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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 coul

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 and politicians recognize statistics like this as an opportunity for reflection and change.

sjg007 8y ago
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.
- ralusek 8y ago
  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 are the same ones who have gotten themselves into this situation. 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. 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. It's not as though the country has a non-existent social safety net. You simply can't propose that the solution can exist independently of the personal decisions made by the individuals in this position.
  - mattnewton 8y ago
    Bahaha, yes, if you make perfect decisions you will have over $400. The whole point is people don’t make perfect decisions. Should they become homeless when they get hurt as a result? Does that threat help them make better decisions? Does it help society to let a small problem escalate into a larger one like that? I’d answer a resounding no on all fronts.
    - rectang 8y ago
      It gives the wealthy a pleasing sense of moral superiority to see the poor fail. Humans compete not only for resources but for status. This alone is sufficient motivation to drive policies which ensure not just inequality, but humiliation of the losers.
  - dragonwriter 8y ago
    > I will say this again. Repetition doesn't actually make your claim any better supported, so maybe instead of repeating it, provide better support or, failing that, just stop instead of reiterating.
  - somerando 8y ago
    And here I was feeling bad because I have less than $100k on hand.
  - xena 8y ago
    What about people whose life situations constantly rip money out of them and their pay is just fundamentally insufficient to cover their expenses?
    - yermom 8y ago
      nah, they should just work harder
      - your-nanny 8y ago
        Forgot your sarc tags
    - trophycase 8y ago
      You're right. Some poor people have bad spending habits, and some have unfortunate life situations, and some have both.
      - mlthoughts2018 8y ago
        In fact, poor spending habits could be caused by a poor life situation.
  - zeth___ 8y ago
    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.
    - ralusek 8y ago
      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.
      - zeth___ 8y ago
        Racism mostly.
        monocasa 8y ago
        Not sure why you're getting down voted. An otherwise identical resume with the first name changed from Tyrone to Brad receives 3x callbacks for interviews. http://www.nber.org/papers/w9873.pdf http://www.nber.org/papers/w9873.pdf
        zeth___ 8y ago
        Techbros. People who have had a golden spoon in their mouth since birth and can't imagine a life where they didn't have their hands held to success the whole time. They think that because they are not billionaires they aren't privileged and anyone can pull themselves up by their bootstraps, just like their great-great-grand pappy who came from Ireland and was treated pretty badly by the English in 1864.
      - dv_dt 8y ago
        It is very difficult to work multiple part time, minimum wage jobs these days because of the scheduling unreliability and availability requirements of the jobs. If you aren't available for ad-hoc hours, then your hours get dropped...
  - keithnz 8y ago
    this is probablly a good pivot point for you to look at sociology. Because personal responsibility just doesn't magically happen. If you are not looking at what leads people into what you think is poor decision making and a lack of personal responsibility, you become part of the problem. The reality is, the social structures play a big part in this, and more problematically, you can't change it quickly.
  - Florin_Andrei 8y ago
    > It is completely unacceptable to not have $400 on reserve for an emergency as a functioning adult. There's a lot of "let them eat cake instead" mentality in that statement.
  - headmelted 8y ago
    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 occured to you.
    - ralusek 8y ago
      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.
      - Retric 8y ago
        The number of allowed bad decisions drops dramatically as you slide down the wealth scale. Saying you need to be correct 99.999% of the time is simply not a viable strategy. Especially when people are actively trying to get you to make bad decisions like enrolling in a for profit collage. The vast US homeless population suggests we don't really have a safety net, so much as a safety rope you need to hold on tight and pray. Consider, if all the homeless people showed up in the same place that would instantly be in the top 10 US cities.
        selimthegrim 8y ago
        And once you've enrolled in that for-profit college, surprise! You can choose to keep your student status to keep your loans in deferment but now you're not eligible for food stamps while an enrolled student unless you work a minimum of 20 hours a week/earn ~$680 a month.
      - harikb 8y ago
        If you have Netflix, watch the documentary "Dirty Money". Then come back and tell us you wouldn't have been in the same situation had some event in your past not gone your favor.
  - wwweston 8y ago
    > That is a situation that can only be achieved by poor decision making and a lack of personal responsibility. Poor decision making or lack of personal responsibility are certainly sufficient to achieve such a situation... but they're not necessary. Unless you play with the definition of "poor decision making" to include things like "capable of making mistakes." This could be a good time for everyone to review the concept of the Fundamental Attribution Error: https://en.wikipedia.org/wiki/Fundamental_attribution_error https://en.wikipedia.org/wiki/Fundamental_attribution_error
  - dv_dt 8y ago
    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!)
    - pwg 8y ago
      Are you referring to the Boots Theory of Socioeconomic Unfairness: https://www.goodreads.com/quotes/72745-the-reason-that-the-rich-were-so-rich-vimes-reasoned https://www.goodreads.com/quotes/72745-the-reason-that-the-r...
