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Note that the median net worth of an American household is ~120k. Obviously $1500 is a lot of money and it's not easy to come up with for normal folks and obvi

Note that the median net worth of an American household is ~120k. Obviously $1500 is a lot of money and it's not easy to come up with for normal folks and obviously there are millions of poor people, but the US is one of the wealthiest nations on Earth, and it's sometimes overemphasized how broke the average American is. Other than a few small European countries, the US has the highest median household incomes in the world, higher than any other large country like Germany, France, the UK, Canada, Japan, or Australia.

sofixa 5y ago
> Note that the median net worth of an American household is ~120k That sounds pretty decent, but the grouped by age/location/education level medians are show that there are still a lot ( as a percentage) of people with low net worths in certain groups. And even then, net worth doesn't mean money in the bank - most people wouldn't and shouldn't have to sell their house or car to be able to afford a medical emergency ( even though i agree that if you have a $120k net worth, you should be able to save money on the side, but i wouldn't be surprised if there are situations where that's hard ( e.g. house bought years ago, a household member without a job, friend/family/only remaining job are in the area)). https://www.businessinsider.com/personal-finance/average-american-net-worth?IR=T#average-net-worth-by-age https://www.businessinsider.com/personal-finance/average-ame...
- caturopath 5y ago
  > That sounds pretty decent, but the grouped by age/location/education level median The poster said "the majority of Americans", not "the majority of young Americans with less education" or something, so I talked about the median, explicitly acknowledging the presence of millions of people who are poor. > most people wouldn't and shouldn't have to sell their house or car to be able to afford a medical emergency If someone needs money from their house, they don't have to sell it. The median non-primary-residence net worth in the US is 40k. I still think it's silly to pretend $1500 is unthinkable for the majority of Americans like it is for the minority of people in America who are poorer than most others. > ( even though i agree that if you have a $120k net worth, you should be able to save money on the side, but i wouldn't be surprised if there are situations where that's hard ( e.g. house bought years ago, a household member without a job, friend/family/only remaining job are in the area)). Paying large bills is hard, especially with all the stuff life throws at you. I didn't mean to imply otherwise.
  - jrochkind1 5y ago
    > Just 39% of Americans could pay for a $1,000 emergency expense > * Fewer than 4 in 10 people have enough savings to pay for an unexpected $1,000 expense in cash. > * The rest would have to borrow, use a credit card or take out a personal loan. > * While the pandemic has set back emergency savings, many people are optimistic their finances will improve in 2021. https://www.cnbc.com/2021/01/11/just-39percent-of-americans-could-pay-for-a-1000-emergency-expense.html https://www.cnbc.com/2021/01/11/just-39percent-of-americans-... But sure, many of those could take on debt to do it, as the summary says, true. Medical debt is a leading cause of bankruptcy in the US. (No, I'm not saying $1500 alone is going to cause a bankruptcy.)
    - anchpop 5y ago
      The bankruptcy stat is that ~60% bankruptcies were contributed to by medical issues or debt. Here is the study it comes from: [0]. Many people misquote this as the bankruptcies having been caused by medical debt. For example, the 60% stat includes income loss due to illness (40% of bankruptcies involved this). Only for about 30% of bankruptcies did the debtor actually say medical bills were a reason for the bankruptcy. This is not to say the healthcare system in the US has no flaws. But it bothers me that a stat which found “loss of income due to illness” was more common among bankruptcies than medical bills greater than $5k or 10% of pretax income (~35%), constantly gets construed as “medical debt is responsible for 60% of bankruptcies” when debt doesn’t even appear to be the largest factor of medical-related bankruptcies. And this misconception is everywhere. This article [1] says “The same researchers' 2009 study claimed that 62.1% of all bankruptcies were caused by medical bills.” and was the top result on google when I searched “bankruptcies caused by medical debt”. Even Bernie Sanders [2] doesn’t get it right, saying that “500,000 people go bankrupt every year because they cannot pay their outrageous medical bills.” 