snowbunny

I agree that there's a lot of wastefulness (overconsumption), but inefficiency? Can you give an example? Worker productivity is still pretty high though it's that way only because the average work week has gotten longer instead of declining.

I think it's horribly inefficient to make so many things overseas and then use up some of what's left of the fossil fuel on the planet just to get a sea of plastic Christmas blow-ups over to your next door WalMart. However, if there weren't overconsumption then that would happen less.

Giantaxe

To business? Not really. And these programs to "save people's homes" are essentially a bandaid. Many people who are underwater would be better off just walking away rather than throw more $$s at a depreciating asset. As for the conforming loan limit being increased, I am unconvinced it will make a lot of difference. It may reduce interest rates on jumbos a percent or so, but how many more people will be able qualify given the gse's requirements versus income? The problem is the housing "bubble" has been built on easy credit (e.g. no doc loans where people lied about their income) and that lending environment is not going to return any time soon to any degree. Until house prices return to historic norms versus incomes and rents, housing will remain a drag on the economy.

lapin_windstar

To be fair, I can only come up with anecdotal ones, but if you look at the size of vehicles used by companies, the oversizing of every machine, the overemployment in the service industry and public sector, the clumsy multiple packaging, the inefficient admin systems (everything seems incredibly inefficient within companies), the psispoor banking sector, the corruption, the cost of healthcare etc etc all seem worse and more inefficient than in the better parts of Europe and Asia. (I am not highlighting the UK as a particular bright spot in this, by the way, this is not a "patriotic" observation). The agricultural subsidies are also very wasteful.

And that's leaving aside the huuuuuuuuuge amount of utter crap that people buy when they can't afford it (a massive part of the economy), and the awful attitude towards savings.

Xebedee

Bit by bit, I'm getting more frugal.
It helps that I was brought up in England in an atmosphere where things were saved for and valued. Buying on the knock was frowned on.

Its feels good and useful to not be so wastefull - as you say, economising on aluminuminum foil is one of many ways to ultimately save a few pennies.

Despite some CC debt, which is getting paid off slowly and will be gone this year. I am saving as much as possible at the mo. For various reasons, but also because if the menudo hits the fan, there will be a lot of people who are two paychecks from the poor house.

I'm also going to teach myself how to grow some fruit and veggies this summer.
May even put up an alotment shed to add to the effect.
Going to need a flat cap.

Kaffy Mintcake

You're right. It's happened before and can certainly happen again.

cpltony

At times like this I look to my British upbringing also. Thank you Mum and Dad
I may not make as much as some people....but I'm a hell of a lot better prepared for when life happens. And it will.

I say save as much as you can and get out of debt ASAP.
Then you'll be in a better position to ride it out.

Giantaxe

There are many people who are zero paychecks from the poor house, but have been able to keep afloat by extracting home equity. Now that's become tougher for many, the shit really is starting to hit the fan for some folks.

fatbrit

I used to think that. But when you see the debt we're in, you begin to wonder if it can be avoided by thinking positive thoughts. We've been moving along by using home equity as an ATM machine. But that's dried up now and there's nowhere else to go.

Jerseygirl

Maybe it's an age thing but I've never seen the point of a home equity loan to pay for a holiday, credt card etc. As far as I'm concerned there is little to compare to owning your own home outright.

fatbrit

But you're not 'Mericun. Well you are -- but you came to it late in life as me. Reports from home seem to report the same thing happening -- though on a lesser scale.

Giantaxe

How about taking a home equity loan to pay the mortgage and other bills? That's what a lot of folks have been doing.

Jerseygirl

Sorry that's not the way I was brought up...you do not borrow to pay of loans....if you can't pay for it you can't have it. That's what I live by and what I have (hopefully) instilled in my daughter. A mortgage is acceptable but do not borrow the max...the sooner you can pay it off the better IMHO.

fatbrit

Depends what you're borrowing it for. If it's to make more money (whether you succeed or fail), that's fine in my book. If you're buying crap with it, that's stoopid.

Jerseygirl

I understand the 'use money to make money' principle. But when it comes to my home I prefer to know it's bought and paid for...so if the sh*t hits the fan I have a roof over my head. Rightly or wrongly that's how I feel and no amount of financial advise will make me think othewise.

Xebedee

Americans should take heed of what the "children of the depression" have always said. The lessons they learned (at worst) are not too dissimilar from those the Germans learned in 1945.
Without the tanks.