3 out of 4 Americans have no personal financial safety net

[Indy Texas]

http://finance.yahoo.com/news/76-americans-living-paycheck-paycheck-045900956.html

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I would really like for someone to emerge from the Republican Party that has something substantive to contribute to this problem. The same people who complain that the public safety net has become too expensive ignore the fact that its wide use stems from the fact that a disturbingly high proportion of Americans are unable to maintain their own safety net.

I agree with the conservative notion that the public responsibility to provide social assistance begins where individual and private assistance ends. What the Right refuses to acknowledge is that the private safety nets of the broad swath of Americans are little more than tatters at this point. The conservative solution would be one that facilitates the rebuilding of these private safety nets. Instead, a family that would be wiped out of their child broke a bone during baseball practice and had to go to the emergency room is given an agenda of domestic oil drilling that would have a negligible impact on gasoline prices, a tighter monetary policy that would increase their borrowing costs in an attempt to tame core inflation that simply isn't a problem, and tax cuts that would ultimately shift more of the fiscal burden to them and away from those of far greater means who don't face the same problems that they do.

Other than a few heretics like Josh Barro, what Republican is willing to admit that unemployment is a far greater problem at present than inflation? What Republican is willing to admit that we do have a revenue problem that has resulted from stagnant incomes? What Republican is willing to admit that their party has, in fiscal matters, nothing to offer 80% of the country?

[opebo]

I would really like for someone to emerge from the Republican Party that has something substantive to contribute to this problem.

They don't consider this a problem, but rather the goal.  An desperate and thus obedient and cheap-to-exploit working class is precisely their dream, and they have most definitely achieved it.  The GOP is probably the most successful political party in history.

[TNF]

I would really like for someone to emerge from the Republican Party that has something substantive to contribute to this problem.

They don't consider this a problem, but rather the goal.  An desperate and thus obedient and cheap-to-exploit working class is precisely their dream, and they have most definitely achieved it.  The GOP is probably the most successful political party in history.

[bedstuy]

I would really like for someone to emerge from the Republican Party that has something substantive to contribute to this problem.

They don't consider this a problem, but rather the goal.  An desperate and thus obedient and cheap-to-exploit working class is precisely their dream, and they have most definitely achieved it.  The GOP is probably the most successful political party in history.

Yup, that's basically true.  Republican economics, be it Reaganomics, Ron Paul Gold Buggery, Hayek worship, squealing about the deficit or taker blaming, is not economics, it's agitprop for the masses.  If you really want to understand Republicans, read Karl Marx.

[DC Al Fine]

I would really like for someone to emerge from the Republican Party that has something substantive to contribute to this problem.

Not sure about politicians, but Ross Douthat has written some impressive stuff in this regard. Pat Buchanan has also talked about this issue a bit.

Here are some of the reasons why people don't save:

1) Low income
2) Low interests rates disincentivize saving
3) Overspending
4) Increased atomization (ie. $50k for a married couple is comfortable, $50k for two divorcees is scraping by)

The first two are relatively easy to fix, but for a lasting solution, the cultural issues that make up #'s 3 & 4 need to be addressed as well.

Here's my conservative/christian democratic solution(s)

1) Import tarrifs to disincentivize offshoring
2) Eliminate tax incentives for companies that move jobs overseas/give incentives to firms that create jobs in the USA
3) Wage subsidies for lower income workers
4) Education about personal finances, credit cards etc.
5) Educate people about the fiscal dangers of divorce/single motherhood and the poverty it brings.
EDIT: 6) Reduce unskilled immigration, both legal and illegal to reduce the depressing effect immigrants have on wages

[TNF]

Encouraging savings won't help the economy recover, which is something to bear in mind here. Capitalism, in this stage, is dependent upon mass consumption. What you need thus is not policies that increase savings at the expense of purchasing (because the latter is far more important if we want to have a functional economy) but rather policies that substitute debt-generated spending (which is what we have now, with maxed out credit cards and the like) in favor of policies that encourage higher wages, which will create a much more stable spending cycle.

Of course, bear in mind that policies to raise wages and end debt serfdom are policies that will not have an iota of support from the established political forces, because they profit from debt serfdom and mass consumption alike.

[DC Al Fine]

Of course, bear in mind that policies to raise wages and end debt serfdom are policies that will not have an iota of support from the established political forces, because they profit from debt serfdom and mass consumption alike.

No one ever wants to play policy wonk on these threads

[Starbucks Union Thug HokeyPuck]

I would really like for someone to emerge from the Republican Party that has something substantive to contribute to this problem.

They don't consider this a problem, but rather the goal.  An desperate and thus obedient and cheap-to-exploit working class is precisely their dream, and they have most definitely achieved it.  The GOP is probably the most successful political party in history.

