Getting ready for the New Normal

When looking at the future in light of the recent election it has become clear to DK and me that we are not living in the America of our childhood. The fact is we now live in a country where 52 percent of the population takes more from the government then the government can afford. That includes social security and Medicare as well as other entitlement programs.
I don’t want to get into a political debate – it is what it is. Most of us here on the forum know how we got here while others have blinders on. No matter, it’s going to impact us all.

Anyway, DK and I are looking at an additional tax bill of at least $300 a month if all of Obama’s wishes come true and only the GOP house stands in the way. Unfortunately, that House can’t stop taxation through government regulation, i.e. the EPA. Our real income has shrunk $3000 a year over the past 4 years and that continues unabated due to inflation and the increase in energy due to Obama’s plan to have “energy necessarily skyrocket.” Oh and I can’t forget the “cost savings” of Obama care. There is no debating this is going to happen. We can’t avoid it; we can only mitigate the situation.

We have decided that we will begin closing our pending spending gap – nowhere near a production of our own choosing – by cutting back on things that once were normal but now are a luxury.
First to go will be the land phone line. We hardly use that number and although it will be a pain having to change all our contact points at the bank and other businesses that’s $ 50. It’s something we have been thinking about doing anyway. Also to go will be the home 800 number we pay $10 a month for so that our kids can’t not call us to tell us they will be late or need help due to unforeseen problems. In the age of cell phones that’s a perk we can do without and not feel.

Next up is the household expenses. We will hold down our energy use as much as possible and repair more items before replacing them. This may be tough because many things are now produced with the repair by replacement mentality. Think about it, how many TV repair shops are around anymore. I won’t be getting the roof done quite yet and I will have to think twice about doing any more landscaping in the yard. Things I would have contracted out to do will be done by us or not be done. A car to replace one of our 10 year old Corollas is on hold, too. Oh and cable TV is gone already. We will hold on to the internet if we can but unlike Uncle Sam we can’t and won’t spend money we don’t have nor will the law allow us to.

Additionally, my regularly scheduled trips to the hair dresser are coming to an end. That means I will wait longer between cuts and end the coloring I enjoyed to disguise my advancing age.
We will have to watch our food dollar more closely, buying less choice cuts of meat and less expensive vegetables. I have a pressure cooker and next summer we will buy in bulk at the farmers market and can some food.

These things are all easy to identify and not particularly painful. The next round of cuts will not be so easy. My question this evening is what is your family considering doing without to meet the increased cost of living and taxation of the new normal of life in the United States under the socialism of the left? Have you even thought about it? How is my cutting back going impact the situation for the producers still producing? Welcome to the new normal.

We have gone through similar cutbacks here. It is also clear to us that our children will have a tough go at living life as well as we did. The American dream of raising children who will all have it easier and achieve higher standards of living then mom and dad is over.

I can foresee a time in the not too distant future when rising energy costs will eventually bring us to a point where for those other than farmers the American dream of living ever farther out in the country or moving out into the more distant outer suburbs will come to an end, as energy costs skyrocket and legislation oppresses and people are thereby forced to move closer to (or directly back into) larger cities and urban centers so they can partake of socialized mass transit in order to get to work or go shopping. That will oddly enough be a time when the generations long trend of falling inner city home prices (as measured ratio relative to suburban and country home prices) combined with rising country and suburban home prices suddenly reverses, and those stuck with homes in the undesirable outer and more remote areas will see their homes value plummet, as inner city houses begin to rise in price by ratio comparison. This virtually unforeseeable and massive inversion that will become the hallmark of the end of the American dream (and will usher in a totally new paradigm) will be purely driven by supply vs, demand, and this will be driven purely by the need to survive more locally vs. more globally within an environment of collapse.

The only way to avoid this will be to become pretty much totally self sufficient and thereby remain remote. Those relatively few with the ability and knowhow and skill set required to choose this option will be thankful that they did.