500,000 is a little over 60% of the 750,000 bankruptcies that happen every year, and his campaign said they were referencing this study. I think there’s a meaningful difference between losing income due to not working while you’re sick and not being able to pay your “insane medical bills”. Also, other studies have found much lower numbers, but I guess they aren’t as fun to quote. This is mentioned in the washington post article I linked: > “Based on our estimate of 4 percent of bankruptcy filings per year and the approximately 800,000 bankruptcy filings per year, our number would be much closer to something on the order of 30,000-50,000 bankruptcies caused by a hospitalization,” one of the co-authors of the NEJM study, economist Raymond Kluender of Harvard Business School, wrote in an email > “This would lead us to be skeptical of the 500,000 medical bankruptcies statistic, but that very much depends on how one defines a medical bankruptcy. … An enormous share of households have some amount of medical debt, so any survey of individuals will report a high share of them have medical debt but this does not imply that the debt caused them to file for bankruptcy.” Again, not saying any of this is fine, just that if we’re talking about solutions it’s probably wise to at least represent studies accurately. [0]: https://www.amjmed.com/article/S0002-9343%2809%2900404-5/pdf https://www.amjmed.com/article/S0002-9343%2809%2900404-5/pdf [1]: https://www.thebalance.com/medical-bankruptcy-statistics-4154729 https://www.thebalance.com/medical-bankruptcy-statistics-415... [2]: https://www.washingtonpost.com/politics/2019/08/28/sanderss-flawed-statistic-medical-bankruptcies-year/?outputType=amp https://www.washingtonpost.com/politics/2019/08/28/sanderss-...
- gruez 5y ago
  >And even then, net worth doesn't mean money in the bank According to this[1] the median family has $5k in the bank. [1] https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Transaction_Accounts;demographic:all;population:1;units:median https://www.federalreserve.gov/econres/scf/dataviz/scf/chart...
jdmichal 5y ago
Net worth is deceptive, because that's going to include illiquid assets such as housing. Are people supposed to take out a HELOC to pay their medical bills?
- caturopath 5y ago
  Median net worth in the US not including primary residence (an odd choice considering this is many folks' largest asset and is easily used to pay for things) is 40k. It is silly to pretend like $1500 is not a possibility for "the majority of Americans". Certainly I do acknowledge explicitly in my post that there are millions of poor people in America.
  - ticviking 5y ago
    Most of which is probably in a retirement account, or cash value insurance policy.
KittenInABox 5y ago
Also Germany, France, UK, Japan, Canada, or Australia doesn't have the medical/student debt so I don't know if its so easy to assume that just because americans earn more that they pocket more.
- fomine3 5y ago
  Student debt is often used also in Japan (but very low APR < 1%)
jrochkind1 5y ago
> Note that the median net worth of an American household is ~120k. Having a net worth of $120K doesn't actually mean you can easily pay an unexpected $1500 bill. It might mean you have a house worth $100K and a car worth $10K and a retirement account with $10K in it, and just enough to cover your payments in the bank. I know there are LOTS of Americans who can't easily pay an unexpected $1500 bill, but I don't know if it's more or less than than 50% of Americans, and median net worth doesn't really tell us.
ticviking 5y ago
And most of that is likely in home equity or a 401k, not something liquid that can be used to pay for an emergency.

