Americans Are Falling Behind on Their Bills | Hacker News Reader

Americans Are Falling Behind on Their Bills

wsj.com

34 pointspaulpauper42 comments

I did a deep learning project on stocks once.

So I dug up old WSJ archives to research possible data sets.

I got one from 1945! It was incredible. Not a word of clickbait. Zero politics. Zero outrage. No fear, no excitement. It was all crop yields, steel tonnages, weather forecasts, trade balances, ads for suits, financial reports. The only news vaguely related to politics was about government budgets, but even that was all numbers and no zing.

After five years of the greatest conflict the world had (and still has) ever known, this seems not so surprising.

When I was in college many decades ago, the same applied. The WSJ was ruined by Murdoch when he purchased it I think 20 or so years ago.

The personal saving rate has dropped a bit.

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

What does this measure exactly? Money in savings accounts or all assets of a person? Does this account for investments and stuff that is not traditionally thought of as savings but is very popular because of returns of traditional savings accounts?

"Personal saving is equal to personal income less personal outlays and personal taxes; it may generally be viewed as the portion of personal income that is used either to provide funds to capital markets or to invest in real assets such as residences."

At the bottom of the page it says:

Frequency: Monthly

Personal saving is equal to personal income less personal outlays and personal taxes; it may generally be viewed as the portion of personal income that is used either to provide funds to capital markets or to invest in real assets such as residences.

*saving rate

Besides June of 2022, the savings rate is the lowest since 2008.

I'm getting pretty tired of WSJ clickbait.

new article title: WSJ is falling behind on its bills!

What is clickbait about it? There are a lot of Americans who are out of jobs and having hard time pay their bills, maybe you’re not in that situation but there are millions of people who are in that position.

News from two weeks ago

Americans Face Credit Hit as Student Debt Goes Delinquent Again

https://news.ycombinator.com/item?id=41491638

*poor Americans are falling behind on their credit card debt

I really truly hate that anyone in the country has credit card debit.

You hate it but companies love it because people having easier access to spending makes them better consumers I guess?

I'd argue credit card debt actually makes people better laborers, by forcing them to work more. If someone is spending 20% of their income servicing their debt, they aren't spending more, they're working more for the same amount of goods and services.

Exploitation is the backbone of the strong American economy.

I guess that's one way to have the poor make less than minimum wage.

CC debt is a net negative spending by consumers. The difference between outstanding credit card debt each year is far less than the money spent servicing credit car debt. Even if you adjust for defaults, it’s a huge drain on people’s spending.

Very specific industries like amusement parks see some gain, but overall the economy would be far better off with significantly smaller credit card limits.

Maybe assuming that you would spend as much with and without the credit, but I think removing the barrier to consumption, and buying on impulse and thinking later is the key. If you’re forced to save up for an expense, you have much more time to reconsider it.

At the beginning sure, the average 21 year old spends more because of CC’s. But most people don’t die or default young. If someone doesn’t pay off that debt by ~28 they’ll spend more in interest than whatever the item was and still need to keep paying down debt / keep paying interest.

Take that same person and remove the impulse buying at 21 and by 28 they will have saved that money to make those same purchases and not have to service debt after that point or try to dig themselves out of a hole.

Even if they end up saving the money for years, it’s likelihood to end up as a down payment on a house or something. Because the economy isn’t just individual purchases it’s the average activity across generations at each individual moment.

If you’re analyzing it that broadly then the interest on the CC debt will also be a profit for the bank which will distribute it across its workers and shareholders, and those people will also use it for consumption. It’s just a wealth transfer from the poor, and impulsive to the rich and clever.

Some shareholders in public companies are guaranteed to be outside the US. Similarly wealthy people are more likely to spend money on goods and services outside the US.

It's a tool like any other. Wear a helmet.

We can educate people. We can protect them. There's a massive disparity in competence between the people selling credit cards and the people using them. That's not intrinsic, it's done to them.

At the same time, I don't want to live in a world where others are doing things for "my safety".

But you already do. Your meat is processed to a certain standard. Your foodstuffs may only have a certain percentage of contaminants. Your vehicle must meet certain safety standards. The buildings you traverse through meet building codes. I could go on.

yeah you do. or at least, the people who make your comfortable life possible do: https://www.osha.gov/young-workers/real-stories. it's wild that's it's only taken a single generation for people to forget the struggles of the generations before them and to take those hard-won rights for granted.

I presume you meant others preventing you from doing things "for your safety?" i.e. the nanny state?

It pays (!!) to pay attention in math class.

Credit card debt is fine when it is used properly; you can defer paying a charge for almost 2 months with no interest depending on when its statement due date is.

The problem is revolving credit card debt, which comes from not paying statement balances in full and you end up accruing interest. That is spending beyond your means, which is bad whether the debt comes from revolving lines of credit or otherwise.

