Spending more than we earn

parking_question_chap

pumpkin89 wrote: »

Strange that, at a time of unprecedented spending, we are also seeing unprecedented problems in the retail industry. It would be really interesting to know what all that extra money is being spent on.

Not really strange.

The money is going to the retailers who are based online.

We might be spending more, but that doesnt mean we are spending more on the highstreet.

Thrugelmir

parking_question_chap wrote: »

We might be spending more, but that doesnt mean we are spending more on the highstreet.

Amazon working on razor thin margins does little for the broader economy either.

antrobus

michaels wrote: »

How would it make sense if every year we saved more than we earned? Savings would become larger for ecer and everyone would be dying effectively only spent part of what they earned - why would you want to do that?

Savings equals investment. Economics 101.

Thrugelmir

ilovehouses wrote: »

It's not that counter-intuitive when you think about it. People are less inclined to put money into a rainy day fund if they expect sunshine.

Is that why the French save over 20% while the UK has decreased to 4.3%.

Seems that the UK isn't concerned about Brexit whereas the French are. :eek:

parking_question_chap

Thrugelmir wrote: »

Is that why the French save over 20% while the UK has decreased to 4.3%.

French are too busy being on strike to go and spend their money.

michaels

antrobus wrote: »

Savings equals investment. Economics 101.

Net true, but person A who is saving could be lending money to person B who is dis-saving (borrowing to consume/spending more than they earn). A great example is if I save in national saving bonds and the govt uses the money to pay benefits and pensions. My savings are not funding any investment.

Enterprise_1701C

I think the problem is the easy credit.

Many moons ago we had serious problems, could barely feed the kids and I often had to go hungry. But that was the way it was, we lived within our means. Turned out OK in the end, managed to feed the kids OK, that was what mattered.

In those days if the washing machine broke you washed by hand until you could afford another one. Went to car boots/jumble sales (whatever happened to them!) for clothes and toys, the kids knew no difference. Our 3 piece was a mis-matched set of furniture we bought second hand. It actually lasted ages!

Now, I would never tell our neighbour I saw this, but I saw a food bank delivery arrive at her house a couple of days ago. Yes, I know it could be temporary, but the rent alone on her house is over a grand, I know she has an iPhone on contract (at least I hope it is on contract the amount of time she spends on it), she had Sky Q put in not long ago, she runs a car and keeps buying new toys for the kids (came back with a few from the holiday they have just been on).

Before all this easy credit you lived within your means. If you couldn't then you asked for an emergency payment from the government. Yes we had times when we were on our uppers, and it would have been very easy to take out some of this easy credit if it had been available, and I am very pleased it was not.

We have come out the other end, we had years without holidays, did not have the latest tech, had things break down on us (and managed to get them fixed) but we have now paid off the mortgage (even though they tried to take it back off us at one time).

It horrifies me when I see these ads offering the chance to buy the latest tech at £x per week for so many years, if you can't afford it then don't buy it, if you need a working computer for whatever reason then there's some second hand units around.

I think a lot of people need to get back to basics, concentrate on feeding the kids first rather than all the tech they so desperately need.

lisyloo

Thrugelmir wrote: »

Amazon working on razor thin margins does little for the broader economy either.

Aren't they still providing jobs and those people are paying income tax, national insurance and claiming fewer benefits?


What about the related companies such as delivery companies?

Enterprise_1701C

I can never work out why people do not think about the people that companies such as Amazon pay and employ.

westernpromise

It's not clear that, absent Amazon, those jobs wouldn't exist anyway. If Amazon didn't employ people to sell garden furniture, people wouldn't stop buying it; they'd just buy garden furniture from whoever did sell it. Those sellers would then hire staff to sell garden furniture.

Concentrating a lot of retail share into one player's hands makes them a more powerful buyer of everything: garden furniture, soup, toasters, baked beans, and labour.

I'm fine with this as long as the saving is passed on, which so far it is.