Its seems a common theme that making minimum payments on credit cards is poor financial planning. So why is it ok for the federal government ? Is it good planning for congress?

I’m curious as to what percentage of the people have credit cards…

Ive never had a credit card

IMO those idiots should learn to run the government on what they take in, period. They have no business borrowing money.

Governments fiscal irresponsibility is a reflection of the fiscal irresponsibility of the populace

"
Approximately 75% to 82% of American adults have at least one credit card, and roughly 45% to 55% of all Americans carry active credit card debt by rolling over a balance from month to month. The average credit card debt per household in the United States stands at $11,507. When it comes to financial emergencies, only 48% of American adults have access to cash or savings to cover a $2,000 expense
"

Milton Friedman on 4 ways to spend money:

1) Your money on yourself (you’re careful about both cost and quality)
2) Your money on others (you care about cost, less about quality)
3) Someone else’s money on yourself (you care about quality, not cost)
4) Someone else’s money on others (you care about neither)

The last one is how government spending works

I have a hard time believing only half the population can come up with 2 grand in an emergency

The Federal government doesn't make minimum payments. Minimum payments slowly reduce the principal. The government borrows money to pay just the interest.

I taught economics for 33 years. A majority of Americans do not have cash to cover minimal expenses. Saving is a lost skill. Personally at one time that was us, due to our career change, a move, and a home purchase, two children, and the pay we received. When I started teaching our children qualified for free and reduced lunch, I would not accept assistance of any sort, my family, my responsibility. Our choice, but we paid off debt as quickly as we could, lived frugally, took extra woork, and in time gained economic freedom. Debt free, no debt with interest is good debt. Most will not do this today. Young people want to start out where their parents are after a lifetime of work.

We have had one credit card since my father passed away in 1985, while getting medical treatment in California, and I could not reserve an air flight without a credit card. Never carry over debt on this. So yes, this happens and is common in America today. Many people live paycheck to paycheck today. Many make poor choices and have to have it now, cannot and will not wait and save. It is good see businesses giving discounts for using cash these days. Some of my perspective.

I've got a coworker with a nice truck, big house, place up North and a bass boat. Couldn't go up north this weekend cause new wrestling shoes for his son left no money for gas in the truck. Borrowed to the max, and makes the minimum payments on everything.

I had a credit card since I was 18. Never paid a penny interest. Got rid of it 2 years ago and wouldn't go back. I don't care what kind of points and rewards they offer. Studies show you spend more with credit, weather you pay it off or not. Spending real money on individual items hits harder when it's not lumped into a sum payment at the end of the month.

The borrower is slave to the lender. That was written a long time ago.

I cut mine up yesterday after Savell told me to.

The national debt crisis is even worse than that. We are borrowing new money just to make the minimum payments.

"You never know who's swimming naked til the tide goes out"
- Warren Buffet

... and exposes their bait. lol
- Not Warren Buffet.

I read most people can't come up with a thousand bucks for an emergency....Only thing wrong with credit cards are the people abusing them. Pay the balance monthly and you're good, but that means people need to live within their means...not a popular concept, lol

So if credit card debt is bad, if half the country is dead broke, how is borrowing money to just pay interest on the national debt a good idea????? Is the dollar still a reliable indicator of your wealth?

Well of course its a bad idea, but you gotta remember, the gov't makes the money....too big to fail.

Show you how much money is worth, economists are saying you need a million bucks to survive your retirement...a million! who has that?, lol

More like 1.6 these days

here's a line from an article in Barron's this morning.

"A 65-year-old retiring today will need $185,500 saved to cover healthcare costs in retirement, up from $172,500 last year, according to Fidelity’s 25th annual Retiree Health Care Cost Estimate released on Tuesday."

And that is just healthcare costs

How many years expected after 65?

It is a great idea, if seniors get the wealth and leave the debt to their grand children. At least for seniors.

I THINK right now the average life expectancy of males in the US is about 84

AI says it is 76.5 and 81.4 for women.

I would say that the 1.6 figure would also be “just scraping by,,,”

If you actually want to enjoy retirement,,,,,

All depends on the person. My best friend and his wife are retiring at 30 with $1.2 million. Neither ever earned over 100k, they just lived like monks and invested in index funds. They're good at living frugally and are still happier than most people I know.

True

If you’re just waiting around to die,,

You can get away with less

There are two ways to have enough: obtain more or desire less.

When it comes to the debt conversation, it seems to me that it's the desire for more that leads people to have less.

I don't agree at all.

Retirement depends on how you prepare. Social security was NEVER meant to be your entire retirement income. Too many people don’t save, and expect government to come to their rescue. Social security, Medicare and Medicaid help but they won’t cover 100% of your cost of living.

