“There’s this wild disconnect between what people are experiencing and what economists are experiencing,” says Nikki Cimino, a recruiter in Denver.
Hey, somebody’s gotta pay for the highest corporate profits in 70 years.
Important to note:
Companies aren’t just raising prices enough to cover costs, they’re padding their margins on top.
Just saying that their profit is higher means nothing because of inflation. Inflation will mean that their profits are more often than not the highest they have ever been every year. But the highest margins? That shows they are price gouging.
If you want to know how bad we’re being fucked, search for the PPI, the producer price index. CPI, the one we always hear about, is the measure of inflation to us, the consumer. The PPI is the measure of inflation to producers, what they pay for goods and services to produce the goods and services we buy.
The PPI has been back to “normal” for a while now. Pretty much as soon as the post COVID logistics issues were mostly ironed out. The difference between PPI and CPI changes is almost all profit.
We don’t get daily articles on the PPI though, I wonder why.
Tell people about PPI whenever you can, online or off, the more people know, the better. It’s easy enough to say inflation is just down to greed but being able to back it up by comparing two simple charts will help people really understand.
I couldn’t find a comparable historical CPI chart on the BLS website, just a 12 month average and historical data by region. Are you able to find something to compare that chart to? It’s kind of difficult to grasp intuitively (without a comparison, that is).
I edited the links to try to get more apples to apples. For the PPI just deselect the blue line and compare red lines between the two. Those should give 12 month change numbers for all goods and services unless I screwed it up.
Edit: I edited the links again, I accidentally used final demand instead of intermediate demand for PPI. No need to deselect anything now. I linked the chart for processed goods, other categories are available in the drop-down list.
Thank you! And thank you for finding and linking all that, it is very informative!
Exactly that. On average the economy is doing fine but it’s skewed very heavily towards the top and nothing much for the 90%. The median income is actually decreasing.
Removed by mod
I would LOVE to see a source on this, but I have a feeling I already know where it is coming from.
Would you prefer the Economic Policy Institute, Politico, or CNBC?
Yes, bottom 10% are doing better and the top 10%. That means the middle is getting hollowed out and the whole thing turns into a very divided society. That’s not a good thing.
It’s not a good thing, but it’s better than the blatant “rich get richer, everyone else gets fucked” economy we’ve had for the past few decades.
And doesn’t it make sense that we improve the situation of the poorest first?
blatant “rich get richer, everyone else gets fucked”
and now you have a rich get richer, almost everyone else gets fucked economy. Yay, progress.
Looking at history, it feels more like an attempt to make sure the poorest don’t fall into the “nothing left to lose” category that can cause so much trouble.
Looking at history, it feels more like an attempt to make sure the poorest don’t fall into the “nothing left to lose” category that can cause so much trouble.
That’s because it is. That’s the point of welfare, give the poorest something to lose and they won’t revolt. Even if it’s the most meager, unfair, dehumanizing scraps.
Oh no, what a…terrible…thing…?
and now you have a rich get richer, almost everyone else gets fucked economy. Yay, progress.
Yes. Things were more bad, and now they are less bad. Vote in more Democrats, and things will continue to get less bad. Eventually, things will be good. That’s how progress works.
There’s a term for this, HENRY. High Earner, Not Rich Yet. The lie is the “Yet”. Millennials and Gen Xers have been struggling to reach the middle class that is kept perpetually out of reach. They have given up on the idea of financial solvency and are going into debt to indulge in luxuries like having children, going on vacations, and living somewhere that isn’t a complete shithole. Saving for retirement is as realistic as training to live on Mars, so why bother? Keep digging a financial hole and then lie down and die in it.
Gen X here and I can’t afford to contribute to my retirement. Even had to withdraw some during unemployment. I’m either working until I die or hoping assisted suicide becomes legal in 20 years.
Yep. Same. I do pretty good for myself and I’m more fortunate than most, but I had to borrow money from my dad recently for a series of expenses I couldn’t absorb in real time. I got the “you don’t know how to budget” sermon. It felt as fun as you’d expect
I said fuck it and gave him a list of earnings and expenses (I’m pretty frugal) and he was like, “oh…”
Did he clap afterwards?
assisted suicide
Is that when you die but take a billionaire with you?
X here too, 53yo, cannot contribute to retirement. At 67 I will have to sell my house because I’ll not be able to afford taxes, insurances, power, repair, etc
Assisted suicide vs… illegal suicide? What’s the difference?
