RE: Mark Cuban, "spend it or lose it" idea.
May 18, 2020 at 12:10 pm
(This post was last modified: May 18, 2020 at 12:21 pm by Brian37.)
(May 18, 2020 at 8:41 am)arewethereyet Wrote:(May 18, 2020 at 3:30 am)Brian37 Wrote: An the other thing you might want to consider is that banks are not free, they are also businesses so when you deposit money into a bank you are helping bank tellers and loan officers keep their jobs too. So again, it is a matter of priorities to me and it makes no sense to kneecap people who are already struggling. If they can spend and save at the same time why is that a bad thing?
If people don't have money coming in they are going to use their savings, if they have any. That means the banks are going to have less held on behalf of their customers and therefore less to invest/use.
Banks also make money on the use of their credit cards and interest collected on things like mortgages, auto loans, and business loans.
People have to have money to pay those things for the banks to continue to make that interest income.
If people are able to save they certainly should but first things first.
Right now, helping people pay their housing, keep food on the table, and the lights on is the immediate need.
You, who don't have to worry about this, aren't the guy to listen to for financial planning.
Yes, people who lose their jobs if they have savings will use it. I don't disagree with that. Right now people are hurting, I agree.
My point is for those who do have savings, why put a string on that where they have to spend everything or lose it, if they have no money left from the government check, and they get cut off, they have to go right back to using their savings.
And again, this isn't just about poor people, this is also about the middle and working class. Many people DO save for the future, such as a house, or car, or college education for their kids. Those things are long term plans that get disrupted. If they get their savings wiped out then they are back to square 1.
I love the idea of bailing out the middle and working class. I think this is a good thing, for the short term. The only thing I object to is implying they shouldn't be able to bank what they don't spend. I wouldn't falsely assume everyone who has lost their jobs don't have savings accounts. If worker stability helps, then it matters that we don't put people in the position of getting wiped out. "Use it or lose it" doesn't keep people whole long term. It is just a temporary dingy in a tsunami.
And you keep skipping over the posts where I talk about priorities.
No, I don't have to worry about money, right now. But I do have to budget it over the next twelve years until I can collect social security. And that isn't including possible health issues, or a hurricane in the future that could wipe all that out. I also said I personally would not take the money if they sent a check to me. But if I saw my savings suddenly drastically sinking, I damned sure would take the checks. And again, banks are not free, they are businesses too. They have tellers and loan officers and financial advisers that depend on people depositing money so they can earn a paycheck too. Banks have to pay their employees too. They do that by earning interest of the money you deposit in them.
Please stop falsely assuming I disagree with everything you are saying.
You, "Workers need help now"..... I agree.
You, " People need their rent, mortgages, utilities paid now" I agree.
You, "People need to spend now to help out others, " Again, I agree.
But none of that is going to mean a thing long term if we don't put people into the position of having enough money to save long term. So savings matter as much as spending.
After this is all over if we go right back to the same value of our exploding pay gap and do nothing about that, we will be right back here again in another decade, maybe not a virus but certainly another recession.