slipping below the fiscal point of no return, giving them every chance to climb their way back up. But! We should do nothing beyond that point.
No one should go hungry, but they certainly shouldn't be getting any steaks.
Lastly, I don't know about Rym and Andrew, but Jason could stand in the middle of a burning building on the brink of collapse and convince himself that everything was okay.
Yup, just keep going the character assassination route. Every time you do, it erodes your credibility.
Lastly, I don't know about Rym and Andrew, but Jason could stand in the middle of a burning building on the brink of collapse and convince himself that everything was okay.
Yup, just keep going the character assassination route. Every time you do, it erodes your credibility.
It's not character assasination. It is your character.
If my bank fails, the feds bail them out as per the FDIC. If I had more money than the FDIC insures in a bank account, I'm already being stupid with my money, and furthermore an already in a position to cover my butt.
Do you think you can immediately make a withdrawal from the FDIC? What do you do for money while the FDIC is processing your claim?
The hard part is figuring out what todowith these people. We need a way to punish them enough to teach them responsibility, yet not so much that we remove them from society or unduly ruin their lives. Justice is about making things right, not punishing the wicked in some misguided attempt at revenge. Letting them fend entirely for themselves will only exacerbate the problem, but bailing them out entirely will ensure that they continue to make the same mistakes, if not more of them on the knowledge that the government will always have their backs.
I'm generally of the mind to offer some form of voluntary government subsidy to these hard-hit people. The government will bail them out, but in return they have to do what the government says. Lost your house due to a ludicrous negative-amortization loan? They'll pay for half of yournewhome... in Montana or Detroit. Need a new car to start working again? They'll guarantee your loan... for a used Kia. We should do whatever we must to prevent these people from slipping below the fiscal point of no return, giving them every chance to climb their way back up. But! We should donothingbeyond that point.
No one should go hungry, but they certainly shouldn't be getting any steaks.
That's a lot more reasoned approach than, "Tough shit."
Do you think you can immediately make a withdrawal from the FDIC? What do you do while the FDIC is processing your claim?
I actually keep about five-hundred dollars of emergency money on hand in cash at any given time. (Even through my poorest days at RIT, I kept the "emergency hundred-dollar-bill." No matter how hungry I was, it was never enough of an emergency to warrant breaking it). I also have my ludicrous credit lines, which are almost always entirely unused.
If my credit lines somehow disappeared at the same time as my bank failed, then, as with most of these doomsday scenarios, everyone is just as screwed as I am, and that $500 in cash suddenly becomes a LOT more valuable.
For someone who spent a major portion of an entire thread calling me a bigot, you can be pretty sensitive.
Do you think you can immediately make a withdrawal from the FDIC? What do you do while the FDIC is processing your claim?
I actually keep about five-hundred dollars of emergency money on hand in cash at any given time. (Even through my poorest days at RIT, I kept the "emergency hundred-dollar-bill." No matter how hungry I was, it was never enough of an emergency to warrant breaking it). I also have my ludicrous credit lines, which are almost always entirely unused.
If my credit lines somehow disappeared at the same time as my bank failed, then, as with most of these doomsday scenarios, everyone is just as screwed as I am, and that $500 in cash suddenly becomes a LOT more valuable.
Okay, that was my mistake in writing "you" instead of "one". We all know that you, in particular, are all set up. What does someone not so well set up do?
That's a lot more reasoned approach than, "Tough shit."
Effectively, though, it's not really all that different from tough shit. These people could move to Detroit, Montana, Arizona, Texas, etc. on their own and not have to be homeless. There is a solution to their problem. These people are just either too ignorant to realize it, or are unwilling to actually execute that solution. All Rym is suggesting is that the government use some carrot and or stick to egg these people along.
Comments
If we're living in an economy where McDonald's employees are all driving Ferraris, and then suddenly they all get repo'd, that is not a cause for concern. That is a cause for a sigh of relief as we return to reality.
Also, if renting a million dollar home in Santa Barbara is actually within my means, and I didn't realize it, then please point me in the right direction. I'm ready to move.
Scott, you are still in your twenties and have yet to experience any form of age discrimination on the job. How long have you even kept the same job for? Have you kept a job for more than 24 months?
If you have a union job (as I do) you do have some security. As new equipment gets added to the telecom system my company trains me on how to operate and fix it. This training is conducted on a seniority basis. This works except when someone with seniority either does not give a shit or is planning to retire. Why train someone who is going to retire or leave the company soon?
