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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

#161

Post by alasdair_ »

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…

>It is completely unacceptable to not have $400 on reserve for an emergency as a functioning adult.

The problem occurs when there are MANY emergencies. You're about to get evicted, your car is broken down (so you're about to lose your job) and your kid is sick and you need a doctor but can't take the time off to get one.

>I will say this again. As a mobile adult, in the United States, to not have $400 on reserve for an emergency is simply not possible with proper decision-making.

Okay. The day your turn eighteen, your parents (who taught you very little and gave you nothing) kick you out on the street. You have no money (because they flat out stole it the day before you became an adult). Where does this magic $400 come from?

$400 is a LOT of money. The federal minimum wage is $7.25 before taxes. That's a week and a half of work without accounting for gas money to get you to the job or food to eat when you get there. After the basics (taxes, cheapest-possible rent, basic food, some kind of heating and lighting and a few other things) you're probably at the point where you have $10 or $20 left over.

Let's say you get sick, or disabled, or laid off. You are so fucked.

> Individuals at that level of poverty have national and state level food stamps, welfare, disability, affordable housing, rent control, minimum-wage laws, child-support, often social security, medicare/medicaid.

Have you any idea how long it takes to get disability? Years. And years. And it's not certain at all. What do you do in the meantime?

Even the other programs - they often fail the very people they are designed to help the most.

Child support? Again, have you any idea how many years it takes to get child support from someone who bails from their job every time the paperwork makes its way into the syste, and who never files a tax return?

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

#162

Post by zaksoup »

prewett wrote: post #156

Wow, everything in this thread is "those evil rich people, fleecing the poor." Quite aside from the fact that the target audience of this site can expect to make around 2X the median income of the US--meaning that we are those evil rich people--surely the problem isn't this one-sided. The poverty rate in the US is about 13% [1]; we would expect those people to not have any savings. That leaves about 33% unaccounted f…

I would push back on this bit about teenagers: > so they don't count as they aren't living on their own.

I think it's a significant assumption to make that parents would be able/willing to cover a random $400 expense. The study did not specify a specific type of emergency expenditure, just that it was unexpected. I can fully imagine a scenario where parents would cover hospital visits for a bad case of the flu, but not cover an abortion, or repairs to a car from an accident where the child was at fault.

The latter two examples still seem like fair 'unexpected expenses' for the child dependent making < $15/hour

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

#163

Post by arebop »

AnimalMuppet wrote: post #153
s73v3r_ wrote: post #132

Earlier quoted context omitted.

"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." The 2015 Federal Budget (I guess the last time we actually had and official one) was about $3.8 trillion dollars. The budget President Obama submitted on 2016 for fiscal year 2017 was about $4.2 trillion.

I stand corrected. I had $1.5T in my mind for some reason. Still, $3T more would be a pretty large increase. And there's exactly zero chance that a corresponding $3T would be cut somewhere else...

Anyway, there's a crucial difference between "financially impossible" and "politically feasible." It's important to distinguish this because what's politically feasible can shift over time; it's not interesting to talk about whether we can agree to build a perpetual motion machine but it might be interesting to talk about whether we should send a manned mission to Mars.

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

#164

Post by seorphates »

ralusek wrote: post #72
headmelted wrote: post #56

Earlier quoted context omitted.

Spoken as someone well north of the poverty line. The reason for some people not having the money around is undoubtedly poor decision making, but for a great many others they simply have no gainful employment, no prospects of obtaining gainful employment and are often trapped in debt spirals due to past financial desperation. I'm real happy for you that you're so far removed from their situation that none of this occ…

Being trapped in a debt spiral due to past financial desperation is just a way of iterating forward in the loop of bad decision making. What I am saying is that to enter financial desperation in the United States is not actually possible if you utilize the available social safety net and make proper decisions.

It looks like you believe stability is simply a matter of 100% good decision making and that lower middle class is just one bus fare and two transfer passes away. You're painting a picture with a brush as wide as your canvas and with only one color on your palette.

I think we are mostly products of our surroundings so, yes, good decisions can help a lot. It just seems placing that level of "blame" is counter-productive and just does not represent reality on the ground. Trapped is trapped, you used the word yourself. I'd wager you have little idea the sorts of life traps that are laid out there. Having debt is pretty easy even with a better than average stability matrix. A single hit with bad luck is simply made worse as the "socially permitted" trolls eat their prey where no "socially permitted" social safety net exists that could possibly save them.

What is that? Trickle-down blame? You got yours? I simply don't understand the economics of "it's your own damn fault" with the force of a gavel.

