Author Topic: Middle class and broke article  (Read 57533 times)

mpbaker22

  • Handlebar Stache
  • *****
  • Posts: 1095
Re: Middle class and broke article
« Reply #50 on: June 09, 2013, 07:06:48 AM »
This is SO not true.  Yes, you can spend a lot of money on education, if you choose to go to the likes of Harvard or Stanford. 

At least Harvard and Stanford have a return on the investment.  The worst decision is going to an out of state, tier 2/3 state school.  You don't get in-state tuition, but I suppose that's on the personal level.  On the community level, I guess all the schools cost similar amounts.

Hamster

  • Pencil Stache
  • ****
  • Posts: 623
Re: Middle class and broke article
« Reply #51 on: June 09, 2013, 01:03:09 PM »
Except it's not primarily poverty insurance, it's primarily a psuedo investment vehicle.
Curious why you consider SS a pseudo-investment vehicle.

Current benefits are primarily funded by current contributions -  ie today's worker contributions are pooled to fund today's benefits to retiree's/survivors/disabled. The surplus in the trust fund is invested in treasury securities.  That is essentially how insurance works.

That is a very different model from most investment vehicles in which I purchase something or contribute to an account today, and in the future sell it or receive the principal back plus/minus gains/losses.

capital

  • Bristles
  • ***
  • Posts: 451
Re: Middle class and broke article
« Reply #52 on: June 09, 2013, 01:36:06 PM »
Education. Costs in the US are astronomical. And if you end up with huge student loan debts...
Yes, you can spend a lot of money on education, if you choose to go to the likes of Harvard or Stanford.  Attend your state university, and costs are maybe 1/10 as much.
Ivy league schools, with their enormous endowments, are free or nearly so to those of average means, or at least cheaper than any flagship state university that provides competitive quality of education, where tuition is often $10k per year. My girlfriend went to Princeton, and none of her friends have (undergraduate) student loans hanging over their heads; some of them come from well-off families but plenty didn't and got lots of financial aid.

It's mid-quality private schools, with high tuitions, small endowments and consequently small financial aid, combined with employment outcomes no better than random state schools, that can screw people, especially schools in expensive areas. Going to NYU for film school can be a very bad financial decision.

Social Security exists because most people are poor planners, and telling people to be responsible doesn't magically make them so. There is a strong negative correlation between social security payments and elderly poverty rates:

It is a pyramid scheme in the same way that other schemes, such as families, that rely on the (presently) young taking care of the (presently) elderly are.
« Last Edit: June 09, 2013, 01:42:13 PM by ehgee »

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Middle class and broke article
« Reply #53 on: June 09, 2013, 02:21:52 PM »
Ivy league schools, with their enormous endowments, are free or nearly so to those of average means, or at least cheaper than any flagship state university that provides competitive quality of education, where tuition is often $10k per year.

Maybe for some people (see previous comments re scholarships), but not for everyone.  Take Barack Obama as a case in point.  Supposedly brilliant, goes to Ivy League schools, had student loans that took decades to pay off.

Now IF you can get a scholarship to one of those Ivy League schools, and it covers living expenses as well as tuition, then you obviously don't need to worry about student loans.  (And of course the same applies if you get a scholarship to a state school.)  But it seems pretty clear that a lot of people aren't getting the scholarships, but choosing to take out loans to attend the expensive schools anyway.

And you will not get a better education at Harvard or Yale than you will at most state universities.

capital

  • Bristles
  • ***
  • Posts: 451
Re: Middle class and broke article
« Reply #54 on: June 09, 2013, 02:45:01 PM »
Ivy league schools, with their enormous endowments, are free or nearly so to those of average means, or at least cheaper than any flagship state university that provides competitive quality of education, where tuition is often $10k per year.

Maybe for some people (see previous comments re scholarships), but not for everyone.  Take Barack Obama as a case in point.  Supposedly brilliant, goes to Ivy League schools, had student loans that took decades to pay off.

Now IF you can get a scholarship to one of those Ivy League schools, and it covers living expenses as well as tuition, then you obviously don't need to worry about student loans.  (And of course the same applies if you get a scholarship to a state school.)  But it seems pretty clear that a lot of people aren't getting the scholarships, but choosing to take out loans to attend the expensive schools anyway.

And you will not get a better education at Harvard or Yale than you will at most state universities.
Those were probably law school loans, and he jumped around in undergraduate and then bought a mansion rather than paying off his loans, which was not a crazy decision considering he was a former law professor who would have likely returned to that well-compensated, secure role had his political career falied. Even before ascending to public prominence, he held substansial assets. He may have claimed he and Michelle didn't have an easy time with their loans as an attempt to gain empathy from young voters, but Michelle alone was making a $250k+ salary before becoming First Lady.

Moreover, most of the no-loan policies in the Ivy League are relatively recent, from the mid-00's. But things are better than they were at huge-endowment schools.

Depending on who you are, you may or may not get a better education at an Ivy League school than a top-flight state university. But the Ivy League school will likely be cheaper, unless you're from a state with very generous scholarships available for in-state students. My home state was not, nor are many states.

And I personally went to a pretty-good but not Ivy private university with a small endowment, but I received decent scholarships and studied computer engineering, which the school is very good in, and that enabled me to pay off student loans very quickly.

But pretty much anyone who can get into an Ivy would find it worth their while to go.

capital

  • Bristles
  • ***
  • Posts: 451
Re: Middle class and broke article
« Reply #55 on: June 09, 2013, 02:49:22 PM »
Ivy league schools, with their enormous endowments, are free or nearly so to those of average means, or at least cheaper than any flagship state university that provides competitive quality of education, where tuition is often $10k per year.

Maybe for some people (see previous comments re scholarships), but not for everyone.  Take Barack Obama as a case in point.  Supposedly brilliant, goes to Ivy League schools, had student loans that took decades to pay off.

