Who does this anymore?
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I've recently made the acquaintance of an 87 year old gentleman. His wife and my mother are residents at the same memory care facility. He visits his wife every day and we talk occasionally. He is a bit lonely and he likes talking about his life history and I listen.
He is a WWII vet and during the war he was trained to be a tank and auto mechanic. He never attended college. After the war he went to work at the Puget Sound Naval Shipyard as a mechanic and his wife worked in the "duplicating office". In 1964, at 44 years of age, he bought his first and only house in which he still lives. It was built in 1963, 2200 sq ft, 2 bed, 2 bath and in a community that was definitely upscale at that time. Now get this – He bought the house on an 8 year contract and paid it off in 4 years! Wow! Not bad for a blue collar worker (or anyone else, IMHO). Can anyone do that today?
I've recently made the acquaintance of an 87 year old gentleman. His wife and my mother are residents at the same memory care facility. He visits his wife every day and we talk occasionally. He is a bit lonely and he likes talking about his life history and I listen.
He is a WWII vet and during the war he was trained to be a tank and auto mechanic. He never attended college. After the war he went to work at the Puget Sound Naval Shipyard as a mechanic and his wife worked in the "duplicating office". In 1964, at 44 years of age, he bought his first and only house in which he still lives. It was built in 1963, 2200 sq ft, 2 bed, 2 bath and in a community that was definitely upscale at that time. Now get this – He bought the house on an 8 year contract and paid it off in 4 years! Wow! Not bad for a blue collar worker (or anyone else, IMHO). Can anyone do that today?
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The house still has the original kitchen cabinets which he built himself, and has been updated only minimally since he built it (but it has been kept in very good condition).
He was a WWII Vet, didn't go to college, worked as an ironworker on the Boeing plant in Renton straddling the roof girders, and then was a boxcar riveter at Paccar, and finished his career working as a garbageman for 20+ years. He worked hard for most of his life. Still can't talk about some of his experiences in WWII (pacific theater, late in the war) as the memories are too graphic for him.
One of the Great Generation, as Tom Brokaw calls them (and he's right).
And of course he has no mortgage, which is good since he's on a fixed income.
Yup--they don't make them like that anymore!
Now we have one Iraq war veteran who buys a house with an ARM he really can't afford after it resets, takes out a 2nd mortgage to do (probably unnecessary) remodeling, and then can't seem to figure out why he is in trouble: http://seattlepi.nwsource.com/local/346891_subprimesoldier11.html
My non-college-educated 90-year-old neighbor, with what mind he has left, is still smart enough to see the folly in doing something like that!
If your neighbor is anything like my acquaintance, I bet he thinks of debt as being in the same catagory as a fatal disease.
My acquaintance has one credit card, that he never uses, and always paid CASH for his automobiles. Who the hell does THAT anymore?
What's really sad is that the $5000 per month cost for keeping his wife in the memory care facility is going to wipe out his savings in about a year and a half. He figures he will have to sell his house if she is still around after that. It's a shitty deal for him to be in that situation at his age. I guess it's something we all get to look forward to.
Uh, I think a lot of us still pay cash for cars. I was willing to use student debt as an investment in myself, and I'm okay with mortgage debt because there's ultimately a break even point vs. renting, but I don't see the advantage of auto or other consumer debt. If you can't afford the car, buy a cheaper one or save up some money.
It can sometimes make sense to finance a purchase such as a car. For my current car they're giving the money to me at 2.9% and I'm making more than that in interest on the cash in the bank, even after tax. Helicopter Ben will soon change that equation, however...
I don't disagree that financing a car purchase can make perfect sense. In fact, I once financed a car purchase when I really did not have to. For that particular purchase I financed the purchase because, like carlislematthew and Alan, the loan rate was really low. It was lower than the interest I was getting from a CD, so I kept the cash in a CD.
The point I was trying to make with earlier posts was that many people of that generation (grew up during the great depression & WWII) appear to be really adverse to taking on any kind of debt. My father was like that. They only financed a purchase when they really had to. I maintain that most people today of later generations (including myself) are alot more casual about taking on debt.
I entirely agree. The only point I wanted to make was that it can *sometimes* make sense to finance a car. Mostly though, people do it because they have to and not because they made a decision either way.
Also, I do wonder about the value of actually saving sometimes. Given that most people don't save, policy is always going to be tilted towards higher inflation. This devalues debt, a good thing for the consumer in debt but a bad thing for those with savings in the bank. Sure, you can beat inflation with prudent saving and investment, but when most people are hopelessly in debt you're bound to get government policy that rewards that. People *do* vote, after all.
