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40% of Americans can't cover a $400 emergency expense

money.cnn.com

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Re: 40% of Americans can't cover a $400 emergency expense

#61

Post by onecooldev24 »

twinkletwinkle wrote: post #29
Meegul wrote: post #21

Earlier quoted context omitted.

I wonder if that's tracked to inflation. A $400 medical expense from 2013 is likely closer to $500 today, which might account for the difference from 50% to 40%.

The BLS calculator ( https://www.bls.gov/data/inflation_calculator.htm ) says $400 in 2013 is ~ $430 today. Seems unlikely to account for that much of the change.

Govt inflation numbers represent a portfolio consisting of all commodities in equal quantity. But if you hold a portfolio of iPhones, Toyotas, and etc (assuming they are non depreciating assets) that number would double very easily.

Re: 40% of Americans can't cover a $400 emergency expense

#62

Post by AnimalMuppet »

cryptoz wrote: post #3

This makes it clear why our current capitalism doesn't work. The ruling class / rich and wealth people and businesses could extract more wealth out of the middle and lower classes than they do now, if the lower classes were more stable and secure. In the US especially, but nearly everywhere, there are hoards of people trying to lower or eliminate social services, basic science research, etc, with the dog-whistle clai…

I have yet to see a UBI proposal that provided non-trivial amounts of money and yet was not simply financially impossible.

For example, there are over 300M (300,000,000) people in the US. To provide $1000 per year would require $300B. But that's less than $100/month. If you're homeless, that might be enough that you don't starve. But it's not enough that you can go to a doctor and eat. It's sure not enough that you can pay rent so you can get off the street.

If you make it $1000/month, now it's enough money to actually help people. But it also costs $3 trillion a year. That's twice the current Federal budget. So either taxes have to be three times as high, or they have to be twice as high while we eliminate every other thing that the Federal government currently does.

I don't think raising taxes to that level is possible, politically.

The usual answer to this objection is that the government can simply print money. Yes, they can. So could Venezuela's, but that didn't work out very well...

I think the solution is going to have to come from a change in society, not from a change in government programs. I think the rich are more often blissfully ignorant than they are evil oppressors. Things may start to change when the rich actually know some poor people, and can see the way society's structure looks through their eyes - when they can feel the pain it causes to people that they know.

Re: 40% of Americans can't cover a $400 emergency expense

#63

Post by dragonwriter »

cryptoz wrote: post #3

This makes it clear why our current capitalism doesn't work. The ruling class / rich and wealth people and businesses could extract more wealth out of the middle and lower classes than they do now, if the lower classes were more stable and secure. In the US especially, but nearly everywhere, there are hoards of people trying to lower or eliminate social services, basic science research, etc, with the dog-whistle clai…

> This makes it clear why our current capitalism doesn't work. The ruling class / rich and wealth people and businesses could extract more wealth out of the middle and lower classes than they do now, if the lower classes were more stable and secure.

The goal is not to maximize wealth, but to maximize power over others. Insecurity in the working class does not increase the maximum extractable wealth for the capitalists, but it does increase the power that the capitalists can exert over the working classes because security creates the practical freedom to not knuckle under.

Re: 40% of Americans can't cover a $400 emergency expense

#64

Post by twblalock »

Florin_Andrei wrote: post #45
johnm1019 wrote: post #2

I think we as a nation should consider this an issue of national security. This type of financial instability in such a large percentage of the population could lead to making short-sighted or bad decisions in tough times, increased violence, increased rates of incarceration (both of those increasing the cost of government for all), among many other things. The reasons for it are multi-faceted I'm sure. I hope voters…

I cannot possibly comprehend how could anyone consider this situation and go "yeah, this is surely stable in the long run".

In the historical long run, few people have ever had financial security until the 20th century. People have much more financial security now than in, for example, the 19th century when there was no welfare safety net or bank deposit insurance.

Yes, it sucks to have trouble coming up with $400 for an emergency. But it's not a serious threat to the ongoing stability of society.

Re: 40% of Americans can't cover a $400 emergency expense

#65

Post by ralusek »

zeth___ wrote: post #44
ralusek wrote: post #31

Earlier quoted context omitted.