Illegal doesn’t pay out insurance claims. Not that I can afford life insurance….
I might be “rich” when my parents die, depending on how much elder care they need.
I’m actually kind of looking forward to the day I look my kids in the eye and say “I’m going out to look for firewood” and just walk out into the snow and die.
But there won’t be any snow anymore so I’ll just wander off into a slightly chilly night.
slightly chilly night.
You’re a glass half full kind of person, aren’t you?
What if we just financed all our kids advantages on our own credit for them and then promptly died?
What would happen to the debt?
Say I max out my credit card for their down payment on a house and then go “get firewood”.
They definitely try to track large cash gifts when putting down a down payment on a house.
So I buy a bunch of gold and leave a map and then bury it in the woods and when I “get firewood.”
Then the credit card companies crank their interest rates higher and restrict the credit they extend to your kids to compensate. It’s not “free money.”
I’d rather look forward to the improvements in technology that make elder care less expensive.
As if regular people can afford whatever improvements happen
You didn’t finish reading the end of the single sentence in my comment.
the improvements in technology that make elder care less expensive.
There is a possibility of that being happening but the last half-century of economic trends makes this unlikely, unfortunately. This decade, especially, makes it likely that the gouging will continue and any advances making care less expensive will just see an increase in profits at the top. Every industry seems to have give into overdrive on driving up profits at the populace’s expense, with the exception of basic consumer entertainment electronics but, they are, realistically also driving up effective costs as they are being used to harvest customer data for sale.
If we’re getting out of this, we’re going to have to do it ourselves because none of the established holders of power have shown the slightest inkling of being interested in stopping it.
The last half-century of economic trends supports my expectations, actually. Treatments have been getting cheaper as technology advances. New treatments tend to be expensive, yes. But then as they become older they too get cheaper.
Insulin was discovered over 100 years ago and it took policy, not improvements in manufacturing, to lower the price (which only happened last year).
In America, they don’t get cheaper because it got easier to make.
You should watch the movie The Road if you haven’t already.
What most people don’t realize is that once you have excess income, you have options. What you do with the excess is what matters. If you don’t save and invest it, you’ll be living paycheck to paycheck for the rest of your life.
A lot of folks think being rich means just spending money on whatever you want. That’s not really the case. If you spend the excess on fancy cars or luxury items that make others think you’re rich, the irony is you’ll be working for a long time and never actually become financially independent.
Edit: well, if I’ve learned anything from this comment, it’s that everyone on Lemmy identifies as a HENRY with bad spending habits no matter how much money they make. Or, at least a temporarily embarrassed one.
Except that’s not at all what OP said or was implying. Nice way of pushing the blame on the people affected rather than the broken system we live in.
Both can be true. There are many people who barely (or don’t) make enough to survive. There are also many people who spend money frivolously and then complain that they’re broke because of the economy.
Most people are struggling with the basics, not disputing that. But, then I wouldn’t consider those people HENRYs.
When I look around, I also see a lot of people with high income making boneheaded moves like buying expensive vehicles, renting luxury apartments, etc. For some people the problem isn’t the system, it’s their own lack of self-control or planning. If you’re making $200,000 and still feel broke. Maybe that $1,500/month car payment was a mistake. Maybe you shouldn’t have used the raise to move into a luxury apartment building.
When I was starting my career all my coworkers lived in $2200/month luxury buildings. I knew we all made roughly the same amount of money, so was shocked that they would pay this much for rent. Meanwhile, I sought out roommates and paid $650. With the money I saved, I paid off my student loan debt aggressively. Now all these people are struggling to get to the next step in life. Yeah, I could’ve seen that coming 10 years ago for you.
I see the same thing with cars. Everyone wants to own some luxury SUV. And, they make fun of me for driving a Prius. I won’t be surprised in another 10 years when they’re still struggling.
This isn’t an attack on people who don’t have the money. This is an attack on people who do and can’t plan well, but then act surprised when they’re broke still.
I gotta back your position here, especially because I think you’re being downvoted unfairly. There is a lot of unfairness in this economy for sure but on this thread that started with HENRY and literally “They have given up on the idea of financial solvency and are going into debt to indulge in luxuries” your comments are totally in line and fair.
