Posted on 05/25/2011 11:46:22 AM PDT by rightwingintelligentsia
Nearly half of Americans say that they definitely or probably couldn’t come up with $2,000 in 30 days, according to new research, raising concerns about the financial fragility of many households.
In a paper published by the National Bureau of Economic Research, Annamaria Lusardi of the George Washington School of Business, Daniel J. Schneider of Princeton University and Peter Tufano of Harvard Business School used data from the 2009 TNS Global Economic Crisis survey to document widespread financial weakness in the U.S. and other countries.
The survey asked a simple question, “If you were to face a $2,000 unexpected expense in the next month, how would you get the funds you need?” In the U.S., 24.9% of respondents reported being certainly able, 25.1% probably able, 22.2% probably unable and 27.9% certainly unable. The $2,000 figure “reflects the order of magnitude of the cost of an unanticipated major car repair, a large copayment on a medical expense, legal expenses, or a home repair,” the authors write. On a more concrete basis, the authors cite $2,000 as the cost of an auto transmission replacement and research that reported low-income families claim to need about $1500 in savings for emergencies.
Financial fragility isn’t limited to low-income groups. “Households with socioeconomic markers of vulnerability (income, wealth, wealth losses, education, women, families with children) are more likely to be financially fragile, and substantially more so,” the authors write. “The more surprising finding is that a material fraction of seemingly ‘middle class’ Americans also judge themselves to be financially fragile, reflecting either a substantially weaker financial position than one would expect, or a very high level of anxiety or pessimism. Both are important in terms of behavior and for public policy.”
(Excerpt) Read more at blogs.wsj.com ...
I agree about the condition of the nation, but I suspect the relationship between that fact and the loss of pensions is more correlational than causal. So, yes, if people were like they were back then, we wouldn't have today's problems. But I don't think it's just the pensions (and I'm sure you don't think that literally, either).
For example, having pensions would mean we were back to having the kind of companies that cared about the long term welfare of their employees. That would be a good start. You'd also need a pool of employees that gave a rat's ass about their company.
I guess what I'm trying to say is that there have been tons of social changes and changes in the way people think. It's a big furball of causality, and it's hard to look at a given piece and tell if it's a cause or a result. Probably most things fall in to both categories, or on a continuum between the two.
My son is in that situation. They rent, have 1 used car they are making payments on, both work, 1 child. Furniture is used, only the used washer/dryer is slightly newer. Live in an area where jobs are hard to come by. He works 60-70 hrs a week..salaried with a truck provided by the company. She works as a nurses’ aide, not the highest paying job in the world. They don’t own any thing new enough to be worth much, certainly not anything that could be sold to get $2K. Had to take medical leaves for 2 surgeries in the past 6 months.
THANK YOU
Until about a month ago my husband and I had been without a regular income for over 3 years. We ate through everything we had saved because work was hard to find. We did what we could and what we had to do to keep the house and the electric going and our daughter fed and clothed. It's not easy, and it sure ain't fun.
It won't by 2 gallons of gas or milk.
It could well be more than half. That would not surprise me. I am just not so good with money myself that I can be “holier than thou” on the issue. I am blessed with a solid enough income and low enough structural expenses that I have the luxury of living without high debt. I owe on my 15 year mortgage but otherwise pay off my credit card every month and try not to live above my means. Unfortuntely, I don’t live much below my means, so I’m no angel. I certainly would have no trouble getting $2,000 or $10,000 or what reasonable amount of money in short order. I’m not that bad.
As far as retiring to Italy, I am stuck in America by choice. I will flee California as soon as I retire, but I will never live outside the USA. If the nation goes to hell, I’ll just go down with her, but not with the bat on my shoulder. I’ll go down shooting and not blanks either.
Well on April 15th we had to come up with quite a bit more than 2k to pay taxes the government thieves said we owed....over and above what we had already paid.
Guess it is a good thing we live within our means.
Sheesh
What is “raising $2000?” Putting it on a credit card?
That’s the salient question.
Precisely.
That USA Toady “analysis” is misleading as hell.
