[johnm1019]

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.

[rndmize]

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-201...

[master-litty]

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]

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.

[alasdair_]

>the entire economy is designed to do this

Unless you are a firm believer in the power of the Illuminati, we have as close to the opposite of a planned (and thus designed) economy as one can get in the present day.

Just because a behavior or other feature in a complex system is emergent doesn't mean the system was initially designed that way.

[api]

I really dislike how absurd conspiracy theories are used to discredit any discussion of networks of power and how those networks operate.

There is no vast monolithic conspiracy but there are certainly many smaller ones (lobbyists, front groups, back room deals, etc.) with incentives that align. Alignment of incentives can generate a result that looks a whole lot like the result of a big organized conspiracy.

If anything the less organized network of aligned interests is tougher to resist than an "Illuminati." It's more resilient and antifragile. Big vertically integrated power structures are slow and brittle.

[heurist]

Read this book and tell me America is a free market: https://www.amazon.com/Framers-Coup-Making-United-Constituti...

In short:

1. A big chunk of the issues leading to today's constitution were tax and debt relief measures being instituted by the states in response to populist movements.

2. The framers were mostly very wealthy and biased toward preservation of capital.

3. Many of the measures instituted in the constitution were designed to preserve wealthy Americans' property (slaves, for instance). Populist debt relief efforts made this an especially high priority.

4. The only way to get the states to ratify the constitution was to concede many populist goals (state legislators were largely very wealthy as well, and apparently stubbornly pessimistic about the constitution despite its immediate necessity).

The book goes into great detail on the reasoning and compromises made to create the constitution. I think you will find that politics rigidly define the operation of our markets.

I get where you're coming from but you have some insufficient assumptions about the context in which this particular complex system operates.

[toofy]

> we have as close to the opposite of a planned (and thus designed) economy as one can get in the present day.

I understand why this might seem like the most obvious answer, but your analysis seems to not take into account things like revolving door politics, regulatory capture, lobbyists priority access to lawmakers, citizens united, etc... etc... etc...

I don’t think most people would suggest that there is a small table surrounded by evil cackling billionaires conspiring to pull every single worldwide string, but rather there is a relatively small number of people who have enough money to buy themselves access to writing regulation and laws which favor their own interests which will often coincidentally align with the other billionaires who can afford this kind of access.

We can’t ignore the ways in which issues like this skew influence to a small number of powerful interests.

[grigjd3]

I'm not in line with jadedhacker, but its hard to ignore how often regulatory legislation is written by the industry being regulated.

[eli_gottlieb]

Then explain the extreme degree of market concentration seen in today's "free" economies.

[jadedhacker]

I am a firm believer in corporate consolidation, so yes, those smoke filled rooms do exist. However, you can consider this a systemic critique of capitalism which systemically concentrates wealth. The intention doesn't matter if the system is set up to create a particular result.

[eli_gottlieb]

>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.

Of course. That's no excuse to snarf your coffee instead of putting nose to the grindstone and doing the work. Agitate, educate, organize!

[pishpash]

All you're going to do with that is to piss off the upper middle class, not the people who actually got fat on the backs of the poor and who are so far ahead of the situation that you're never getting that money back. It's gone. The only equalizer left is massive inflation, which may happen for other reasons.

[aninhumer]

Inflation doesn't make much difference to inequality, because the wealth of the rich is primarily assets not cash.

[eli_gottlieb]

Insofar as those assets are actually debt instruments, they become worthless under high inflation.

[kamaal]

This is so true.

If anything inflation only makes matters worse for people who weren't careful enough to save and invest in assets(like land) early on in their life.

[jadedhacker]

Don't despair comrade, the revolution is coming (we must hope). Trump and Sanders both showed that the citizenry are restless and are ready to demand (some kind of) change.

[scarface74]

Yes and when they demand change and start "taxing the rich". You're going to find that a lot of doctors, lawyers, and people in IT who are making low six figures are going to be classified as "the rich".

[ryanx435]

This is an even more childish comment. You think you can change how human nature fundamentally works? How naive.

People are selfish and greedy. They always have been. They always will be.

