Another turning point?

Generation Y getting hard finance lessons early:

One 28-year-old man who declined to be named because he is a hedge fund vice president said five years ago he kept about 10 percent of his finances in cash. Now, he keeps 70 percent.

Generation Y's views on money echo that of another generation — their grandparents. Many of those people learned the value of saving and frugality because they grew up in the wake of the 1929 market crash and the Great Depression.

By contrast, their parents — the Baby Boomers — were buoyed by several major bull markets, soaring home values and the proliferation of easy consumer credit.

From the comments:

"HAHA! Learn to balance a CHECK BOOK! Awww, the generation Y crowd has to learn financial hardship, boohoo.

Mommy and daddy got me a cellphone, and then couldn't afford their mortgage payments, I think i'll Text all my friends of what losers mommy and daddy are. Mommy and daddy bought me a car, I think i'll drive around till 2 am on friday night while mom and dad try to figure out how their going to pay for groceries. Mommy and daddy decided to sue the school board, when the teacher called me a moron for not learning anything, like who cares, I was to busy tweeting under the desk. It's not like i need to learn anything, when I can just google it at home with the computer mommy and daddy bought me.

Generation Y can go @!$%# itself."
...
"I'm one of the lucky few 4 in 10 people in Gen Y that has a full time job but am underemployed and living at home. At the rate I am going I will be lucky to be able to afford my own house at 40. I'm thankfully and gratefully debt free and have no intentions of trying to make the next step in life (wife, kids, etc) until I know I can absolutely afford to take care of such financially."
...
"Maybe the 30 year olds had grandparents that survived the depression, but most of the Gen Y'ers had great-grandparents that survived the depression. I doubt that's what taught them any lessons. If anything, it's watching not only their parents suffer now, but in general, they are living what their great-grandparents lived - witnessing the financial ruin of America's middle class. This is exactly why their great-grandparents were frugal - they too witnessed the financial ruin of the middle class. But more accurately, it's today's children, let's say ages 10 - 20, that are probably learning lessons that will hopefully stay with them throughout their lives. As for the rest of us, until we get the older baby boomers retired, nothing is going to change in this country. They brought about sex, drugs, and rock-n-roll, and then they went on to financially devastate this country. It's time for them to go. Since I was born in 1963, and am considered part of the baby boomer generation, albeit among the youngest, I can speak with authority."

It's about time. My generation, the Boomers, and Gen X coasted because of their great grandparents' and grandparents' frugality. They were lulled into thinking that the nanny government - aka taxes on the rich - would take care of them. Survival on this planet has never been easy and never will be. Hopefully this new generation will be more realistic.

PS The trouble with coasting downhill on this roller-coaster ride that we call human life is that going downhill requires a hard slog uphill.

PPS Those same frugal ancestors were also stupid enough to be fooled by the socialist Democrats like Wilson, FDR, LBJ and JFK - who BTW died 47 years ago tomorrow.

Why VAT stinks

From Ace's favorite fag, Gabriel Malor:

The value added tax is back in the news and worse, in the few days since Mitch Daniel's suggestion that the United States adopt a VAT, I'm seeing it proposed more and more from (so-called?) conservative commentators. Often, they pair a VAT with a flat income tax and suggest replacing the existing federal income tax scheme.

It should go without saying that the VAT is an exceptionally bad idea, whether it's paired with a flat tax or a fair tax or any other tax and whether it replaces the federal income tax or not. Whatever its merits, they are outweighed by its key features: the VAT obscures for the taxpayer just how much money is being sucked up by the government; it is prone to Congressional abuse; and it is, in the words of economists, "efficient."

Yes, you can put VAT on each and every sales receipt. But unless the taxpayer keeps and diligently tallies every receipt, he will have no idea what he's ended up handing over to Uncle Sam.

This feature of the VAT is a tax-and-spend liberal's wet dream because it keeps the taxpayer-voter in ignorance of how much of his property the government is appropriating over time. Even under the current complicated income tax scheme, the taxpayer-voter has a pretty good idea of how much of his annual income gets sent off to Washington, D.C. And he can then make reasonable predictions and demands and votes when Congress starts fiddling with tax rates. But for the average American, if Congress were to adjust a VAT, the question "how much does this affect me or my business" becomes difficult to answer. Again, unless the taxpayer-voter has been keeping track of his consumption.

And there, too, a VAT gives Congress even greater means to target disfavored industries and individuals. Progressive nannies can push for a higher VAT on soda and fast food. Social conservatives can push for a higher VAT on...er, morally questionable commerce. Other major targets: the oil industry (after all, they should pay more for being Gaia-raping capitalists); the pharmaceutical industry (it's for the children, somehow); and, without a doubt, Big Tobacco (for obvious reasons).

Economists laud the VAT because it is a "more efficient" means of collecting taxes. As a conservative, hell as a taxpayer, I am not in favor of more efficiency in letting the government take what's mine. I acknowledge the need for a government and the obvious necessity of paying for one. But simultaneous efficiency and obscurity are not on the top of my list for features of a tax scheme. I want what taxes I'm paying to be SCREAMINGLY obvious. And I want to be able to get that information any time I want, but particularly when I'm asked to elect or reelect these jokers in Congress. (In fact, it is for this reason that I support moving Tax Day from April 15 to the first Monday in November. Let's put Tax Day nearer to Election Day.)

In short, the VAT is exactly the type of tax scheme that conservatives shouldn't want. And pairing it with a flat income tax does not alter its key features, that is, it's patent deficiencies. It's disappointing to see conservatives using the Obama-spawned budget crisis as an excuse to propose a fundamentally awful tax scheme. Shame on them.