6 ms·

Americans Are Living Paycheck to Paycheck

32 points by ctoth 4y ago

chiefalchemist 4y ago
Expenses + inflation has been outpacing income increases for many years now. The ruling class seems oblivious to the sociopolitical implications of the imbalance. The 2016 election should have been an epiphany moment. Instead they pushed their heads deeper into the sand, and ratcheted up the rhetoric and distractions. This isn't sustainable.
- jleyank 4y ago
  The 2016 election gave a slug of cash and tax breaks to the investor class, voted in by a huge cadre of people probably living check to check. Given that, why should it have been an epiphany? Until people vote in their legitimate best interest, nothing will change.
  - MomoXenosaga 4y ago
    True but the US government, Trump himself in fact, authorised helicopter money bags when COVID 19 disrupted society. In fact as much as I hate Trump he was change: the first evidence of the old elite losing control.
    - jleyank 4y ago
      All countries threw bags of money. The difference was who it was thrown at.
    - andrekandre 4y ago
      > the first evidence of the old elite losing control. admittedly pre-covid, but trumps tax-cuts greatly benefited the elites...
  - Maursault 4y ago
    > Until people vote in their legitimate best interest, nothing will change Best interest here means best economic interests. About 25% of Republicans earn less than $30K/yr, another 25% earn less than $50K, another 25% earn less than $100K/yr, and another 23% of Republicans earn less than $300K/yr. This means 98% of Republicans have absolutely no idea what they're doing and are voting themselves into economic stagnation. The 2% of Republicans earning more than $300K/yr are quite shrewd, but at moral cost. The Republican Party is made up nearly entirely of the bamboozled, yet while they will never see economic opportunity while Republicans hold power, they are paying for the 2% to make inroads on the 0.01%.
    - Red_Leaves_Flyy 4y ago
      Do you have sources for those numbers?
      - Maursault 4y ago
        Yes, but I eye-balled it.[1] Satisfied? [1] https://www.pewresearch.org/religion/religious-landscape-study/compare/income-distribution/by/state/among/party-affiliation/republican-lean-rep/ https://www.pewresearch.org/religion/religious-landscape-stu...
        Red_Leaves_Flyy 4y ago
        Awesome, thanks. Note of warning for lurkers, the page is broken on my mobile.
    - patrick451 4y ago
      Without a baseline, your numbers are both meaningless and uninteresting.
      - Maursault 4y ago
        Lovely straw man. Out of curiously, just what exactly are you talking about? Why do you think a baseline is needed? Because I have no earthly idea what you mean by "baseline" in the context of what percentages of Republicans earn.
  - rayiner 4y ago
    Corporate tax breaks, like those in Trump's tax cuts, are complicated in terms of their effect on the economy. There's a reason why even countries with robust social democratic parties like Germany and Sweden have low corporate taxes. At least in theory corporate tax cuts drive business activity and lowers unemployment, which happened during Trump's presidency. Meanwhile, Trump also took aim at the "investor class" by capping SALT deductions, which hurt rich people in the orbit of Wall Street and Silicon Valley. As a practical matter, moreover, tax cuts are something Republicans can do with only 51 Senate votes, because the budget is an exception to the filibuster's 60 vote requirement. Query what would have happened if we eliminated the filibuster and the GOP had more room to give their voters what they want.
    - bombcar 4y ago
      Corporate taxes just come from the customers of the corporations. It may be more palatable but it’s just VAT with extra steps. The SALT change and the deductible increase affected large swaths of taxpayers favorably-mostly the working poor who made enough to pay taxes but not enough for much deductions.
  - hotpotamus 4y ago
    There's that, but also people are now turning down free, potentially lifesaving vaccines as an expression of their political identity. Dying on a ventilator to spite your perceived political enemies is not sending a very strong message of disapproval to the elite.
    - polio 4y ago
      Dying and giving up your vote is not particularly effective politics either.
  - chiefalchemist 4y ago
    I believe that when it comes to voting, those who do vote do the best they can. What's broken is the two party cartel system. Getting two choices, both of which are often second rate isn't the voters' fault. Put another way, if you don't have anyone worth voting for you're not going to vote. Voter turnout is very low. What does that tell us? Oddly enough, there's no one responsible and accountable for voter turnout. Funny how that is.
- throwaway5959 4y ago
  They’re not oblivious, they just don’t care. They’re in extraction mode in the US, the money is going to be reallocated to higher growth regions like China, India and Africa.
  - master_crab 4y ago
    Growth in China has been wildly overexaggerated as indicated by a recent report: https://www.economist.com/graphic-detail/2022/09/29/a-study-of-lights-at-night-suggests-dictators-lie-about-economic-growth https://www.economist.com/graphic-detail/2022/09/29/a-study-... (And that isn’t even considering the sharp drop in population growth China is about to experience) Plus the GDP (per capita and otherwise) in Africa and India lead me to believe there really isn’t much money being reallocated to them.
    - kennend3 4y ago
      You entirely missed their point. - The U.S. goods trade deficit with China was $310.3 billion in 2020 - The U.S. goods trade deficit with China was $355.3 billion in 2021 I think their choice of "growth" was bad, but their point of "sucking up money" was spot on. It is not an accident that China maintains a surplus, they are intentionally extracting money from them.
      - master_crab 4y ago