Want to add too, that even the first subject in the article ‘Making the most I’ve ever made’ isn’t the best example of a tough economy. She went through a divorce and then bought a house in one of the most competitive housing markets in the US. The high interest rates certainly make that tougher but that’d be hard to afford even before without it.
I don’t make 200k, but together with my wife, we make a little under that. We both have cars, and both are paid off. I still have the first car I ever brought, which is a Nissan Sentra 2006 basic model. So, 17 years on the same car and hers is a 2015 Toyota. We do have 2 kids and brought a house in 2015. The last 4 years have been almost impossible to make ends meet, and all we try to do is survive with the very occasional do something for the kids. I have tons of housework I can’t do but also can’t pay for either. Because of this, we also can’t move until it’s taken care of, so we’re kind of stuck here as well. We have no money to save or invest. Did we make some bad decisions? Sure, probably shouldn’t have had kids for starters. They cost a fortune. But my point is we aren’t doing anything crazy here, it’s just that more and more things are taking our money and prices also went up. It sucks because all I want to do is live and get by, I don’t really have any grandiose dreams of doing crazy things or buying tons of stuff. I just want to get by as my parents did, which seems impossible today.
How much did you pay for your house? Assuming you live in a HCOL area? Making almost 200k you shouldn’t be struggling at all, unless you’re living in some crazy high cost of living area.
I live in North NJ. From my understanding, it’s about as bad as it gets. House was 330k 10 years ago. We also have crazy property taxes, so that alone is 13k a year. I also live in a very rural area which was the only option for the area if we wanted some space and also keep house prices semi cheap.
How damn costly is everything else there, that’s crazy high for property taxes though.
Even if you do nothing, if you don’t get into debt, you will have millions in equity in the house when it’s paid off.
You’ve basically invested into real estate so you’re saving money even if it doesn’t go into your savings account.
We purchased the house for around 300k, and even with the market today, it’s about 500k. Sure, it could go for higher whenever we do sell, but it’s not an investment. With our current loan we will have paid over 500k over 30 years, so I really am not expecting to make out from this. The only way this makes me money is when I retire (which is close to payoff anyway) and move someplace way cheaper than we’re we live now.
You’re going to pay it off in what, like 25 years? Yeah, it will be worth over a million by then.
My dad bought his house for $600,000 in 2008 peak, and it is now worth maybe 2 million. It hasn’t even been twenty years and it’s more than tripled, despite being underwater on the mortgage in 2009 (owed more than market value)
Every time ive tried investing, i had to take it out after a few months to pay for something thats popped up in life after other things have raided my savings.
Investing is for people with a lot of excess cash.
Precisely, which is why I don’t think my comment is directed at you. If you’re always trying to get ahead of the latest unexpected big expense, you’re not a “HENRY.”
That’s what living pay check to pay check is though…
Not necessarily. It’s what living paycheck to paycheck is if you’re poor. If you make a lot of money but spend a lot of money on unnecessary things you can also be paycheck to paycheck.
What are those “somethings” that pop up every few months?
If you don’t save and invest it, you’ll be living paycheck to paycheck for the rest of your life.
I don’t think you really know what “living paycheck to paycheck” actually means if you think it, in any way, involves investing.
I think his point is people are only living paycheck to paycheck out of choice when they could save and invest if they tightened their belts.
Not saying I agree, just explaining his perspective.
There are peple who are genuinly struggling.
Then there are those who choose to spend 10-20K on vacations every year and ‘feel’ they are struggling.
And these latter people will forever tell you how they are living ‘paycheck to paycheck’ and talk your ear off about how theri struggles are more genuine and ‘real’ than people who are actually poor.
Maybe if they ate less avocado toast right!
In some cases genuinely yes. If you are earning $X and you are spending $X every month, but some of those expenditures are on luxury items like fine foods, then complaining about how you’re living paycheck-to-paycheck and don’t have the “choice” to invest rings hollow. You do have the choice to invest, you’re just choosing to spend that investable money on immediate luxuries instead.
SOME cases? Half the country isn’t really earning enough to more than barely get by. They have nothing to invest. They aren’t spending much on “fine” foods unless you are counting not eating entirely ramen and rice as “fine foods”
You can have very high income and still live paycheck to paycheck if you spend every paycheck
“living paycheck to paycheck” generally means that all money is spent on living expenses and there is very little, if anything, left over. If you have any appreciable discretionary income, you are not living paycheck to paycheck.