sofixa 5y ago

> Note that the median net worth of an American household is ~120k That sounds pretty decent, but the grouped by age/location/education level medians are show that there are still a lot ( as a percentage) of people with low net worths in certain groups. And even then, net worth doesn't mean money in the bank - most people wouldn't and shouldn't have to sell their house or car to be able to afford a medical emergency ( even though i agree that if you have a $120k net worth, you should be able to save money on the side, but i wouldn't be surprised if there are situations where that's hard ( e.g. house bought years ago, a household member without a job, friend/family/only remaining job are in the area)). https://www.businessinsider.com/personal-finance/average-american-net-worth?IR=T#average-net-worth-by-age https://www.businessinsider.com/personal-finance/average-ame...

caturopath 5y ago
> That sounds pretty decent, but the grouped by age/location/education level median The poster said "the majority of Americans", not "the majority of young Americans with less education" or something, so I talked about the median, explicitly acknowledging the presence of millions of people who are poor. > most people wouldn't and shouldn't have to sell their house or car to be able to afford a medical emergency If someone needs money from their house, they don't have to sell it. The median non-primary-residence net worth in the US is 40k. I still think it's silly to pretend $1500 is unthinkable for the majority of Americans like it is for the minority of people in America who are poorer than most others. > ( even though i agree that if you have a $120k net worth, you should be able to save money on the side, but i wouldn't be surprised if there are situations where that's hard ( e.g. house bought years ago, a household member without a job, friend/family/only remaining job are in the area)). Paying large bills is hard, especially with all the stuff life throws at you. I didn't mean to imply otherwise.
- jrochkind1 5y ago
  > Just 39% of Americans could pay for a $1,000 emergency expense > * Fewer than 4 in 10 people have enough savings to pay for an unexpected $1,000 expense in cash. > * The rest would have to borrow, use a credit card or take out a personal loan. > * While the pandemic has set back emergency savings, many people are optimistic their finances will improve in 2021. https://www.cnbc.com/2021/01/11/just-39percent-of-americans-could-pay-for-a-1000-emergency-expense.html https://www.cnbc.com/2021/01/11/just-39percent-of-americans-... But sure, many of those could take on debt to do it, as the summary says, true. Medical debt is a leading cause of bankruptcy in the US. (No, I'm not saying $1500 alone is going to cause a bankruptcy.)
  - anchpop 5y ago
    The bankruptcy stat is that ~60% bankruptcies were contributed to by medical issues or debt. Here is the study it comes from: [0]. Many people misquote this as the bankruptcies having been caused by medical debt. For example, the 60% stat includes income loss due to illness (40% of bankruptcies involved this). Only for about 30% of bankruptcies did the debtor actually say medical bills were a reason for the bankruptcy. This is not to say the healthcare system in the US has no flaws. But it bothers me that a stat which found “loss of income due to illness” was more common among bankruptcies than medical bills greater than $5k or 10% of pretax income (~35%), constantly gets construed as “medical debt is responsible for 60% of bankruptcies” when debt doesn’t even appear to be the largest factor of medical-related bankruptcies. And this misconception is everywhere. This article [1] says “The same researchers' 2009 study claimed that 62.1% of all bankruptcies were caused by medical bills.” and was the top result on google when I searched “bankruptcies caused by medical debt”. Even Bernie Sanders [2] doesn’t get it right, saying that “500,000 people go bankrupt every year because they cannot pay their outrageous medical bills.” 500,000 is a little over 60% of the 750,000 bankruptcies that happen every year, and his campaign said they were referencing this study. I think there’s a meaningful difference between losing income due to not working while you’re sick and not being able to pay your “insane medical bills”. Also, other studies have found much lower numbers, but I guess they aren’t as fun to quote. This is mentioned in the washington post article I linked: > “Based on our estimate of 4 percent of bankruptcy filings per year and the approximately 800,000 bankruptcy filings per year, our number would be much closer to something on the order of 30,000-50,000 bankruptcies caused by a hospitalization,” one of the co-authors of the NEJM study, economist Raymond Kluender of Harvard Business School, wrote in an email > “This would lead us to be skeptical of the 500,000 medical bankruptcies statistic, but that very much depends on how one defines a medical bankruptcy. … An enormous share of households have some amount of medical debt, so any survey of individuals will report a high share of them have medical debt but this does not imply that the debt caused them to file for bankruptcy.” Again, not saying any of this is fine, just that if we’re talking about solutions it’s probably wise to at least represent studies accurately. [0]: https://www.amjmed.com/article/S0002-9343%2809%2900404-5/pdf https://www.amjmed.com/article/S0002-9343%2809%2900404-5/pdf [1]: https://www.thebalance.com/medical-bankruptcy-statistics-4154729 https://www.thebalance.com/medical-bankruptcy-statistics-415... [2]: https://www.washingtonpost.com/politics/2019/08/28/sanderss-flawed-statistic-medical-bankruptcies-year/?outputType=amp https://www.washingtonpost.com/politics/2019/08/28/sanderss-...
gruez 5y ago
>And even then, net worth doesn't mean money in the bank According to this[1] the median family has $5k in the bank. [1] https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Transaction_Accounts;demographic:all;population:1;units:median https://www.federalreserve.gov/econres/scf/dataviz/scf/chart...

jdmichal 5y ago

Net worth is deceptive, because that's going to include illiquid assets such as housing. Are people supposed to take out a HELOC to pay their medical bills?

caturopath 5y ago
Median net worth in the US not including primary residence (an odd choice considering this is many folks' largest asset and is easily used to pay for things) is 40k. It is silly to pretend like $1500 is not a possibility for "the majority of Americans". Certainly I do acknowledge explicitly in my post that there are millions of poor people in America.
- ticviking 5y ago
  Most of which is probably in a retirement account, or cash value insurance policy.

KittenInABox 5y ago

Also Germany, France, UK, Japan, Canada, or Australia doesn't have the medical/student debt so I don't know if its so easy to assume that just because americans earn more that they pocket more.

fomine3 5y ago
Student debt is often used also in Japan (but very low APR < 1%)

jrochkind1 5y ago

> Note that the median net worth of an American household is ~120k. Having a net worth of $120K doesn't actually mean you can easily pay an unexpected $1500 bill. It might mean you have a house worth $100K and a car worth $10K and a retirement account with $10K in it, and just enough to cover your payments in the bank. I know there are LOTS of Americans who can't easily pay an unexpected $1500 bill, but I don't know if it's more or less than than 50% of Americans, and median net worth doesn't really tell us.

ticviking 5y ago

And most of that is likely in home equity or a 401k, not something liquid that can be used to pay for an emergency.