Now IF you can get a scholarship to one of those Ivy League schools, and it covers living expenses as well as tuition, then you obviously don't need to worry about student loans.  (And of course the same applies if you get a scholarship to a state school.)  But it seems pretty clear that a lot of people aren't getting the scholarships, but choosing to take out loans to attend the expensive schools anyway.

And you will not get a better education at Harvard or Yale than you will at most state universities.
Those were probably law school loans (though he might have had extra debt from jumping around in undergraduate). After graduating, he bought a mansion rather than paying off his loans, which was not a crazy decision considering he was a former law professor who would have likely returned to that well-compensated, secure role had his political career falied. Even before ascending to public prominence, he held substansial assets. He may have claimed he and Michelle didn't have an easy time with their loans as an attempt to gain empathy from young voters, but Michelle alone was making a $250k+ salary before becoming First Lady.

Moreover, most of the no-loan policies in the Ivy League are relatively recent, from the mid-00's. But things are better than they were at huge-endowment schools.

Depending on who you are, you may or may not get a better education at an Ivy League school than a top-flight state university. But the Ivy League school will likely be cheaper, unless you're from a state with very generous scholarships available for in-state students. My home state was not, nor are many states.

And I personally went to a pretty-good but not Ivy private university with a small endowment, but I received decent scholarships and studied computer engineering, which the school is very good in, and that enabled me to pay off student loans very quickly.

But pretty much anyone who can get into an Ivy would find it worth their while to go.

Undecided

  • Handlebar Stache
  • *****
  • Posts: 1088
Re: Middle class and broke article
« Reply #56 on: June 09, 2013, 02:53:31 PM »
Ivy league schools, with their enormous endowments, are free or nearly so to those of average means, or at least cheaper than any flagship state university that provides competitive quality of education, where tuition is often $10k per year.

Maybe for some people (see previous comments re scholarships), but not for everyone.  Take Barack Obama as a case in point.  Supposedly brilliant, goes to Ivy League schools, had student loans that took decades to pay off.

Now IF you can get a scholarship to one of those Ivy League schools, and it covers living expenses as well as tuition, then you obviously don't need to worry about student loans.  (And of course the same applies if you get a scholarship to a state school.)  But it seems pretty clear that a lot of people aren't getting the scholarships, but choosing to take out loans to attend the expensive schools anyway.

And you will not get a better education at Harvard or Yale than you will at most state universities.

Respectfully, you're way off here. First, there are no undergraduate "scholarships" at Ivy League universities; financial aid is need-based, not merit-based. Second, there has been a sea change since Barack Obama's undergraduate years. A bit over 10 years ago, Princeton adopted a policy of eliminating student borrowing from financial aid packages, offering grants to cover any admitted student's financial need, which kicked off other very generous financial aid reforms at the undergraduate schools at other Ivy League universities.

As to whether you will get a better education at Harvard or Yale than at most state universities, I guess that's partly a matter of what better means, but education is one of the few areas where people like to express the claim that vastly more selectivity in the inputs regarding faculty, students and resources has no impact on the output.

meadpointofview

  • Guest
Re: Middle class and broke article
« Reply #57 on: June 10, 2013, 09:56:54 AM »
OK after re-reading the article I am changing my tune.  I think we do need more government intervention for those who cannot manage their spending. 

Proposal:
  • Draft legislation that requires anyone with a Savings rate of higher than 20% to give up 100% of assets over the 20% savings threshold to the federal government so they redistribute that money to those who have savings rates under 20%.
  • Force health care, child care, and education providers to provide their services free of charge for anyone with a savings rate under 20%.
  • Force lenders to not charge any interest to anyone with a savings rate under 20% seeking a loan for automobiles or homes.
  • Last but not least - Force all food providers who make a profit greater than 10% to give away food to anyone with a savings rate under 20%.


Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Middle class and broke article
« Reply #58 on: June 10, 2013, 11:33:11 AM »
Respectfully, you're way off here. First, there are no undergraduate "scholarships" at Ivy League universities; financial aid is need-based, not merit-based. Second, there has been a sea change since Barack Obama's undergraduate years. A bit over 10 years ago, Princeton adopted a policy of eliminating student borrowing from financial aid packages, offering grants to cover any admitted student's financial need, which kicked off other very generous financial aid reforms at the undergraduate schools at other Ivy League universities.

All I can say is that that is very different from the situation when I was a high school graduate, and if it's the case, why the heck is anyone complaining about student loans?  If the Ivy League is essentially free, and state universities are cheap, how do people manage to rack up $100K or more in loans?

infogoon

  • Pencil Stache
  • ****
  • Posts: 840
Re: Middle class and broke article
« Reply #59 on: June 10, 2013, 12:04:24 PM »
OK after re-reading the article I am changing my tune.  I think we do need more government intervention for those who cannot manage their spending. 

Proposal:
  • Draft legislation that requires anyone with a Savings rate of higher than 20% to give up 100% of assets over the 20% savings threshold to the federal government so they redistribute that money to those who have savings rates under 20%.
  • Force health care, child care, and education providers to provide their services free of charge for anyone with a savings rate under 20%.
  • Force lenders to not charge any interest to anyone with a savings rate under 20% seeking a loan for automobiles or homes.
  • Last but not least - Force all food providers who make a profit greater than 10% to give away food to anyone with a savings rate under 20%.

It would probably be quicker to just ban Ayn Rand books from being reprinted, sparing us all from tiresome libertarian tantrums like this.