Tell that to the people who make 150K and spend 200K a year.
Hint: they dont’ give a shit what you say.
I’m not concerned about what those people say; they are doing just fine. I’m concerned about the people who are actually living paycheck to paycheck.
This is really stupid.
You’re basically telling people “just be rich” like it’s that simple.
People living paycheck-to-paycheck are not able to invest money because they don’t have excess income, they get to decide if they want to pay for rent or want to pay for food. Combine that with astonishing inflation rates and salary raises that don’t match cost of living increases or simply layoffs, and we have one fucked up situation.
This is a systemic problem. Billionaires shouldn’t exist. Billionaires are a societal problem.
edit: Oh, I see your comment isn’t directed at people living paycheck-to-paycheck, that’s a bit more reasonable then but I still think you’re missing the mark. It’s not as simple as “just increase your income” like you seem to be thinking it is.
The problem in this thread is that there are people - such as the one mentioned in the title of this article - that are living paycheck-to-paycheck by choice. They choose to spend their entire paycheck on stuff. They don’t need to spend it all, they could save some, but instead they buy the biggest houses they can afford or build a deck they don’t actually need.
There are people who would literally die if they tried to significantly reduce their spending. Those are the people who don’t have a choice, and I sympathize with them and want solutions for this because it’s a serious problem. The others I have somewhat less sympathy for.
because it is that simple.
be rich or forever be poor.
this is the system we have setup and the system that we worship.
I try to save whatever extra I have, because everyone says I need to have six months of expenses saved.
The problem is that before I can save up enough to cover that there’s some huge expense that I need to cover that empties it out and puts me even more into debt.
If I could manage to save up a year of expenses, I could probably start my own consulting agency and start making a lot of money, but I just can’t get there.
The problem is that for many folks the amount they are making isn’t enough for them to live a very reasonable life AND they have nothing to invest in the first place. Suppose a household in a given area needs $100,000 to afford a VERY modest house in that area, health insurance, savings, healthy food etc. Now suppose the house has one disabled breadwinner and one fellow working for $40,000.
Because of this they live in shit town in a tiny apartment a building full of drug addicts in a not so great part of the state wherein the average life expectancy is about 10 years less than one of the good parts of the country.
The first 40k of “excess” would be spent on having a decent life, working a sane number of hours, moving into an actual home. For fully half the country the idea of having excess is laughable. It’s a crass joke.
My SO has a medical condition that limits her income. I’m in academia, so I don’t make much and work crazy hours. We get to have happy day to day, and save money to invest by renting a shity apartment. As in, my investment account is worth more than that of some friends in software development, cus they wanted to live in good apartments.
It doesn’t matter that average life expectancy is 10 years shorter. It matters why. Are people randomly getting murdered or constantly exposed to high air pollution? Don’t live there. Is it shorter cus they are mostly stupid fucks that eat shity food and their only hobby is smoking on the bench below the building? You can live there fine, those are my neighboors. Doesn’t stop me from eating healthy home made food, staying in shape and saving money.
Am I happy about it? No, I will never own a house, and it sucks cus I love to tinker, and enjoy growing plants. But I can live a full filling live, better than any king that ever lived up till around the 18-19 century, and save money.
The economic system is dead, it died in 2008. Combine that with climate change, and things are only going to get worse. Unless some politician is going to pull out free, infinite, energy machine out of their arse they can’t do much as the system is already collapsing.
You can be smart about it, and have a few more happy years before we all die. Or you can be stupid about it, and suffer till we all die.
- am not a USA citizen, the problem is global.
Most areas don’t need $100,000 a year to afford a “very modest house”, you could get a nice mobile home and afford to pay off the loan in just a couple years.
the areas where most people live, however, do.
nobody wants to live in trailer park in Mobile, AL.
Why not?
Everybody wants everything at no cost. That’s not how the world works, though. If you earn $X a month and want to save some of it as a long-term investment, you simply cannot spend $X a month. You can’t have both.
There are indeed some people who have no choice but to spend $X a month, their basic expenses just can’t go any lower without literally ending up on the street or straight up dying. Those people do have a real problem and I sympathize with them.
People who say “I want to save money but I also want to live in the nicest possible house in the nicest possible neighborhood” I have less sympathy with, because they have a choice. I face that choice myself and instead of griping about how I can’t have everything I want with no sacrifice I just go ahead and make the choice. I don’t spend all my money each month, and as a result I don’t take vacations as nice as I could take and I don’t have as nice a car as I could have. But in exchange for that I’ve got plenty of savings built up.
