More idle musings - future lower standard of living

[leegs]

I think most of us here take it for granted that the foreseeable future will bring a 'lower standard of living' as the system recovers from (maybe) the excesses of the last 30 years.

For the sake of discussion, lets assume that we are talking about material standard of living, excluding other (more) important aspects of a happy and healthy life.

One of the primary reasons for this reduced SOL is / will be the much reduced use of debt, public and private, to create an artificial and temporary sense of prosperity. On the private side, I think of excess use of credit cards, home equity loans, and the like that have enable us collectively to drive fancy new gas-hogging SUVs, have multiple big screen TVs, jet around the country and world on vacations, etc.

Now consider someone who has lived very much in the mainstream, making a good middle-class income, but didn't avail themselves of all this easy credit to pursue the aforementioned goodies.

Assuming this someone is able to stay employed, and barring all sorts of other possible catastrophic events, to what extent do you think this person will see a reduced SOL?

I'm afraid that we will all get dragged down as the system resets, but I'm interested in other points of view.

[Jay]

Re: More idle musings - future lower standard of living

I think most of us here take it for granted that the foreseeable future will bring a 'lower standard of living' as the system recovers from (maybe) the excesses of the last 30 years.

For the sake of discussion, lets assume that we are talking about material standard of living, excluding other (more) important aspects of a happy and healthy life.

One of the primary reasons for this reduced SOL is / will be the much reduced use of debt, public and private, to create an artificial and temporary sense of prosperity. On the private side, I think of excess use of credit cards, home equity loans, and the like that have enable us collectively to drive fancy new gas-hogging SUVs, have multiple big screen TVs, jet around the country and world on vacations, etc.

Now consider someone who has lived very much in the mainstream, making a good middle-class income, but didn't avail themselves of all this easy credit to pursue the aforementioned goodies.

Assuming this someone is able to stay employed, and barring all sorts of other possible catastrophic events, to what extent do you think this person will see a reduced SOL?

I'm afraid that we will all get dragged down as the system resets, but I'm interested in other points of view.

I think the big question involves the stability in the transition to a new economy. If everything goes peachy, and that middle class person is able to maintain a job, then if they didn't avail themselves of too much credit it is tempting to think they will do OK. I think inflation is going to make even the rosiest projections difficult. The cost of all goods and of travel will likely go up greatly while wages stagnate. The middle class J6P who has lived well within their means is going to feel that pinch. An increase in taxes may make it feel more like a vise. Further government intervention, which is inevitable and will likely accelerate, is going to exacerbate inflation. So, we should all prepare for the pain and attempt to salvage as much purchasing power as possible while we can. PM's are still a raging buy to me.