American Economics Thread
- Thread starter Bernard
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Hey, let him celebrate the 1.6%, oops I mean, 1.3% growth. It's better than most of EU.
Happiness is an unquantifiable factor. People in Nepal are often happy. People are happy the moment fentanyl hits their veins.
Maybe half of USA in some specially worded poll really are "happy". What is important is that US' aggregate production and economic capabilities is not projected to catch up to China. Which they're not doing at 1.3%.
Correct. My entire point was that what is considered “normal” is a moving target, needs are insatiable, and as a result, consumer expectations on “comfortable” or “average middle-class lives” and the like are perpetually upwards moving targets and those biases should be noted.
Same thing with economists always “being wrong” - no one will focus on things economists get right: such as auction structure, insurer solvency, or regulatory incentives - those are solved problems; everyone only focuses on things where the economics field is split: such as on financial shocks.
Right: except if “financially strained” means “after taxes, spending, and savings, I have no money”: then that applies to everyone and is therefore meaningless.
A house is simultaneously a savings account and a consumable.
If people can’t pay their bills because of a lack of cash, their utilities would get shut off and they would only get turned back on when they have the income to do so. Hence; irregular cash payments to utilities, and what would be irregular accounts receivables by utilities (alas, they don’t exist).
1. Market or book price is a very common debate in accounting in every setting and
2. The National Income and Product Accounts are published in sufficient detail that one can derive either the market or book price of imputed rents.
3. The main point on hand: household net worth (excluding NPISHs) are ~$120 trillion. Hardly “broke”.
No: you have to note survey response biases such as priming, push polls, rank bias, etc to know what you are actually measuring. When survey respondents in general have a pessimistic bias - that needs to be noted along side, actual survey responses
Premature death will result in substantial income loss to their loved ones. Disability will result in substantial income loss and increased expenses. Most people are able to insure away these risks with life and disability insurance. Retirement is also, obviously a risk wvFor an exceedingly small population, insurers will not write policies that large and thus force those wealthy individuals to self-insure (save a lot more).
This is incredibly rare and I’ve already addressed this above.
I gave an example of a hypothetical riskless situation where no one would save money in. You increase the risk, the savings increase. It was meant to be illustrative.
And if you ask people if they would prefer to go have a giant mansion with a maid, or not -> they will prefer the former. Households have to balance their competing interests with only a portion of the savings.
No: they haven’t. Macroeconomists have largely been correct about China’s trend growth rate (see pg. 54 of this 2001 report - “many experts assess that China can maintain a growth rate of more than 7% for many years” - or this 2013 report “according to the World Bank, Chinas trend growth from 2011-2015 will be 8.6% and from 2016-2020, will be 7%” -https://www.ecb.europa.eu/pub/pdf/other/mb201301_focus01.en.pdf (China’s growth was actually 8% from 2011-2015 and 6.6% from 2016-2019, not counting 2020 because of COVID - so if anything it was an overestimate) not withstanding various amounts of copium in the media (citing more extraneous and hyperbolic predictions).
No. It doesn’t. Poor people get income replacement from the social insurance, social security, and the like. Rich people do not. Rich people thus would need to save more in the risk of an income loss.
Right. Savings are prophylactic against any and all future risks, balanced against a desire to consume today.
So why do young people in China have lower savings rates than middle-aged people in China? And isn’t that exactly what the intertemporal choice model would predict?
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manqiangrexue
Brigadier
No, wrong. That doesn't apply to everyone. Nobody's definition of paycheck-to-paycheck includes having substantial savings in the bank that can be used to live on if one loses his/her job. I don't live paycheck to paycheck; no bullshit mental gymnastics can define me as a person who lives that way. The only thing meaningless is your escapism first saying that Americans don't live paycheck to paycheck then, making it sound like it doesn't even mean anything. It does, to everyone. To you as well; it means the phrase you need to escape from.
Something else you might like:
Which is locked up in an unspendable state.
No, you are either too stupid to read and understand or you are avoiding it. When utilities are affected, that is the last nail in the coffin. Everything else goes before the necessities. So things can be in serious decline without affecting utility payments.
That's all nonsense and aside from the fact that American imputed rent is basically adding numbers out of thin air to puff up the US economy while other methods of imputed rent such as the Chinese method are actually reasonable.
You brought up the survey; you quoted its number as being true because you thought that having 51% of the people not struggling is great. Then when you realized that's terrible, you backtracked to try to discredit the survey you brought up. Not gonna let you get away with it. Americans are 50% struggling and piss poor by their own admission and yours. End of story.
Neither of which would be a problem for the truly wealthy... unless.... they were worried about their loved ones expanding their wealth, which is exactly as I said, more is better, hence the saving.