Lets define “most”. Herein I define most as the area immediately surrounding the majority of people. 70% of people live in urban areas not out in bum fuck.
I live in a small city of 50,000 in Washington. A house around here starts at about 400k. I would have to pay about 3100 per month including taxes and insurance. I would take home about 6500 per month after taxes if I made 100k. At current interest rates I would need to spend 3100 per month to service such a loan.or about 47% of my take home pay. It is difficult to see how I could afford a home with a household not individual of less than 100,000.
Adjacent to me is a much bigger city with about 20x the jobs and opportunities. I would need more like 900k to buy into there. Realistically to afford a home there we are talking about my household making more than 200k. Why so much? Because housing has got very expensive and interest is very high.
A ton of urban areas have much options cheaper than the west coast though, mobile homes, townhouses, duplexes, etc. $400,000 is much more than a very modest house. For example I would consider a shotgun house very modest, and short of very high income areas they’re usually much less than $400,000
Cheaper places are cheaper for a reason. Worse health care. Worse education for your kids. Worse life expectancy. Worse Opportunity. For instance St Louis has a median home price of 207k but they also have 10x the murder rate of Seattle a worse jobs outlook. You’ll make less money etc.
Who in their right mind would want to live in a red state?
Cheaper places are cheaper for a reason.
Yes, and I agree I prefer higher density, but ultimately some people living in less desirable areas is more reasonable than trying to build ever taller skyscrapers in city centers- in a country with massive amounts of empty land.
Worse health care.
It depends, there are plenty of cheaper cities with very good healthcare, I grew up in Louisville, KY, spent a lot of time in LA, CA, and now live in Prague, CZ. Louisville has had the cheapest rent/purchase price and had by far the best quality healthcare(at least that I and my family received) out of anywhere I’ve lived.
Worse education for your kids.
This is valid in some cases, and there are plenty of valid reasons to desire living somewhere else more, that doesn’t mean there aren’t costs to that. Furthermore, there are plenty of expensive places with terrible school systems, plenty of cheap places with passable school systems, but more importantly traditional schools systems in general suck. Kids now days have access to the internet, that combined with parents who encourage curiosity and creativity will be much more important to them learning than the school system they go to.
For instance St Louis has a median home price of 207k but they also have 10x the murder rate of Seattle a worse jobs outlook.
That is cherrypicking, compare Chicago to Fargo, ND. Or a less distant example, Seattle to Spokane.
You’ll make less money etc.
Assuming you don’t work remotely, but you’ll also spend less.
Who in their right mind would want to live in a red state?
Not about being red or blue, its about not being a HCOL megalopolis. You can also move to Maine.
what the heck’s a rimjob?
I had dinner with my mom last night. She told me she made $2.20/hr as a waitress in 1972. Not including tips.
That’s the equivalent of over $16/hr now.
The boomers have no idea how lucky they were. And they fucking wasted it.
They weren’t lucky. They voted for people that removed all the guardrails that enabled their success.
I agree. I still think they were lucky insofar as they were born in the right place at the right time to benefit massively over future generations.
This is the important detail. Europe was destroyed and the USA was able to flourish. Opportunities existed that will likely never exist again. Capitalism has never been as great as it was in the USA post-WWII.
Ah, but the USA post-WWIII will be even better! Or at least growth capitalism suggests it will.
America was basically the only industrialized country that hadn’t been bombed to fuck. You had to be a clown to not succeed in that environment (or systemically oppressed, since opportunity in the US is always only for white people). Boomers took quality jobs making reliable products and moved those to low wage jobs making disposable products in China.
Boomers Now: “hey if we blow up half the world again maybe it will help the economy, also I’m way too old to be drafted”
They had too. They couldn’t get rich if they had to pay workers what they were paid when they were starting out.
Waiters today make $2.13 an hour in my state.
Few people in that period had the information you have now. People were presented with this economic miracle in the 50s and there was little to no components other than conformity.
As more time has passed and I continually re-assess my Boomer parents, I am struck more and more that they truly were a propagandized generation who was never given the tools to properly think through what they were seeing. It was always just “here, more, buy this, this technology is new and amazing”. Everything was new year after year until the late 80s/early 90s, when technology evened out. Even then people had cell phones and such. Once met with the Internet, especially through Facebook, we could see all of their problems flourish.
