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Old 08-07-2019, 09:18 PM
 
20,372 posts, read 11,319,693 times
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Quote:
Originally Posted by MinivanDriver View Post
Debt in itself is neither bad nor good. It is debt you cannot pay is bad. And as I pointed out earlier in this thread, the percentage of household disposable going towards servicing debt has cratered to levels we haven't seen since the 70s or 60s.
That is the "Potemkin Village" factor.
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Old 08-07-2019, 09:26 PM
 
5,588 posts, read 2,375,811 times
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Quote:
Originally Posted by Ralph_Kirk View Post
That is the "Potemkin Village" factor.

Cute. But no.



The poster I was responding to somehow hoists 1948 as the year to which we should compare.



All right. The poverty rate in this country in 1948 was around 30%. That last statistics I saw for the poverty rate in 2017 was 11.2%.



Better opportunity for all sectors of society as opposed white males, better housing, better healthcare, better life expectancy, better everything.



Anybody who somehow claims that life was better for the average American in 1949 or 1959 or 1979 as opposed to today is just not looking at in an objective way.
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Old 08-07-2019, 09:51 PM
 
20,372 posts, read 11,319,693 times
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Quote:
Originally Posted by MinivanDriver View Post
Cute. But no.



The poster I was responding to somehow hoists 1948 as the year to which we should compare.



All right. The poverty rate in this country in 1948 was around 30%. That last statistics I saw for the poverty rate in 2017 was 11.2%.



Better opportunity for all sectors of society as opposed white males, better housing, better healthcare, better life expectancy, better everything.



Anybody who somehow claims that life was better for the average American in 1949 or 1959 or 1979 as opposed to today is just not looking at in an objective way.
This thread is not about the "average American." Nor is it about "life was better."

It's about the financial struggles of the middle class.

The fact that the middle class is shrinking is proof enough that it is struggling.
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Old 08-08-2019, 04:03 AM
 
12,751 posts, read 10,067,560 times
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Quote:
Originally Posted by notch on my belt View Post
Things that make life in the middle class more stressful today include: Medical Costs, Health Insurance, No Pensions (You must save for retirement yourself), school expenses for the kids that people in my day did not have to worry about, College Tuition, a second or third car with all the bells and whistles that have jacked up the costs, the costs of travel, Cable TV, Cell Phones, Out to Eat Meals, Credit Card Interest, etc.

When I was a kid we did fine, at least we thought we did because there were not so many messages by Madison Avenue and the media telling us we were nothing unless we had the latest toys and all the things I listed above.

The government says the median income for the bottom 80% of the population, adjusted to inflation, has not really moved up since the early 1980s but somehow the middle-income people are spending more on all these things. How do they do it?
The bolded items are (often or usually) discretionary consumer goods/services.

The increased consumption has come at the expense of savings.

A drop from a 12.5% savings rate to a 7.5% rate may not seem like much, but it is actually a 40% drop in the amount being saved if real income is constant! Even falling from 10% to 7.5% is a 25% drop...

https://fred.stlouisfed.org/series/PSAVERT
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Old 08-08-2019, 04:36 AM
 
26,246 posts, read 33,232,193 times
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Quote:
Originally Posted by Berrie143 View Post
My husband goes to Top Golf about once a year with his dad and/or buddies and has a great time. He spends about $75-100 for just himself and that's going all out- paying his portion of the Uber/Top Golf, drinks and bar food. Would I want him to do it every weekend or even once a month? Eh, probably not, but, considering that a lot of the golf courses in DFW can be $75+ for a Saturday AM round, Top Golf provides a nice alternative.

Everyone has a different definition of what "middle class" really is. It amazes me that people can complain that they "have no money" to have experiences or the like, but then they drive up in a new SUV that stickers at $60K, pull a new $1K phone out of their pocket and show me into their house that cost $600K. Uhhhh, what? LOL!

To me, middle class is:
1. Nice/decent house in a safe neighborhood
2. Good cars with reasonable payments (to me, reasonable is $300 a month or below so that probably means a USED car, gasp!)
3. Quality public schools for your kids.