You've addressed everything wrong. Doesn't have to be that high. The phenomenon that richer people have higher savings than poor people shows that saving is a matter of enhancing the future and not just setting aside for contingencies.
It's illustrative of a non-existent situation that does not and cannot happen in real life. People call that pulling shit out of your ass.
They can't have the former even though they prefer it just like American spending addicts can't have high savings even though they prefer it.
I'm talking about American/Western economists. You're cherry picking your data again. I don't even feel like posting all the China doom articles from decades ago to today. This whole savings theory is obviously another twist and struggle against common sense to try to explain why Western economies where people lose everything when they lose their jobs is somehow better than a Chinese economy where people save responsibly making them much better financially prepared for boom or bust, whatever comes their way.
No, there is no reason for anyone to have to replace his exact income; it's just for contingencies, right? Rich people get the same security, probably even more from insurance and the like because they can afford expensive insurance. According to your "economic theory," rich people would just set aside enough to get by, (maybe even leave it all up to a very expensive insurance that they can afford) therefore, they would have this one emergency account, maybe a half a mill or much less actually, then they would blow the rest. But no, reality is never on your side.
Wrong, you missed the main part again, which is that savings are stored power to take advantage of future oppertunities to become wealthier or otherwise better.
Younger people are 1. more influenced by a more global culture, much of which comes from the West and its terribly undisciplined spending habits and 2. less prone to have children or many children and thus their savings would become a matter of enjoying something now or later rather than enjoyment now vs an investment into future power. If I couldn't or didn't want to have kids, I'd be saving a lot less too.
While we're on the topic of obvious questions, if you have a kid in the US economy, would you recommend he spend all his money to prove how confident he is in the economy or would you recommend he develop a healthy savings account, for whatever he may encounter in the future?
So going by that point, you would have to calibrate American advances against rival (Chinese) advances in the time to see if it were moving forward or backward, making your "We have fruit year round" crap totally stupid to mention. Compared to China, America is moving backwards.
That's because they're wrong too often. If you're right 99% of the time, you might be able to argue that. If you're wrong 50% of the time on big things, you're basically worth a coin toss. And stating the obvious that even an untrained person with common sense would recognize doesn't count as being right either; you don't get to pad the numbers that way. And if you can never even agree or come to a strong majority consensus on the big issues, well... that's just a worthless mess, isn't it? And that is US economists in a nutshell.
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Incredibly detailed household financial accounts show median households have substantial liquidity but okay.
It’s not. HELOCs and selling the house are options.
Households can’t pay their bills except they can pay their bills. Okay lol.
Is it nonsense that there’s a large debate in accounting whether to use book or market values for assets?
No. “Most Americans are struggling” turned not to be that way, there’s substantial survey data showing pessimism about readily verifiable data. Indeed, once you break up the 2 option survey into a broader range, you get less “struggling” ().
Or because they want to ensure consumption continuity by their loved ones in contingent events/risks that are uninsurable.
No. It doesn’t. People save for future contingencies so they can smooth their income over their lifetimes - in retirement, poor people get near full income replacement from Social Security. Rich people do not get full income replacement and thus must save more. Especially for other risks - such as illness and disability and unemployment - ceilings on welfare payouts means if rich people want to continue their consumption levels in those contingent events, they must draw on their own savings but poor people can apply for welfare. Rich people saving more is entirely consistent with saving for contingent risks.
Yes, turns out the DNI and the ECB are staffed by “American/Western economists”. The industry/academic/government trend growth estimates on China have been broadly accurate. Media clickbait has not been (which tends to be various kinds of hyperventilating on niche microeconomic issues). It’s also clickbait and therefore inherently less authoritative.
No. They don’t. Public welfare programs have benefit ceilings and private insurers simply will not write policies with exceedingly large face values because of capital adequacy concerns. Further, there is no private “retirement insurance” since it’s a near certain risk. Retirement insurance doesn’t exist in the private sector ends up turning on private savings.
Rich people retire earlier and maintain their spending levels in retirement. Both of these would necessitate higher savings rates during their working years. It’s entirely consistent.
Saving money for capital expenditures that are expected to increase future income is still consumption, just capitalized consumption amortized before purchase instead of expensed consumption
So the intertemporal choice model, indeed, correctly predicts savings activity in China. The culture is a function of younger people perceiving their future income more optimistically.
No one needs to “prove” anything. Spending and savings decisions are private. It’s individualized perceptions on their future income that determine savings activity today.
No. I don’t. I wasn’t making a point about China. I was making a point on how people talk about relative living standards.
They aren’t. Forecast accuracy on the big 3 - gdp growth, inflation, and unemployment - has been largely accurate (
Or people don’t focus on economists being right but they will focus on economists being wrong (
Nah. This is circular. They are “big issues” because they lack a “strong majority consensus”. Settled consensus simply fails to get headlines or highly passionate debates. Furthermore, many of the “big issues” have highly political debates on equitable distributional outcomes that economists simply solve because they are inherently political questions.