This.  It is easily visible in their policy aspirations.  This one is a wonderful example:

http://www.dailykos.com/story/2013/02/25/1189635/-Eric-Cantor-will-propose-Federal-Law-that-Ends-Overtime-Pay-for-hourly-workers

They do this in steps. 

Step 1: Squeeze the middle (stagnant minimum and base wages, non-progressive taxation, less collective bargaining rights, privatize everything so costs go up, etc.) and working class with policies that make it difficult to continue to support their households on their base salary. 

Step 2: Give them incentives to work overtime. 

Step 3: Squeeze them more until overtime is no longer a nice bonus... but a NECESSITY.  The working class gets used to working 50, 60, 70 hour weeks. 

Step 4: Eliminate any benefit to working overtime, and just reel in all those savings.  The worker is used to the long hours... so they just take it in stride, because, frankly... what the hell else are they going to do?  Quit their job and die/starve/look for a better (lol) job?

It's all very apparent and right in front you.  It's quite sad, the whole thing, considering that the American everyman is all worked up about "conspiracies" like Bengazi, the IRS, 9/11 truthism, etc. etc.... when the real conspiracy to [Inks] them over is being perpetrated right in front of them by the very people they vote for.

Sad.  Sad.  Sad. 

[DC Al Fine]

Hockeydude's America: Where CEO's deliberately increase the cost of labour for 30 years in hopes of increasing the firms profits long after they're dead.

Yet another thread destroyed by complaineypants who do nothing but whine about the GOP being evil while never bothering to actually debate the issue at hand. (IndyTX & TNF exempted)

[Starbucks Union Thug HokeyPuck]

Hockeydude's America: Where CEO's deliberately increase the cost of labour for 30 years in hopes of increasing the firms profits long after they're dead.

Yet another thread destroyed by complaineypants who do nothing but whine about the GOP being evil while never bothering to actually debate the issue at hand. (IndyTX & TNF exempted)

I'd rather just get to the meat of matter than beat around the bush with things like "safety nets".  How the hell is the working man supposed to save enough for a "safety net" these days, Al? 

Uh... money in America stays in the family and 30 years is RIGHT about when a 35-40 year old board member is going to start enjoying his most lavish retirement years. 

But it's ok, continue being the champion for the rich if that's what you like. 

[tpfkaw]

If there are more than 20 or so under-40 non-token-Latina board members in the Fortune 500, I'd be shocked.  (Also, corporate boards don't really run anything de facto, nor are they particularly well-compensated positions in themselves).

[memphis]

Less than 6 months does not equal zero. This is an area of my life that I've been working really hard on. I don't have six months' worth yet, but I'm happy to report that I also have quite a bit more than zero, which was not the case a few years ago If not for a crushing student loan debt, I'd have a positive net worth. Hooray!
I made reference to the need for six months' savings (I think in the update but not totally sure) a while back and all the non-Americans thought I was out of my mind. With all their government protections, especially on healthcare and employment, they don't need it and thought it bizarre that Americans have to do so much cash hoarding just to have basic protections against the crap life throws at all of us from time to time. Honestly, it's not realistic for an enormous number of folks to have this much money saved up. And then there is a never ending cascade of vulture industries like credit cards that hit people when they are at their worst and ensure they never get back up. The six month goal reminds me of the "every man a millionaire" nonsense that was ubiquitous during the 401(k) boom of the 1990s. If it sounds too good to be true, it invariably is. But that doesn't mean I'm gonna stop saving every chance I get.
FWIW, I give Suze Orman credit for saving my soul on this front. While I was still in my 20s, which is nice. I recommend her book, The Money Class to everybody. In a better world, it would be required reading in every high school in America.

[Grumpier Than Uncle Joe]

Probably 2 out those 3 who  have no safety net are under-employed.  A horrible situation that doesn't hit you in the face because there's not a monthly stat that's covered heavily by the media, like the unemployment rate.

[DC Al Fine]

Probably 2 out those 3 who  have no safety net are under-employed.  A horrible situation that doesn't hit you in the face because there's not a monthly stat that's covered heavily by the media, like the unemployment rate.

Unfortunately underemployment is a far more nebulous concept than unemployment, so it's more difficult to measure.

To answer Hockeydude:

1) Re: Overtime: You really need to retake grade 7 math. Compound interest (or profits) is key here. Reducing profits 30 years ago takes a heavy toll on future growth, one that won't be made up by suddenly reducing overtime pay for most firms 30-50 years down the line. Even if it was a good business decision, executives aren't incentivized to make decisions that long term.

2) Re: Savings: Assuming the working dude is within the middle more or less, here's how he or she could save...

