re: What motivates people to live above their means?

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The decline In quality also masks inflation. While a socket set today costs about the same as it did 20 years ago, or cheaper... So we think "what Inflation, things cost the same". But, it's not the same socket set. Its almost impossible to find decent quality tools at the retail level.

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Indeed. When Walmart dropped their "Made in America" shtick back in the 90's, their effort to remain the "Low Price Leader" led them into a race to the bottom in terms of quality. Yes, they maintained their low prices, but at the expense of quality.

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Indeed. This country could use a healthy dose of deflation to cure a lot of its cultural ills. A painful process no doubt. But necessary in my view.

But our economic and monetary policies have not been about solid decision making for some time. It's all about pain avoidance.

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Now I'm no economist by any stretch of the imagination, but it has occurred to me that the fundamental problem with our economic system could be the Federal Reserve.