Undecided

  • Handlebar Stache
  • *****
  • Posts: 1088
Re: Middle class and broke article
« Reply #60 on: June 10, 2013, 12:19:10 PM »
Respectfully, you're way off here. First, there are no undergraduate "scholarships" at Ivy League universities; financial aid is need-based, not merit-based. Second, there has been a sea change since Barack Obama's undergraduate years. A bit over 10 years ago, Princeton adopted a policy of eliminating student borrowing from financial aid packages, offering grants to cover any admitted student's financial need, which kicked off other very generous financial aid reforms at the undergraduate schools at other Ivy League universities.

All I can say is that that is very different from the situation when I was a high school graduate, and if it's the case, why the heck is anyone complaining about student loans?  If the Ivy League is essentially free, and state universities are cheap, how do people manage to rack up $100K or more in loans?

Yes, well, why do so few Americans have any savings to speak of?

meadpointofview

  • Guest
Re: Middle class and broke article
« Reply #61 on: June 10, 2013, 12:51:36 PM »
Yes Infogoon you are right on the mark!  Ban all books that are ciritical of government intervention or in any way promote self reliance or self responsibility. 

And while we are at it lets expand the Echelon program and all related programs to make sure we can identify and contact  the people who promote such libertarian lies.

Eric

  • Magnum Stache
  • ******
  • Posts: 4061
  • Location: On my bike
Re: Middle class and broke article
« Reply #62 on: June 10, 2013, 01:23:04 PM »
It'd be nice if we could just ban Straw Man arguments.  That would save us all a lot of trouble.

mpbaker22

  • Handlebar Stache
  • *****
  • Posts: 1095
Re: Middle class and broke article
« Reply #63 on: June 10, 2013, 02:05:17 PM »
It'd be nice if we could just ban Straw Man arguments.  That would save us all a lot of trouble.

You are aware that's exactly how you got this whole argument started, right?  That's a little hypocritical of you to make that comment then.


I'd prefer to do it all on my own, and if the government got the hell out of social security and my healthcare, I could be saving a lot more.

The government out of Social Security?  You're asking for the government to not be involved in the program that was started by the government and is administered by the government?  How exactly would that work?  People would just voluntarily pay their SS taxes?  And others would voluntarily issue checks to seniors out of the goodness of their hearts every month?

That's quite the idea you've got there!

Would you also like the government to keep their hands off of your Medicare?

Eric

  • Magnum Stache
  • ******
  • Posts: 4061
  • Location: On my bike
Re: Middle class and broke article
« Reply #64 on: June 10, 2013, 02:14:09 PM »
It's not hypocritical at all.  I wasn't making a straw man argument.  I was making fun of you for suggesting that the government get out of Social Security.

rockstache

  • Walrus Stache
  • *******
  • Posts: 5865
  • Age: 2015
  • Location: Northeast
Re: Middle class and broke article
« Reply #65 on: June 10, 2013, 02:15:43 PM »
Ivy league schools, with their enormous endowments, are free or nearly so to those of average means, or at least cheaper than any flagship state university that provides competitive quality of education, where tuition is often $10k per year.

Maybe for some people (see previous comments re scholarships), but not for everyone.  Take Barack Obama as a case in point.  Supposedly brilliant, goes to Ivy League schools, had student loans that took decades to pay off.

Now IF you can get a scholarship to one of those Ivy League schools, and it covers living expenses as well as tuition, then you obviously don't need to worry about student loans.  (And of course the same applies if you get a scholarship to a state school.)  But it seems pretty clear that a lot of people aren't getting the scholarships, but choosing to take out loans to attend the expensive schools anyway.

And you will not get a better education at Harvard or Yale than you will at most state universities.

I agree with everything you said except the last statement. The standards at Harvard at least (for both students and professors) are much much higher than any state university that I have heard of/witnessed. I don't pretend to speak about schools that I don't know about, and I don't know much about Yale, but I do think that in Harvard's case you get what you pay for. Of course a lot of it is opinion, but that's mine.

capital

  • Bristles
  • ***
  • Posts: 451
Re: Middle class and broke article
« Reply #66 on: June 10, 2013, 11:14:06 PM »
Respectfully, you're way off here. First, there are no undergraduate "scholarships" at Ivy League universities; financial aid is need-based, not merit-based. Second, there has been a sea change since Barack Obama's undergraduate years. A bit over 10 years ago, Princeton adopted a policy of eliminating student borrowing from financial aid packages, offering grants to cover any admitted student's financial need, which kicked off other very generous financial aid reforms at the undergraduate schools at other Ivy League universities.

All I can say is that that is very different from the situation when I was a high school graduate, and if it's the case, why the heck is anyone complaining about student loans?  If the Ivy League is essentially free, and state universities are cheap, how do people manage to rack up $100K or more in loans?
Very few people rack up $100k in undergraduate debt. The present average is $26k from undergraduate: http://www.today.com/money/interest-government-student-loans-set-double-summer-1C9273332
State universities, especially the ones where you're able to get an education competitive with the Ivy League, are not particularly cheap any longer. My home state's flagship university, which offers a top-flight education if not the networking opportunities of the Ivy League, has a $24k cost of attendance, and not much aid for the middle class outside of loans. Even if that cost didn't go up over the next four years, a very generous $10,000 per year from parents, plus $6000 per year in summer earnings by the student, would leave $32,0000 in debt by the end. Obviously there are ways to reduce that, but zero debt would require either big scholarships that not everyone can get or enough time working to put studies at risk. Many undergraduates at state schools also have trouble graduating in four years because the school doesn't schedule enough sessions of required classes for popular majors, which only increases that debt load.

Then there are midlevel private schools that have sticker prices as high as the Ivy League and much less financial aid, which can lead to undergraduates with $100k+ in nondischargable debt granted based on the signature of a teenager.

Graduate education is much less sure of a route than it once was, with many degree programs that lead to much debt and no meaningful employment prospects. Many people fled the poor economy into graduate school (which was a sensible route in previous recessions) and are emerging into an economy that's just as bad with a ton of debt. Even formerly safe paths such as law school have turned into debt traps in many cases.