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

#165

Post by alasdair_ »

ralusek wrote: post #72
headmelted wrote: post #56

Earlier quoted context omitted.

Spoken as someone well north of the poverty line. The reason for some people not having the money around is undoubtedly poor decision making, but for a great many others they simply have no gainful employment, no prospects of obtaining gainful employment and are often trapped in debt spirals due to past financial desperation. I'm real happy for you that you're so far removed from their situation that none of this occ…

Being trapped in a debt spiral due to past financial desperation is just a way of iterating forward in the loop of bad decision making. What I am saying is that to enter financial desperation in the United States is not actually possible if you utilize the available social safety net and make proper decisions.

>Being trapped in a debt spiral due to past financial desperation is just a way of iterating forward in the loop of bad decision making.

Imagine you went to a crappy school where you spent most of your days trying to avoid gangs rather than learning anything. You did everything people told you to do and you applied to some for-profit bullshit college that accepted you. You signed some paperwork that you literally didn't understand the details of (because of said shitty school and parents who have never dealt with this situation before and for-profit colleges that explicitly set out to target people exactly like you). Now you have $50,000 in debt that you literally can't even declare bankruptcy on and no marketable skills. What do you now do?

To blame it all on personal responsibility degenerates into a No True Scotsman argument very quickly. It's the kind of overly simplistic thinking that makes thirteen year old kids think Ayn Rand had it all figured out and never think further than than her heroic fantasy novels.

(I admit, I actually really like Ayn Rand's philosophy if it's seen as an ideal, rather than something that is practically p[possible. Marx and Engels were also idealists and in their perfect world everyone would be happy too.)

Humans are not born with an innate understanding of optimal decision making and the power of compound interest. Our environment shapes us to a massive degree and you're discounting this.

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

#166

Post by dragonwriter »

jadedhacker wrote: post #136
dragonwriter wrote: post #120

Earlier quoted context omitted.

> Why do I have the feeling that most posters on HN who consider themselves the "middle class", actually fall well above of the middle quintile of household income and most are in the 5th quintile. Because middle class in a capitalist society is an economic relationship between the captialist and working class (characterized by mixed dependence on capital and labor, most archetypically the independent operator who su…

This is a concept I haven't yet seen a good definition for though I know it is rigorously defined. What is the difference between the bourgeoisie and the petit bourgeoisie ?

In discussion of capitalist economies, a rough definition (loosely following Marx) of the major classes is:

haut bourgeoisie (capitalists): those who own capital and rent labor to apply to it.

petit bourgeoisie (middle class): those who live by a combination of labor and capital, particularly those who apply their own labor (perhaps alongside a small amount of rented labor) to their own capital.

proletariat (working class): those who derive income mainly by selling labor to members of either of the preceding classes.

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

#167

Post by ravar »

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…

If this is an opportunity for change then what is a positive change that you would suggest?

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

#168

Post by mikeash »

integration wrote: post #113
georgrwasington wrote: post #95

Earlier quoted context omitted.

No it's not. Poor people live in food deserts and buy 5000 calorie dinners for $2 at Dollar General. It's hardly discretionary to try to feed yourself real food. Now let's tie in the cost of healthcare associated with eating cheap junk food and you've got a problem. This is like an argument with someone who denies global warming.

Unless someone is starving, spending more on food as income rises is discretionary. A proper food budget is stable, it should not change as someone earns more money. As someone who ate well on minimum wage, you’re not going to convince me low-income families can’t afford food in America if they’re properly budgeting.

I’m amazed that your personal experience was so representative that you don’t even have to consider that other people’s circumstances might be different.

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

#169

Post by [deleted] »

eanzenberg wrote: post #90
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…

Capitalism is the primary reason we're out of medieval times, thank you very much.

[deleted]

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

#170

Post by ryanwaggoner »

vkou wrote: post #54
gerdesj wrote: post #41

"More concerning are the 25% of Americans with no retirement savings whatsoever, according to the report." Is that true? What happens when those 25% retire or can no longer work? Ahh: https://www.telegraph.co.uk/finance/personalfinance/pensions... - not too bad - the US got a C, UK got a C+. Now back to the headline: $400 in available readies? You do have to start measuring somewhere when looking into poverty but it…

> What happens when those 25% retire or can no longer work? They eat cat food on their meager social security payments.

I’m skeptical that this happens much. It reeks of urban legend.

Now, I’m sure some seniors do this, but I suspect it’s due mental issues rather than fiscal concerns. Is cat food even cheaper than really cheap canned food?

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