In my local area this has not been a problem as the person with the least amount of seniority still has 8+ years working here. The top folks are in the 30+ year area. This is probably completely opposite to what you see in IT. Well, except for those Unix gurus with the beards...
So yes, in my case my specialized training is always kept current.
What if you are a secretary? What sort of job skills can you improve? Aside from shorthand and learning MS Office there is nothing else. So what does that person, who has been working the same job for 20 years, do when they find themselves out of a job? Who is going to pay extra for their "experience" when their experience does not mean much and is easily duplicated?
As to the overall problem of people living beyond their means... Yeah, they did bring that upon themselves but they had help in the form of ever increasing credit card limits. I think all of my credit cards have credit limits higher than my annual pay. I never ask for these "upgrades" they just come every year for having good credit.
If I were to lose my job I would be tempted to maintain my lifestyle on credit cards while looking for a new job. The reason is two-fold.
1. I like the level I live at.
2. I would not want to admit that I was broke.
I have known people who juggle balances waiting for that next "0% balance transfer" offer to come in the mail. It often start small with the person just trying to consolidate everything onto one low interest card and then it snowballs because they are short a few dollars here or a few dollars there. Suddenly they need some work done on their car. Before you know it they have $20K in debt and a monthly interest charge of several hundred dollars. It's all they can do to maintain the debt let alone pay it off.
Then they get an interview so they buy new clothes. Then they don't get the job or it does not pay enough.
At this point they are stuck. They can go bankrupt or they can keep trying. At the same time the credit card company keeps on increasing their credit limit! Even though their minimum payment is $500 a month only about $20 goes to principal! That's why the credit card companies keep increasing the credit limit it's because they are making a killing off of it.
On the housing side it is a bit different. A lot of speculators got burned on real estate and just walked away. I'm sure you have read the stories and seen the ads on TV for how to make millions in real estate by flipping houses. Some of those folks abuse the system by getting special loans that require you to live in the house, they don't. Instead these people buy a whole bunch of properties (little or no money down) and try to flip them before their first payment comes due. They don't care about the loan interest rate because they expect to have the house sold before any interest accumulates.
Those people got burned hard when the housing market collapsed. I have to wonder if they created that bubble on their own.
I have compassion for those who have tried to live within their means but something bad happened. I have no compassion for those who deliberately lived lives of bad finance. If someone lives in their house and has trouble making the payments and wants to fix their finances I'm all for giving them a grant or a low interest government "bail out" loan to help them get on their feet. Even something as small as a two month mortgage payment can be enough to get people back on track.
However, those who apply for such aide must also agree to sit down with a financial counselor so that they can figure out where they went wrong so they do not do it again.
As for the older folks without marketable skills... Well, I don't know. If you've lived the last 40+ years of your life irresponsibly you are kind of screwed.
Also, I know that you think you will never be affected by the world around you. Other, less fortunate types (such as everyone else in the world) are not so lucky.
Here are some statistics about people who were doing just fine but are now screwed.
The other conflating factor is the generally rapid depreciation of technology-related job skills. What was difficult or required a specialist in 1996 is trivial for any freshman at a tech university today. Many of the skills that longer-standing workers have developed have been made completely obsolete by modern automation. For example, professional system builders have been replaced by minimum-wage workers and intelligent disk imaging systems: the formerly valuable and rare skill of being able to build a computer is so trivial as to not even be a consideration in modern hiring.
Let's say you could pay. Have you ever been 67 years old? At 67, you're grateful when you can use the bathroom effectively, much less take classes and effectively learn a new skill. The stress of taking classes is negligible when you're in your 20s. Its a whole different ball game when you're in your 60s.
I took some electrical engineering and some chemistry course at the University of Louisville when I was in my early 40s. I was working full time as well. It was a much, much different experience than when I was in my 20s.
Who is going to hire someone who is fresh out of college AND 71 years old?
What do I tell the woman? Tough shit. You screwed up before, and therefore put yourself in a situation where you have little to no way out. What comes before determines what comes after. She was stupid with her money, and now she has to face the consequences. If you focus only on her present situation as someone with no way out, it's not hard to understand how you could be sympathetic, especially if you blame the cause of that situation on outside forces beyond her control against which there is no defense. The reality is that she made her pot, and now she has to sit in it. She rented a house she could not afford, and she couldn't pay for it with money. Now she has to pay for it with suffering. Her misery is of her own making.