Copy/paste

Social Security is a Ponzi scheme with one feature Bernie Madoff never had: the federal government will send armed men to your home if you refuse to participate.

Every working American pays 12.4% of wages into a system that holds zero assets on their behalf. The Social Security Trust Fund owns Treasury IOUs, meaning the government owes money to itself. When you pay in today, Congress spends that money immediately on current retirees and general expenditures. Your "account" is a political promise, enforced by statute, backed by nothing except the Treasury's capacity to tax future workers. Charles Ponzi ran the same structure in 1920 and went to federal prison for it. The difference is purely jurisdictional.

Free market economists succintly explained how this unravels. A pay-as-you-go system requires an expanding base of workers to fund a growing pool of retirees. In 1950, 16 workers supported each Social Security beneficiary. By 2024, that ratio sat at 2.7 workers per beneficiary, and the Social Security Administration's own actuaries project the combined trust funds reach insolvency by 2033. At that point, the law mandates automatic benefit cuts of roughly 21%. The math is not ambiguous. The program has been consuming its own structural foundation for decades.

You were never given a choice. No opt-out exists. Attempt to withhold your payroll tax and the IRS assesses penalties, levies your bank account, and ultimately prosecutes you. The moral weight of that coercion tends to disappear beneath softer language about "contributions" and "entitlements," but the underlying mechanism is identical to any other government extraction: comply or face force. Calling the payroll tax a contribution is calling a mugging a voluntary wealth transfer.

The cruelest part is what the coercion actually costs you. A 25-year-old earning $60,000 today who redirected their 12.4% payroll tax into a simple index fund over a 40-year career would retire with approximately $1.4 million in real assets, not a political promise subject to congressional revision every budget cycle. Instead, Congress gets the capital, allocates it to current political priorities, and hands you a benefit formula that the same Congress retains the legal authority to cut at any time. The Supreme Court confirmed in Fleming v. Nestor (1960) that you hold no contractual right to Social Security benefits whatsoever.

They built a mandatory retirement system where you own nothing, control nothing, and are protected by nothing except the goodwill of the people spending your money

A lot of people today dont give a crap what they owe when they die.
It is the new way.
They feel entitled and expect free stuff one way or the other.
They view work as a waste of time.

And they may be right.With AI coming you will soon see basic income for everyone and no one will have to work.Govts will tax AI and distribute it to the people.

W


White and spjones, are you talking about living ng off the interest without touching principal on the million +?

If you calculate the interest on 1.6 conservatively,,,, you’ll come up with 44-65k a year

In 5-10-15-20-25 years,,, the buying power of 45-65k is going to be greatly reduced

At that point,, it’ll be difficult to not dip into the principle

And yes, you can tweek the numbers for different/better outcomes,,,,


Fiat currencies have a 100% failure rate,,,,

Some just haven’t failed yet,,,,, but they all do

The government debt is the cause,,,,, every time

It’s the most serious problem humanity currently faces

No. The number I gave....1.6 mil is the latest guesstimate I can find that actuaries calculate is necessary to live through your retirement years. It is EXCLUSIVE of social security and is calculated by assuming a 4.7% annual withdrawal rate from your retirement savings...................

If you are willing to not live the same lifestyle as during your earning career, then you can probably figure on a bit less

Sometimes I wonder? I spend a bit of time around retired people and have yet to figure what they have to spend money on. I just got a 30% senior discount at the salvation army store. Highly subsidized health care would be the only real increased expense that retired people may have when they reach retirement. They should own their homes, have some form of reduced property taxes. I certainly could see some extremely dysfunctional people having a rough time in retirement, however, if that is the majority then that is a sad commentary on the average American.

If you find yourself running short in retirement you can supplement your income by being a walmart greeter or coon trapper.

"Baby Boomers hold $83.3 trillion in assets, over half of all U.S. household wealth.
Gen X accounts for $42.6 trillion, more than the combined $37.2 trillion held by the Silent Generation, Millennials, and Gen Z.
Millennials and Gen Z together hold just $17.1 trillion, making up 10.5% of total wealth—despite being the largest cohort by population size.
The Baby Boomer generation is arguably the richest in history, averaging $1 million in wealth per person in America."

Source: Visualizing America's Wealth.

It's tough being old, I need me a 30 percent discount.

Well for starters there is taxes and insurance.

Then there is hunting, fishing, trapping, grand kids, great grand kids. Home maintenance, carr maintenance

I don't know what it will cost to retire, I don't know how much money a guy will need. Every time I think about what age it goes up a year in my mind.

That's my plan for the lake cabin. Build it when I retire and put it on a 30 year plan. Kids can pay it of lol.

Who am I kidding I'm too cheap.