An undergraduate CS degree is presently an incredible bargain from a pure ROI perspective. Whether that'll remain true in four years for current freshmen presently seeking to optimize ROI remains to be seen. But we've taken the funding of education away from the broader tax base (for whom it was a very good deal in aggregate) and placed it mostly on the back of students and parents (for whom it will pay off on average, but that average conceals many poor individual outcomes).

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8832
  • Registered member
Re: Middle class and broke article
« Reply #67 on: June 11, 2013, 12:00:31 AM »


If the Ivy League is essentially free, and state universities are cheap, how do people manage to rack up $100K or more in loans?

Because:

(1) if your family income is high you don't get financial aid -- but high family income does not mean they will pay for your education
(2) even when tuition is free, people still take out loans for extravagant lifestyles
(3) if you don't get into one of the elite schools, the mid-tier private schools are happy to charge you much higher tuition
(4) graduate education (particularly for professional degrees like medicine, business, and law) is far from free even in the Ivy League

lisahi

  • Stubble
  • **
  • Posts: 225
Re: Middle class and broke article
« Reply #68 on: June 11, 2013, 09:01:21 AM »
I agree with everything you said except the last statement. The standards at Harvard at least (for both students and professors) are much much higher than any state university that I have heard of/witnessed. I don't pretend to speak about schools that I don't know about, and I don't know much about Yale, but I do think that in Harvard's case you get what you pay for. Of course a lot of it is opinion, but that's mine.

You would literally have to have gone to multiple universities, take the same courses, and pursue the same activities to actually know. Harvard has a fantastic reputation. But are the academic standards better certain state schools or non-Ivy League private universities? I would venture to say no. I'm not saying you don't get what you pay for; what I'm saying is that you can also get that elsewhere. Now, perhaps you can't get exactly what Harvard's reputation can get you elsewhere--which is interviews with certain companies, or an edge over a student with a similar (or even higher) GPA and activities elsewhere. Reputation does count for something. But I personally believe it's a highly fought-for myth that you get a more thorough, or more stringent academic education at an Ivy League school than anywhere else.

As for me, I racked up $120,000 in student loan debt getting a law degree. And that's all Federal loans. Graduate school is where I believe most people wind up with big debt. My undergraduate loans were pretty minimal. Now, I could have made the choice to go to the state law school that offered me a scholarship. Looking back on it now, I probably should have. But I went to the out of state 1st tier law school because I believed rankings were important (I have since modified that belief after meeting some brilliant attorneys from 3rd and 4th tier law schools, and some mediocre attorneys from 1st tier law schools). When you get to a high graduate level at an accredited graduate school, the school, in most cases, is what you make of it and how you use it. The jobs that require the 1st tier school name are generally the jobs that, later in life, you will regret having taken because they ate up some of your best years.

Anyway--tangent--that's how I got into debt.
« Last Edit: June 11, 2013, 09:09:26 AM by lisahi »

Hamster

  • Pencil Stache
  • ****
  • Posts: 623
Re: Middle class and broke article
« Reply #69 on: June 11, 2013, 10:15:35 AM »
I have mixed feelings about the value of the reputation of the school. I think that ROI based on reputation is very dependent on what field you go into, and how important the initial open door or networking opportunities are to your career.

I was at a respectable, but not top-tier state school for undergrad with zero undergrad debt through scholarships and research assistantships. I went to medical school at a top-tier ivy. I borrowed a fair amount of money for med school, but less than most who took financial aid since I was in a federal program for my first 2 years, and then my wife was working. I thought I would go into acadamia, but became very disillusioned by the politics and narcicism/sense of self-importance in academics.

The Ivy name definitely helped me get into my choice of residency program. When patients see what medical school I went to, they will comment and it seems to increase their initial sense of confidence in me, but I would guess only a small fraction of my patients know where I studied.

Did I learn anything more in an ivy-league med school than I would have at my state medical school? Absolutely not. Did it increase my earning potential (in primary care practice)? Nope. But, it did allow me to see a different world-view and opened doors for a number of international research and practice opportunities that gave me great personal fulfillment, if not financial benefit.

I ultimately chose to work in one of the lowest-paying medical specialties (still fortunate to earn more than anyone needs). I have friends who went to medical schools you've never heard of, but chose to become orthopedists or dermatologists. They make 2-3 times what I make for less investment in tuition, so had much better financial ROI.

If I ever want to get an academic position, or even an administrative position, I think the fancy name on my diploma will help. In terms of what I earn as a practicing physician, it makes zero difference.
« Last Edit: June 11, 2013, 11:46:38 AM by Hamster »

samustache

  • 5 O'Clock Shadow
  • *
  • Posts: 58
Re: Middle class and broke article
« Reply #70 on: June 11, 2013, 10:49:22 AM »
Mead:

getting the government out of healthcare and SS requires this:

- The government cannot restrict supply, so no more requirement for doctors to be credentialed, anyone can buy "healthcare" from anyone they please. Drugs don't need to be tested for effectiveness or whether they cause sickness. The market decides who is the best healthcare provider by who kills the least people.

- no retirement savings means people have to learn from other people's mistakes over time, meaning mass poverty for old people - especially during economic downturns. People will learn to save because they will be stepping over dead old people who didn't.

I'm not going to argue about whether this will "work", or even whether it's the most efficient with its shortcomings, but do you really think that it is sustainable given the mass suffering that is necessary for people to learn their lesson? It wouldn't last one cycle of Congress.

Here's the point: I'm all for more efficient old age income insurance and I think Obamacare is a clusterf*ck. But what we need is less knee-jerk "the government is useless", and more "here's how we can get a better outcome with more market-based ideas that minimize government command and control policies".


