A Measure of How Bad it Really is

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We’ve done everything we reasonably can to lower our cost of living – which these days seems to be the only realistic way to counterbalance inflation and declining or stagnant (or tenuous) incomes.

We moved to a less expensive area eight years ago – and paid less for the house we bought than we got for the house we sold. We own older, paid-for-in-cash vehicles, so no car payment.  We do not have kids, so no expensive – and mandatory – “health care” costs associated with that. Or the extra food, clothing and so on. We eat cheap. We wear old clothes. We’ve been able to dramatically reduce our electric bill by living in an area where we only need to use the AC in the house a few days out of the year. And can heat with wood (free) that I cut/split myself.

And despite all this, we’re far from feeling secure, financially.

We still don’t have much money in the bank – and have no real choice other than to work (both of us) in order to bring in enough money to keep up with the ever-upticking price of basic commodities (food, gas) as well as to feed the always-hungry maw of Leviathan. Our property taxes have increased about 30 percent over the past eight years. Gas is double what it was eight years ago (in terms of the Fed Funny Money you need to buy a gallon of it). Food prices are also up about 30 percent. But our incomes (the amount of Fed Funny Money we bring in) haven’t increased by 30 percent. In fact, our income is down in real terms, because we’re not receiving 30 percent more Fed Funny Money. In effect, we’ve suffered a 30 percent pay cut – and that’s all else being equal. Which it isn’t. Publishing (my line of work) has become like the music business: You work a lot more for less money each year. An article I used to sell for $1,800 to a magazine now brings in $800 (if I am lucky). My wife hasn’t had a pay raise of any consequence in several years.

Where am I headed with all this? Here’s where:

We couldn’t afford to buy a new car. Sure, we could get a loan on one. But the idea of signing up for a five-year payment plan in this economy seems about as smart as going ice skating on a pond that just skinned over last night.

Who, then, is buying new cars? The two-thirds (plus) people out there who do have mortgages – and car payments. And kids on top of that? How is this possible?

Let alone sustainable?

Who is buying new homes? Allegedly, the market is “recovering.” I’m not buying it. Because I don’t see who is buying them. Maybe it is the TSA goons and other government “workers” – perhaps the only “industry” where there is “growth.” (No surprise that the DC area is one of the few areas in the country where the housing market is demonstrably recovering some ground. The “work force” consists almost entirely of people collecting a government check. And for government, it’s boom times.

But what about the rest of us – out here in fly-over country?

It seems to me that we’re balancing on the razor’s edge – and it won’t take much to push us off the wrong side. Which of course is either side. We are facing either indirect confiscation of our wealth (and so, our independence) via inflation or direct dependence and penury as a result of anything more than mere existence becoming exorbitantly expensive.

There must be some kind of way out of here, said Jimi. But I don’t know about that. It seems to me the most we can do is get ready – to the extent we can – and hope for the best.

But plan for the worst.

Throw it in the Woods?

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17 COMMENTS

  1. I can still remember the world of 35 years ago. Every store was quirky, unique, there was a feeling of everything belonging to us as individuals, workers and customers alike.
    The starchworks where my father worked was like a great industrial playground where I wandered freely. More like a 2000 member family really.
    Adults spent nights in cabins, boats, barbacues, pool parties. The night aesthetics were magical everywhere. Us kids had are own get togethers in vacant lots or near streams or in woods.
    There were various groups of us’s and never any thems. You might fall to the bottom of a pecking order, but you still belonged somewhere.
    10 years ago, we still had our group that meets outside by the firepit. But we were a minority. Most yards were empty, Everywhere is a malaise or dread that someone is watching in disapproval, or looking for opportunities for malice.

    Work has a yard perimeter fence. 6 people in the building, 500 visit only on payday briefly. Everywhere surveillance, forms to fill, matter of fact like a detention camp.Fear and guardedness.

    The night aesthetics are a bright pitiless floodlight. Probably so satellites can film and cars can patrol. Lone stragglers pace, like refugees on the dusty, joyless asphalt and concrete. Everywhere flashing lights, wailing sirens, helicopter blades, and weary isolated people. Afraid of the hidden unknowns who own and control everything.

  2. “Who, then, is buying new cars? The two-thirds (plus) people out there who do have mortgages – and car payments. And kids on top of that? How is this possible?”

    This is me, and it’s barely possible, as long a corners are cut in other areas. I’ve been working for two years after having been out of a job for almost three. I decided to buy a minivan. With a family, I wanted something reliable my wife could cart the kids around in. Meanwhile, I drive around in an old Buick that I manage to keep running (I feel like I’m in high school again). I wish things could be different, but, for now, I’ll just have to suck it in and do what’s best for me and my family

  3. Unfortunately Eric, Jimi did find some kind of way out of here, as you will recall. The question is not if, but when, each of us finds that way out of here and how it happens. If things get really bad the Free Shit Army will probably riot (they may do it anyway if the Obomunist loses this election). Of course the Roman Legions will ineptly attempt to contain it. The ensuing chaos could potentially screw up logisitics for weeks.