Don't spend more than you can afford and keep money earmarked to pay statements in full when they come due. A credit card that is used properly has an effective interest rate of 0% and helps make your finances easier to manage.

This. Everyone I've seen in high levels of debt got that way because they have access to credit. If it's not credit cards, it's going to be loans of other kinds. You can't really stop people from going into debt, it's a mental thing.

If you're taught it early, then people have a chance. The problem is that credit is predatory. If you're barely scraping by but paying your minimum, I believe most lenders will slowly increase your limit as long as you're current. Or if not them, another lender will give you a line of credit and you can just transfer it or accumulate more.

Now, even banks got into the game with even asking you if you'd like to finance something after you've bought it! If you buy something for 300, they'll show you an option to pay 3 installments of 100 instead with penalties if you fail to pay on time. So what some people do, instead of saving and buying one thing for 300, they buy 3 things for 900 and pay for them monthly. The problem is when you can't pay, now you're screwed.

Credit is scary. Life is also crazy expensive. I can't imagine how the next generation will feel once they come of age and things are soul crushingly expensive. Inflation has no bounds. You know how the yen is like a penny? That wasn't always the case. The yen was a dollar and cents were sen. Inflation got so high so fast, that domination just went away. We're not far from cents going away either, god forbid with 100 becomes the new dollar.

These days people just throw their coins in the trash. Literally. I know this because I saw a news story about a company that "mined" trash for coins. Doing at scale made it profitable.

This is a big reason why I switched over to credit cards. I don't throw away my coins, but they end up in a plastic container somewhere.

Aren't you being a bit pessimistic about the next gen? US got a couple years of moderately high inflation, and yeah buying a house is harder than it was 50 years ago.

But the hedonic index is still going up, it's insane how much more stuff we have access to now.

Even comparing to the yen is misleading, since Japan is the only country which has had nearly zero inflation for 30 years. A USD is still ~1€ or ~1CHF for example.

>If you're barely scraping by but paying your minimum, I believe most lenders will slowly increase your limit as long as you're current. Or if not them, another lender will give you a line of credit and you can just transfer it or accumulate more.

Congratulations, unfortunately you don't understand credit as well as you would like to.

* Carrying debt is actually unfavourable for requesting further debt, most credit reports track your current debt to available credit and score you lower the smaller that difference is.

* Each new line of credit you open for a balance transfer is another hard inquiry ("hard pull"), and each of them will ding your credit score for at least a year because it is unfavourable for someone to be looking for and taking on new debt whether real or potential.

This means you will eventually run out of new potential debt to pay your current real debt with, and you're now drowning in debt.

Please for the love of sweet baby Jesus do not do this, do not fucking carry a statement balance over. If you can't pay your statement balance in full, it means you can't afford it and you need to stop spending so much.

If life decides today is your day to get fucked (eg: emergency medical bills, sudden job loss) then there's no way around that, but you shouldn't deliberately go to get fucked.

This is incidentally why high national debts like that seen here in the US or Japan are points of concern: A lot of that debt is financing to pay off debts, borrowing money to pay monies borrowed. What happens when the creditors stop lending?

>You know how the yen is like a penny? That wasn't always the case. The yen was a dollar and cents were sen. Inflation got so high so fast, that domination just went away.

The JPY was 360 JPY to 1 USD once upon a time, today's ~143 JPY or even the ~80 JPY seen around 15 years ago are very high value relatively speaking. The sen is also still used, just not in daily life because fractional yen isn't significant outside of financial circles.

> Carrying debt is actually unfavourable for requesting further debt...

Hit the nail on the head. I have 1 effing credit card that is maxed out (interest free for another year) and it represents less than 8% of my total revolving credit line. Can't get another credit card even though I have 92% of total available credit remaining.

I suppose I'm referring to people with established credit. I know when I was 22, I already had 7 years of credit history and was maxed out at 1k, then they upped it. I reached 2k at one point. I constantly received laters for credit cards, pre-approved. At the time, I'd transfer it over at 0% for a year, paying like 3% transfer fee or something like that. Started with Cap1, got offers from Citi and Chase on the regular. I had friends whose parents were doing this that eventually filed for bankruptcy. So I know first hand it works and that it's obviously a problem. If you have no credit history, then yeah, you can't do this but it's doable.

I'm not saying to do this but it's how it works. Some people have kids, give them lines of credit before their of legal age then start massing credit on their name and rinse and repeat their game on the kids credit.

> Everyone I've seen in high levels of debt got that way because they have access to credit.

Isn't that a tautology?

> Isn't that a tautology?

Not quite, because there are a few other ways to accrue liabilities other than someone extending credit (e.g., tort judgements), but, yeah, it's not very profound if you consider what "credit" and "debt" both mean.

https://archive.ph/A1c9B

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