4. One nice vacation per year.

5. Being able to still save for rainy days and retirement while paying your bills.

6. Splurging on something once in awhile, whether it be a new electronic or experience and PAYING FOR IT ALL AT ONCE.

I don't know, I suppose it all depends on what you choose to make important to you and your family. If having the latest and greatest in phones and cars is what's important, then expect to pay for them and don't whine about the cost.

That ^^ is a notch above middle class to me.

We were absolutely middle class growing up. Saving for retirement was not anything my parents ever were able to accomplish. They did retire, but only because my dad had a small pension, and they had saved enough money from the buying and selling of 2 homes in their later years (long after kids were all grown and married with children of their own).

There was no nice vacation each year. If we were lucky, we got thrown in the back of the station wagon and fought the whole 18 hour drive up to see family in NC.

Always just one car, but a good one.

Houses were okay, each one was better than the last. (We moved around a lot.)

No splurging on anything. Ever.


And for me, after I moved out at 23, that (the description above) was still above my level. I don't think I reached that level until maybe my early 40's - earlier than my parents did for sure.

As for the OP - middle class was ALWAYS a struggle. That was always just a part of life.

Last edited by ChessieMom; 08-08-2019 at 04:59 AM..
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Old 08-08-2019, 04:39 AM
 
26,246 posts, read 33,232,193 times
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Quote:
Originally Posted by notch on my belt View Post
There has been a flurry of stories recently in the news talking about how much the middle class has been struggling financially. As a person who has closely watched economics and personal finance stories in the news for over 40 years, I have to say I don't remember a year in my lifetime where the middle class did not struggle financially. It seemed like every year there was a story in the news about how the middle class is struggling.

The articles that are being written today seem to be saying that middle-class people have it harder TODAY than in the past. It is easier to make that blanket statement, but harder to back it up. Was there a date(s) in the last 60 years where middle-income people had it easier and could live a 2019 version of the middle-class lifestyle without watching their budget and getting into debt? What year in our history did the middle class have the highest standard of living?

If things are so great today economically, why is there an uptick this year in the media stories about middle-class struggles?
Surely this is not a mystery. Because it gets people's attention. It's a revenue generator.

Quote:
Originally Posted by Dd714 View Post
Also, I mean, the media isn't going to do a news story on how the middle class is doing great are they. That doesn't sell news or generate clicks for web stories. People don't really care about good news, they want to read about bad news. There is also an obvious political bias and "good economic news" doesn't fit their agenda.
Exactly.

Last edited by ChessieMom; 08-08-2019 at 04:58 AM..
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Old 08-08-2019, 05:04 AM
 
26,246 posts, read 33,232,193 times
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Quote:
Originally Posted by notch on my belt View Post
All the things you say below is true but with these opportunities cost money. For example, I am constantly online looking at e-commerce sites and mostly out of boredom I break out my credit card and buy buy and buy. I see there is so many things to do, places to go and wonderful experiences that are offered. By just giving them a credit card number, it can all be mine. These all have become necessities in the middle class and if we can't have them we feel terrible and unfulfilled.
Then you have a spending problem - unless you are wealthy. Only the wealthy spend out of boredom. I have not yet reached that point, unfortunately.
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Old 08-08-2019, 06:25 AM
 
Location: DFW/Texas
778 posts, read 704,077 times
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Quote:
Originally Posted by ChessieMom View Post
That ^^ is a notch above middle class to me.

We were absolutely middle class growing up. Saving for retirement was not anything my parents ever were able to accomplish. They did retire, but only because my dad had a small pension, and they had saved enough money from the buying and selling of 2 homes in their later years (long after kids were all grown and married with children of their own).

There was no nice vacation each year. If we were lucky, we got thrown in the back of the station wagon and fought the whole 18 hour drive up to see family in NC.

Always just one car, but a good one.

Houses were okay, each one was better than the last. (We moved around a lot.)

No splurging on anything. Ever.


And for me, after I moved out at 23, that (the description above) was still above my level. I don't think I reached that level until maybe my early 40's - earlier than my parents did for sure.

As for the OP - middle class was ALWAYS a struggle. That was always just a part of life.