I hate to sound like the grumpy old guy that I actually am--no I don't--What I'm reading here(sorry Lisa) is people have come to the realization that the grandiosity with which we live our lives is in no way, shape or form "THRIFTY"--ex: loseing your 800 number Lisa??? fewer trips to the beauty salon??? The one phone system of YOUR choice??? Holding down on energy use??? Being more frugile with food shopping??? All these things describe how my Grandparents, parents & myself have always lived--within our means. NOW comes the mean part--we have become a society where people are paid way more then should realistically happen. I'm wondering if people wise up that prices of things might be curbed in accordance with thier actual worth--I commend you & DH & can only hope that many, many people follow suit. My kids never had a need that was not covered. If demand for all this glitz deminishes & paychecks become a bit more realistic possibly that supply & demand concept will take affect. All this getting back to a level playing field will not happen over night, but we didn't get here overnight--elem. school kids HAVING to have cell phones--come on Oh well, I suspect I've gotten myself in enough trouble for this early in the day.

I am going to go with fred on this one. I think we are going to go through a reset to where people are going to go back to the basics. Which they should have never left anyway. I wrench for a living and I see it in the shop. car comes in needing lets say $1200 worth of work. 5-6 years ago they would haved bought a new car, now the customer will fix it. If it makes finacial sense to fix it now, it made sense to do it 5 years ago.

I look at the amish who live with not much, they seem to be immune to these type of problems, cause they have money saved up and can weather the storm so to speak.





Eric

Expanding upon my reply post above, what happens when those (like me) who drive long stretches to work and back are suddenly faced with energy costs that cut so deeply into the wallet that they make it impossible to both make ends meet and commute one hour or more to work and back?

It's that supply & demand thing again--got city people that move up here from the cities--thier houses are set back about 100 yds from the road & they--after realizing that the mail lady was not going to door deliver thier mail ( yep, they actually went to the PO & tried to make that happen) get in thier SUV & drive the 100yds & back to pick up thier mail--WTF. I feel for ya Larry, but I know I didn't create this mess. Ps---I don't even want to get into fuel costs for Ag. equipment as far as keeping critters in hay & feed--which in turn produces the meat we eat & milk we drink, etc.

My wife and I had to cancel our health insurance for the first time in our lives. When OB announced that the insurance companies premium increases would be frozen and the gov would approve any increases, my carrrier announced that they were going to be raising our retirement group premiums before the freezes came into effect. In three years it went from 375 a month to $1,987 a MONTH. My entire net pension is $1,085 a month. Not being able to afford almost 2k a month for health insurance premium alone, we had to cancel and hit the open market. We couldn't get insurance because no one would take us because of pre-existing conditions. Just in time we went to Christian Healthcare Ministries which is like a health care cooperative. So far they have reimbursed us for the pneumonia she contacted along with bleeding veins in the throat. Now we have to start working on remaining bills. Our income is my pension, a small stipend from the church I pastor, and a part time job as a facility director for two youth centers.

My wife got sick with the flue in December 2011 and could never quite shake it. In April 2012 she caught double pneumonia and spent a week in the hospital. She almost died and only weighed 89 pounds when she came home. Her normal weight is around 105. Yep a tiny woman who lost a lot of weight over a 4 month time span. Resulting hospital bill $49K. In June bleeding varicose veins in her throat due to the coughing from the pneumonia had to removed with laser surgery. Another 5K. Then in September she had a hemorrhoid rupture. Resulting emergency surgery and another 8K. Colonoscopy to ensure everything is ok, $1,200.

We have already dropped everything you talked about except the cable and internet. We look at like that is our sole vice/luxury and were keeping that. We put our home up for sale and raided our IRA for 24k cash to buy a much much much smaller home only 10 minutes from the church where I am the pastor and 5 minutes from the youth centers that I am the director. With the real estate market In NE PA.we will have a devil of a time selling our home without taking a big loss. The property price inversion has already hit NE PA. We went from a five bedroom 2 1/2 bath almost 3000 sq ft to a two bedroom one bath, 1100 sq ft cottage type home built in 1895. This home has an oil fired boiler for hw heating and dhw but I installed our LL econo1 in the old chimney in the dining room. The home was built in 1895 to be heated by a coal stove thank goodness. We can heat the entire home with our little Econo 1 with no problem. We can't afford the fuel oil. She wanted to do her own hair color and such but I insisted she treat herself so once a month she goes to the shop for "the works" as we call it. We still use the oil fired boiler for DHW and emergency backup. We haven't had to use it for heating yet but it's there just in case.