Not to say that any generation is better than any other or not, but I do believe that each generation after Boomers is actually much better than the previous one at critical thinking–probably because society had no choice but to and the fact that more people have at least a bachelors degree now.
Bachelor’s degrees and unleaded fuel make a hell of a difference.
As much as you complain about the boomers, the current generation(s) are the ones you need to pay attention when it comes to who’s caused the house shortage because of unchecked capitalism. There’s more than enough houses that should house everyone for cheap.
You cannot blame boomers for the smouldering wreck that Airbnb left behind. That was the work of a millennial. Take some responsibility for yourselves and your own actions that have attributed to the current state of society that you live in.
My guy, air bnb didn’t cause the shortage or even significantly make it worse. It’s the mega corps that literally own hundreds of thousands of homes across the US and just rent them out. I’m not even upset at boomers who own 3 or 4 rental properties and I work with a lot of them. It’s always mega corps fucking it up for the rest of us.
Megacorps aren’t in general ‘boomers’
mega corps span all the recent generations.
And fuck off with this ‘my guy’ bullshit you sexist, condescending git.
Housing was wildly expensive and rising incredibly fast before Airbnb was invented (company started in 2008, which you might recognize as an important year for the real estate market). After 2008, tons of investors came in to buy up the depressed value properties to either flip or rent out or just hold onto until the value returned. People buying houses with cash isn’t something Airbnb caused. Corporations buying up houses to rent isn’t something Airbnb caused. Foreign investors buying up houses to get their money out of their country isn’t something Airbnb caused.
Airbnb invented a way to make money off of housing by taking houses away from people. Entire blocks will be bought by a company just to use as an Airbnb hence why a lot of stipulations have been recently coming in to prevent a ‘housing shortage’ while there’s enough housing.
So yes, Airbnb did a lot of damage there when it comes to ‘who can we pin ideas on’ blame which we love to do so much to boomers.
LOL you really believe that “a millenial” created AirBNB and not some conglomerate of venture capitalists funneling billions at a team made up of people of all ages?
No shit. So you agree It’s not just boomers. Now go get mad at the OP for spawning this stupid nonsense argument in the first place. Go on and grow that attention span.
Seems you think that I am responsible for your anger. Weird.
Seems you think everyone is responsible for you aside from you
Ow, burn!
Wtf even does “the current generations” mean? Whenever people say “the newer generation” or “the young generation” or something they just sound so fucking incompetent.
And worse: the home buying age isn’t 19, it’s more like 30 - 40.
Being over 40 doesn’t make you a boomer.
As is blaming boomers when the world is not run by just that one generation. The most successful billionaires today are made up from genx and millennials.
So making it a generation war just when it’s pointed at boomers is just stupid and incompetent for an argument.
Nikki Cimino, a 40-year-old recruiter living in Denver, said she finally saved up enough to buy a condo last year, but missed out on the ultra-low interest rates that had made homeownership more affordable in the early days of the pandemic. Her 5.25% interest rate pushed her monthly payments to $1,650. After a divorce in 2020, she’s shouldering $4,000 in credit card debt.
It’s the credit card debt…
Instead of paying that off since 2020, she saved a down payment and bought an expensive condo. She’s wasting a shit ton of money on interest because credit cards are all like 20-30%
Credit cards are predatory, if you ever carry a balance to the next month, that needs to be your highest priority.
Do a transfer to get 0% each year if you have to when recovering from emergencies. But paying credit interest for years is insane.
Holy crap! She was “saving up” to buy a condo instead of using that money to pay off the credit cards? That’s absolutely insane. I really feel like society would benefit immensely if there were mandatory financial literacy courses every 4 years, or at least before any major purchases (house, car, etc).
Or just common sense laws against predatory lending by capping interest rates.
Most people don’t have a safety net and live paycheck to paycheck.
A huge expense comes up, and rather than get a bank loan at even 8-10%, it goes on a credit card
Companies have a tiny “minimum payment” because they don’t want you to pay it off. They want that balance to grow while people ignore it. They don’t want it back now, they want thousands more later.
I’m all for interest caps but if the highest they could charge was say 9% they’d just deny credit to tons of people, not give them lower interest debt. I’m okay with that though.