But personal responsibility is actually an important concept. It is completely unacceptable to not have $400 on reserve for an emergency as a functioning adult. That is a situation that can only be achieved by poor decision making and a lack of personal responsibility. Any strategy that is employed to remedy this has to contend with the fact that the individuals who need to have this situation remedied for themselves…

Try being black in a ghetto. What you mean is that a college educated young white male in his 20s/30s will have $400 in spare change around the house. Because we can't be bothered to keep track of $50 notes we keep around for pizza.

What exactly about being black and in a ghetto prevents you from gathering $400? I have worked multiple minimum wage jobs before without even being on any social welfare. If you are on social welfare, receiving food stamps, affordable housing, etc, you absolutely have the capability to provide yourself with an emergency buffer, even on minimum wage.

Re: 40% of Americans can't cover a $400 emergency expense

#66

Post by fhkatari »

projectileboy wrote: post #4

Wealthy investors are happy to tell founders that a smaller percentage of a bigger pie is a better deal, but then seem not so happy to make their percentage smaller in order to increase the size of the pie for society at large.

Not sure why you got downvoted. Upvoted

Re: 40% of Americans can't cover a $400 emergency expense

#67

Post by magicalist »

integration wrote: post #48

40% of America’s lowest-income families’ consumption goes to luxuries. The bigger problem is American’s terrible spending habits not lack of real income. https://www.google.com/amp/s/www.marketwatch.com/amp/story/g...

Those aren't luxuries as the word is often used.

> For its part, the Deutsche Bank report explicitly defined luxuries as goods or services consumed in greater proportions as a person’s income increases and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.

> It’s worth noting that by the specialized nomenclature of the dismal science, even eating at McDonald’s is a luxury — that is, we do it more as our incomes rise — while smoking and lottery-ticket buying are categorized as necessities.

Re: 40% of Americans can't cover a $400 emergency expense

#68

Post by dv_dt »

ralusek wrote: post #31
sjg007 wrote: post #19

Earlier quoted context omitted.

We should but you know personal responsibility and all that jazz. The wealthy only care when the pitchforks come out. The biggest achievement of the wealthy has been to convince the middle class to eat itself.

But personal responsibility is actually an important concept. It is completely unacceptable to not have $400 on reserve for an emergency as a functioning adult. That is a situation that can only be achieved by poor decision making and a lack of personal responsibility. Any strategy that is employed to remedy this has to contend with the fact that the individuals who need to have this situation remedied for themselves…

The overhead margin of basic life costs are much higher when one is poor then one is wealthy. It's an even higher overhead when trying to access our ever shrinking safety net with its perverse incentives and a high time and hassle factor. Blaming the victim for being poor is both ridiculous and counterproductive. You should wonder instead why basic personal finance skills aren't on any National education curriculum if its such a basic needed skill. (and I agree it is!)

Re: 40% of Americans can't cover a $400 emergency expense

#69

Post by zeth___ »

maerF0x0 wrote: post #34

I had a coach that when I'd ask about how to get out of tricky situations he'd often respond with something along the lines of "Bro, you f'd up a long time ago"... I don't think 40% is some magic number to begin hysteria. Neither is $400. Selling something to cover your expenses might be a blessing in disguise if the thing you sell is a liability in the first place (ex: a car you cant really afford). My observation o…

Unfortunately if we did this we would be in a much deeper hole than the great depression. The economy only works because people have been trained for 80 years to buy things they don't need, throw them out when they shouldn't and replace them with pretty much exactly the same thing they got rid of.

This might be a bad state of affairs to be in, but before we go trying to change people we need to change the system. Else we will be looking at Hitler as a moderate who had some reasonable national policies.

Re: 40% of Americans can't cover a $400 emergency expense

#70

Post by Meegul »

twinkletwinkle wrote: post #29
Meegul wrote: post #21

Earlier quoted context omitted.

I wonder if that's tracked to inflation. A $400 medical expense from 2013 is likely closer to $500 today, which might account for the difference from 50% to 40%.

The BLS calculator ( https://www.bls.gov/data/inflation_calculator.htm ) says $400 in 2013 is ~ $430 today. Seems unlikely to account for that much of the change.

Yeah that's not too big of a change. Medical expenses, at least measured by national health expenditure per capita, have grown about 17% since then [1]. An additional 17% on $400 would be ~ $468. That number could be enough to account for some of the difference. Of course, medical expenses are by no means the only type of emergency expense, and what you've said about inflation as a whole is still true.

1: https://www.statista.com/statistics/184955/us-national-healt...

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