      - dv_dt 8y ago
        That as well as the Welfare Trap https://en.wikipedia.org/wiki/Welfare_trap https://en.wikipedia.org/wiki/Welfare_trap
  - dionidium 8y ago
    OK, but, like, what if some people are just actually bad at making decisions? Unless you have a plan for that you’re just moralizing toward no practical end.
    - rectang 8y ago
      Moralizing is its own reward. It feels good to look down on people.
  - whatAmount 8y ago
    What makes $400 such a special number? Why not $100, Why not $500, Why not $1,000? What makes $400 the ideal number? Probably nothing, except the fact that it makes for the best headline, since "2 out of 5" is a quotable statistic. Formulating advice should follow a different pattern. The ideal number for emergencies is probably closer to $5,000 since it covers more realistic emergency scenarios. $500 might cover food, gas, a few taxi rides or train tickets and basic OTC medication like asprin for possibly a week. $5,000 might cover a lost or stolen laptop, plane tickets, hotel stays, car repairs, emergency rooms and ambulances and out-of-pocket prescriptions, funerals, rent or convert to a month's worth of basic needs (food, gas, short-haul travel). More is obviously always better, but emergency response is about covering the cost of capacity to react, plus supplies needed to take action, plus duration of endurance. $500 wouldn't keep you off the street for more than a weekend, but $5,000 could last a month or more.
  - jlarocco 8y ago
    The funny thing about what you're saying is that there's always somebody richer saying the same thing about you, just with bigger sums of money. "He wouldn't have a mortgage if he just made better financial decisions!" ;-) Honestly, though, you're just stating the obvious: people screw up and behave irrationally. That's common knowledge. The goal is to minimize the impact of poor decisions and give people a way to get back on track. "F* 'em, I've got mine" doesn't help anybody.
  - alasdair_ 8y ago
    >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?
  - empath75 8y ago
    You simply have no understanding of what it’s like to be poor in this country. In a lot of ways it’s more expensive to be poor than to be middle class— you get hit with higher interest rates, more fees, more things like inspection tickets for your car that you can barely keep on the road. A single emergency room visit is enough to bankrupt some people. I’m making well into six figures now, but in my early 20s, I was living pay check to pay check and barely had enough to eat some weeks. If I managed to scrape up an extra $400, I had a hundred things to spend it on that weren’t a rainy day fund.
  - ridgeguy 8y ago
    I find your absolutist view remarkably blinkered, indeed unrealistic in the fundamental sense of the word. I wonder if you suddenly incurred uninsured medical expenses of oh, let's say, 20X your net worth or annual income, whether you might see things differently. A family of four on a $50K annual income would find a sudden $1000K obligation utterly devastating. That's life for (IMHO) too many of us. On average, it has far more to do with luck than your proffered causal moral failure. I think we can do better.
- roenxi 8y ago
  The problem with personal responsibility, which I am very much in favour of and wish we promoted a bit more, is that the deck is so stacked against people who don't have assets that I'm not sure average person can keep up. I keep saying it; the amount of money in the system has increased +50% since 2008 [1], and worker compensation has gone up +25% (the BLS publishes a lot of series, I use [2]; hope it is right). So someone is getting a lot of money and it isn't obvious to what end - it isn't helping the workers or the poor, and nobody can make up that sort of difference by working harder. Workers are reaping a smaller percentage of society's bounty. [1] https://fred.stlouisfed.org/series/M2 https://fred.stlouisfed.org/series/M2 [2] https://fred.stlouisfed.org/series/A033RC1A027NBEA https://fred.stlouisfed.org/series/A033RC1A027NBEA
  - taysic 8y ago
    Is this due to QE? edit: I am wondering about why the money supply has increased 50%. Wouldn't that require a massive printing of money?
    - pnj9 8y ago
      It’s due to a long and storied history of elites manipulating the masses through intimidation and fear It went from overt violence to less obvious propaganda programs tuning our feelings I wish the “smart” crowd would look into the history of government-corporate propaganda research I’m not talking “deep state”. It’s plainly recorded in government record how they financed propaganda research and gifted it to media for advertising and corporate use Look at the joke history classes taught in public school Look at the efforts to hide info about the environment by this admin There is a concerted effort in our faces to deceive and misdirect is Economics, jobs, and government scandals are distractions in support of these efforts Read up on Greenspan’s comments in the 90s about growing worker insecurity being a boon to beneficiaries of supply side economics Watch Varoufakis explain how during the Greek debt crisis German tax payers took out loans from German banks to have it to Greece who gave it right back to German banks This is a generations long boondoggle unrelated to one policy decision 10 yrs ago It’s a round n round we go with numbers because even the educated masses are too on the periphery to see or outright prevented from being in the room
- scarface74 8y ago
  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. The true Middle Class probably don't make any distinction between anyone who is in the top 20% (household income over $116,000) or especially the top 10% ($161,000). https://dqydj.com/household-income-percentile-calculator-2016/ https://dqydj.com/household-income-percentile-calculator-201...
  - dragonwriter 8y ago
    > 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 supports themselves by applying their own labor to their own capital rather than primarily by renting labor to apply to capital or selling labor to capitalists), and its members are usually well above middle income (though, on average, far below that of the capitalist class.) The middle income quintile is largely members of the proletariat, not the petit bourgeoisie.