NYD3030

  • 5 O'Clock Shadow
  • *
  • Posts: 76
  • Age: 36
  • Location: Madison, WI
Re: Middle class and broke article
« Reply #71 on: June 11, 2013, 10:53:58 AM »
The Randroids in this thread make me laugh.  "Personal responsibility" is an important notion but not an organizing philosophy on which to build a society.  It completely ignores the increasingly complex ways we depend on one another to facilitate the abundant, modern life.

What this philosophy boils down to is "Only people who can meet the responsibilities I currently meet deserve respect/shelter/food."  For those of us on the MMM forum, this would mean holding a job, saving money, frugality, etc.  Of course those at the top of the economy feel the same way, and look down at us as the scabs clinging to the body politic - we haven't started a hugely successful business or invented a complicated financial product, we're practically subhuman!  From the enterprising pizza delivery man  to the international financier, every Randroid is John Galt, a master of his domain and a titan among mortals.

Might as well believe you're superman.

NYD3030

  • 5 O'Clock Shadow
  • *
  • Posts: 76
  • Age: 36
  • Location: Madison, WI
Re: Middle class and broke article
« Reply #72 on: June 11, 2013, 11:02:52 AM »
Mead:

getting the government out of healthcare and SS requires this:

- The government cannot restrict supply, so no more requirement for doctors to be credentialed, anyone can buy "healthcare" from anyone they please. Drugs don't need to be tested for effectiveness or whether they cause sickness. The market decides who is the best healthcare provider by who kills the least people.

- no retirement savings means people have to learn from other people's mistakes over time, meaning mass poverty for old people - especially during economic downturns. People will learn to save because they will be stepping over dead old people who didn't.

I'm not going to argue about whether this will "work", or even whether it's the most efficient with its shortcomings, but do you really think that it is sustainable given the mass suffering that is necessary for people to learn their lesson? It wouldn't last one cycle of Congress.

Here's the point: I'm all for more efficient old age income insurance and I think Obamacare is a clusterf*ck. But what we need is less knee-jerk "the government is useless", and more "here's how we can get a better outcome with more market-based ideas that minimize government command and control policies".

Apparently people forget that this has already been tried.  It was called "The Victorian Era" and anyone who has read a history book or Charles Dickens novel should know that it was an abysmal time where huge masses suffered in abject poverty.  Why we'd want to return to that in order to uphold some platonic ideal of self reliance baffles me.

infogoon

  • Pencil Stache
  • ****
  • Posts: 840
Re: Middle class and broke article
« Reply #73 on: June 11, 2013, 11:46:42 AM »
Apparently people forget that this has already been tried.  It was called "The Victorian Era" and anyone who has read a history book or Charles Dickens novel should know that it was an abysmal time where huge masses suffered in abject poverty.  Why we'd want to return to that in order to uphold some platonic ideal of self reliance baffles me.

There are a surprising number of people who believe that, if this were still the Gilded Age, they'd be Cornelius Vanderbilt.

I suppose it's possible that I might have what it takes to be a robber baron -- but it's a lot more likely, statistically speaking, that I'd be one of the early-dying Irishmen shoveling coal into a locomotive.

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Middle class and broke article
« Reply #74 on: June 11, 2013, 01:23:29 PM »
The Randroids in this thread make me laugh.  "Personal responsibility" is an important notion but not an organizing philosophy on which to build a society.  It completely ignores the increasingly complex ways we depend on one another to facilitate the abundant, modern life.

What this philosophy boils down to is "Only people who can meet the responsibilities I currently meet deserve respect/shelter/food."

I'm certainly not one of your "Randroids" - if nothing else, she was such an abysmal writer than I never managed to wade through more than a few chapters of any of her works - but I would go partway along that path.  After all, I have managed to work myself up from basically migrant farm worker to prosperous professional, with damned little help from the government (or anyone else).  So why should I have to work harder to support those who won't (not can't) work themselves?

NYD3030

  • 5 O'Clock Shadow
  • *
  • Posts: 76
  • Age: 36
  • Location: Madison, WI
Re: Middle class and broke article
« Reply #75 on: June 11, 2013, 03:17:06 PM »
The Randroids in this thread make me laugh.  "Personal responsibility" is an important notion but not an organizing philosophy on which to build a society.  It completely ignores the increasingly complex ways we depend on one another to facilitate the abundant, modern life.

What this philosophy boils down to is "Only people who can meet the responsibilities I currently meet deserve respect/shelter/food."

I'm certainly not one of your "Randroids" - if nothing else, she was such an abysmal writer than I never managed to wade through more than a few chapters of any of her works - but I would go partway along that path.  After all, I have managed to work myself up from basically migrant farm worker to prosperous professional, with damned little help from the government (or anyone else).  So why should I have to work harder to support those who won't (not can't) work themselves?

The government spends vastly more subsidizing our collective middle class lifestyle through the mortgage and healthcare deductions, higher education, and infrastructure than it does helping the needy with unemployment, food stamps, TANF.  Thus when people say they want "less government", they mean "less government for the poor.  I'll keep the government for me, thank you!"

Then you get these elaborate philosophies like Ayn Rand's that are designed to convince you what you already know - you deserve it, they don't, so screw em!  If your definition of a just world is a world in which you personally get "what you deserve" and everyone else can go starve, I don't think you understand justice.

samustache

  • 5 O'Clock Shadow
  • *
  • Posts: 58
Re: Middle class and broke article
« Reply #76 on: June 11, 2013, 03:17:51 PM »
Quote
So why should I have to work harder to support those who won't (not can't) work themselves?

What's your actual viable solution to this problem? The fact is, SOME redistribution is here to stay. Even if you managed to get your anti-government guy elected and got rid of redistribution altogether it will not last. You'd be better off accepting it and finding a better way to do it. The fact is - the more obvious redistribution is, the simpler and more efficient it can be. When people reject the simple obvious way, we get incredibly inefficient, complicated Rube-Goldberg-machine-Obamacare-like ways.