Pretty sure every cc has the minimum payment higher than the interest. If you just stop buying shit you’ll pay it off eventually, even if you can only afford the minimum payment. The balance can’t grow unless you’re still buying shit.
They codified that so yes you will pay it off eventually. It will no longer continue to grow forever. However it will take an excessively long amount of time. Like taking a 30-year mortgage to buy a bag of fuckin McDonalds.
For example the couple above, 62 and 65, will almost assuredly be dead by the time they pay it off at minimum payment.
Fair.
Also she was apparently planning on low interest rates, but when the rates went up she shrugged and didn’t adjust her plans. It’s kind of hard feeling sympathy for her. If she’d been hit with an unexpected but unavoidable expense that would be a different matter.
Have you seen the movie Maxed Out? That was pretty eye opening for me.
Bingo. I never, ever let credit card debt carry over. I’d genuinely rather miss a house payment.
For Denise and Paul Nierzwicki, credit cards are the only way to make ends meet. The couple, ages 69 and 72, respectively, have about $20,000 in debt spread across multiple cards, all with interest rates above 20%.
The trouble started during the pandemic, when Denise lost her job and a business deal for a bar that they owned in their hometown of Lexington, Kentucky, went bad.
They applied for Social Security, which helped, and Denise now works 50 hours a week at a restaurant. Still, they’re barely scraping together the minimum payments for their credit card debt.
Jesus. I don’t see how this gets un-fucked without a massive wave of defaults. And that’ll just lead to a different kind of fucked.
Her mortgage is $1650/mo, which is incredibly reasonable in Denver. I think this specific person’s problems have more to do with her recent divorce. She was used to splitting costs, and probably spent quite a bit on the divorce itself
She’s paying $1650 for a house? You’d pay more for a house in a neighborhood where every night is the purge here.
That’s supply and demand, for you.
…that’s more than I’d make with minimum wage in my state, which I don’t think is that far behind colorado. Yikes.
ETA: ok nvm I did math and if you make a little over $10/hr 40 hrs a week, your entire paycheck would go just toward that.
You’re still off unfortunately.
Full time at $10/hr is $1600/month before income tax. For simplicity, we’ll say federal+state tax is 15% so now we’re at $1360. Social security is 6.2% so take away another $100.
Then, of course, this is the United States where most people have to rely on their employees for “affordable” health insurance - and often still have money taken out of their check for it.
So now we’re at $1000-1260 monthly take home pay for a full time job at $10/hr
“affordable” health insurance
At that income, you would qualify for Medicaid.
Also I don’t think you pay income tax when your income is that low.
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The standard deduction is $13850 so there’s no way you’re paying 15% tax on an income of $20,000
You’re paying about a little over $600 federal plus whatever state tax and usually state tax is less than federal, but depends on the state. In some states you don’t pay state income taxes.
So best case scenario you pay a little over 3% federal and no state.
At that salary you’d also get EIC and likely pay no taxes at all.
Someone making minimum wage is unfortunately not likely to be getting a mortgage.
I pay more than $2k for a 1-bed apartment in Seattle. Would love that rate for sure.
As someone with mortage of 520€/month there’s nothing reasonable in what she’s paying. I don’t care if it comes with 6 bedrooms, a maid, cook, gardener and a chauffeur - I’m not paying that. I’m more than fine in my tiny granny cottage on the outskirts of a middle sized city.
You couldn’t rent a shack that had a floor made of perpetual dirty needles for $520/month near me.
The floor is rising! But, the floor is lava.
But the lava is tax deductable
But you need an attorney to claim the deduction
To anyone struggling in the USA and wondering how to possibly get out, just live like Congress and become rich. Then, money problems are way easier to handle. If you have as much money as a Congressman, you will be equally as unconcerned with them as to the state of our union and you will be able to say things are great with a straight face.
Not even.
All you really need is wealthy parents. That way you never have to have any debt and get exploited by the credit system and can live your life glib and clueless and wondering why other people are so lazy and poor and didn’t work hard like you.
Exactly, just do a lot of insider trading and live the good life.
Hard part is being rich first. New money goes to jail before old money
Congress members don’t make enough to be rich without taking bribes. They make $174k/year in 2024, which is equivalent to $75k/year in 1990. The only wages that haven’t dropped due to inflation are CEO and other C-suites.
Congress members don’t make enough to be rich without taking bribes.
That’s why so many of them take bribes :)
And some are rich because of government money through contracts or handouts.
