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No one said these people who don't have $400 are min wage workers.
For all anyone knows they could be making $90-$100K a year and spending it all so they have nothing left.
One can have an empty bank account regardless of how much they make as a wage.
If faced with an unexpected expense of $400, 61 percent of adults say they would cover it with cash, savings, or a credit card paid off at the next statement—a modest improvement from the prior year. Similar to the prior year, 27 percent would borrow or sell something to pay for the expense, and 12 percent would not be able to cover the expense at all.
What the Federal Reserve is actually saying is that people are better-off now than they were under Obama.
The 2015 Report says....
To determine individuals’ preparedness for a smaller-scale financial disruption, respondents are asked how they would pay for a hypothetical emergency expense that would cost $400. Just over half (54 percent) report that they could fairly easily handle such an expense, paying for it entirely using cash, money currently in their checking/savings account, or on a credit card that they would pay in full at their next statement (collectively referred to here as “cash or its functional equivalent”). The remaining 46 percent indicate that such an expense would be more challenging to handle and that they either could not pay the expense or would borrow or sell something to do so.
2015: 54% could handle a $400 sudden expense while 46% could not.
2018: 61% could handle a $400 sudden expense while 39% could not.
The economy is better, since a greater number of people can handle a $400 sudden expense.
If those numbers were reversed, then someone might actually have an argument the economy is bad.
I haven't parsed all the facts, but from what I can tell, this also doesn't say they DON'T have savings - it just says what they would use if they were faced with an unexpected expense.
For instance, when I was in my early thirties I had some retirement savings but no real easy cash on hand in a savings account - not much anyway. But what I did have, I wouldn't have used as my first option. Sense or no sense, I would have probably charged something that was under $500 on a credit card before I wiped out or put a huge dent in my cash on hand - which wasn't much.
Now I don't worry about that sort of thing.
Anyway, so 12 percent of Americans couldn't pay for a large unexpected expense. Why do I have a feeling that no matter how good things get overall, there is always going to be a small percentage of people who have no recourse, no savings, etc.?
As someone who has lived this life before, I also want to point out that this study is limited to the here and now, this instant. Not a week from now or whatever. Not the time it may take to get some savings out of another sort of fund either.
first and most importantly, it's a complete falsehood to say we have the weakest economy in decades.
it may be true that GROWTH over some period of time you wish to claim is weaker than growth over 1 or more similar length periods in the past few decades. Perhaps you can enlighten us all and provide this info, rather than a wildly false claim.
Quote:
Originally Posted by EddieB.Good
Besides the point that the 40% are not just limited to min wage earners, this is all just meaningless data citing.
The issue isn't that they can't save $400. It's that they are spending 100% of their disposable income and we have the weakest economy in decades.
To repeat: 40% of the Americans are spending 100% of their disposable income and we STILL HAVE THE WEAKEST ECONOMY IN DECADES.
Are you understanding what I'm saying yet?
as long as your point is it's the weakest economy, it's pointless to argue a falsehood. Now, if your point is non-partisan and ONLY "why do they spend all their disposable income?" then the immediate answer would be HEALTH CARE.
Quote:
This is meaningless babble. First of all, if they spend less, OUR ECONOMY CRATERS! Do you understand that?
I believe I've already quoted retail growth - consumerism - was 4%, and 3% was considered good. And folks - if they ONLY made minimum wage - would need to reduce their total spending by 2%.
Do you think 40% of adults is some insignificant slice of the economy? You're suggesting that 40% of consumers scale back their spending and you don't think that's going to have a devastating impact?
I'm confused as to whether you DO or DON'T want to involve data. For my answer to this, please read my prior post.
also read the other person's post that said that the survey was overweighted to low-income people (I don't think it said an actual % though)
To quote from history " 'It is difficult to get a man to understand something, when his salary depends on his not understanding it."
Between Wage Slaves, Billionaires, Paid Pundits, Media and many many others that rings true. People who are in chains, virtual or otherwise, are not exactly going to sit around and realize how much they've been screwed....or even how much they are screwing others.
Some people are not comfortable with notion that; chance, luck and fate might have played some part in their success. They have to believe it was their hard work and their enterprising nature that got them where they are today. But then they see some one who has all those tributes who is not doing well and they look at them as an enigma. It would burst their bubble to believe that intelligence, hard work and an enterprising nature is not enough to lift every one out of financial despair. So they look harder at the person to find something that they can disparage.
It was having children, it was the cell phone, it was drinking brand name soda pop, eating out, but it must be something.
Nobody is suggesting money should stop being fed into or circulated within the economy. Our economy is not dependent on every person in it spending every last cent they have the instant they have it. We are a consumer driven service economy, true, but that doesn't mean that any amount of saving will wreck the economy.
Saving is deferred spending. The money gets moved through the economy eventually, just not today. It doesn't disappear, and money that was saved in the past is spent in the present, albeit at less NPV if it was simply socked away versus invested.
If liquid cash on hand detracts from anything, it is lenders who profit off interest paid by borrowers. A person who pays cash for things doesn't pay interest. So someone could buy all of the things you say the economy needs, but they can budget and/or save to pay cash for them instead of adding interest fees associated with borrowing.
Again, nobody is talking about saving every last dime you ever get, but saving enough that if an emergency happens, you won't have to borrow your way to a solution. You're going the reductio ad absurdum route to make your rebuttal by suggesting the economy shuts down if people save money.
it's like the old saying "feed a man a fish, and he eats for a day ..."
If I take $400/mo I could have spent - would have liked to spend on any consumer good - and instead put it in an index fund, then over time that money will be used by the corporations to create those consumer goods, to make more money, and increase the value of my money. Or I can enjoy a depreciating asset, and have nothing to show financially for my $400 consumer good in a year or less.
Some people are not comfortable with notion that; chance, luck and fate might have played some part in their success. They have to believe it was their hard work and their enterprising nature that got them where they are today. But then they see some one who has all those tributes who is not doing well and they look at them as an enigma. It would burst their bubble to believe that intelligence, hard work and an enterprising nature is not enough to lift every one out of financial despair. So they look harder at the person to find something that they can disparage.
It was having children, it was the cell phone, it was drinking brand name soda pop, eating out, but it must be something.
Some people are not comfortable with notion that; chance, luck and fate might have played some part in their success. They have to believe it was their hard work and their enterprising nature that got them where they are today. But then they see some one who has all those tributes who is not doing well and they look at them as an enigma. It would burst their bubble to believe that intelligence, hard work and an enterprising nature is not enough to lift every one out of financial despair. So they look harder at the person to find something that they can disparage.
It was having children, it was the cell phone, it was drinking brand name soda pop, eating out, but it must be something.
"nobody" chooses to become disabled and unable to work. I don't believe anybody begrudges helping the truly disabled.
Nobody chooses to have a chronic medical condition that costs them $1,000's more annually than healthy people.
There are exceptions to all conditions. 40% isn't a sum of the exceptions. It's an indication of bad habits and choices in the vast majority of the 40%.
if you believe that there are only 2 types, and they're both on the extreme. Sure.
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