        What point? That America runs a trade deficit with China? That isn’t news. Have you looked at our trade relationship with Japan? Germany? It’s been negative by tens of billions for decades. No one claims they are depleting America of money. Trade deficits aren’t a zero sum game. Countries end up putting those earnings back in American securities, burning that money on useless investments (particularly relevant to China right now) and many of the inputs/outputs (like services which America excels at) aren’t ever properly recorded.
        bombcar 4y ago
        Trade deficits are wonderful. We print worthless dollars and other countries give us real valuable things in exchange. Win!
- bheadmaster 4y ago
  The whole system is rigged. Everybody knows it, but nobody can do anything against it.
  - jleyank 4y ago
    Sure they can. Stop watching news programs and vote your pocketbook.
    - bheadmaster 4y ago
      It's hard to vote with your money when you barely have enough to keep a roof over your head and food on your table. And what I do with my money is meaningless unless I coordinate with millions of other people to do the same thing. And the probability of that happening is extremely low.
      - jleyank 4y ago
        You misunderstand. Vote when thinking of your pocketbook. Not how you spend. Can’t outspend the investor class. Cut off their oxygen by restaffing government.
        bheadmaster 4y ago
        Same principle - my vote is a drop in the sea. Unless I agree and coordinate with everyone else on how to vote, it's meaningless. And the probability of that happening is extremely low. I admire the optimism, but I just don't feel it's realistic. There is absolutely nothing an individual, on their own, can do to change anything in the current world.
        jleyank 4y ago
        Correct. As long as the investors lead the sheep they’ll get sheared. It will take a groundswell that is positive rather than what is common worldwide right now.
        4y ago
jschveibinz 4y ago
According to the US Government Bureau of Economic Analysis, the personal savings rate is currently 3.5% of monthly income: https://www.bea.gov/data/income-saving/personal-saving-rate https://www.bea.gov/data/income-saving/personal-saving-rate
- bombcar 4y ago
  Averages can be really misleading in these things, because some will be saving at FIRE levels, others will be spending more than they make.
LatteLazy 4y ago
How many Americans (or Brits as I am a brit) do this because they only earn just enough for essentials, and how many because they choose to piss away their generous incomes rather than save so much as a penny?
- mensetmanusman 4y ago
  The YOLO effect?
- biggerChris 4y ago
  You do know. We can die anytime. No need to save. A lot of people in the USA save like 3,000 for emergency. Life is a joke.
deleted 4y ago
[deleted]
pengaru 4y ago
A lot of Americans don't seem to have any self-discipline when it comes to consumerism, and they're all carrying credit cards. Once you're underwater on thousands of dollars in credit card debt, while still addicted to consuming unnecessary junk for your overall happiness, it's like a real-life version of OOM thrashing.
- slively 4y ago
  I’ve always thought there’s a tipping point of fault when such a large amount of people have a problem. Small % of folks with the issue? Maybe a personal responsibility thing. Half the population can’t come up with $1000? Large amount of credit card users carrying a balance? Large swaths of people over consuming? There’s something else at work here and I struggle to point to the individual as the source of the problem.
  - pengaru 4y ago
    It all seems like predictable outcomes of capitalism run amuck. At least it's not illegal yet to live without credit cards and/or lead a frugal life. But it is arguably part of the problem IMO that credit scores have become so necessary it's difficult if not impossible to find an apartment without one. That alone is a forcing function pushing young Americans to rely on credit, greasing those consumer wheels by decoupling their spending from their earning at a young age.
    - Red_Leaves_Flyy 4y ago
      My employer keeps track of my credit worthiness. People have been fired by my employer for having bad credit because they present a risk to the company. I cannot keep my employment without maintaining good credit. Maintaining good credit cannot be done without taking on debt.
      - bombcar 4y ago
        You can maintain good credit with empty credit lines. Not amazing credit, but good.
throwaway22032 4y ago
Most people have no interest in personal finance. Zero. It's not possible to succeed without one, so they fail. There's not much more to it. People who prioritise other things above essentials fail in every endeavour. Wealth, health, happiness.
joshstrange 4y ago
If you are ever interested in getting serious about budgeting I can highly recommend YNAB [0] ("You need a Budget). It's a more advanced "envelope" system and it completely changed my relationship with money. I went from effectively living paycheck-to-paycheck (aside from hiding away some funds then blowing them randomly, no emergency fund) to now having 6 months into the future fully funded (aka I could lose all my income sources and be able to maintain my lifestyle for a minimum of 6 months without any extra cuts, of which I would make some if that happened), no debt save for my house and a tiny bit of student loans I'm waiting on, and maxing my 401k contributions. I tried YNAB three different times before it finally clicked for me and I can attribute a lot my success to Nick True's videos (specifically his "YNAB for beginners" [1] video) and a friend giving me a push at just the right moment. Let this comment be your personal wakeup call to get your finances under control and remove the background (often subconscious) stress that worrying about money causes. [0] https://www.youneedabudget.com/ https://www.youneedabudget.com/ [1] https://www.youtube.com/watch?v=exS0gU-Ie8E https://www.youtube.com/watch?v=exS0gU-Ie8E (NOTE: This is the updated 2022 version, I've only seen his original version but I assume this is the best one to watch now)
- greenie_beans 4y ago
  ynab has helped me too, though i still occasionally spend money in un-budgeted ways and just move it from an envelope
Michelle009 4y ago