-Tax deduction on mortgage interest
-PMI tax deduction (for a time, for some borrowers)
-Tax deduction on your HELOC, even though you're going to buy a plasma TV with the money and it has nothing to do with your housing situation.
-Tax deduction on the capital gains from selling a house.
-Tax break on the IRS taxable "gain" when you default on your mortgage
-Federal sponsership of mortgage companies (i.e. your tax dollars are backing these companies - not necessarily a bad thing overall)
-Tax deduction for Bank of America so it can use Countrywide's losses to offset its gains.
When we get a tax deduction on the interest when buying a car from an American car company, that's when I know things have really gone to hell!
Did you know that credit card interest used to be tax dedcutible?
..Tax break on the IRS taxable "gain" when you default on your mortgage..
Wow! I was unaware of IRS tax changes upon mortgage default. I thought cancelled debt was still considered taxable income. Apparently these changes are very recent?
I had no idea! Sounds crazy! Although I got a credit card for a HELOC I used to have, so I'm not sure how different that really is.
Yes, very recent.
http://realestate.yahoo.com/info/news/n ... short-sale
There are lawyers who specialize in protecting your savings from health care. Essentially they transfer some of your savings into things that Medicaid doesn't count...and then Medicaid pays for your health care sooner rather than later. It's not a perfect system, but you can protect a lot of money - you should mention it to him.
It's really a shame that people can spend their whole life saving only to have those savings completely eaten away in the last few years of their life. For those of you who intend to leave something to your kids, talk to a lawyer sooner rather than later about how to protect that money. Medicaid generally has a 5 year lookback period, so you can't just write a check to your children once you find out you're in bad health.
It is sad. Alot of people make no plans for long term care and most are unaware of the Medicaid 5 year look back (it used to be a 3 year look back). The consequences of making no plans can be financial devastation for the survivor.
Another perspective / explanation for the economic success of post WWII U.S. is that a lot of the competition's industrial base was destroyed during the war (which we did not start). Alot of our overseas manufacturing competition have caught up with / overtaken us now. Whose fault is that?
You also cannot discount the pressure of continually expanding population with respect to pollution and depletion of natural resources. You cannot blame the "Greatest Generation" as the sole cause for that. Last time I checked most people of all generations still like to "hold hands". The world population has more than doubled during my lifetime. It does not take a genius to determine that the population of homo sapiens cannot increase indefinitely without eventual negative consequences. In my high school biology class, the teacher set out a petri dish with a culture of bacteria for the class to observe. I really do not remember the "lesson" I was supposed to take from this demonstration but what I do remember is that the bacteria population increased until the nutrients were depleted and the toxins from their own waste started killing off the bacteria. I think I see a parallel. I sometimes wonder if humans are acting any smarter than bacteria with respect to managing population, natural resources, and pollutants.
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The "bad thing" here IMO is lack of planning. If you have assets that could be at risk that you want to pass on to heirs, buy long term care insurance. I believe most people do not even want to think about stuff like that until it's too late.
They are largely to blame. The baby boom was their doing. It should have been obvious by 1950 that having 3+ kids would have major negative ramifications for future generations. But they had 3, 4, and 5 kids anyway, often with the reasoning that they needed lots of people to take care of them in old age. Consequently, many of my friends do not have kids, in part because they can't afford them.
The Great Generation created the Superfund sites. My generation is cleaning those up at great expense, and not benefiting from the cost savings of creating new ones. The Great Generation cut down almost every last remaining old-growth tree, and poisoned the oceans and the animals. That generation exploded the federal budget deficit and to this day the ones still alive benefit from that debt, having paid back only a small fraction of it, the rest to be paid in full, if only by loss of standard of living, by their descendants. The Great Generation did a lot of truly great things too, but overall their track record is not pretty.
Wow! You have a very cynical point of view.
The Axis industrial base was severely damaged during the war because that's where they were making tanks, airplanes, rifles, bullets, etc. The U.S. was trying to win a war, not eliminate competition in the marketplace! I do not understand your assertion that the "....U.S. destroyed manufacturing facilities of its competitors ... even after those countries were neutralized."
Yes, there was a baby boom, peaking at about 118 babies per 1000 women between 1957 and 1962, but you guys aren't doing too shabby pumping out 67 babies per 1000 women right now. Your connection between the post WWII baby boom and not being able to afford children today is unclear. Maybe just to me.