Any solution to a problem that relies on building "a new kind of social momentum" are ignorant at best and actively harmful at worst.

[smilangalang]

You are wrong. In a healthy, high functioning family, values are extremely different than what you describe. The fact that massive amounts of homes are broken, with the children only being raised by one parent, the prevalence of drug abuse, "substance" abuse such as caffeine and sugar, poor diets and habits... Is not human nature, it's a systemic illness. These two things are not the same.

[jabgrabdthrow]

You sound like you’re trying to be edgy. Are Democracy and Polio Vaccines actively harmful?

Parent comment is right.

[ryanx435]

Oh are we listing arbitrary inventions or historical events to prove our points?

People are selfish and greedy:

Subprime mortgage crisis

Enron

George Soros shorting the British pound

The entire Mongolian expansion and their culture of rape and pillaging

* Small time Nazi officers stealing Jewish people's wedding rings

* Too big to fail

* Literally any employment contract where people are laid less than market value.

* Thieves exist.

* Murderers exist

* Corruption exists

* Swindlers exist

I guess that acknowledging human nature is edgy now. Well, fuck it. I must be edgy then.

[ionised]

For each of those destructive things you mentioned I could name a positive and contributing thing.

Humans aren't all bad or all good. It's a spectrum of traits and behaviours, and they absolutely can be altered and conditioned.

[dragonwriter]

> 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

The current administration was elected with fewer votes than the leading opponent, so it certainly reflects a subset of voters and the politicians comprising the administration, but hardly is a basis for concluding that voters in general have zero interest in issues simply because the administration evidently does not.

[smilangalang]

While I agree with your stance, I don't think using HRC as an example, nor her supporters is an accurate example. She got played trying to play the GOP's own games. Now if you had said Bernie specifically...

[stevenwoo]

Although comforting, the having a majority of the votes is a misleading metric in some ways, the electoral college is skewed so that voters in states with lower population have more power so each vote is not equal. This effect carries over to the Senate where a similar outcome with lower population states having more power so one person's vote is more powerful depending upon their geographic location.

[dragonwriter]

> Although comforting, the having a majority of the votes is a misleading metric in some ways

In some ways, perhaps, but not when the question is whether the actions of the person elected can, based on the election results, be taken as proof that the voters collectively have zero concern for an issue.

> the electoral college is skewed so that voters in states with lower population have more power so each vote is not equal.

True.

> This effect carries over to the Senate

No, it's a carryover from the Senate: electoral college representation is identical by state to Congressional representation in both houses combined.

[eli_gottlieb]

> Your post is optimistic to the point I choked on my coffee.

Don't sneer. Do the hard work to make necessary things happen.

[smilangalang]

Statistically and psychologically speaking, his voice reflects the paradigms and perceptions of someone who has resorted to corrupt behavior, i.e. Using other people, relying on people to bail him out of taking responsibility for his actions, lying and skewing or hiding the truth to gain a competitive edge, etc. He could also just be someone who recently forsook his values because that is the nature of corruption, it slowly spreads like a cancer.

This will become more and more apparent in the coming years and I do believe it will be at the center of all conflict and political discourse going forward.

Nihilistic minds will lead us down a path that depletes the healthy parts of the system(s) upon which such people rely too heavily. And these aforementioned parasitic systems are not good at generating wealth nor are they historically efficient at generating innovation or new, stronger systems.

There might not be a revolution, but there will be a subverting downward spiral that will end with a wake up call. One can only hope and try to convince & convert others to put on the brakes long and hard enough for us to develop immunities and fixes.

[ioquatix]

Modern day slavery. Wow, never did I see it like this before.

[sjg007]

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.

[roenxi]

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 [2] https://fred.stlouisfed.org/series/A033RC1A027NBEA

[jarfil]

Some people are getting huge amounts of money just because they can, and today's society, with the growing relevance of intellectual property, is geared more and more towards income inequality.

It used to be that one could somewhat easily get $1M by just selling 1 million people some $1 items, however that required making 1M items in the first place. Nowadays one can get the same $1M by making just a single unit of IP, and selling 1M copies at $1 each. Sure there is no guaranteed way of knowing whether some IP will sell 1M copies, but that only turns it into a sort of lottery which exacerbates the inequality even more.