32 points by ctoth 4y ago

Expenses + inflation has been outpacing income increases for many years now. The ruling class seems oblivious to the sociopolitical implications of the imbalance. The 2016 election should have been an epiphany moment. Instead they pushed their heads deeper into the sand, and ratcheted up the rhetoric and distractions. This isn't sustainable.

jleyank 4y ago
The 2016 election gave a slug of cash and tax breaks to the investor class, voted in by a huge cadre of people probably living check to check. Given that, why should it have been an epiphany? Until people vote in their legitimate best interest, nothing will change.
- MomoXenosaga 4y ago
  True but the US government, Trump himself in fact, authorised helicopter money bags when COVID 19 disrupted society. In fact as much as I hate Trump he was change: the first evidence of the old elite losing control.
  - jleyank 4y ago
    All countries threw bags of money. The difference was who it was thrown at.
  - andrekandre 4y ago
    > the first evidence of the old elite losing control. admittedly pre-covid, but trumps tax-cuts greatly benefited the elites...
- Maursault 4y ago
  > Until people vote in their legitimate best interest, nothing will change Best interest here means best economic interests. About 25% of Republicans earn less than $30K/yr, another 25% earn less than $50K, another 25% earn less than $100K/yr, and another 23% of Republicans earn less than $300K/yr. This means 98% of Republicans have absolutely no idea what they're doing and are voting themselves into economic stagnation. The 2% of Republicans earning more than $300K/yr are quite shrewd, but at moral cost. The Republican Party is made up nearly entirely of the bamboozled, yet while they will never see economic opportunity while Republicans hold power, they are paying for the 2% to make inroads on the 0.01%.
  - Red_Leaves_Flyy 4y ago
    Do you have sources for those numbers?
    - Maursault 4y ago
      Yes, but I eye-balled it.[1] Satisfied? [1] https://www.pewresearch.org/religion/religious-landscape-study/compare/income-distribution/by/state/among/party-affiliation/republican-lean-rep/ https://www.pewresearch.org/religion/religious-landscape-stu...
      - Red_Leaves_Flyy 4y ago
        Awesome, thanks. Note of warning for lurkers, the page is broken on my mobile.
  - patrick451 4y ago
    Without a baseline, your numbers are both meaningless and uninteresting.
    - Maursault 4y ago
      Lovely straw man. Out of curiously, just what exactly are you talking about? Why do you think a baseline is needed? Because I have no earthly idea what you mean by "baseline" in the context of what percentages of Republicans earn.
- rayiner 4y ago
  Corporate tax breaks, like those in Trump's tax cuts, are complicated in terms of their effect on the economy. There's a reason why even countries with robust social democratic parties like Germany and Sweden have low corporate taxes. At least in theory corporate tax cuts drive business activity and lowers unemployment, which happened during Trump's presidency. Meanwhile, Trump also took aim at the "investor class" by capping SALT deductions, which hurt rich people in the orbit of Wall Street and Silicon Valley. As a practical matter, moreover, tax cuts are something Republicans can do with only 51 Senate votes, because the budget is an exception to the filibuster's 60 vote requirement. Query what would have happened if we eliminated the filibuster and the GOP had more room to give their voters what they want.
  - bombcar 4y ago
    Corporate taxes just come from the customers of the corporations. It may be more palatable but it’s just VAT with extra steps. The SALT change and the deductible increase affected large swaths of taxpayers favorably-mostly the working poor who made enough to pay taxes but not enough for much deductions.
- hotpotamus 4y ago