    There would be more than a few hot/cold, hungry, thirsty and sick “innocent bystanders” due to a scenario like this that weren’t prepared in any meaningful way (think Clover here). Some would undoubtedly die outright. Others would go foraging and find out the hard way that the few who prepared with the necessities for living also prepared to defend what they have. The current borrow / inflate / spend system can’t go on forever and it’s going to be an interesting show to say the least when the day of reckoning comes.

  4. Just got my property taxes in the mail. They state my house is assessed at 20% less than what I paid for it five years ago. According to what comparables are selling for in the area the correct/real (what I could actually get) is more around 35% less than what I paid. Why are they taxing me so high? Anyhow, I’m about to refinance my home and get my payment to around $500 a month. The time to cut all expenses has come…

  5. I’ll be able to look for a new car in a couple of months, but only by driving my current one for 11 years and putting money aside since my car payments ended 8 years ago. It also helps to have a very secure job — NOT with the government — due to my experience and seniority.

    In general, the economy is headed down the drain, no matter which corrupt asshole is elected next month. The only question is when the crash will occur. Marc Faber says 5-10 years; Jim Rogers says 2013 or 2014. I say there’s no way to predict the timing, but I’m near certain that it will be within the lifetime of all of us who post on this site. In the meantime, living standards will continue to decline for the productive. The parasite class and the politically connected will do quite well, of course.

    • “The parasite class and the politically connected will do quite well, of course.”

      There’s nothing more pernicious than a spoiled child.

      • Amen, Scott. I have been saying since the 1980s that Americans were becoming like spoiled children. That process seems to be complete. I see riots here worse than the ones in Greece when the SHTF. Spoiled children do throw tantrums.

  6. stuff isn’t bought with the money people have today, it is bought with the money they hope to have in the future.
    that only works when the future looks prosperous.
    And when it doesn’t look prosperous, lie to others and yourself and convince everyone it is prosperous.
    the people i see “spending” are either complete idiots or receiving an entitlement thru some form of wealth redistribution.

    • That’s my sense of things also.

      No one I know is doing other than husbanding resources and keeping their ears and eyes open. In my area, there’s little indication of “recovery.” But go up the road about 240 miles to the DC area and things are humming along…

      • The entire DC enclave is now the richest region in the country.

        Easily accomplished, if you have license to steal.

        As Bastiat said, “legal plunder”.

    • Harry, I just bought a really nice 1/2 drive torque wrench (25-250 ft/lbs) for $65 off Amazon using money I put in the bank in 1999.

      Not all of us are scoundrels.

  7. Eric, it’s a great question: Who is really buying expensive shit like new cars? Are there enough govmt parasites out there to support the car industry? It seems unlikely but it’s possible. I also have a hard time believing that there are enough shrewd speculators (e.g., the Doug Caseys) out there to profit from state-caused market distortions to prop up anything other than a few luxury industries. So the question remains: who has the cash and credit to spend these days? I do not know.

    PS – Most people do not grasp the concept inflation-adjusted income. I’ve had many arguments with people who I thought should know better but I swear the brain is just not tuned to long-term changes in the value of one’s own labor output. Such an intellectual blindspot is a boon to knaves and manipulators in govmt who understand very well that they can hide their evil behind the blindspot.

    • I wasn’t shrewd enough to profit in any big way. Not even enough to cover my losses, but I did buy a new car. Why? My other cars are old and I thought that this may be my last chance at the kind of car I like. (V8, RWD, MT) Plus it was Milton Friedman in an interview that said one of the best ways to deal with inflation was to live large…. So I spent some savings that were earning me next to nothing and bought it. Although I didn’t go that large… but for me it was a big leap.

      I know some here like used cars. I am in the buy new, keep forever camp. It just seemed like a now or never. Plus I could always put some 55 gallon drums on it and head out into the wasteland.

      • Nothing wrong with buying new, if it works for you/your situation. I’d probably consider it, too – if new cars weren’t throw-aways. If I could buy, say, a new 1976 Trans Am – a car I could economically and practically keep running for 40-plus years – and at a price equivalent to what such a car cost in 1976 (about $20k, in today’s Fed Funny Money). But a new throw-away Camaro SS that will become economically unsupportable to keep going after about 15 years of regular use? And which costs almost twice what a ’76 TA cost in real terms?

        No way!

        • We’ve had this discussion before… So long as it is something like a mustang, something with a following, it is infinitely rebuildable regardless of year by those with the mechanical skill to do it. I see no reason why I couldn’t keep my ’97 for decades more provided there isn’t a collapse of society or something. In which case there likely won’t be gasoline either.

          If you really want to build a ‘new’ old car there is always dynacorn. 🙂 I’ve considered it myself. But paying retail for all the parts would get expensive fast. I think it totals up to around $35K.

  8. Eric, I hear ya man! It’s no different than when I see new shopping centers going up where there used to be a farm field. How is this possible I say when there are no real jobs, other than minimum wage, being “created”? Where is this money coming from?

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