Given that money -and particularly M2- is credit, which is kind of an "intellectual property" on itself, it isn't really surprising that a greater amount of IP in circulation would also mean a greater amount of credit/money.

Workers who exchange their effort for a fixed amount of income, are just out of all this IP lottery and its income multiplying potential.

[taysic]

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?

[dv_dt]

QE, Fractional reserve banking is basically printing money on every loan, us gov't budget deficit prints money. In terms of inflation, it does seem the supply needed to keep expanding to prevent a liquidity collapse of the economy - though my suspicion is it needed to keep expanding because the finanicialized sections of the economy basically keep sucking it up, somehow locking it up from liquidity in the economy.

[pnj9]

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

[jabgrabdthrow]

No, you are talking deep state (unelected “eternal beaurocracy”), they’ve just associated that term with crazies and racists like everything else that threatens them, so you’re scared to use it.

[pnj9]

Don’t put words in my mouth

Deep state is nonsense. It’s public record what’s going on

Lack of information or looking on the part of the rubes and proles doesn’t mean “conspiracy”

Especially when it’s a Google search away

[scarface74]

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-201...

[dragonwriter]

> 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]

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?

[AstralStorm]

The difference is owning major assets. Be it a company, many housing investments, office spaces, factories, big farms, major amounts of stocks, financial institutions etc. Secondary, amount of political and medial power and pressure wielded.

Finally, a condition wether your own labour is not technically required for survival.

Most petit bourgeoisie still has to work, does not wield direct (individual) political power nor has big enough assets to survive despite major downturns.

The difference from proletariat is that they can rent and hire labour. Sometimes they get to manage it too.

[dragonwriter]

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.

[Maybestring]

Do I understand correctly that an Uber driver with a 30k capital investment in a car is part of the petite bourgeoise, and a surgeon working for a hospital who has put 400k toward education is part of the proletariat? Or do you count education as capital?

[ryanx435]

It's funny to me that you are using words like proletariat and bourgeois, words used to describe class differences in an agrarian basee society/economy, to describe modern america, which is as opposite as you can get from an agrarian society.

The social Dynamics of the modern anerican situation have changed so much from when Marx was alive his labels no longer accurately apply.

[kamaal]

>>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.

[mayniac]

>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]

>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_plutocr...

[dorgo]

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]

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.

[ralusek]

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.

[headmelted]

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.

[devonkim]

The problem with being poor is that it is extremely taxing on both your time, your ability to make rational decisions, and even IQ. Being poor is, in effect, a disability that keeps one from being able to make it out of that situation itself. Depression and many other mental conditions are treated similarly in American society where we oftentimes point to people that are successful with depression and ignore the sheer massive weight that depression by and large keeps most of its sufferers from achieving success.

The whole individual agency and moral superiority complex of American culture is more and more sickening to me as I grow older and see how most people simply with a rational set of actions and existing opportunities better off not pursuing what used to be the better options due to structural problems. Endless optimism only works so far for attitudes that help with success until you’re truly at a rock bottom point and nobody wants to be near someone that’s failed so much out of social niceties alone.

[ralusek]

It wasn't my point to suggest that poverty is not a difficult position to be in, my point was to suggest that there is a serious problem with shrugging off the role of personal responsibility. I am very aware of what it means to be broke, you often don't even know where to begin. I'm not saying that they're poor because their situation at birth was necessarily fair, I'm not saying that nobody should change anything to help remedy their situation. What I am saying that in this country, at this time, the reality is that if 40% of the country does not have $400 saved for an emergency, given all of the available social services, there is a serious problem of priority and character.

There are obvious exceptions for individuals suffering from unavoidable medical circumstances and the like, and I am fully willing to criticize our existing healthcare system's failings in providing suitable mitigation against such circumstances. But we're talking about 40% of the country.

[ralusek]

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.

[seorphates]

It looks like you believe stability is simply a matter of 100% good decision making and that lower middle class is just one bus fare and two transfer passes away. You're painting a picture with a brush as wide as your canvas and with only one color on your palette.