1) Avoid living alone until there is you've saved the safety net.
2) If married, try your best to stay married.
3) Get a 2nd job or side hustle until debt is paid down/savings accumulated
4) Don't drive or only have 1 car if possible
5) Get rid of cable
6) Eat cheap bulk staples and other inexpensive food.
7) Try for cheaper health insurance if possible.

[Starbucks Union Thug HokeyPuck]

Probably 2 out those 3 who  have no safety net are under-employed.  A horrible situation that doesn't hit you in the face because there's not a monthly stat that's covered heavily by the media, like the unemployment rate.

Unfortunately underemployment is a far more nebulous concept than unemployment, so it's more difficult to measure.

To answer Hockeydude:

1) Re: Overtime: You really need to retake grade 7 math. Compound interest (or profits) is key here. Reducing profits 30 years ago takes a heavy toll on future growth, one that won't be made up by suddenly reducing overtime pay for most firms 30-50 years down the line. Even if it was a good business decision, executives aren't incentivized to make decisions that long term.

2) Re: Savings: Assuming the working dude is within the middle more or less, here's how he or she could save...

1) Avoid living alone until there is you've saved the safety net.
2) If married, try your best to stay married.
3) Get a 2nd job or side hustle until debt is paid down/savings accumulated
4) Don't drive or only have 1 car if possible
5) Get rid of cable
6) Eat cheap bulk staples and other inexpensive food.
7) Try for cheaper health insurance if possible.

When did I say companies/agencies (because my example specifically affects them) are reducing profits, anyway.  The "incentive for overtime" comment?  Maybe I should've used a different word, and I take back trying to completely defend the comment, but do I think a good chunk of the so called 1% have been ****ing the rest of us over for years?  Do I think squeezing the middle class into long hours and then cutting their overtime pay is typical of the ownership class as a way to completely shatter the spirit of the working class?  Of course.  I'm not going to go back on that.   

And "guy in the middle" these days isn't do so hot despite cutting corners.  Mean income and median income in America are wildly out of whack. 

[Grumpier Than Uncle Joe]

Probably 2 out those 3 who  have no safety net are under-employed.  A horrible situation that doesn't hit you in the face because there's not a monthly stat that's covered heavily by the media, like the unemployment rate.

Unfortunately underemployment is a far more nebulous concept than unemployment, so it's more difficult to measure.

Of course it's more difficult to measure, but I think it's a key factor in why 3 out of 4 americans have no personal financial safety  net.

[Torie]

What percentage of Americans had a personal financial safety net 20 years ago?  That is the first question. The second question is whether it is as necessary to have such a net, or as large a one, given a more robust taxpayer financed government social safety net. It may even be true vis a vis certain government programs, that there is an incentive to keep your personal wealth down.

My personal opinion based on experience, is that irrespective of income levels, the vast majority of Americans don't know much about managing their money, and do a suck job of it, nor do they have the will power to delay gratification even if it is in their long term interest, financial and/or otherwise, to do so. I know a fair number of chaps making six figure incomes that don't have a pot to pis* in.

[opebo]

What percentage of Americans had a personal financial safety net 20 years ago?  That is the first question. The second question is whether it is as necessary to have such a net, or as large a one, given a more robust taxpayer financed government social safety net.

What planet do you live on?  Or, do you live in France?  There is NO social safety net in America.  If you are a single man and you lose you job, you get absolutely nothing.

It may even be true vis a vis certain government programs, that there is an incentive to keep your personal wealth down.

My god, you're 30 years out of date and spouting pure Reaganist mythology.

[DC Al Fine]

Probably 2 out those 3 who  have no safety net are under-employed.  A horrible situation that doesn't hit you in the face because there's not a monthly stat that's covered heavily by the media, like the unemployment rate.

Unfortunately underemployment is a far more nebulous concept than unemployment, so it's more difficult to measure.

To answer Hockeydude:

1) Re: Overtime: You really need to retake grade 7 math. Compound interest (or profits) is key here. Reducing profits 30 years ago takes a heavy toll on future growth, one that won't be made up by suddenly reducing overtime pay for most firms 30-50 years down the line. Even if it was a good business decision, executives aren't incentivized to make decisions that long term.

2) Re: Savings: Assuming the working dude is within the middle more or less, here's how he or she could save...

1) Avoid living alone until there is you've saved the safety net.
2) If married, try your best to stay married.
3) Get a 2nd job or side hustle until debt is paid down/savings accumulated
4) Don't drive or only have 1 car if possible
5) Get rid of cable
6) Eat cheap bulk staples and other inexpensive food.
7) Try for cheaper health insurance if possible.