For my money, Social Security is nearly perfect: it's mathematically the same as a consumption tax because it doesn't tax investment; it's not so generous as to totally dissuade people from investing, and the majority of the tax burden is borne by those who will need it most. Plus, the solution to the SS fiscal imbalance is staring us in the face (bring in more dang young people).



Hamster

  • Pencil Stache
  • ****
  • Posts: 623
Re: Middle class and broke article
« Reply #77 on: June 11, 2013, 03:51:56 PM »
The Randroids in this thread make me laugh.  "Personal responsibility" is an important notion but not an organizing philosophy on which to build a society.  It completely ignores the increasingly complex ways we depend on one another to facilitate the abundant, modern life.

What this philosophy boils down to is "Only people who can meet the responsibilities I currently meet deserve respect/shelter/food."

I'm certainly not one of your "Randroids" - if nothing else, she was such an abysmal writer than I never managed to wade through more than a few chapters of any of her works - but I would go partway along that path.  After all, I have managed to work myself up from basically migrant farm worker to prosperous professional, with damned little help from the government (or anyone else).  So why should I have to work harder to support those who won't (not can't) work themselves?
I don't want to get into an argument, as there are certainly those who work hard to achieve success and those who work little and expect to be taken care of.
But I think "damned little help from the government" can only be true in the most superficial sense of not getting direct assistance. Who built the physical infrastructure to allow for commerce? Who developed the internet? Who maintains a stable currency? Who polices to prevent crime? Who immunized the public so you didn't risk dying from polio or smallpox? Who broke up the Ma Bell monopoly so we are no longer paying several dollars a minute to call the next town over and leasing our phones from a monopoly? I'm not a fan of wasteful government, but I don't think anyone in a stable country can claim that the government didn't provide the environment that allowed for success.

samustache

  • 5 O'Clock Shadow
  • *
  • Posts: 58
Re: Middle class and broke article
« Reply #78 on: June 11, 2013, 04:57:13 PM »
Quote
At least Harvard and Stanford have a return on the investment.  The worst decision is going to an out of state, tier 2/3 state school.  You don't get in-state tuition, but I suppose that's on the personal level.  On the community level, I guess all the schools cost similar amounts.

I read a NY Times article where if you applied to an Ivy League, didn't even have to get in, your expected median income was about the same as an ivy league graduate no matter where you went to school.

Lots of schools get way more credit than they deserve for just being able to recruit kick-ass students.

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Middle class and broke article
« Reply #79 on: June 11, 2013, 05:53:56 PM »
...but I don't think anyone in a stable country can claim that the government didn't provide the environment that allowed for success.

Sure, though I could argue a few of your specifics.  What you miss is that most of your basic government-created environment was available to everyone, not just the few.  So within this environment people can choose to make reasonable financial decisons about everything from what career to pursue and how hard to work at it down to choosing to rent wheels & tires for their car.

So I choose, metaphorically, to drive around on plain steel rims because I'm saving up to afford my own new tires.  Why should part of my savings go to pay the rental fees of the guy who believes he absolutely deserves to have those fancy new rims right now?

Eric

  • Magnum Stache
  • ******
  • Posts: 4061
  • Location: On my bike
Re: Middle class and broke article
« Reply #80 on: June 11, 2013, 06:04:46 PM »
Are we going to start with the "I know one person who scams welfare, therefore, everyone on welfare is a scam artist" arguments now? 

I like how we've already started with rims.  Throw in some Kool cigarettes and some malt liquor and we'll have the racist trifecta!

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8832
  • Registered member
Re: Middle class and broke article
« Reply #81 on: June 11, 2013, 07:42:39 PM »
Are we going to start with the "I know one person who scams welfare, therefore, everyone on welfare is a scam artist" arguments now? 

I like how we've already started with rims.  Throw in some Kool cigarettes and some malt liquor and we'll have the racist trifecta!

I think it's a reference to another thread about tire rentals, although I'm not sure how James thinks he is subsidizing the tires of others.

mpbaker22

  • Handlebar Stache
  • *****
  • Posts: 1095
Re: Middle class and broke article
« Reply #82 on: June 11, 2013, 09:25:37 PM »
Are we going to start with the "I know one person who scams welfare, therefore, everyone on welfare is a scam artist" arguments now? 

There's a lot more than one people scamming welfare.  Particularly SNAP, and to a slightly lesser extent, WIC, have tons of people scamming them.  Unfortunately, it's a fact of the system.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8832
  • Registered member
Re: Middle class and broke article
« Reply #83 on: June 11, 2013, 10:01:09 PM »
Are we going to start with the "I know one person who scams welfare, therefore, everyone on welfare is a scam artist" arguments now? 

There's a lot more than one people scamming welfare.  Particularly SNAP, and to a slightly lesser extent, WIC, have tons of people scamming them.  Unfortunately, it's a fact of the system.

I looked into scamming these, but it looked like way more effort than just working a side gig.

infogoon

  • Pencil Stache
  • ****
  • Posts: 840
Re: Middle class and broke article
« Reply #84 on: June 12, 2013, 08:40:30 AM »
There's a lot more than one people scamming welfare.  Particularly SNAP, and to a slightly lesser extent, WIC, have tons of people scamming them.  Unfortunately, it's a fact of the system.

If it makes you feel better, think of SNAP and WIC as government subsidies to grocery stores, farmers, and food manufacturers. The actual recipients are just a distribution mechanism for the subsidies.

ncornilsen

  • Pencil Stache
  • ****
  • Posts: 907
Re: Middle class and broke article
« Reply #85 on: June 12, 2013, 11:43:40 AM »
Are we going to start with the "I know one person who scams welfare, therefore, everyone on welfare is a scam artist" arguments now? 