“One of the problems with the private sector is that they pay way too much to their employees. If they would have given a reasonable pay check to each person then pensions would still be around.”
So, in this one single aspect, the federal government is frugal - federal employee pay?
No, the reason why there are federal pensions is that the federal government does not have to account for their spending in the way the private sector does. If it did, there would be no federal employees, because there would be no money to pay them and meet other obligations.
Remember: for every federal employee, a dozen or so actual real hard-working Americans creating wealth against all odds.
Actual hard working Americans could save for their own retirement if the federal workforce were “right sized” and paid for the value that they create (or fired if they create none).
As we discussed on another thread - you cannot take any more from the private sector to benefit the federal sector.
We aren’t going to be able to meet our obligations to federal retirees of all stripes and other benefit recipients.
Every federal check recipient should be thankful for every check they get and treat it like it is their last one - because it just may be.
My wedding cost $100 for the Lake Tahoe driven marriage guy and the gas to get up there and back.
Just sayin’...
The good news is that if the federal government goes down the so called hard working Americans (barf) that you fraudulently claim will go down too......If you think for a minute that the private sector will go unscathed when the federal government goes down they you must be smoking some heavy stuff.
Unfortunately there are a lot of people in that kind of situation.
“If you think for a minute that the private sector will go unscathed when the federal government goes down they you must be smoking some heavy stuff.”
The private sector reflects actual supply and demand. it will be impacted, and severely so, but the private sector will live on - if civilization lives on.
“The good news is that if the federal government goes down the so called hard working Americans (barf) that you fraudulently claim will go down too”
I’m not sure what you are saying. But be honest - feds simply do not work that hard, and they are not that competent all in all. They will need the pity and support of the private sector in such a scenario - and they’ll get it eventually - but they’ll have to actually contribute something.
both of mine were over 25 grand, hardly fancy, and didn't get a penny from the groom's parents, unfortunately
She is not married - yet. We are expecting to pay at least $25 K, but I want to offer them $20 K and tell them to elope. LOL. My wife and I got married 31 years ago, and we didn't spend much over $5 K and had a beautiful wedding. Of course, it was at our church and the reception was at the officer's club at Bergstrom AFB.
You could look for a temporary new “used” couch at a garage sale or thrift store!
;-)
?
“Sorry, my FRiend, but that just isn’t true -— I’m speaking from experience.”
Wow, I stirred up quite a hornets nest with my commentary. ;-) I suppose I should have added the rare qualifier that it may not be possible for EVERY person, however I still stand firmly in my position that the vast majority of those who think they are financially fragile could come up with $2K in 30 days by working more and selling “stuff.”
Since you are on my ping list, I know that you are part of the very small minority that qualifies as the exception. However, we also know that it is not a permanent condition...
;-)
“Empathically, NO...you cannot make (clear, take home, save) $2000 in two months by selling your ‘stuff’ on eBay and delivering pizzas as a second job.”
Yet there are people that are doing it every day.
“And anyone who believes so, or believes that anyone living ‘hand to mouth’ is lazy, has ‘big screen tvs and cell phones’ etc., has lived a truly blessed life.”
Or, rather than “blessed” they have lived like no one else so that now the get to LIVE like no one else. It takes a lot of sacrifice and hard work to get there.
“Any family is one major illness away from the situation described. Sadly I know this first hand.”
Not “any family” but those that are not properly prepared or planning for preparation.
Yes, what you describe is “normal” in this country, but with hard work and proper planning, anyone can start being weird.
Of course it’s not a permanent condition, but believe me it’s been danged hard keeping that attitude for over 3 years.
The reason you stirred up such controversy was your broadbrush stereotyping. I honestly do not think that I am such a rare exception or minority.
I’m not looking to pick a fight with you, but I think we’ve been friends long enough for your to know how much I despise broad brush stereotyping :)
BTW -— the Escort is back up and running and the windshield was replaced in the Ranger about an hour ago — but the car fund is now back to zero and I have to start all over again.
P.S. -— please add me to your ping list, I’m not on it.
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