    - jadedhacker 8y ago
      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?
      - dragonwriter 8y ago
        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.
- mayniac 8y ago
  >The wealthy only care when the pitchforks come out. I can't find the link right now, but there was a TedX talk by a multi-millionaire arguing that he wants to be taxed more. And it's a growing trend, a lot of very wealthy people are starting to plead for higher taxes. The reasoning being if wealth inequality continues to widen, eventually it won't be a case of shaking the rich to empty their pockets a bit, it will be a case of hanging the rich from lampposts. I've met a lot of anti-capitalists who are mildly Posadist/accelerationist for this reason. For all of the ideas in this thread regarding increasing taxes on the rich and social welfare problems, I cannot help but believe that ultimately, we are overdue large scale social unrest in 1st world countries. Placating the proletariat with incentives like tax breaks and welfare programs is great in the short term, but in the end it might just be delaying the inevitable, and making it far worse. I'm firmly of the belief that a new economic system needs to be part of mainstream discussion as soon as possible, because otherwise we will eventually have riots which cause a power vacuum, and history has shown nothing good comes from that.
  - thedragonline 8y ago
    >The wealthy only care when the pitchforks come out. I can't find the link right now, but there was a TedX talk by a multi-millionaire arguing that he wants to be taxed more. This? https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming/up-next#t-1210455 https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocr...
  - dorgo 8y ago
    Why do rich people want to pay more taxes? Why not directly invest in improving the situation of the poor? This way they remain in control of how money is spent. Tax money will just be spent for more wars.
    - AstralStorm 8y ago
      It is labour intensive to directly infest into poor. It involves setting a good programme and/or charity and managing it... Technically government is already equipped to do everything a charity can and more eith superior information so should be more efficient at it. Although it depends on the country/state in question.
- kamaal 8y ago
  >>The wealthy only care when the pitchforks come out. Generally by that time the wealthy are long out of the country. In fact in most revolutions where people imagine they will take from the rich, people are generally in for a shock when they realize the rich are long gone. And now the door for a peaceful taxation is also gone. >>The biggest achievement of the wealthy has been to convince the middle class to eat itself. The wealthy have to convince nothing. Middle class is full of people who want instant gratification, and are bad at savings and investments.
Florin_Andrei 8y ago
I cannot possibly comprehend how could anyone consider this situation and go "yeah, this is surely stable in the long run".
- twblalock 8y ago
  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.
  - pishpash 8y ago
    Only because of social programs. If those are gutted all bets are off.
  - Florin_Andrei 8y ago
    I'm pretty sure most people would not be okay with going back to the 19th century living conditions, to say nothing of the medieval era or before that.
- flubert 8y ago
  I believe I've been hearing stories like this (about the lack of liquid savings for Americans) for something like 30 years now. Anyone able to dig up the historical data on this? I kind of think Milton Friedman wrote about this in one of his books.
rndmize 8y ago
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 legal grounds to kick you out, terminate your service, etc.) Never mind the difficulty of making use of a court system stacked against the poor... > I hope voters and politicians recognize... Actually, it appears that voters and politicians have zero interest in improving this situation, seeing as the current administration is making every effort to demoralize and defang the CFPB[0], which was literally created to do some of the things you're interested in. I especially like how Mulvaney is moving everything into "financial education", as if an agency with 500M budget is going to make a dent against the billions spent on marketing related to financial "services". [0] http://www.latimes.com/business/la-fi-cfpb-student-loans-20180509-story.html http://www.latimes.com/business/la-fi-cfpb-student-loans-201...
- ioquatix 8y ago
  Modern day slavery. Wow, never did I see it like this before.
- master-litty 8y ago
  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.
  - jadedhacker 8y ago
    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.
mid 8y ago
Spin. From the actual survey data at https://www.federalreserve.gov/consumerscommunities/files/SHED_2017codebook.pdf https://www.federalreserve.gov/consumerscommunities/files/SH..., page 6: Overall, which one of the following best describes how well you are managing financially these days? 14 (0.1%): Refused 893 (7.2%): Finding it difficult to get by 2,395 (19.2%): Just getting by 4,930 (39.6%): Doing okay 4,215 (33.9%): Living comfortably
- babaganoosh89 8y ago
  Are you sure that's right? I don't get how that adds up to 40%.
  - veidr 8y ago
    If 40% of people can't find $400 in a pinch, then it means at least some of those people self-reporting as "Doing OK" still can't find $400 in an emergency.
- oldcynic 8y ago
  How is it spin? Just means there are a lot of people who believe doing OK encompasses having less than $400 ready cash. I might call it blind optimism seeing as pg 21 of the same PDF shows the sources they would consider to fund an emergency expense, but not spin.
ravar 8y ago
If this is an opportunity for change then what is a positive change that you would suggest?
0x4f3759df 8y ago
There's just so many ways Americans are getting wrecked. College debt, housing crisis, terrible public transit, ruinous health care prices, and looming pension crisis that the government will have to print its way out of.