There's a lot more than one people scamming welfare.  Particularly SNAP, and to a slightly lesser extent, WIC, have tons of people scamming them.  Unfortunately, it's a fact of the system.

I looked into scamming these, but it looked like way more effort than just working a side gig.

It looks pretty easy when I see it...  roll up to the checkout isle... buy a bunch of junkfood and sode with the WIC card... then buy the 40's and beer with one of the five fifties they had in thier wallet. I'm not sure how to fix that and policing it will probably be as expensive as tolerating it, but it still pisses me off.

Eric

  • Magnum Stache
  • ******
  • Posts: 4061
  • Location: On my bike
Re: Middle class and broke article
« Reply #86 on: June 12, 2013, 11:47:05 AM »
You know what pisses me off?  The mortgage interest tax deduction.  I see all these middle class folks buying Starbucks that I PAID FOR!  They're wasting MY MONEY!  Where do they get off buying coffee when I'm subsidizing their housing?!?

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Middle class and broke article
« Reply #87 on: June 12, 2013, 12:11:15 PM »
I think it's a reference to another thread about tire rentals, although I'm not sure how James thinks he is subsidizing the tires of others.

Correct, and it's a metaphor.  Replace the rims with any other consumer good that someone believes they deserve*, but are unwilling to work.save for.

*Ever notice how often that word is used in ads?  And of course the earlier post about people deserving this or that, regardless of whether they could earn the money to pay for it.

And I'll be damned if I can see what's racist about it, since I see lots of white people driving around in cars with fancy rims, even sometimes those stupid ones where the disk keeps spinning when the vehicle is stopped.

You know what pisses me off?  The mortgage interest tax deduction.

Can't see why, because even from the quasi-socialist point of view, it should be a good thing to discourage a cultural division into a class of landowning aristocracy and a lower class of renting peasants.

OTOH, I'm not real fond of the per-child deduction.
« Last Edit: June 12, 2013, 04:29:28 PM by Jamesqf »

JR

  • Stubble
  • **
  • Posts: 129
Re: Middle class and broke article
« Reply #88 on: June 12, 2013, 02:05:23 PM »
Are we going to start with the "I know one person who scams welfare, therefore, everyone on welfare is a scam artist" arguments now? 

There's a lot more than one people scamming welfare.  Particularly SNAP, and to a slightly lesser extent, WIC, have tons of people scamming them.  Unfortunately, it's a fact of the system.

I looked into scamming these, but it looked like way more effort than just working a side gig.

It looks pretty easy when I see it...  roll up to the checkout isle... buy a bunch of junkfood and sode with the WIC card... then buy the 40's and beer with one of the five fifties they had in thier wallet. I'm not sure how to fix that and policing it will probably be as expensive as tolerating it, but it still pisses me off.

You can't buy soda with WIC.

NYD3030

  • 5 O'Clock Shadow
  • *
  • Posts: 76
  • Age: 36
  • Location: Madison, WI
Re: Middle class and broke article
« Reply #89 on: June 12, 2013, 02:48:16 PM »
You can buy pretty much anything with SNAP though.  I know from experience as I graduated from college in 2006 and found myself unemployed in Chicago for eight months in the dark times of fall 2008.  I had been living a wildly unmustachian life, so when I was laid off I had basically nothing to fall back on.

I still carry my SNAP card (LINK in Illinois) with me so that no matter how well I do (very well lately!) I don't forget, "There but for circumstance I go."  I'm no smarter, harder working or more deserving today, just luckier.

MrsPete

  • Magnum Stache
  • ******
  • Posts: 3519
Re: Middle class and broke article
« Reply #90 on: June 17, 2013, 09:09:23 AM »
It's hard to say whether this or that college degree is more valuable than others.  Too many variables exist: 

Some degrees are more likely to lead to profitable careers than others.
Some families are more willing/able to pay.
Some colleges cost more than other colleges.
So many financial variables exist even within the same college.
Students bring different levels of ability and motivation to the table. 

Realistically, you can buy whatever you want with WIC or food stamps.  You just have to go through the extra step of finding someone who'll give you $50 of cash to buy them $100 of groceries with your benefits card.  It happens all the time. 

mpbaker22

  • Handlebar Stache
  • *****
  • Posts: 1095
Re: Middle class and broke article
« Reply #91 on: June 17, 2013, 10:05:02 AM »
I disagree with people who say that SNAP abusers are the exception.  I saw two more women this weekend using SNAP.  One had a coach coin purse (real).  The other had a Luis Vuitton handbag (likely fake, but still).  SNAP is a joke.

I can only think of one time where I saw someone using SNAP who looked like she actually needed it.  She was wearing raggity jeans and her family just looked poor.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8832
  • Registered member
Re: Middle class and broke article
« Reply #92 on: June 17, 2013, 11:08:50 AM »
I disagree with people who say that SNAP abusers are the exception.  I saw two more women this weekend using SNAP.  One had a coach coin purse (real).  The other had a Luis Vuitton handbag (likely fake, but still).  SNAP is a joke.

I can only think of one time where I saw someone using SNAP who looked like she actually needed it.  She was wearing raggity jeans and her family just looked poor.

Good thing there's no sample bias there.  When I said it was hard to "scam" I meant that it's not worth the trouble of faking the paperwork and jumping through the hoops for such a trivial (compared to Marginal hourly wage) amount of money.

Edit: how do real people fake the paperwork anyways?  Income is easily verifiable against tax returns.  If you are lying on those then things will not end well.
« Last Edit: June 17, 2013, 11:12:03 AM by dragoncar »

mpbaker22

  • Handlebar Stache
  • *****
  • Posts: 1095
Re: Middle class and broke article
« Reply #93 on: June 17, 2013, 11:43:59 AM »
Good thing there's no sample bias there.  When I said it was hard to "scam" I meant that it's not worth the trouble of faking the paperwork and jumping through the hoops for such a trivial (compared to Marginal hourly wage) amount of money.

