American Economics Thread

[fishrubber99]

Households living paycheck to paycheck is a function of poor survey design and inconsistent standards, especially when household balance sheets are strong

https://twitter.com/i/web/status/1769362133760815143

To be fair, the difference between "living paycheck to paycheck " and "being able to survive 3 weeks without getting paid when I get a paycheck every 2 weeks" seems pretty marginal. Plus, it's not just about vibes, 44% of Americans wouldn't be able to pay for a $1000 emergency with savings:

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This is not a qualitative assessment, it's either you have $1000 or you don't. For a country with around $80,000 USD per capita, 44% seems higher than you would expect.

 

[FairAndUnbiased]

To be fair, the difference between "living paycheck to paycheck " and "being able to survive 3 weeks without getting paid when I get a paycheck every 2 weeks" seems pretty marginal. Plus, it's not just about vibes, 44% of Americans wouldn't be able to pay for a $1000 emergency with savings:

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This is not a qualitative assessment, it's either you have $1000 or you don't. For a country with around $80,000 USD per capita, 44% seems higher than you would expect.

this is a persistent problem since almost 10 years ago.

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62% of Americans can’t cover unexpected expenses​

Published Wed, Jan 7 2015 4:00 PM EST Updated Wed, Jan 7 2015 5:55 PM EST

Just 38 percent of Americans said they could cover an unexpected emergency room visit or even a $500 car repair with cash on hand in a checking or savings account, according to Bankrate, which commissioned the study. About 26 percent would reduce spending on other things, and 28 percent said they would either borrow from family or friends or use credit cards.

 

[manqiangrexue]

To be fair, the difference between "living paycheck to paycheck " and "being able to survive 3 weeks without getting paid when I get a paycheck every 2 weeks" seems pretty marginal. Plus, it's not just about vibes, 44% of Americans wouldn't be able to pay for a $1000 emergency with savings:

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This is not a qualitative assessment, it's either you have $1000 or you don't. For a country with around $80,000 USD per capita, 44% seems higher than you would expect.

You beat me to it. I was gonna say, the difference between paycheck-to-paycheck and 5 weeks is just 8 days. That's like a short person being offended that you said he's 5'2" and correcting you that he's actually 5'2.5" LOL

But I don't dwell on this American weakness. China will win because our economy is the best in the world, not because we needed the US to regress. We'd beat them even in their prime but whether or not they are is subject to their actual performance.

 

[horse]

Households living paycheck to paycheck is a function of poor survey design and inconsistent standards, especially when household balance sheets are strong

1. Time to pile on. This post reveals more about you the poster, than the situation on the ground. You are not an American, and I doubt you have been to America, or know very much about America.

2. If you actually are an American, then you are just trolling.

3. This is America, of poor people, who have to pay rent, then pay for gas and fix the car, then put food on the table. The poor have no savings. If someone is paying off their mortgage, they are living paycheck to paycheck as well. Mortgage payments are expensive, but at least they are building equity into their house with a mortgage on it, but that is still living paycheck to paycheck.

Living paycheck to paycheck, is not some technical phrase, this is the experience of life, for too many people. That is where that expression came from, "I am living paycheck to paycheck," because that was how they were living. They had no money until they get paid.

Why do we think there are so many pay-day-loans outfits around?

 

[chgough34]

To be fair, the difference between "living paycheck to paycheck " and "being able to survive 3 weeks without getting paid when I get a paycheck every 2 weeks" seems pretty marginal.

Eh. That was just immediate liquidity. Also if households were living paycheck to paycheck, then they’d only have 2 weeks of immediate liquidity, no net worth, and no discretionary spending. All 3 are false. Median household net worth ~192K including some that’s not immediately liquid but still very liquid - directly held stocks, bonds, cash value life insurance, certificates of deposit, etc. most households have very little reason to have excess cash - they can earn more interest through other investments and for basically everyone above the 40th income percentile, they don’t need to save precautionarly because there just don’t exist harms that are both sufficiently loss inducing, uninsurable, and frequent enough to warrant it

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Plus, it's not just about vibes, 44% of Americans wouldn't be able to pay for a $1000 emergency with savings:

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This is probably false when they clearly have more than that in transaction (checkings/savings) accounts. Households underestimate how much money they have (see for example, survey-based measures of income consistently underestimating actual income compared to tax records -

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) and simultaneously interpret being “unable to pay” as meaning “do large unexpected expenses cause headaches”.

see: “The Fed survey points out that some of the 37% actually do have the cash, but they would take out debt in an emergency in order to preserve a cash buffer for other emergencies. So last year the poll included a new question, asking people what is the largest emergency expense they could handle right now using only savings. 68% of households said they could handle an expense of $500 or more.”

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small changes in survey questions result in drastically different outcomes, and when survey-based data on American consumers is compared to much more accurate administrative records (ex., tax records and account balances from the IRS SOI or the Fed SCF; it’s proven time and time again, US households underestimate their balance sheet and income statement strength)

 

[horse]

Ever been to the Bronx?

Or Harlem?

LOL.

 

[chgough34]

A few adversely selected NYCHA census tracts compared to the mass McMansion affluence of Nassau and Suffolk Counties in Long Island; the mass McMansion affluence of Upstate in Westchester/Rockland/Orange/Putnam Counties or the Yuppies next door Manhattan. One is far more populous and representative of the U.S. population (it’s not the NYCHA census tracts)

US cities (the anchor cities of metro areas) have been adversely selected for geographies since redlining restricted black people getting mortgages to select few urban census tracts while simultaneously: white flight, suburbanization, and the Interstate Highway System made it so that racially conservative wealthy whites moved to inner-ring suburbs right outside of major metro areas (for example: the 6-mile line in Detroit, the border of Milwaukee County and Waukesha County in Wisconsin, or why metro Atlanta has 4 trillion different cities) - thus leading to in the U.S., enduring patterns of residential segregation (though weakening after the 1968 Fair Housing Act banned race as an explicit classifier) that follow municipal borders where adversely selected minority groups live in formal city limits and wealthier individuals of all stripes live in inner-ring suburbs of formal city areas)

 

[GodRektsNoobs]

1. Time to pile on. This post reveals more about you the poster, than the situation on the ground. You are not an American, and I doubt you have been to America, or know very much about America.

2. If you actually are an American, then you are just trolling.

3. This is America, of poor people, who have to pay rent, then pay for gas and fix the car, then put food on the table. The poor have no savings. If someone is paying off their mortgage, they are living paycheck to paycheck as well. Mortgage payments are expensive, but at least they are building equity into their house with a mortgage on it, but that is still living paycheck to paycheck.

Living paycheck to paycheck, is not some technical phrase, this is the experience of life, for too many people. That is where that expression came from, "I am living paycheck to paycheck," because that was how they were living. They had no money until they get paid.

Why do we think there are so many pay-day-loans outfits around?

Or, you know, he could be completely out of touch with the general populace. Kinda like a senile 80 year old man running a particular superpower right now who couldn't figure out why he has only few supporters.

 

[Serb]

18% last year's peak inflation had they not been manipulating data by changing old variables. Real inflation is more than double that of the reported one.

https://twitter.com/i/web/status/1769683355153420699

Btw, unrelated to this, but a great read I accidentally found:

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[chgough34]

Interest expenses were removed from the CPI in 1984 due to changes in macroeconomic thought that interest wasn’t an expense of consumption, it was an expense of consumption smoothing.

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