sjg007 8y ago

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.

ralusek 8y ago
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 are the same ones who have gotten themselves into this situation. 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. 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. It's not as though the country has a non-existent social safety net. You simply can't propose that the solution can exist independently of the personal decisions made by the individuals in this position.
- mattnewton 8y ago
  Bahaha, yes, if you make perfect decisions you will have over $400. The whole point is people don’t make perfect decisions. Should they become homeless when they get hurt as a result? Does that threat help them make better decisions? Does it help society to let a small problem escalate into a larger one like that? I’d answer a resounding no on all fronts.
  - rectang 8y ago
    It gives the wealthy a pleasing sense of moral superiority to see the poor fail. Humans compete not only for resources but for status. This alone is sufficient motivation to drive policies which ensure not just inequality, but humiliation of the losers.
- dragonwriter 8y ago
  > I will say this again. Repetition doesn't actually make your claim any better supported, so maybe instead of repeating it, provide better support or, failing that, just stop instead of reiterating.
- somerando 8y ago
  And here I was feeling bad because I have less than $100k on hand.
- xena 8y ago
  What about people whose life situations constantly rip money out of them and their pay is just fundamentally insufficient to cover their expenses?
  - yermom 8y ago
    nah, they should just work harder
    - your-nanny 8y ago
      Forgot your sarc tags
  - trophycase 8y ago
    You're right. Some poor people have bad spending habits, and some have unfortunate life situations, and some have both.
    - mlthoughts2018 8y ago
      In fact, poor spending habits could be caused by a poor life situation.
- zeth___ 8y ago
  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.
  - ralusek 8y ago
    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.
    - zeth___ 8y ago
      Racism mostly.
      - monocasa 8y ago
        Not sure why you're getting down voted. An otherwise identical resume with the first name changed from Tyrone to Brad receives 3x callbacks for interviews. http://www.nber.org/papers/w9873.pdf http://www.nber.org/papers/w9873.pdf
        zeth___ 8y ago
        Techbros. People who have had a golden spoon in their mouth since birth and can't imagine a life where they didn't have their hands held to success the whole time. They think that because they are not billionaires they aren't privileged and anyone can pull themselves up by their bootstraps, just like their great-great-grand pappy who came from Ireland and was treated pretty badly by the English in 1864.
    - dv_dt 8y ago
      It is very difficult to work multiple part time, minimum wage jobs these days because of the scheduling unreliability and availability requirements of the jobs. If you aren't available for ad-hoc hours, then your hours get dropped...
- keithnz 8y ago
  this is probablly a good pivot point for you to look at sociology. Because personal responsibility just doesn't magically happen. If you are not looking at what leads people into what you think is poor decision making and a lack of personal responsibility, you become part of the problem. The reality is, the social structures play a big part in this, and more problematically, you can't change it quickly.
- Florin_Andrei 8y ago
  > It is completely unacceptable to not have $400 on reserve for an emergency as a functioning adult. There's a lot of "let them eat cake instead" mentality in that statement.
- headmelted 8y ago
  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 occured to you.
  - ralusek 8y ago
    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.
    - Retric 8y ago
      The number of allowed bad decisions drops dramatically as you slide down the wealth scale. Saying you need to be correct 99.999% of the time is simply not a viable strategy. Especially when people are actively trying to get you to make bad decisions like enrolling in a for profit collage. The vast US homeless population suggests we don't really have a safety net, so much as a safety rope you need to hold on tight and pray. Consider, if all the homeless people showed up in the same place that would instantly be in the top 10 US cities.
      - selimthegrim 8y ago
        And once you've enrolled in that for-profit college, surprise! You can choose to keep your student status to keep your loans in deferment but now you're not eligible for food stamps while an enrolled student unless you work a minimum of 20 hours a week/earn ~$680 a month.
    - harikb 8y ago
      If you have Netflix, watch the documentary "Dirty Money". Then come back and tell us you wouldn't have been in the same situation had some event in your past not gone your favor.
- wwweston 8y ago
