Economic Reality: Bottom 50% of Americans No Longer Matter
By Mike “Mish” Shedlock
Apr 30 2017
The Fed likes to brag about the “We saved the world” recovery.
However, the unfortunate truth of the matter is a record Half of American Families Live Paycheck to Paycheck.
Does it Matter? Let’s investigate.
Unprepared for Nearly Anything
• 50% are woefully unprepared for a financial emergency.
• Nearly 1 in 5 (19%) Americans have nothing set aside to cover an unexpected emergency.
• Nearly 1 in 3 (31%) Americans don’t have at least $500 set aside to cover an unexpected emergency expense, according to a survey released Tuesday by HomeServe USA, a home repair service.
• A separate survey released Monday by insurance company MetLife found that 49% of employees are “concerned, anxious or fearful about their current financial well-being.”
A Fed study shows U.S. Households Will Soon Have as Much Debt as They had in 2008.
The Federal Reserve announced Friday that the U.S. has $1 trillion in credit-card debt. Consumers hit that number in the fourth quarter of 2016, but eased on revolving credit during January 2017. The Fed announcement showed revolving consumer credit hit more than $1 trillion once again in February 2017.
“Credit card debt is rising quickly, but delinquencies are still really low,” said Matt Schulz, a senior industry analyst at the credit cards site CreditCards.com. “Many Americans are doing a good job of controlling their debts, but eventually with big debts and rising interest rates, it’s likely that something will have to give.”
Paycheck to Paycheck “Good Job”
Excuse me for asking but if half the nation lives paycheck to paycheck, is that really indicative of doing a good job at managing debt.
And as for “low delinquencies”, I remind you of my April 26 article Subprime Credit Card Losses Bite Capital One: Income Down 20%, Charge-Offs Up 30%.
Nonetheless, I remind you of an important perception.
We Saved the World
• Wall Street Journal Oct 4, 2015: How the Fed Saved the Economy
• Washington Post August 26, 2009: Ben Bernanke: The Man Who Saved the World
• Forbes Oct 5, 2015: Ben Bernanke On How The Fed Saved The Economy
• January 12, 2013: How Tim Geithner Saved the Banks—With Ben Bernanke’s Help