When did I say companies/agencies (because my example specifically affects them) are reducing profits, anyway.  The "incentive for overtime" comment?  Maybe I should've used a different word, and I take back trying to completely defend the comment, but do I think a good chunk of the so called 1% have been ****ing the rest of us over for years?  Do I think squeezing the middle class into long hours and then cutting their overtime pay is typical of the ownership class as a way to completely shatter the spirit of the working class?  Of course.  I'm not going to go back on that.   

And "guy in the middle" these days isn't do so hot despite cutting corners.  Mean income and median income in America are wildly out of whack. 

I agree that the working class and guy in the middle are being squeezed, but that is not what you originally postulated. As is your habit, you made an inflammatory, poorly thought out statement, and when cornered, redefined your argument beyond recognition.

[© tweed]

I have a personal safety net thanks to the teachers' and railroad workers' unions of yore.

[Starbucks Union Thug HokeyPuck]

Probably 2 out those 3 who  have no safety net are under-employed.  A horrible situation that doesn't hit you in the face because there's not a monthly stat that's covered heavily by the media, like the unemployment rate.

Unfortunately underemployment is a far more nebulous concept than unemployment, so it's more difficult to measure.

To answer Hockeydude:

1) Re: Overtime: You really need to retake grade 7 math. Compound interest (or profits) is key here. Reducing profits 30 years ago takes a heavy toll on future growth, one that won't be made up by suddenly reducing overtime pay for most firms 30-50 years down the line. Even if it was a good business decision, executives aren't incentivized to make decisions that long term.

2) Re: Savings: Assuming the working dude is within the middle more or less, here's how he or she could save...

1) Avoid living alone until there is you've saved the safety net.
2) If married, try your best to stay married.
3) Get a 2nd job or side hustle until debt is paid down/savings accumulated
4) Don't drive or only have 1 car if possible
5) Get rid of cable
6) Eat cheap bulk staples and other inexpensive food.
7) Try for cheaper health insurance if possible.

When did I say companies/agencies (because my example specifically affects them) are reducing profits, anyway.  The "incentive for overtime" comment?  Maybe I should've used a different word, and I take back trying to completely defend the comment, but do I think a good chunk of the so called 1% have been ****ing the rest of us over for years?  Do I think squeezing the middle class into long hours and then cutting their overtime pay is typical of the ownership class as a way to completely shatter the spirit of the working class?  Of course.  I'm not going to go back on that.   

And "guy in the middle" these days isn't do so hot despite cutting corners.  Mean income and median income in America are wildly out of whack. 

I agree that the working class and guy in the middle are being squeezed, but that is not what you originally postulated. As is your habit, you made an inflammatory, poorly thought out statement, and when cornered, redefined your argument beyond recognition.

Yes it is.  Glad you agree. 

[Torie]

What percentage of Americans had a personal financial safety net 20 years ago?  That is the first question. The second question is whether it is as necessary to have such a net, or as large a one, given a more robust taxpayer financed government social safety net.

What planet do you live on?  Or, do you live in France?  There is NO social safety net in America.  If you are a single man and you lose you job, you get absolutely nothing.

It may even be true vis a vis certain government programs, that there is an incentive to keep your personal wealth down.

My god, you're 30 years out of date and spouting pure Reaganist mythology.

The US has no social safety net for single men? Really? Come on opebo, you can do better than that. Some government cross subsidy programs look at your net worth opebo to boot.  That is not mythology, that is fact.

[opebo]

What planet do you live on?  Or, do you live in France?  There is NO social safety net in America.  If you are a single man and you lose you job, you get absolutely nothing.

The US has no social safety net for single men? Really? Come on opebo, you can do better than that.

Torie, it is precisely true that there is no social safety net for adults who have no children.  What do you imagine there is?  Please list precisely those benefits upon which such an unfortunate could survive? 

Even food stamps are only provided to such social pariahs for 3 months out of any three year period (and as we all know, it is not food which is expensive, it is housing and transportation).

[Torie]

Well in addition to food stamps, opebo, we have unemployment insurance and medicaid that come to mind. Utility companies give a break on utility bills to low income folks. There is also Section 8 housing, which subsidizes housing costs. One can make the case that this is all inadequate perhaps, but one cannot make the case that there is no safety net at all.

[opebo]

Well in addition to food stamps, opebo, we have unemployment insurance and medicaid that come to mind.

Unemployment insurance doesn't cover most poor workers.  (no one I knew ever got unemployment benefits, as the employer simply denied them - as you know if one is 'fired for cause' one gets no benefits, and since a lot of payouts impact negatively on the employer, they simply don't allow anyone to get it).

There is also Section 8 housing, which subsidizes housing costs.

That's only for families, and even they often have a very difficult time getting it (long waits, etc.)

One can make the case that this is all inadequate perhaps, but one cannot make the case that there is no safety net at all.

I think 3 months of food stamps is close enough to zero that we can say 'there is no social safety net for single childless people'.