  > That is a situation that can only be achieved by poor decision making and a lack of personal responsibility. Poor decision making or lack of personal responsibility are certainly sufficient to achieve such a situation... but they're not necessary. Unless you play with the definition of "poor decision making" to include things like "capable of making mistakes." This could be a good time for everyone to review the concept of the Fundamental Attribution Error: https://en.wikipedia.org/wiki/Fundamental_attribution_error https://en.wikipedia.org/wiki/Fundamental_attribution_error
- dv_dt 8y ago
  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!)
  - pwg 8y ago
    Are you referring to the Boots Theory of Socioeconomic Unfairness: https://www.goodreads.com/quotes/72745-the-reason-that-the-rich-were-so-rich-vimes-reasoned https://www.goodreads.com/quotes/72745-the-reason-that-the-r...
    - dv_dt 8y ago
      That as well as the Welfare Trap https://en.wikipedia.org/wiki/Welfare_trap https://en.wikipedia.org/wiki/Welfare_trap
- dionidium 8y ago
  OK, but, like, what if some people are just actually bad at making decisions? Unless you have a plan for that you’re just moralizing toward no practical end.
  - rectang 8y ago
    Moralizing is its own reward. It feels good to look down on people.
- whatAmount 8y ago
  What makes $400 such a special number? Why not $100, Why not $500, Why not $1,000? What makes $400 the ideal number? Probably nothing, except the fact that it makes for the best headline, since "2 out of 5" is a quotable statistic. Formulating advice should follow a different pattern. The ideal number for emergencies is probably closer to $5,000 since it covers more realistic emergency scenarios. $500 might cover food, gas, a few taxi rides or train tickets and basic OTC medication like asprin for possibly a week. $5,000 might cover a lost or stolen laptop, plane tickets, hotel stays, car repairs, emergency rooms and ambulances and out-of-pocket prescriptions, funerals, rent or convert to a month's worth of basic needs (food, gas, short-haul travel). More is obviously always better, but emergency response is about covering the cost of capacity to react, plus supplies needed to take action, plus duration of endurance. $500 wouldn't keep you off the street for more than a weekend, but $5,000 could last a month or more.
- jlarocco 8y ago
  The funny thing about what you're saying is that there's always somebody richer saying the same thing about you, just with bigger sums of money. "He wouldn't have a mortgage if he just made better financial decisions!" ;-) Honestly, though, you're just stating the obvious: people screw up and behave irrationally. That's common knowledge. The goal is to minimize the impact of poor decisions and give people a way to get back on track. "F* 'em, I've got mine" doesn't help anybody.
- alasdair_ 8y ago
  >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?
- empath75 8y ago
  You simply have no understanding of what it’s like to be poor in this country. In a lot of ways it’s more expensive to be poor than to be middle class— you get hit with higher interest rates, more fees, more things like inspection tickets for your car that you can barely keep on the road. A single emergency room visit is enough to bankrupt some people. I’m making well into six figures now, but in my early 20s, I was living pay check to pay check and barely had enough to eat some weeks. If I managed to scrape up an extra $400, I had a hundred things to spend it on that weren’t a rainy day fund.
- ridgeguy 8y ago
  I find your absolutist view remarkably blinkered, indeed unrealistic in the fundamental sense of the word. I wonder if you suddenly incurred uninsured medical expenses of oh, let's say, 20X your net worth or annual income, whether you might see things differently. A family of four on a $50K annual income would find a sudden $1000K obligation utterly devastating. That's life for (IMHO) too many of us. On average, it has far more to do with luck than your proffered causal moral failure. I think we can do better.
roenxi 8y ago
The problem with personal responsibility, which I am very much in favour of and wish we promoted a bit more, is that the deck is so stacked against people who don't have assets that I'm not sure average person can keep up. I keep saying it; the amount of money in the system has increased +50% since 2008 [1], and worker compensation has gone up +25% (the BLS publishes a lot of series, I use [2]; hope it is right). So someone is getting a lot of money and it isn't obvious to what end - it isn't helping the workers or the poor, and nobody can make up that sort of difference by working harder. Workers are reaping a smaller percentage of society's bounty. [1] https://fred.stlouisfed.org/series/M2 https://fred.stlouisfed.org/series/M2 [2] https://fred.stlouisfed.org/series/A033RC1A027NBEA https://fred.stlouisfed.org/series/A033RC1A027NBEA
- taysic 8y ago
  Is this due to QE? edit: I am wondering about why the money supply has increased 50%. Wouldn't that require a massive printing of money?
