Greg, a reader, posted a comment on a post that started with the following line, “I think the issue is that a lot of people just don’t see the long-term consequences of their actions.”

The comment was related to a post I wrote entitled, “Everyone Has A Vice” and was talking about something else but it gave me some food for thought.

What really bugs me about PF Blogger “advice” that starts off with “Don’t buy a new car” is that the writer really hasn’t bothered to stop and think things through thoroughly.  In essence, many bloggers don’t think about the long term consequences of their suggestions.   Most PF bloggers will easily whip out some calculations and illustrate that if you start investing at age 18, with xxx amount of money, you’ll have xxxxx amount in 40 years.  “Think about the long term consequences of not investing early”, they’ll say.

But on the flip side, these same PF Bloggers completely forget how an economy functions and dole out advice like “Don’t buy a new car.”

What are the long term consequences of that advice?  Let’s walk through it.

1. Everyone stops buying new cars on the advice of pfbloggers because this will supposedly make them rich.

2. GM, FORD, Toyota, etc stop making new cars because no one is buying them.

3. The Auto Manufacturers file for bankruptcy and lay off all workers.

4. With no new cars, dealerships nationwide close down and lay off workers.

5. Federal, State & City governments that relied on tax revenues from these industries lose tax revenue.

6. Federal, State & City governments furlough workers.

See the pattern?

Wait it gets worse…with NO NEW CARS on the market the PRICE FOR USED CARS SKYROCKET!   That’s right, it turns out that new car buyers, in essence, were subsidizing used cars buyers but now those new car buyers are buying up all the used cars to “save” money the used car market becomes red hot.

I’m not advocating that everyone go out and buy a new car and you should clearly live within your means but if your means include enough income to buy a new car then consider doing it.

Tomorrow I’m posting a theory as to why I think many PF Bloggers give this type of advice.  It’s just a theory but I think you’ll find it interesting and/or amusing.