The so-called "greatest generation" did not invent the clearcut, nor the chemical dump, but it was while they were at the helm of running our country that the EPA was created. Perhaps a more accurate perspective is that they inherited generations of bad environmental practices, but they were the first to be aware of the problem and to start to turn things around. It is also interesting to note that the Superfund site closest to my residence, Wyckoff Eagle Harbor, was created in 1903, a good 15 to 20 years before the "greatest generation" was even born. Your all-inclusive statement " The Great Generation created the Superfund sites....." is inaccurate.
By the way, I have no stake in whether the so-called "greatest generation" gets trashed or not. But I do think the accusations should be accurate.
References:
Wyckoff Eagle Harbor
Birth of the EPA (December 2, 1970)
Demographic Trends in the U.S.
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It's a bad thing because it shouldn't cost $5000/month. That's criminal. Regardless, I can understand how for some, if it's not their money or a family's member's money they'd probably prefer them to lose it than to have tax dollars pay for someone else's health care, but when it happens to a parent or other loved one they might feel differently.
BTW, a lot of these people do plan ahead, paying insurance for months on end for years and years, but then they miss a payment and that's all it takes. Is it their fault, yes it is, but sometimes you have to look at why they missed that insurance payment. Have you ever met someone with dementia or Alzheimer's? They forget things...like paying bills or they lose the ability to make reasoned decisions...like why they should be paying bills. There's not a thing their children can do about it either until the situation gets so bad (and that's way beyond the not paying bills stage) that they can get a court to grant them guardianship --and that process is no picnic either.
Finally, it's worth pointing out (esp. on this forum) that the people who didn't bother to save a penny during their lifetimes and did things like buy houses and cars they couldn't afford end up with Medicaid from day one.
That is one of the reasons why I am a proponent of some sort of national health care plan. Canada's program doesn't work very well, but Austrailia's does.
Everyone should at least have an insurance company to negotiate for them. I saw a bill recently for a $76k hospital stay that the insurance company negotiated down to $11k. If you don't have insurance you are run through the ringer. There is a cynical attitude in medicine that if you are paid your billing rate then you are not billing enough.
On a side note, an Austrailian friend of mine thinks that paying to see a doctor when you are sick is just a strange as paying for the police when you are robbed.
Business interests get entwined in war efforts, even defensive ones. The bombings of Dresden, Tokyo, Hiroshima, and Nagasaki were all unwarranted overkill. They most logical explanation is that these were for-profit actions. These bombings and other overkill had the effect of solidifying the US as a superpower, a position from which it greatly profited.
Women have to pump out some number of babies or else civilization is dying out. A growth rate somewhere north of 2 kids per couple is eventually devastating to a society. Having 3+ kids when the odds of them all reaching adulthood is good is to dump a giant problem on future generations.
The more people, the greater the demand for resources, the higher prices across the board go. Kids were way cheaper in the Great Generation's time. They might still be affordable today if 3, 4, or 5 kids wasn't the norm for the Great Generation. For example, people might be able to pay for a college degree working part time through college, like my parents did, rather than taking out large debilitating loans.
Agreed.
True, they didn't create all of them.
Still, there is great inequity. A survivor of the Great Generation today gets Social Security payments, and the benefit of other services like Medicare, far in excess of what they contributed, even though many could easily afford to pay their fair share, having benefited from a huge run-up of stock prices and property values due in large part to their generation's massive federal borrowing and other delayed payment schemes. Meanwhile the people paying for their Social Security payments are unlikely to see any of their contribution returned to them. Zero %!
I actually agree with most of what you say, with a different perspective. I look at the so-called "greatest generation" as being unlucky enough to grow up during the great depression and having to participate in WWII but lucky in that they were the first in line to benefit from the prosperity resulting from being part of the dominant world economic power after that war. That is their place in history. So be it. It could have gone another way.
I've heard the opinion that the atomic bombing of Hiroshima and Nagasaki was unnecessary before. All I can say to that is that you would probably have a way different opinion about the necessity of bombing those two cities if you were one of the American infantrymen scheduled to invade Japan back then. Japan was not going to surrender. Bombing those two cities made them reconsider. Those two atomic bombs ended the war and saved tens of thousands of American soldier's lives.