  There's that, but also people are now turning down free, potentially lifesaving vaccines as an expression of their political identity. Dying on a ventilator to spite your perceived political enemies is not sending a very strong message of disapproval to the elite.
  - polio 4y ago
    Dying and giving up your vote is not particularly effective politics either.
- chiefalchemist 4y ago
  I believe that when it comes to voting, those who do vote do the best they can. What's broken is the two party cartel system. Getting two choices, both of which are often second rate isn't the voters' fault. Put another way, if you don't have anyone worth voting for you're not going to vote. Voter turnout is very low. What does that tell us? Oddly enough, there's no one responsible and accountable for voter turnout. Funny how that is.
throwaway5959 4y ago
They’re not oblivious, they just don’t care. They’re in extraction mode in the US, the money is going to be reallocated to higher growth regions like China, India and Africa.
- master_crab 4y ago
  Growth in China has been wildly overexaggerated as indicated by a recent report: https://www.economist.com/graphic-detail/2022/09/29/a-study-of-lights-at-night-suggests-dictators-lie-about-economic-growth https://www.economist.com/graphic-detail/2022/09/29/a-study-... (And that isn’t even considering the sharp drop in population growth China is about to experience) Plus the GDP (per capita and otherwise) in Africa and India lead me to believe there really isn’t much money being reallocated to them.
  - kennend3 4y ago
    You entirely missed their point. - The U.S. goods trade deficit with China was $310.3 billion in 2020 - The U.S. goods trade deficit with China was $355.3 billion in 2021 I think their choice of "growth" was bad, but their point of "sucking up money" was spot on. It is not an accident that China maintains a surplus, they are intentionally extracting money from them.
    - master_crab 4y ago
      What point? That America runs a trade deficit with China? That isn’t news. Have you looked at our trade relationship with Japan? Germany? It’s been negative by tens of billions for decades. No one claims they are depleting America of money. Trade deficits aren’t a zero sum game. Countries end up putting those earnings back in American securities, burning that money on useless investments (particularly relevant to China right now) and many of the inputs/outputs (like services which America excels at) aren’t ever properly recorded.
      - bombcar 4y ago
        Trade deficits are wonderful. We print worthless dollars and other countries give us real valuable things in exchange. Win!
bheadmaster 4y ago
The whole system is rigged. Everybody knows it, but nobody can do anything against it.
- jleyank 4y ago
  Sure they can. Stop watching news programs and vote your pocketbook.
  - bheadmaster 4y ago
    It's hard to vote with your money when you barely have enough to keep a roof over your head and food on your table. And what I do with my money is meaningless unless I coordinate with millions of other people to do the same thing. And the probability of that happening is extremely low.
    - jleyank 4y ago
      You misunderstand. Vote when thinking of your pocketbook. Not how you spend. Can’t outspend the investor class. Cut off their oxygen by restaffing government.
      - bheadmaster 4y ago
        Same principle - my vote is a drop in the sea. Unless I agree and coordinate with everyone else on how to vote, it's meaningless. And the probability of that happening is extremely low. I admire the optimism, but I just don't feel it's realistic. There is absolutely nothing an individual, on their own, can do to change anything in the current world.
        jleyank 4y ago
        Correct. As long as the investors lead the sheep they’ll get sheared. It will take a groundswell that is positive rather than what is common worldwide right now.
      - 4y ago