  - pnj9 8y ago
    It’s due to a long and storied history of elites manipulating the masses through intimidation and fear It went from overt violence to less obvious propaganda programs tuning our feelings I wish the “smart” crowd would look into the history of government-corporate propaganda research I’m not talking “deep state”. It’s plainly recorded in government record how they financed propaganda research and gifted it to media for advertising and corporate use Look at the joke history classes taught in public school Look at the efforts to hide info about the environment by this admin There is a concerted effort in our faces to deceive and misdirect is Economics, jobs, and government scandals are distractions in support of these efforts Read up on Greenspan’s comments in the 90s about growing worker insecurity being a boon to beneficiaries of supply side economics Watch Varoufakis explain how during the Greek debt crisis German tax payers took out loans from German banks to have it to Greece who gave it right back to German banks This is a generations long boondoggle unrelated to one policy decision 10 yrs ago It’s a round n round we go with numbers because even the educated masses are too on the periphery to see or outright prevented from being in the room
scarface74 8y ago
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. The true Middle Class probably don't make any distinction between anyone who is in the top 20% (household income over $116,000) or especially the top 10% ($161,000). https://dqydj.com/household-income-percentile-calculator-2016/ https://dqydj.com/household-income-percentile-calculator-201...
- dragonwriter 8y ago
  > 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 supports themselves by applying their own labor to their own capital rather than primarily by renting labor to apply to capital or selling labor to capitalists), and its members are usually well above middle income (though, on average, far below that of the capitalist class.) The middle income quintile is largely members of the proletariat, not the petit bourgeoisie.
  - jadedhacker 8y ago
    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?
    - dragonwriter 8y ago
      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.
mayniac 8y ago
>The wealthy only care when the pitchforks come out. I can't find the link right now, but there was a TedX talk by a multi-millionaire arguing that he wants to be taxed more. And it's a growing trend, a lot of very wealthy people are starting to plead for higher taxes. The reasoning being if wealth inequality continues to widen, eventually it won't be a case of shaking the rich to empty their pockets a bit, it will be a case of hanging the rich from lampposts. I've met a lot of anti-capitalists who are mildly Posadist/accelerationist for this reason. For all of the ideas in this thread regarding increasing taxes on the rich and social welfare problems, I cannot help but believe that ultimately, we are overdue large scale social unrest in 1st world countries. Placating the proletariat with incentives like tax breaks and welfare programs is great in the short term, but in the end it might just be delaying the inevitable, and making it far worse. I'm firmly of the belief that a new economic system needs to be part of mainstream discussion as soon as possible, because otherwise we will eventually have riots which cause a power vacuum, and history has shown nothing good comes from that.
- thedragonline 8y ago
  >The wealthy only care when the pitchforks come out. I can't find the link right now, but there was a TedX talk by a multi-millionaire arguing that he wants to be taxed more. This? https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming/up-next#t-1210455 https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocr...
- dorgo 8y ago
  Why do rich people want to pay more taxes? Why not directly invest in improving the situation of the poor? This way they remain in control of how money is spent. Tax money will just be spent for more wars.
  - AstralStorm 8y ago
    It is labour intensive to directly infest into poor. It involves setting a good programme and/or charity and managing it... Technically government is already equipped to do everything a charity can and more eith superior information so should be more efficient at it. Although it depends on the country/state in question.
kamaal 8y ago
>>The wealthy only care when the pitchforks come out. Generally by that time the wealthy are long out of the country. In fact in most revolutions where people imagine they will take from the rich, people are generally in for a shock when they realize the rich are long gone. And now the door for a peaceful taxation is also gone. >>The biggest achievement of the wealthy has been to convince the middle class to eat itself. The wealthy have to convince nothing. Middle class is full of people who want instant gratification, and are bad at savings and investments.

