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Comment by onlyrealcuzzo | Hacker News Reader

> the personal savings rate plunged from 5.2% to 3.8%

Americans don't save - haven't for 30 years - this isn't anything new. The savings rate was only 5.2% because people were getting handed free private money as the public debt swelled.

> credit card debt is at the highest amount ever in history

It should be. Dollars are down 30% from pre-pandemic. It'll likely go much higher.

> and auto loans are experiencing the highest delinquency rate in 30 years.

Not surprised. Car prices led inflation during the pandemic, and despite that, sales went through the roof.

Americans don't plan for a rainy day. Student loan payments resumed, incomes are down (mostly because government transfers are down, not wages).

Something's got to give.

Looks like car payments were the first to go. Will they be the only thing? Who knows! Stay tuned.

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> Americans don't plan for a rainy day.

This sentiment scares the crap out of me, and explains a lot of frustrations I felt through the pandemic. I've complained [0] before about feeling like I was getting screwed by making "reasonable" or even fiscally conservative choices throughout the pandemic and it's recovery. It's a topic I have complicated feelings on: I don't want my fellow citizens to be "punished" for being reckless, both because I don't like the idea of punitive reformation and because punishing basically everyone would do Bad Things to the economy, but the feeling of "something's got to give" has been hanging over me for years.

Everyone seems over-extended, but anyone who "plays it safe" just gets taken advantage of by everyone else. It feels like a microcosm of peoples' reaction to climate change in a lot of ways; we see older generations reveling in the spoils of just not caring and know that if we're going to do anything about it _we_ will have to give up luxuries they've enjoyed for years--and that there will be plenty of others who will just take up the "slack" we're creating by cutting our emissions.

Maybe I'm just projecting my own FOMO, but I see a _lot_ of the sentiment of "they got theirs, why shouldn't I get mine?" when it comes to saving money or climate change or even just post-COVID travel. There's no sense of communal responsibility or "we're all in this together."

[0]: https://news.ycombinator.com/item?id=35265201

When your government is in debt ~120% to GDP, and that percentage is growing rapidly - it's a fool's errand to try to be fiscally conservative.

However, if it starts to shrink - and you're leveraged to your neck in debt - buckle up.

Interestingly, your sentiments about moral hazards in finance exactly mirror mine regarding obedience to the law.

E.g., if I'm one of the few who pays all of the taxes I'm supposed to, does that just make me a self-righteous chump?

Or is there much point in me properly disposing of household lead, fiberglass insulation, etc. when 99% of other users of the landfill ignore the rules?

Eloquently put! The "you should've saved more" advice is incredibly dismissive of the millions of people who realistically can't. You can't save for a rainy day when it's already raining everyday.

The economy is musical chairs, but you don’t want to stop the music if you don’t have to until after you die.

Well put. This is how I feel.

I think you are right on the nose.

> Americans don't save - haven't for 30 years - this isn't anything new.

It's also worth noting that the intuitive relationship of "savings is low, ergo times are hard" doesn't really fit the data. For example, during the bubble years prior to the '08 mortgage crisis, the savings rate declined significantly. When the crisis hit, the savings rate went up and stayed up afterwards.

https://fred.stlouisfed.org/series/PSAVERT

When you live in an economy based on consumption, not production - you're in for a bad time if savings rates go up.

> Looks like car payments were the first to go.

Car repo rates are an extremely reliable signal for an impending economic crisis. Problem is, right now, the signal has been active for an unusually long period. Maybe it's just the previous administration's "free" money drying up?

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