There are people in this world whose misery is not of their own making. These Santa Barbara homeless are not those people. You are right that these people are canaries in the coal mine. They are a warning to other people living above their means that such inflated unrealistic lifestyles are no longer going to be tolerated, and if they continue in their irresponsible ways, they will be ruined. For the rest of us, who aren't coal miners, there's nothing to worry about. It's called continuing education. She had 20 years to take advantage of it.
Look, personal finance is easy. Spend 10 percent less than you make and put the rest in a savings account. Never touch the savings account. Don't buy anything with a credit card that you can't pay off immediately. Conversely, buy as much as you can on a credit card and pay it off immediately to build your credit rating. Fund your 401k to the max. Negotiate for a job that offers 401k matching. Fund your IRA to the max. Put whatever else you can afford in a six-month money market. Buy a house if you can afford it so that you're building equity instead of paying rent -- and if you buy, don't get the best house you can get financed. Drive your car into the ground until it is either unsafe or monthly repair fees approach a monthly payment. Never buy a new car -- always buy last year's trade-in model. Grocery shop on a budget, using a menu and a list. Don't pay for cable, satellite, or cell phone services that you don't need (I hate driving by Section 8 housing complexes with satellite dishes rigged all over them). Don't buy clothes, shoes, purses, decorations, gadgets, or other shit that you don't need. Don't have children early. Itemize your tax returns. Don't play the lottery. Make a monthly budget and don't spend outside of it. Buy term life insurance. Make a will.
If you want sympathy find people who got trapped, with no way out, and no way to prevent the trap. One good example is a child with cancer. Another good example is an orphan in North Korea. People living in mansions they could not afford getting kicked out onto the street is not an economic crisis, it is the return of sanity.
Go Steve and Joe!
Maybe you could make a "Scrooge" thread where you could rant all day about how smart you are with money and how anyone who isn't as smart as you deserves ruin.
Also, as I've said before, if there isn't ultra-economic ruin, then big deal. It's not a false dichotomy. If the banks are still working, then people who are prepared for a hardship will be ok. If the banks go under, it's a great depression and money no longer matters. All that will matter are things like food, fuel, water, and skills that are useful in the here and now. I can see why an old man might fear a Mad Max sort of situation. Personally, such a catastrophe actually makes me a little excited. It would be an escape from mundane desk jobs into a daring life of action and adventure. It would be a chance to grab the exposed beating heart of a ruined society with my bare hands.
Also, remember, the economy is a representation of what people think. If people are worried like you, they save. If people are optimistic, they spend. Being worried is what causes the economy to go bad. In other words, your pessimistic attitude that the end is near is actually the cause of the end being near. If everyone thought like you, we would be worse off than the great depression already. If you are really worried about bad times coming, you should be spending to prevent those bad times.
Also, Jason, Rym, and Andrew seem to agree with me.
Lastly, I don't know about Rym and Andrew, but Jason could stand in the middle of a burning building on the brink of collapse and convince himself that everything was okay.
If the feds somehow can't bail the banks out, then our problems are far deeper than anything I could have prevented or planned for on my own. In that horrible case, it's Mad Max time. There's a difference between noting whose fault it is and leaving them entirely to their fate. It's very easy to put the blame squarely on these peoples' shoulders for not managing their lives responsibly, and that's where the majority of the blame should lie.
The hard part is figuring out what to do with these people. We need a way to punish them enough to teach them responsibility, yet not so much that we remove them from society or unduly ruin their lives. Justice is about making things right, not punishing the wicked in some misguided attempt at revenge. Letting them fend entirely for themselves will only exacerbate the problem, but bailing them out entirely will ensure that they continue to make the same mistakes, if not more of them on the knowledge that the government will always have their backs.
I'm generally of the mind to offer some form of voluntary government subsidy to these hard-hit people. The government will bail them out, but in return they have to do what the government says. Lost your house due to a ludicrous negative-amortization loan? They'll pay for half of your new home... in Montana or Detroit. Need a new car to start working again? They'll guarantee your loan... for a used Kia. We should do whatever we must to prevent these people from slipping below the fiscal point of no return, giving them every chance to climb their way back up. But! We should do nothing beyond that point.
No one should go hungry, but they certainly shouldn't be getting any steaks.
If my credit lines somehow disappeared at the same time as my bank failed, then, as with most of these doomsday scenarios, everyone is just as screwed as I am, and that $500 in cash suddenly becomes a LOT more valuable.