Florin_Andrei 8y ago

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

twblalock 8y ago
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.
- pishpash 8y ago
  Only because of social programs. If those are gutted all bets are off.
- Florin_Andrei 8y ago
  I'm pretty sure most people would not be okay with going back to the 19th century living conditions, to say nothing of the medieval era or before that.
flubert 8y ago
I believe I've been hearing stories like this (about the lack of liquid savings for Americans) for something like 30 years now. Anyone able to dig up the historical data on this? I kind of think Milton Friedman wrote about this in one of his books.

rndmize 8y ago

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 legal grounds to kick you out, terminate your service, etc.) Never mind the difficulty of making use of a court system stacked against the poor... > I hope voters and politicians recognize... Actually, it appears that voters and politicians have zero interest in improving this situation, seeing as the current administration is making every effort to demoralize and defang the CFPB[0], which was literally created to do some of the things you're interested in. I especially like how Mulvaney is moving everything into "financial education", as if an agency with 500M budget is going to make a dent against the billions spent on marketing related to financial "services". [0] http://www.latimes.com/business/la-fi-cfpb-student-loans-20180509-story.html http://www.latimes.com/business/la-fi-cfpb-student-loans-201...

ioquatix 8y ago
Modern day slavery. Wow, never did I see it like this before.
master-litty 8y ago
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.
- jadedhacker 8y ago
  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.

mid 8y ago

Spin. From the actual survey data at https://www.federalreserve.gov/consumerscommunities/files/SHED_2017codebook.pdf https://www.federalreserve.gov/consumerscommunities/files/SH..., page 6: Overall, which one of the following best describes how well you are managing financially these days? 14 (0.1%): Refused 893 (7.2%): Finding it difficult to get by 2,395 (19.2%): Just getting by 4,930 (39.6%): Doing okay 4,215 (33.9%): Living comfortably

babaganoosh89 8y ago
Are you sure that's right? I don't get how that adds up to 40%.
- veidr 8y ago
  If 40% of people can't find $400 in a pinch, then it means at least some of those people self-reporting as "Doing OK" still can't find $400 in an emergency.
oldcynic 8y ago
How is it spin? Just means there are a lot of people who believe doing OK encompasses having less than $400 ready cash. I might call it blind optimism seeing as pg 21 of the same PDF shows the sources they would consider to fund an emergency expense, but not spin.

ravar 8y ago

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

0x4f3759df 8y ago

There's just so many ways Americans are getting wrecked. College debt, housing crisis, terrible public transit, ruinous health care prices, and looming pension crisis that the government will have to print its way out of.