I think we are mostly products of our surroundings so, yes, good decisions can help a lot. It just seems placing that level of "blame" is counter-productive and just does not represent reality on the ground. Trapped is trapped, you used the word yourself. I'd wager you have little idea the sorts of life traps that are laid out there. Having debt is pretty easy even with a better than average stability matrix. A single hit with bad luck is simply made worse as the "socially permitted" trolls eat their prey where no "socially permitted" social safety net exists that could possibly save them.

What is that? Trickle-down blame? You got yours? I simply don't understand the economics of "it's your own damn fault" with the force of a gavel.

[internetman55]

Tbh I think we should take the people who run scam schools and just ban them for the country. Or have stricter regulation and accreditation I guess

[Retric]

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]

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.

[cuckcuckspruce]

Untrue. Get majorly sick or in a major accident and lose your insurance because your job finds a reason to restructure your department. Trust me, you will enter financial desperation very quickly while you wait for the social safety net to catch up, and by that time you're thousands of dollars in debt, likely already out of your house, and totally screwed.

[kaybe]

All of you couldn't do a better job to make me very very glad of the taxes and other money I pay to the state and public health insurance here in Germany. As long as we can protect this system this will never happen to me or my neighbours.

[skookumchuck]

40% of Americans are not and never were majorly sick. Unless you count drug addicts and winos.

Yes, I've lost jobs before because of corporate restructuring.

[alasdair_]

>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.

Imagine you went to a crappy school where you spent most of your days trying to avoid gangs rather than learning anything. You did everything people told you to do and you applied to some for-profit bullshit college that accepted you. You signed some paperwork that you literally didn't understand the details of (because of said shitty school and parents who have never dealt with this situation before and for-profit colleges that explicitly set out to target people exactly like you). Now you have $50,000 in debt that you literally can't even declare bankruptcy on and no marketable skills. What do you now do?

To blame it all on personal responsibility degenerates into a No True Scotsman argument very quickly. It's the kind of overly simplistic thinking that makes thirteen year old kids think Ayn Rand had it all figured out and never think further than than her heroic fantasy novels.

(I admit, I actually really like Ayn Rand's philosophy if it's seen as an ideal, rather than something that is practically p[possible. Marx and Engels were also idealists and in their perfect world everyone would be happy too.)

Humans are not born with an innate understanding of optimal decision making and the power of compound interest. Our environment shapes us to a massive degree and you're discounting this.

[skookumchuck]

None of my public school classes ever mentioned compound interest.

[harikb]

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.

[s73v3r_]

Try it. I will bet you a million dollars that you would not be able to do it in any meaningful amount of time.

[alasdair_]

>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?

[wwweston]

> 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

[xena]

What about people whose life situations constantly rip money out of them and their pay is just fundamentally insufficient to cover their expenses?

[trophycase]

You're right. Some poor people have bad spending habits, and some have unfortunate life situations, and some have both.

[mlthoughts2018]

In fact, poor spending habits could be caused by a poor life situation.

[yermom]

nah, they should just work harder

[your-nanny]

Forgot your sarc tags

[empath75]

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.

[mattnewton]

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]

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.

[keithnz]

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.

[jlarocco]

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.

[dv_dt]

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]

Are you referring to the Boots Theory of Socioeconomic Unfairness:

https://www.goodreads.com/quotes/72745-the-reason-that-the-r...

[dv_dt]

That as well as the Welfare Trap

https://en.wikipedia.org/wiki/Welfare_trap

[dragonwriter]

> 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.

[dionidium]

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]

Moralizing is its own reward. It feels good to look down on people.

[ridgeguy]

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.

[Florin_Andrei]

> 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.

[somerando]

And here I was feeling bad because I have less than $100k on hand.

[whatAmount]

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.

[mid]

Spin. From the actual survey data at 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

[oldcynic]

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.

[babaganoosh89]

Are you sure that's right? I don't get how that adds up to 40%.

[veidr]

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.

[0x4f3759df]

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.

[Florin_Andrei]

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

[twblalock]

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.

[Florin_Andrei]

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.

[pishpash]

Only because of social programs. If those are gutted all bets are off.

[flubert]

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.

[ravar]

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