Edit: how do real people fake the paperwork anyways?  Income is easily verifiable against tax returns.  If you are lying on those then things will not end well.

Who said these people are faking the paperwork?  They have all their necessities paid by the government, so what little they do make, they can blow on useless crap.  It's not that these people are actually really wealthy, it's that they don't know how to manage their own money and purchase necessities.  It's all done legally and within the system - that's the worst part.

ace1224

  • Bristles
  • ***
  • Posts: 469
Re: Middle class and broke article
« Reply #94 on: June 17, 2013, 11:51:49 AM »
Good thing there's no sample bias there.  When I said it was hard to "scam" I meant that it's not worth the trouble of faking the paperwork and jumping through the hoops for such a trivial (compared to Marginal hourly wage) amount of money.

Edit: how do real people fake the paperwork anyways?  Income is easily verifiable against tax returns.  If you are lying on those then things will not end well.

Who said these people are faking the paperwork?  They have all their necessities paid by the government, so what little they do make, they can blow on useless crap.  It's not that these people are actually really wealthy, it's that they don't know how to manage their own money and purchase necessities.  It's all done legally and within the system - that's the worst part.

yes and the system actually encourages it.  i had a neighbor who got SNAP, she made more money at work by working overtime so the govt told her she didn't need as much money on the SNAP card.  nevermind that her 3 kids still had to eat the same amount of food.  i'm actually really impressed that anyone manages to get ahead, honestly i am.  its like you are punished for working harder and trying to better your situation.  she finally had to work "under the table" somewhere to even begin to build a stache of cash. 
so think about it, if working harder yields the exact same results why work harder?  that must be what a lot of people think.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8832
  • Registered member
Re: Middle class and broke article
« Reply #95 on: June 17, 2013, 01:07:00 PM »
Good thing there's no sample bias there.  When I said it was hard to "scam" I meant that it's not worth the trouble of faking the paperwork and jumping through the hoops for such a trivial (compared to Marginal hourly wage) amount of money.

Edit: how do real people fake the paperwork anyways?  Income is easily verifiable against tax returns.  If you are lying on those then things will not end well.

Who said these people are faking the paperwork?  They have all their necessities paid by the government, so what little they do make, they can blow on useless crap.  It's not that these people are actually really wealthy, it's that they don't know how to manage their own money and purchase necessities.  It's all done legally and within the system - that's the worst part.

You said people are "scamming" the system.  To me, scamming is not playing by the rules.  For example, getting benefits for poor people when you are not poor.  I don't see using money you make by working to buy alcohol as "scamming" the system.  Selling the stamps would be scamming since it is not allowed.

Quote
if working harder yields the exact same results why work harder?  that must be what a lot of people think.

No systems are designed that way.  They all have some incentive built in.  Eg you make $100 extra dollars and your benefit is reduced by $75.

Hamster

  • Pencil Stache
  • ****
  • Posts: 623
Re: Middle class and broke article
« Reply #96 on: June 17, 2013, 02:09:05 PM »


Quote
if working harder yields the exact same results why work harder?  that must be what a lot of people think.

No systems are designed that way.  They all have some incentive built in.  Eg you make $100 extra dollars and your benefit is reduced by $75.

The earned income tax credit actually is designed that that way. The more income you earn the bigger the tax credit, up to the point where it gets phased out.
Behavioral economists, the right, and the left are generally supportive of the EITC because it incentivizes, rather than penalizes earning more income. Maybe the only federal tax program that both sides of the aisle support?
Edit:fixed screwy quote.
« Last Edit: June 17, 2013, 07:09:56 PM by Hamster »

lisahi

  • Stubble
  • **
  • Posts: 225
Re: Middle class and broke article
« Reply #97 on: June 17, 2013, 04:07:23 PM »
Scamming the system would be to buy a bunch of groceries using WIC or SNAP or whatever, returning them (which you can do at some grocery stores so long as you return them shortly thereafter), then taking the cash you get to buy the stuff you really want.

I'm not sure how many people actually do this, but I have seen it being done.

mpbaker22

  • Handlebar Stache
  • *****
  • Posts: 1095
Re: Middle class and broke article
« Reply #98 on: June 17, 2013, 06:27:57 PM »
Scamming the system would be to buy a bunch of groceries using WIC or SNAP or whatever, returning them (which you can do at some grocery stores so long as you return them shortly thereafter), then taking the cash you get to buy the stuff you really want.

I'm not sure how many people actually do this, but I have seen it being done.

I don't think that's what people usually mean when they talk about scamming SNAP though.  They might be using the wrong term, but I'd argue that spending all your money on luxuries so you can stay under the $2,000 asset limit is a form of scamming.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8832
  • Registered member
Re: Middle class and broke article
« Reply #99 on: June 17, 2013, 08:48:11 PM »
Scamming the system would be to buy a bunch of groceries using WIC or SNAP or whatever, returning them (which you can do at some grocery stores so long as you return them shortly thereafter), then taking the cash you get to buy the stuff you really want.

I'm not sure how many people actually do this, but I have seen it being done.

I don't think that's what people usually mean when they talk about scamming SNAP though.  They might be using the wrong term, but I'd argue that spending all your money on luxuries so you can stay under the $2,000 asset limit is a form of scamming.

Wherein "all your money" is under $1,211/mo (for a single), minus the non-luxuries you buy like shelter, transport, etc.  As I understand it, above $1,211/mo you are phased out anyways, so "all your money" is likely significantly less than $1,211/mo to obtain any significant benefit (max is $200/mo).

I don't know, I guess Jacob from ERE could live like a rockstar on that, but I don't begrudge people at that wage some free food from my tax dollars.