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manqiangrexue
Brigadier
nnnd there you are running away from the paycheck-to-paycheck debate again trying to substitute that for something else which was already discussed and unable to overturn the primary contention.
Yeah, like I said, sell and become homeless or now, you can put your home up for a loan. Certainly says things are going well, don't they?
Just less than before, like your chart would tell you if you could read charts LMFAO
It's nonsense that the US imagines everyone paying market rent (which, by the way, has markedly increased) to themselves thereby creating nonexistent value. It's a man negating his need to live, and the US government wants to put that value as high as possible.
Yes it did, says the article you cited.
Who says that approach is correct? I say this approach is correct; wonder where I got it from:
OK so from this article and from your history of shooting yourself in the foot:
"Fewer express such high satisfaction with the remaining four life elements -- the amount of leisure time they have (43%), their personal health (41%), their standard of living (37%) and their household income (30%)."
Womp womp. Hey I got something nice fer ya:
"The survey, taken between Jan. 2-22 and , shows only 47% of U.S. adults are highly content with their daily lives, down from 50% this time last year, while the current measure nearly eclipsed the all-time low.
It marked the third time in more than two decades that less than half of Americans expressed satisfaction with the way things are going.
certain demographic groups reported feeling very satisfied, Gallup said.
These include individuals with annual household incomes exceeding $100,000, married couples, churchgoers, college graduates, and people above the age of 55.
The poll also found that many Americans harbored an overall negative outlook on the national economy amid poor consumer confidence."
So basically in other words, more is better because it ensures a better future, right, book fool?
OK book fool, if that's what the always-wrong US economists tell you. I know I save for a better future, never to maintain or replace, not even thinking about contingencies. That's why my friends save too and none of them have ever been in a paycheck to paycheck situation before. But that's ok because the books you read written by guys who said China's economy should have collapsed 50 times already told you people like me don't exist LOL
You can say it all you want but there is no explanation for it that makes sense.
Your bullshit is the same clickbait trying to pretend that the Chinese culture of saving for a better future is fear while America's reckless spending addiction is actually confidence.
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manqiangrexue
Brigadier
I didn't say retirement insurance; I said general insurance for disasters that cause one to go bankrupt, which are enough to contingencies, but woefully insufficient for maintaining wealth and power.
Consistent with you being wrong. Personal retirement spendings are nothing compared to the wealth amassed by the truly elite. That wealth is to create and expand a dynasty for generations. From an American point of view, you have once again stopped thinking for the true future, which is your children and their ability to generate more and more wealth and you are stuck with the rather meaningless aspect of the future, which is old people spending everything before they die. The common Chinese culture of sacrificing personal pleasures to pass on power is simply too advanced a concept for you.
It's part of the savings now. It's not consumption now. And not all of it is consumed even after passed on; great parts of it are passed on as savings again to be used snowballed and used for the future yet. It's called always being financially healthy, not holding your breath for that one big puff then dropping to the very American paycheck to paycheck I-can't-afford-a-$800-emergency state.
The the function here does not work, and by that, I mean the function of your reading comprehension. I cited the reasons of the cultural spread of Western frivelous spending and the reduction in child-bearing as the answer to your question. You somehow made up your own answer. Now it's true Chinese do feel more optimistic about our futures, but that is a coincidence which you cannot attribute a causative relation on. I have told you that my savings patterns are unaffected by the economic direction but by the decision to have kids and invest in their futures. You cannot reconcile this with your failed model save for your fantasy of an imaginary world of no risk. So you decided to inject your own answer into mind. Very debate tactic you use is equally pathetic.
Hahahaha, seriously, are you a lawyer/politician/economist? What is your job? That answer was so full of meaningless cop-out shit you have to work as one of these in the US. You know that to answer truthfully, you'd have to disprove your own theory but you couldn't think of a way to answer untruthfully without sounding so stupid it'd make your hands tremble when typing. So you answered neither; you answered meaninglessly.
Well yeah, you don't go from, "We have fruit" derp to comparing yourself to the upcoming superpower, duh LOL
Your point is true but stupid and meaningless. Nobody would argue against it that every country is expected to improve throughout time but how fast compared to rivals is where all the contention lies. I can barely think of a country that does not fit this trend. You are truly the king of low expectations. In addition to the jobs above, head of the US board of education would also suit you.
'm not reading a 47 page paper. Cite the page, the line, the table/graph (not that you know what tables or graphs mean) and we can go from there.
Yeah, if you're a doctor and you committed malpractice 6 times this week, nobody is foing to focus on the 6 other patients whom you didn't f up.