What is considered the middle class?
The Pew Research Center defines the US middle class as those earning 67% to 200% of the median household income. Middle-class Americans earned about $40,425 to $120,672 in 2016, according to Pew's definition, but middle-class incomes vary at the state and city levels. Nov 14, 2018


Like I said, everyone's definition of middle class is different but here is what is considered a basic definition. While those income levels have a huge gap between them, it gives you an idea of what the middle class is earning. If people making 120K per year can't afford the type of lifestyle I described, then, to me, they have spending problems. Hell, if they're earning 75K and can't maintain that kind of lifestyle then they may also want to look into some financial counseling.

Oh, and just to clarify- a nice vacation to me means being able to leave your house and go somewhere, whether it be via a car or plane, and post up for a week or less. You can score some cheap plane tickets if you look hard enough for them. These vacations do NOT mean Disney World, trust me. I looked into going there and almost passed out at how much we would spend on less than a week- it was almost EIGHT THOUSAND DOLLARS. Once again, a "nice vacation" is different to everyone. We spend an average of $1500 or less on a week's vacation for 4 and that can include plane tickets, along with the place we're staying at and food/gas/treats. We don't go every year and if we don't, we try to make camping trips throughout the year.
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Old 08-08-2019, 10:19 AM
 
975 posts, read 251,463 times
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Quote:
Originally Posted by MinivanDriver View Post
The other thing? Let's compare the middle class of 1948. Life expectancy has increased remarkably. Opportunity has increased remarkably. And, as I guess I need to point out again, there were huge swaths of American society that were pretty much barred from having any chance at a middle-class lifestyle at all.
Well, let's look at a few of those things:

Yes, life expectancy has increased markedly since 1948, but we've actually seen a decline in those numbers over the last three consecutive years, something that hasn't happened since 1915-1918 (WWI and Spanish Flu epidemic). Small sample size and all, but something that could become a worrying trend. And the reasons oft cited: rise in drug overdoses, increase in liver disease, and marked rise in the suicide rate. Over the last 20 years, the US suicide rate has risen 33%, while the global rate has decreased 30%. These things hardly seem like the hallmark of a society that feels optimistic.

And, I'll certainly cede that opportunity has increased, especially for women and minority groups. However, I would argue that that increased opportunity largely exists on an individual, not a group, level, as we can see by the amount of poverty that still exists in this country, which largely affects those minority communities. In fact, since implementation of the Great Society, we've remained relatively unchanged in national poverty rate since the mid-60s. And we're seeing an marked increase in income inequality.

And, while certain segments of society have the opportunity to not be left behind anymore, we're simply leaving different segments of the population behind--most especially the uneducated, who used to be able to carve out a decent living with just a high school diploma. We can argue the merits of whether they should be, but the reality is that a simple bell curve distribution would show that about 25% of the population lies below a range that would be considered "average" intelligence, while 49.9% of the population lies below the midpoint. We can be worried about the fact these people are being left behind, or we can just call them lazy and unmotivated. I'll let you choose which is more productive.

As for women, yes they have more "opportunity" to carve their way in the middle class. However 50-60 years ago, many of them had the opportunity to be in the middle class simply based on the one income of their spouse. I'm certainly not suggesting that we go back to those days in terms of the opportunities for women, but it is hard to say with a straight face that the middle class isn't doing marked worse when it takes two incomes to achieve a level that could formerly be achieved with one.
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Old 08-08-2019, 10:46 AM
 
Location: Myrtle Creek, Oregon
12,442 posts, read 12,639,033 times
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Quote:
Originally Posted by Larry Caldwell View Post
One of the things that was not available was credit cards. Total credit card debt is over $1 trillion in the US. Assuming an 18% average interest rate (probably low), that costs $18 billion a year. The average American has a credit card balance of $4,293, according to the latest Experian data. Add in late payment penalties and over limit charges and it adds up to over $800/year. Add in unnecessary impulse and convenience purchases, and the cost of using a credit card quickly becomes astronomical.

In the old days, when you ran out of money at the bar, you had to quit drinking.
My apologies. I slipped a decimal point there. Credit card debt costs American cardholders $180 billion a year.
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