Musicmystery
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OK. What cost $300 in 1978 would cost $975.71 in 2009.
It's a little unusual to remember the take home but not the salary/wage. Was this legal income? No offense meant, just asking. If it was skirting the tax man, that's $50,000 in today's dollars.
But, depending on your tax situation, if it was after withholdings, you made something in the 20s. Let's be generous and call it $25,000 (that gives you an overall tax rate of 38%) -- that's $81,300 in 2009 dollars.
A nice income, to be sure. Not all that unusual--as debated in another thread, that's just under the median income for a number of NYS counties--but at the higher end of the average worker, certainly.
The point, though, Term, is that 1978 to now is hardly the glory days next to ruin as your post content and color display (except perhaps for you personally--you didn't share and I wouldn't ask you to post your specific current circumstances publicly). 1978 had us squarely in stagflation. Unemployment was rising, and rose every year for the next four years until it was higher than it is today. Inflation was out of control. Jobs for new entrants (I graduated in 79) were nonexistent (I cut grass, painted houses, and picked raspberries until I finally found a somewhat steady job as a bartender after a few months--my career started only after I started getting creative instead of looking to be hired).
Nor am I arguing for a rosy picture today, as some have claimed in other threads. Rather, it's just not helpful, neither for solving nor coping, personally or as a society, to exaggerate and misrepresent the situation. Last summer I argued (with Merc) that we were pulling out of recession (I was right--GDP for the past year is strong), and that as inventories shrunk, unemployment would start to come back this August. Well, I still have time on that one, but now I'm worried that might not happen--the oil spill is, of course, an additional drag on the economy in a number of sectors, which I obviously couldn't have known in advance, but also credit remains very tight, still, with prohibitive consumer and business rates, preventing the expansion and hiring that otherwise would be going on now. So, contrary to what should normally happen, people are reining in, as they have to look to their own resources only, significantly slowing the economy (both factory and consumer orders on durable goods are down). This brings about worries of a double dip recession, worries I take seriously. We have the resources, but we're just letting them sit. Further, the political mood both globally and nationally favors austerity over stimulus--which is all fine in theory, but letting austerity sort itself out takes time, and unemployment will remain low or worse, as will economic growth, while we wait for self-correction. Not good.
We need plans that make sense long term. Nationally and individually we continually pursue short term options, and consequently fail to save and plan in good times for the slower times. I'm fine now because after struggling so hard early in my adult life, I never wanted to return to living like that, and so made decisions that set me up with a paid for home, land, retirement funds, timber, produce and multiple income sources. Now that's just what I did, not a template, but the the point is, saving and planning ahead would have seen us through this. Instead, we spent money we didn't have, individually and nationally, during the good times! Foolish, but then you can get away with that while things are expanding. Trouble is, contractions come too. We went on like prosperity would never slacken, and I bet next time, we do it again.
Nor are our businesses much better at this overall. During the double digit interest rate days of the 70s, our car manufacturers, flush with cash, on top of the world, untouchable in the market, said, "Hey, why invest in the future when we can earn good returns simply in the money market?!" Meanwhile German, Swedish, and Japanese manufacturers said, "Hmmm. I know it's only a 6-8% return, half what we could earn short term...but let's invest in new technologies and tooling and set ourselves up for the next few decades of new automobiles." Without the hubris and short term approach of the Big 3, who always could have made the fuel efficient cars that became their competition, they never would have lost so much market share to Toyota, Honda, Subaru, etc. By the time the market turned, the 3 now had to play catch up, including design and retooling from scratch.
Look at energy policy--we woke up in the 70s to the problems with our dependence on oil. Carter instituted a number of initiatives and reforms. 18 months later, Reagan and Congress eliminated them all to pay for tax cuts--cuts that would further fuel a quadrupling deficit. Today, we are kicking around the same and similar proposals to the ones we already had started 25 years ago! And blaming government is too easy---look at all the 12 mpg vehicles on the road (especially here, where driving a truck the size of a house is the norm, and paid for with 7 year loans--that's practically a mortgage, and on a rapidly depreciating asset).
Here's the thing. While we may not feel it or like to admit it, we are wealthy. We have abundant resources. People complain about government waste, but look around our homes, and there are wasted resources everywhere. And even in a slow economy we have a wealth of opportunities. But we have to make changes. As another thread brought up, high fuel prices and immigrant labor problems add to produce prices, reliability, and legalities, all of which can be eased by growing local produce--I'm not the only one turning grower in a big way, and even in the cities, some are turning rooftops to tenant gardens. The point is that new circumstances open up new opportunities. That's what new businesses do---recognize need/problem, bring in skills and resources to solve it. It means doing things differently. If you want different things to happen, you have to make changes.
It works better than complaining and blaming--but that's the American way, it seems. We are waxing poor amid prosperity. We don't need to. We need only act.
< Message edited by Musicmystery -- 7/4/2010 8:50:27 AM >
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RE: The plan - 
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