jschveibinz 4y ago

According to the US Government Bureau of Economic Analysis, the personal savings rate is currently 3.5% of monthly income: https://www.bea.gov/data/income-saving/personal-saving-rate https://www.bea.gov/data/income-saving/personal-saving-rate

bombcar 4y ago
Averages can be really misleading in these things, because some will be saving at FIRE levels, others will be spending more than they make.

LatteLazy 4y ago

How many Americans (or Brits as I am a brit) do this because they only earn just enough for essentials, and how many because they choose to piss away their generous incomes rather than save so much as a penny?

mensetmanusman 4y ago
The YOLO effect?
biggerChris 4y ago
You do know. We can die anytime. No need to save. A lot of people in the USA save like 3,000 for emergency. Life is a joke.

deleted 4y ago

[deleted]

pengaru 4y ago

A lot of Americans don't seem to have any self-discipline when it comes to consumerism, and they're all carrying credit cards. Once you're underwater on thousands of dollars in credit card debt, while still addicted to consuming unnecessary junk for your overall happiness, it's like a real-life version of OOM thrashing.

slively 4y ago
I’ve always thought there’s a tipping point of fault when such a large amount of people have a problem. Small % of folks with the issue? Maybe a personal responsibility thing. Half the population can’t come up with $1000? Large amount of credit card users carrying a balance? Large swaths of people over consuming? There’s something else at work here and I struggle to point to the individual as the source of the problem.
- pengaru 4y ago
  It all seems like predictable outcomes of capitalism run amuck. At least it's not illegal yet to live without credit cards and/or lead a frugal life. But it is arguably part of the problem IMO that credit scores have become so necessary it's difficult if not impossible to find an apartment without one. That alone is a forcing function pushing young Americans to rely on credit, greasing those consumer wheels by decoupling their spending from their earning at a young age.
  - Red_Leaves_Flyy 4y ago
    My employer keeps track of my credit worthiness. People have been fired by my employer for having bad credit because they present a risk to the company. I cannot keep my employment without maintaining good credit. Maintaining good credit cannot be done without taking on debt.
    - bombcar 4y ago
      You can maintain good credit with empty credit lines. Not amazing credit, but good.

throwaway22032 4y ago

Most people have no interest in personal finance. Zero. It's not possible to succeed without one, so they fail. There's not much more to it. People who prioritise other things above essentials fail in every endeavour. Wealth, health, happiness.

joshstrange 4y ago

If you are ever interested in getting serious about budgeting I can highly recommend YNAB [0] ("You need a Budget). It's a more advanced "envelope" system and it completely changed my relationship with money. I went from effectively living paycheck-to-paycheck (aside from hiding away some funds then blowing them randomly, no emergency fund) to now having 6 months into the future fully funded (aka I could lose all my income sources and be able to maintain my lifestyle for a minimum of 6 months without any extra cuts, of which I would make some if that happened), no debt save for my house and a tiny bit of student loans I'm waiting on, and maxing my 401k contributions. I tried YNAB three different times before it finally clicked for me and I can attribute a lot my success to Nick True's videos (specifically his "YNAB for beginners" [1] video) and a friend giving me a push at just the right moment. Let this comment be your personal wakeup call to get your finances under control and remove the background (often subconscious) stress that worrying about money causes. [0] https://www.youneedabudget.com/ https://www.youneedabudget.com/ [1] https://www.youtube.com/watch?v=exS0gU-Ie8E https://www.youtube.com/watch?v=exS0gU-Ie8E (NOTE: This is the updated 2022 version, I've only seen his original version but I assume this is the best one to watch now)

greenie_beans 4y ago
ynab has helped me too, though i still occasionally spend money in un-budgeted ways and just move it from an envelope

Michelle009 4y ago