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Why America's economy is soaring ahead of its rivals

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Re: Why America's economy is soaring ahead of its rivals

#491

Post by jandrewrogers »

giantg2 wrote: post #411
jandrewrogers wrote: post #386

Earlier quoted context omitted.

US Federal Reserve studies indicate that the percentage of US households with no excess income after necessary expenses (as distinct from "ordinary expenses" as a term of art) is on the order of 10-15%. This definition roughly matches most people's intuition of what "living paycheck-to-paycheck" means. That isn't nothing but it implies 85-90% of Americans are not actually living paycheck-to-paycheck. There is another…

Are retirement savings considered ordinary expenses? If not, that could be a huge gap in this understanding.

The criteria that makes a category of life expense "ordinary" (IIRC) is that the majority of households spend income on it, so it includes things like taxes, healthcare, and mobile phones. Typical American life as revealed by actual expenditure patterns, and BLS breaks each category down by income decile.

I can't find precise data on retirement outflows and there are many possible ways to account for it (e.g. is Social Security contribution considered saving for retirement?) but what I can find seems to indicate that the majority of Americans do save for retirement, which would suggest it is an ordinary expense.

The only category of "non-ordinary" that I recall being surprising was eating out at restaurants. I should know better, almost no one ate out at restaurants when and where I grew up, but my perspective has clearly been skewed over time by my own lifestyle.

Re: Why America's economy is soaring ahead of its rivals

#492

Post by bastloing »

luizfzs wrote: post #255

But is the majority of the population thriving? It is very misleading (at best) to say the economy is strong when a good chunk of the population live paycheck to paycheck. A handful of companies are thriving, but barely any of its employees.

Everyone I know is doing well and looking forward to the next 4 years. Just look at the stock market, which anyone can invest in. I started back when I was making $4 an hour, now doing very well.

Re: Why America's economy is soaring ahead of its rivals

#493

Post by joejohnson »

One of America’s biggest rivals is in fact the EU and a unified Eurasian continent. But luckily the ties connecting this continent literally blew up, the price of energy in Western Europe skyrocketed and it sent Germany (and thus the whole EU) into a recession. Even better, these “allies” are being forced to fund their own demise.

Re: Why America's economy is soaring ahead of its rivals

#494

Post by bpt3 »

nielsbot wrote: post #458
jandrewrogers wrote: post #386

Earlier quoted context omitted.

US Federal Reserve studies indicate that the percentage of US households with no excess income after necessary expenses (as distinct from "ordinary expenses" as a term of art) is on the order of 10-15%. This definition roughly matches most people's intuition of what "living paycheck-to-paycheck" means. That isn't nothing but it implies 85-90% of Americans are not actually living paycheck-to-paycheck. There is another…

So is your argument that there's no "affordability crisis" in the US?

The "affordability crisis" is mostly that recent college grads can't afford the lifestyle they are accustomed to in the location they desire with a job they want to work at.

As has been stated repeatedly in this topic, the median US household has more disposable income than the median in any other country. That doesn't sound like there is a national crisis to me.

Re: Why America's economy is soaring ahead of its rivals

#495

Post by Clubber »

samirillian wrote: post #428
luizfzs wrote: post #255

But is the majority of the population thriving? It is very misleading (at best) to say the economy is strong when a good chunk of the population live paycheck to paycheck. A handful of companies are thriving, but barely any of its employees.

It’s funny because right after Trump was elected there was an ft article about all the metrics that showed that poor people were doing worse in real terms. One ft author uses one index to prove one point another uses others to prove another point. I’ve noticed that divide in particular between ft standard sub (40/mo) and ft premium (80/mo) How much must I pay to not get consistently bullshat?

>How much must I pay to not get consistently bullshat?

You can't because you aren't the customer of news, you are the product.

Re: Why America's economy is soaring ahead of its rivals

#496

Post by swat535 »

jandrewrogers wrote: post #386
luizfzs wrote: post #255

But is the majority of the population thriving? It is very misleading (at best) to say the economy is strong when a good chunk of the population live paycheck to paycheck. A handful of companies are thriving, but barely any of its employees.