With respect to U.S. family size, the transition away from an agricultural economy had more influence toward smaller families than anything else IMO. My mom grew up during the 1920's and 1930's and came from a family of twelve children. They lived on a farm in virtual poverty. You needed lots of kids to help work the farm back then.
According to the U.S. Census Bureau, the U.S. population is about 303,260,000 right now with:
One birth every........................................ 8 seconds
One death every....................................... 11 seconds
One international migrant (net) every......... 30 seconds
Net gain of one person every..................... 13 seconds
You feel that the so called "greatest generation" is receiving an unfairly disproportionate amount of benefits from programs such as Social Security and Medicare. I do not know how to respond to that. I can verify that buying a home was easier for that generation as I have found records that indicate that the one and only home my father bought cost about 1.3 times his annual salary. I think that may not have been that unusual back in 1968. I question your assertion that they benefited from "...a huge run-up of stock prices and property values due in large part to their generation's massive federal borrowing and other delayed payment schemes..." Note the fact that the DJI remained below 2000 until 1986. Other than the recent real estate bubble, of which this blog is supposed to be about, real estate values have pretty much kept pace with inflation.
Note how I steered this thread back to the real estate bubble
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Folks over 50 probably had more cash to do that with than anyone else. The S&P tripling and the Naz going up 8-fold was a monstrously huge wealth builder - provided you had some to begin with.
My guess is that boomers and before were very well positioned to profit from that, and any other benefits or stumbling blocks were overwhelmed by that. It also positioned them to be afford afford a big house or three over the last decade.
That certainly had some effect on the speculative fervor we've seen.
When you are the first to build nukes you need to demonstrate their deadly force, if you will be able to use the fear of such death to become a superpower and make the incredible amounts of money that come from that position.
You mean that they had to cause massive problems for future generations, to eek out a living themselves? If so, I agree, that's what they did. They did what they felt they had to do, I just wouldn't call a generation that did such things "Great".
Yes, it's increased over 600% in 21 years, and about double that in 25 years or so. That's the huge run-up of stock prices. The Great Generation and early baby boomers could just invest in the market, then sit back and let the members of the rest of the population boom do the work and pay the majority of their Social Security and Medicare benefits. If you and everyone else has 5 kids and society does not collapse in your lifetime, you'll likely get a free ride beyond age 50 or so. But life will be hell for your descendants at some point.
Yeah, getting back to that, I hope that the generations running the show today can somehow bring sustainability to our country, including housing. Bubbles will probably always occur to some degree, but we shouldn't employ strategies (like having 3+ kids) that virtually guarantee the eventual collapse of our society. A generation that manages to effect such sustainability would be the first one that could truly be called "great", I think.
Markor - My uncle was at Pearl Harbor when it was attacked by the Japanese. It must have been a life-changing experience and he never wanted to talk about it. How would have things been different if the Japanese had the atomic bomb at that time? Since the intent of that raid was to destroy the U.S. Navy by surprise attack, I'm sure they would have demonstrated great moral restraint and refrained from committing crimes against humanity by not using the bomb during that raid or later conflicts. If you believe that, I think you may need recalibration. We were incredibly lucky to be the first to develop the atomic bomb and we used it to end a war.
The U.S. bombed the hell out of Tokyo and other major cities with incendiary bombs before using the atomic bombs. 15 square miles of Tokyo burned, 100,000 killed and another 200,000 killed by incendiary bombing of other major cities. 300,000 dead, miles and miles of their major cities burned to the ground and still the Japanese wouldn't surrender.
The people of the United States weren't willing to quit either. Aside from the attack on Pearl Harbor, 50,000 Americans were killed in the Pacific. Think about how upset we were over the 3000 killed in 9/11. Multiply that 15 fold for the U.S. and 100+ fold for Japan, throw in a war that had already killed over 50 million, and you can begin to understand how people felt.
You're stuck with two nations who hate each other, each having already lost hundreds of thousands of lives in the war, and both still hell bent on continued killing until the other side surrenders. The logical reason to use the atomic bomb was to end the war as quickly as possible with as few American casualties as possible. That said, I bet that aside from any logical reasons, emotions played a role in the decision as well.
The war already proved we were a superpower, and if necessary, a non wartime demonstration of the atomic bomb would have further driven that point home to any nation who doubted it. The logical reason was not profit, we aren't perfect, but we aren't so horrible we bombed Japan just to make some money. WWII was terrible, but it wasn't our idea; we didn't start it.
btw...why did Japan attack Pearl Harbor?
Because we cut off their supply of...oil.