In other words, when it's a simply matter of common sense, regular people know the answer. When the going gets tough and true expertise is needed, economists don't know either and will turn it into the modern debate equivalent of a chimpanzee gang fight so that it is completely useless to anyone.
My two cents which may or may not be relevant to the conversation at hand:
A large minority of Americans are known to be in a position that they can live comfortably without shocks but would not be able to pay a sudden $1000 bill. This means that while most may be happy with the life they lead, they will very quickly become unhappy with the life they lead should a sudden bill appear in their life.
Examples of potential sudden bills include sudden medical fees, car repairs, and unexpected fines.
It's my personal belief that a lot of this "$1000 predicament" stems from a poor financial literacy.
Some pieces of evidence to support this belief are the prevalence of credit card debt (defined as credit card debt that has had interest paid on it), the prevalence of television ads for such-and-such product with 0% financing for so many months, and a common miscomprehension of the nature of compound interest.
The cumulative result of these pieces of evidence is a consumer behavior that (a) encourages maximal spending at all times and (b) does not encourage substantial saving for future events.
The result of this is the "$1000 predicament".
It is also important to address how people decide whether they are happy with their life: if you ask people in substantial debt if they are happy with their life, chances are they will say yes. The reason for this seemingly nonsensical response is that people in debt only really become unhappy after their possessions are taken from them by whatever institution they have borrowed money from. If they make regular payments on their debt, this will not happen, and so they will remain happy despite being in debt, possibly for life. It should be observed that vast majority of people in debt make payments on their debt--otherwise, lenders would not lend money for fear of frequent defaults. In fact, some people despite being in substantial debt can continue to make purchases that dig them further into debt if they have a good enough record making minimum payments on their existing debt. In this way, debt can be expanded substantially, digging further into savings for the future, while still maintaining a satisfactory standard of living.
I'm not quite sure how this will be resolved once these people enter retirement age. This issue I believe is much more prominent amongst people 50 and younger, who were still fairly young when credit cards entered widespread use. These people still have some time to retirement, and it is an interesting thing to watch what will happen once these people do retire. It is however safe to say that their saving habits will probably remain unchanged up until they retire, and maybe even past it.
Another thing to keep in mind is a common value amongst American parents: children are often left to fend for themselves after reaching 18, or 22, or some fairly young age. Despite the value placed on the so-called "nuclear family", this value only really seems to last until the child reaches adulthood, after which parents and children seem to want to have nothing to do with each other. Notice that this is only common amongst the "peons" of America, and that the rich always seem to take good care of their children well into adulthood. This is an interesting divide in mentality.
A large minority of Americans are known to be in a position that they can live comfortably without shocks but would not be able to pay a sudden $1000 bill. This means that while most may be happy with the life they lead, they will very quickly become unhappy with the life they lead should a sudden bill appear in their life.
Examples of potential sudden bills include sudden medical fees, car repairs, and unexpected fines.
It's my personal belief that a lot of this "$1000 predicament" stems from a poor financial literacy.
Some pieces of evidence to support this belief are the prevalence of credit card debt (defined as credit card debt that has had interest paid on it), the prevalence of television ads for such-and-such product with 0% financing for so many months, and a common miscomprehension of the nature of compound interest.
The cumulative result of these pieces of evidence is a consumer behavior that (a) encourages maximal spending at all times and (b) does not encourage substantial saving for future events.
The result of this is the "$1000 predicament".
It is also important to address how people decide whether they are happy with their life: if you ask people in substantial debt if they are happy with their life, chances are they will say yes. The reason for this seemingly nonsensical response is that people in debt only really become unhappy after their possessions are taken from them by whatever institution they have borrowed money from. If they make regular payments on their debt, this will not happen, and so they will remain happy despite being in debt, possibly for life. It should be observed that vast majority of people in debt make payments on their debt--otherwise, lenders would not lend money for fear of frequent defaults. In fact, some people despite being in substantial debt can continue to make purchases that dig them further into debt if they have a good enough record making minimum payments on their existing debt. In this way, debt can be expanded substantially, digging further into savings for the future, while still maintaining a satisfactory standard of living.
I'm not quite sure how this will be resolved once these people enter retirement age. This issue I believe is much more prominent amongst people 50 and younger, who were still fairly young when credit cards entered widespread use. These people still have some time to retirement, and it is an interesting thing to watch what will happen once these people do retire. It is however safe to say that their saving habits will probably remain unchanged up until they retire, and maybe even past it.
Another thing to keep in mind is a common value amongst American parents: children are often left to fend for themselves after reaching 18, or 22, or some fairly young age. Despite the value placed on the so-called "nuclear family", this value only really seems to last until the child reaches adulthood, after which parents and children seem to want to have nothing to do with each other. Notice that this is only common amongst the "peons" of America, and that the rich always seem to take good care of their children well into adulthood. This is an interesting divide in mentality.