We have two cars a 2005 toyota echo with 120k miles and a 1999 Subaru forester with 146K miles. Both are paid off but the nickle and dime maintenance items are starting. We are frugal with the electricity and water. We have gone to CFL's and watch light usage like a hawk. Sewer is a fixed charge each month. We ensure our medications are generic and come from the discount plan at Walmart and CVS pharmacy. There is not much left to cut except food and coal usage. We are blessed to be only 5 minutes from Reading coal company, 7 minutes from the Gilberton coal company, 15 minutes from the Harmony mine in Mt. Carmel and there are 3 other coal yards within 30 minutes. The engine doesn't even warm up between home and the Reading breaker. We buy coal by the 5 gallon bucket as needed. Right now we are burning about 10-12 buckets every two weeks. Only about 5 buckets a week which works out to around 16-$18 a week. I don't see how we can cut down much more there for any substantial savings without shivering. Since my wife got so sick we have to keep the house warmer. We keep the living room at 72 which holds the upstairs bedroom at 68.

Are we better now than 4 years ago? You do the math. When I do it, it comes back a resounding NO>

We couldn't get insurance because no one would take us because of pre-existing conditions.

And yet the very same law that froze those premiums forbid that from occurring.

Nevermind, that doesn't start until 2014.

Padre, my thoughts & prayers go out for your wife. Basically what I'm hearing is that you are living in the same financial world as everyone I know. EXCEPT for the healthcare thing--that needs to be dealt with & companies that do/did what yours did need to answer for that--in my opinion, that would be BO's responsibility being he is the one that put obama care on the table--my question would be--who's in bed with who on that one. Sounds like a much more realistic housing situation you are in now.

freetown fred wrote:Padre, my thoughts & prayers go out for your wife. Basically what I'm hearing is that you are living in the same financial world as everyone I know. EXCEPT for the healthcare thing--that needs to be dealt with & companies that do/did what yours did need to answer for that--in my opinion, that would be BO's responsibility being he is the one that put obama care on the table--my question would be--who's in bed with who on that one. Sounds like a much more realistic housing situation you are in now.

I completely agree. Its disgusting that we live in a country where over 60% of all bankruptcies are caused by medical expenses. Its disgusting that health insurance is a for-profit industry. Its disgusting that people lose everything and people die because they can't afford even basic medical care.

Davian wrote:I completely agree. Its disgusting that we live in a country where over 60% of all bankruptcies are caused by medical expenses. Its disgusting that health insurance is a for-profit industry. Its disgusting that people lose everything and people die because they can't afford even basic medical care.

The reason for high medical costs is of course the very insurance that Obamacare is mandating be taken to a higher level. Can you imagine the flip side of this, and foresee how inexpensive health care would become if its funding came from merely our personal abilities to pay, and doctors and hospitals etc... were thereby forced to live within the very same economic paradigm as the rest of us?

See here as to why this will most assuredly happen (whether any of us want it to or not): http://nepacrossroads.com/about23092.html

The health insurance carrier was AIG. Remember them? The government designated them as too big to fail so the government propped them up with the bail out funds.

The government as the major stock holder approved all the expenditures and approved the retiree health care premium increases.

The government helped with the creation of this crises with zero regulation of derivatives, and created our crises when they went to the government and said give us money after their stupidity resulted in the collapse of the American economy.

The government gave them the money and approved their rates so tell me who is supposed to do something about it? We already did that.

We re-elected Obama.

Don't even get me wound up on this.

The only changes that should be made to my original mathematical proof that health care will be forced to become affordable are that instead of using 4% for annual wage growth and 8% for annual health care cost increases, one must now work the equations using 2% for wage growth and 9% for health care inflation. Things are going to happen much faster than I had originally projected.

I'll provide the link here once again for those jumping in at this point and not following from above: http://nepacrossroads.com/about23092.html

Ya know, all your numbers are real impressive on paper, but I think are just a bunch of crap that the over thinkers come up with to impress whoever with something or other--really--am I the only dumb ass that doesn't understand graphs & projections, but I damn sure understand my monthly bills

The only way to avoid this will be to become pretty much totally self sufficient and thereby remain remote. Those relatively few with the ability and knowhow and skill set required to choose this option will be thankful that they did.

