Wasting Money, American Style

There are many very useful tips about how not to waste money in this CNN/Money story, highlighted by the first item on the list where my guess is that people routinely pay four or five times as much as they should for little pieces of plastic sold at places like Target.

  • Expensive PlasticPaying full-price for tech accessories
  • Not using the data you pay for
  • Subscribing to Netflix and Amazon Prime
  • High-priced organic food
  • Leaving stuff crammed into a storage unit
  • Forgetting rewards, points and miles
  • Weekly visits to the dry cleaner
  • Your cable company’s modem rental plan
  • Failing to program your thermostat
  • Broad index fund you assume is a bargain
  • Insurance policies from different providers
  • Unspent funds in your FSA

Regarding that second item, I could never bring myself to  commit to the monthly charges for a smartphone (and we don’t really need one anyway), but I’m guessing that data plans are a huge waste of money for many, if not most people. They’re either paying for high-priced connectivity that they don’t use or they’re doing things on their smartphone that they could do on a laptop for a tiny fraction of the data cost.

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Higher Education in Greece

This Bloomberg story about campus life in the new, more austere Greece makes you wonder about the future of the Occupy Wall Street protests in the U.S. and about higher education in places like California where budget cuts will continue to be felt for years to come.

In the universities of Athens, the city where Plato taught and Cicero studied, campuses are covered in anarchist graffiti, stray dogs run through buildings and students take lessons in Swedish with the aim of emigrating.

Higher education in Greece, as in much of Europe, has been battered by the recession and austerity measures. Budget cuts of 23 percent since 2009 mean buildings aren’t heated in the winter, schools have slashed faculty salaries and newly hired professors can wait more than a year to be appointed.

Students say it’s hard to be hopeful with youth unemployment surpassing 50 percent and protesters seizing university buildings.

“People are pessimistic and sad,” said Konstantinos Markou, a 19-year-old law student, speaking in a lobby at the University of Athens, where dogs fought nearby and students say drug dealers and users congregate. “The sadness is all around the air.”

As universities in Greece reduce salaries and slow hiring, young academics are rethinking their careers there, said Leonidas Karakatsanis, 39, who received his Ph.D. in political science last year from the University of Essex in England and has a research fellowship at Panteion University in Athens.

“My initial plan was to spend some years abroad and return back to Greece,” Karakatsanis said. “Now it seems like it’s impossible to return to Greece. I’m starting to imagine myself living abroad for the next 15 to 20 years.”

While no one is expecting any U.S. states to follow the path of Greece, there are already some important parallels, namely, how policy makers continue to pass on a disproportionate share of the pain to the younger generation who have little political power and how people are adjusting to recent changes by relocating within the U.S.

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Nothing to See Here… Move Along…

Now, admittedly, long-term projections about economic growth and the rise in government debt are notoriously unreliable, but, nonetheless, the data in this chart from a new Mercatus Center report is a little shocking. I mean, it’s like we’re not even trying.

Fast Growing Debt

… and I guess, since it’s an election year, there won’t be much of an effort to do anything about this until after all the voting is done in the fall, if then. Oh well, as long as the Federal Reserve keeps buying Treasuries, we shouldn’t have any problems…

Greek Economy Now Poised for … Something

In this commentary at the Telegraph today, Ambrose Evans Pritchard seems none too optimistic about the chances of an austerity-fueled economic revival in Greece, citing the rather shocking comparison to the U.S. below about recent job losses.

In November alone 126,000 Greeks lost their jobs in a country of 11 million, equivalent to three and a half million Americans in a single month. The unemployment rate jumped from 18.2pc to 20.9pc.

This has not yet fed through into social breakdown. Greeks receive unemployment support for an average of thirty weeks, with a ceiling of €454 a month, according to Professor Manos Matsaganis of Athens University. Those with civil service tenure are placed on labour reserve for two years at half their basic pay, or a third their actual pay.

Once these cushions are exhausted, Greeks are on their own. The monthly ratchet effect will then become painfully evident. It is why the Orthodox primate Hieronymos II warned in a letter to the prime minister that ever further doses of the same “deadly medicine” is becoming dangerous.

“The voices of the desperate, the voices of Greeks are being provocatively ignored. Fear is giving way to rage and the risk of a social explosion can no longer be ignored by those who give orders and those who execute their lethal recipes,” he said.

Anyone looking for alternative solutions to what ails Greece should consider a recent comment by Jeremy Grantham about central bank policy: “Well, I wouldn’t start from here”.

When the government accounts for 40 percent or more of a nation’s GDP, you’ve basically purchased yourself a one-way ticket to a much lower standard of living and, if you haven’t already done so, have a look at last week’s New York Times story – The Way Greeks Live Now. I finally got around to reading it the other day and it’s well worth a look.

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The Greek Debt Deal is Done … For Now

There’s no telling how long it will be before this latest deal goes awry due to the Greeks not holding up their end of the austerity bargain, but, for the time being at least, there are lots of sore arms in Brussels from everyone slapping each other on the back for a job well done.

It’s almost comical when you think about it… They’ve been haggling over the level of Greek debt-to-GDP eight years from now after the deals and promises that they previously agreed to over the last two years have all proved to not be worth the paper they were written on.

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He Doesn’t Sound So Crazy Anymore

As it turns out, that “giant sucking sound” ended up coming from China, not so much Mexico, and it’s almost quaint to think about Ross Perot’s concern over the national debt back when he ran for the nation’s highest office in 1992 and we only owed about $4 trillion.

From the Mike Thomson archive at the Detroit Free Press.

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