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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

#121

Post by redditmigrant »

nathanaldensr wrote: post #14
georgrwasington wrote: post #8

America is over. The class divide has surpassed any reasonable threshold and in time it will only further crystalize. This country needs an Elon Musk to replace every part of the government, which is itself a jobs program at this point. We do not live in "America" anymore.

I was with you until your Musk comment. We don't need more centralization of power; instead, we need de centralization--more local sustainability in place of the just-in-time global economy we live in now.

America or more specifically California has tried local responsibility for zoning of housing and it has created a crippling housing shortage. Local or centralized, sustainability comes from the right incentive structures.

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

#122

Post by skookum »

aarongray wrote: post #30
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%.

Sorry, but the recent inflation rate has been about 0-2% per year. A $400 medical expense in 2013 is about $430 today.

The inflation of medical expenses in the US significantly outpaces the standard measures of inflation that you're quoting, generally by at least 3%. The OPs estimate of $500 is much closer to reality than yours.

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

#123

Post by arebop »

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.

Why does it seem unlikely? I don't know the shape of the distribution but it doesn't seem implausible to me that a 7.5% change in the threshold amount would correspond to a 10% change in the population quantile.

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

#124

Post by lukeschlather »

integration wrote: post #76
magicalist wrote: post #67

Earlier quoted context omitted.

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 Mc…

It’s a better definition of luxuries. If someone is spending more on food, clothing, electronics as their income rise those things are clearly discretionary.

A rational actor defers maintenance when money is scarce. That doesn't make maintenance discretionary, just deferrable and indefinitely deferred maintenance eventually causes unavoidable, huge spending.

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

#125

Post by aarongray »

lukeschlather wrote: post #114
aarongray wrote: post #30

Earlier quoted context omitted.

Sorry, but the recent inflation rate has been about 0-2% per year. A $400 medical expense in 2013 is about $430 today.

Medical expenses are going up much faster than inflation. At least 4% annually I think. Maybe as much as 6-8% on average since 2013? I see varying figures, but definitely not 0-2%.

Average increases in nationwide medical expenses and inflations' effect on the average household are completely separate issues because the sickest 5 percent of the population consume 50 percent of total health care costs. The healthiest 50 percent only consume 3 percent of the nation's health care costs.

Source: https://www.thebalance.com/causes-of-rising-healthcare-costs...

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

#126

Post by aarongray »

skookum wrote: post #122
aarongray wrote: post #30

Earlier quoted context omitted.

Sorry, but the recent inflation rate has been about 0-2% per year. A $400 medical expense in 2013 is about $430 today.

The inflation of medical expenses in the US significantly outpaces the standard measures of inflation that you're quoting, generally by at least 3%. The OPs estimate of $500 is much closer to reality than yours.

See my reply here: https://news.ycombinator.com/item?id=17130287

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

#127

Post by dragonwriter »

lukeschlather wrote: post #124
integration wrote: post #76

Earlier quoted context omitted.

It’s a better definition of luxuries. If someone is spending more on food, clothing, electronics as their income rise those things are clearly discretionary.

A rational actor defers maintenance when money is scarce. That doesn't make maintenance discretionary, just deferrable and indefinitely deferred maintenance eventually causes unavoidable, huge spending.

Or just loss that doesn't manifest as spending. E.g., deferred health maintenance eventually causes death.

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

#128

Post by s73v3r_ »

integration wrote: post #76
magicalist wrote: post #67

Earlier quoted context omitted.

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 Mc…

It’s a better definition of luxuries. If someone is spending more on food, clothing, electronics as their income rise those things are clearly discretionary.

It's a definition that works for how economists talk about things, but is extremely out of phase with the colloquial definition. Hence the stated outrage from the parent on how the poor spend so much of their income on "luxuries", when that refers to different things than what most non-economists would define as "luxuries".

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

#129

Post by jadedhacker »

master-litty wrote: post #101
rndmize wrote: post #55

Earlier quoted context omitted.

Your post is optimistic to the point I choked on my coffee. Our economy is predicated on consumer spending; we have a whole set of industries built on the backs of poor financial decision making and being near-broke (payday loans, credit cards, overdraft charge reordering, debt collectors, etc.) all of which pull power away from desperate people and give it to others (now your landlord/phone company/ISP/etc have lega…

It's so childish putting optimistic people down. Our economy, habits, and mindset can change with a great deal of work and energy. People are becoming more connected than ever before, and with that we can build a new kind of social momentum. Hey, you're right, things suck now, but it doesn't have to be like this.

The piece you're missing is that none of this is a mistake, the entire economy is designed to do this. Apathy and hoping it'll get better will if anything make it worse (not that I'm implying that's your position).

The only thing that will make it better is demanding that things change. This means mass unionization, strikes, worker owned businesses, protests, leftist politicians like Sanders and Corbyn, and a whole program of fundamental goods provided free at the point of service like healthcare, education, and child care. We have a lot of work ahead of us.

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

#130

Post by somerando »

georgrwasington wrote: post #22
nathanaldensr wrote: post #14

Earlier quoted context omitted.

I was with you until your Musk comment. We don't need more centralization of power; instead, we need de centralization--more local sustainability in place of the just-in-time global economy we live in now.

My Musk comment was more about how much of NASA had turned into a jobs program than anything. Take a very simple example, the BMV. We've had good internet now for a couple decades and you still can't do basic transactions without going to the BMV in the middle of the day. Almost all other government agencies have been entirely immune to technological change as well. They are, jobs programs.

What is the BMV?
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