US Federal Reserve studies indicate that the percentage of US households with no excess income after necessary expenses (as distinct from "ordinary expenses" as a term of art) is on the order of 10-15%. This definition roughly matches most people's intuition of what "living paycheck-to-paycheck" means. That isn't nothing but it implies 85-90% of Americans are not actually living paycheck-to-paycheck. There is another…

Does this also account for things like Healthcare costs?

Re: Why America's economy is soaring ahead of its rivals

#497

Post by Spivak »

standardUser wrote: post #487
jandrewrogers wrote: post #386

Earlier quoted context omitted.

US Federal Reserve studies indicate that the percentage of US households with no excess income after necessary expenses (as distinct from "ordinary expenses" as a term of art) is on the order of 10-15%. This definition roughly matches most people's intuition of what "living paycheck-to-paycheck" means. That isn't nothing but it implies 85-90% of Americans are not actually living paycheck-to-paycheck. There is another…

> The median household can easily accumulate a million dollars in inflation-adjusted net worth, not including their house, over a 40 year career. That sounds like barely enough to retire on.

Don't know why this is grey. You will reach a point where you can't hold down a steady job anymore. Age comes for us all and the "old people" working as Walmart greeters are younger than you're probably imagining.

Being old is expensive. You don't necessarily realize how many things you do that save money rely on being at least somewhat youthful and able bodied. And 1 million sounds like a lot but that is going to be in 2070 dollars and has to last you between 10 to 40 years.

Re: Why America's economy is soaring ahead of its rivals

#498

Post by roenxi »

dragonelite wrote: post #397
georgeecollins wrote: post #179

Earlier quoted context omitted.

A lot of macro economic statistics should be taken with a grain of salt, or more literally: approximations with a measurement error. PPP GDP is useful to compare, particularly politically because if the cost of goods in a country is lower people are more likely to be healthy / comfortable with less income. I think it is a little dubious when you use PPP to compare th3e size of two economies because 1) you are taking…

gdp is really bad, countries don't even use the same counting methods. I think in the Netherlands they started using criminal activity to pad up gdp growth. Also money printing and inflation is a good way to up gdp. I like energy production and consumption a lot more, modern economies pretty much come down to using energy to either transfer or modify goods, services or data.

This is actually my preferred measure too. I was happy to use GDP PPP figures because they tell a similar story to the energy statistics on ourworldindata.org. Asia miles ahead, China the most dominant, then the US and then EU. India looking to overtake the EU fairly rapidly if they follow China's footsteps.

Of course the per-capita numbers favour the US still. But by absolute figures, the crown goes to Asia. And per capita the Europeans can realistically be said to be behind China for policy making purposes, the trends are clear.

Re: Why America's economy is soaring ahead of its rivals

#499

Post by chii »

canadaduane wrote: post #402
mullingitover wrote: post #382

Earlier quoted context omitted.

> But is the majority of the population thriving? It's important to understand that the stock market is a leading indicator . Everyone doesn't immediately get laid off when the stock market tanks. Everyone doesn't immediately get a raise when the stock market is roaring. A lot of people are just now experiencing the stock market mini-crash of 2022, when the pandemic helicopter money dried up. In two years a lot of pe…

This is such a great, succinct insight. I've heard various pieces of it, but you put it all together, thank you. Now I wonder, are there historical exceptions to this general rule? Also, does the "lead time" grow and shrink substantially?

> does the "lead time" grow and shrink substantially?

it changes based on other people's guesses in their participation in the stock market. Aka, it's chaotic.

Re: Why America's economy is soaring ahead of its rivals

#500

Post by bdangubic »

amrocha wrote: post #208
rich_sasha wrote: post #48

One thing this article doesn't touch on is the soaring government debt, which is now really quite big: 120%, and IIRC if you add municipal debt, it's more like 140%. That is high. It also seems like much of the recent growth has been fueled by this debt. It's unclear how this is going to unwind. America can afford, apparently, to run their deficit hot, but not forever and without limit. So at some point they have to…

Government debt doesn’t matter. It’s literally fake.

the largest expediture of the US government now is fake interest payments on fake debt then? or we pay that with fake money fake Americans pay with fake taxes? :)
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