That’s why you can’t just look at their salary, the real money is in lobbyists and stock market betting prior to rolling out industry wide changes.
But then again they have no health care costs whatsoever.
I dunno. Congressional salary really is still in the rage of “Middle Class”, though definitely at the higher end of that. These people were wealthy or connected, for the most part, before getting into office. People who are barely getting by don’t quit their jobs for political campaigns.
I should have been more specific. Let’s talk salary + perks. (official and unofficial)
Like Dubya said, you should get 2 or 3 more jobs so you can put more food on your family.
“You work three jobs? Uniquely American, isn’t it. That is fantastic that you’re doing that. Get any sleep?” - President George Bush to a divorced mother of three. Omaha, Nebraska Feb. 4th 2005
Proof you can’t die of cringe
That requires self awareness
Well he is a war criminal so I don’t think he feels shame like a normal person would.
Our enemies are innovative and resourceful - and so are we. They never stop thinking about new ways to harm our country and our people and neither do we.
It was funnier when it wasn’t so blatant. A politician saying this today might mean it.
How else is she going to put food on her family?
Aahahaha Bush’s malapropisms, a gift that never stops giving
Most of them were said by Dan Quayle.
I’m in this article and don’t like it.
Gary Stevenson explains why this is, and why it’s not gonna get better anytime soon.
This video is great. He put into words what I’ve been suspecting for a couple months now. He predicts asset/housing prices will continue increasing while living standards stay terrible and he thinks they’ll get worse. I think he’s absolutely correct. A better quality of life is being gatekept by the wealthy.
Great channel!
Consider the possibility that, first and given the political importance they have in the present day, the official numbers that the Economists are using are less than honest.
Also, I know that some countries don’t include Housing Inflation - which is huge* - in their Official Inflation. Is that also the case in the US?
Last but not least, there is the whole difference between what is usually reported to us by Politicians, Economists and the Press, which is either country totals (which grow up merelly by the population growing) or the mean average (i.e. adding all values and dividing by the total number of points) which suffers from the “if a man has 10 chickens and 9 others have none, each has in average 1 chicken even though most have none” problem, and the mode (the value around which most cases are found) which is far more representative of most people’s experiences: if for example the wealth increases from higher productivity are going entirelly to a few people who just get ever more filthy rich whilst the many have either stagnated or, worse, are getting a bit poorer due to inflation eating up the true value of their pay, the grand total will be growing, as will the average (if the population numbers are steady) but the mode will have stagnated or even be falling, matching the experience of most people - people get to hear about country GDP growing and even GPD-per-capita growing all the while the vast majority see not growth at all, maybe even a falling of their purchasing power (the latter for sure for any who don’t already own their house).
Apparently inflation went down bigly in the 1980s when they decided to stop counting the cost of housing. NPR last week had a report about people advocating to put that back in so that we can have a better idea of what is going on.
Well, the official Inflation is used in the calculation of the official GDP were it acts as a deflator (i.e. the more the inflation the less the GDP) to correct the Nominal GDP (which is in present day currency terms) to make the Real GDP (which is supposedly free of Inflation and hence comparable between years) aka the Official GDP.
If the official Inflation understates the real Inflation, what happens is that the increase is the Nominal GDP that comes merelly from inflation rather than from any actual growth in wealth, is not fully offset when the Real/Official GDP is calculated, so the resulting “real” GDP number is bigger than reality and proud government politicians can come out, compare it to last years’s GDP (which it should’ve been comparable with, if both were done properly) and claim that it was their steering of the Economy that made such a difference to last year’s GDP, i.e such high GDP Growth.
Hence the is massive political pressure to understate Inflation, i.e. to lie, so that ultimatelly larger GDP Growth figures can be posted and boasted about.
Been arguing for years that the Mode is far more representative of the common person’s experience than Mean or Median. Most ppl don’t remember that Mode even exists.
All three should be reported, along with raw data. Maybe it’s available somewhere, I haven’t looked.
I’ve never understood why median is a useful metric.
Money is for corporate people, not normal people! Silly goose
A higher quality of living is being gatekept by the wealthy.
Honest work: You make just enough to live on until its not enough and then you’re homeless
Scams and grifting: You make possibly lots of money then maybe get sent to jail which is where the courts are gearing up to send homeless people anyway.
Yeah welcome to the fuck guy.
I’m going to start using this. Thanks!