I have been saying this several times now. If you are not prepared to go off the grid right now, you are already behind the 8 ball. Indoor plumbing is nice, but an outhouse works fine in a pinch. Water can come from a well, or if need be, the lake. Cultivating land is hard work, but not difficult. And of course, harvesting meat. We are already scoping land in the north for a 1 room cabin where we live off the grid and off the land. Totally self sufficient. The only thing that is keeping us from doing it right now is the kids. I tried to talk her into Patagonia or Easter Island, but so far she isn't on board with that.

This is just another reason why I am hard on my children when it comes to academics and athletics. If they want to live a comfortable life when they are my age, they are going to have to focus 100% on it NOW. They can't wait, they won't have that option. They will have to pay for their own college, like I did, so I am already putting that into their heads. They had better get academic or athletic scholarships, or go the military route. WORK WORK WORK if they want to actually have what was once thought to be the American Dream. Never slow down, never stop, and never look back. My twin sons can begin martial arts training in 4 months (age 3) and can begin wrestling at age 4. They will. They will be mentally, physically, and emotionally prepared to handle what is coming. The 8 year old is already a stand out football player and was selected for the All-Star baseball team this past spring. The 5 year old is in gymnastics and is lifting weights. Both are excellent students. We preach a WIN philosphy around here, a trample the weak hurdle the dead attitude, because if you want success you are going to have to be willing to kick, claw, and bleed for it. The weak get eaten.

I am in the same boat as a few others here, I am lucky enough to have a job that cant go overseas and a union powerful enough to stop crazy insurance hikes. They came up, but not much, and I cannot be without insurance. My heart surgeries run about $160,000 to $180,000 each time, and I have been under the knife 4 times since 2000. My twins sons were born early and blue and spent 2 weeks in the NICU. We couldn't have done it without my insurance. I am grateful for that, but I worked hard and did what I had to do to get to where I am. And I will continue to do the same to keep moving up. Not to live in luxury, but to simply PROVIDE.

Those who work in the private sector or have their own businesses are going to be hurting. Like others, I do my own home repairs. 5 years ago I would have hired someone to refinish my dining room, paint, do the new trim, put new cupboards in, shelves, etc. Now I have learned (thanks pops!) to do it myself. 5 years ago I didn't have a basement full of food stores. Now I do. 5 years ago my ammo buys were for hunting season. Now they are a monthly thing.

We are facing tough, scary times. How we get through them is up to each and every one of us. We push forward, we get punched in the face and keep going, we do it because we are all AMERICANS and that is what we DO. We don't piss and moan about what we dont have, we go out and make it happen, and we help our neighbors if need be.

http://www.youtube.com/watch?v=dnZQYYvmImo

Back in 39 she was 26
The wife of a soldier tryin’ to raise four kids
On rationed out beans and watered down milk
Tryin’ to keep ‘em all warm with a patchwork quilt
That great depression ended about 1945
But grandma lived to be 92
See, tough times don’t last
Tough people do

Tough people pull themselves up by the bootstraps
When they hit hard luck
And they stay strong and they keep on fightin’
Like they don’t know how to lose
Tough times don’t last
Tough people do

Those talkin’ heads on cnn
Say we’ll never get out of this hole we’re in
Price of gas is up and the market’s down
And there’s a bunch of empty houses in every town
Well, i’d interrupt that program with a little headline of my own
This just in from the old red, white and blue
Tough times don’t last
Tough people do

Tough people pull themselves up by the bootstraps
When they hit hard luck
And they stay strong and they keep on fightin’
Like they don’t know how to lose
Tough times don’t last
Tough people do

I’ve been out of work since mid july
My bank account’s about bone dry
Been lookin’ for a job no luck so far
But I bought a little time when I sold my car
Well, I’ll go dig a ditch if that’s what it takes
Baby, somehow or another we’ll get through

Tough times don’t last
Tough times don’t last
Tough people do
Tough people do