READING: I Don’t Feel Like Buying Stuff Anymore

“The US didn’t become a nation of consumers because everyone has ample amounts of discretionary cash. Before the pandemic, income inequality had reached its highest levels since the Depression. Most Americans’ wages, when adjusted for inflation and purchasing power, have barely risen in four decades. In 2018, with the economy at its most robust in years, 61% of Americans said they could not cover a surprise expense of $400. In 2019, a study by the AARP found that 53% of American households did not have an emergency savings account — including a quarter of those who earn more than $150,000 a year. So how do Americans buy so much when we have so little discretionary money? Massive amounts of credit. Payday loans, credit cards, quick and easy car loans, and the newly common “Afterpay” function in online checkouts incentivize spending beyond our means.The average American has a startling $6,194 in credit card debt, with an average interest rate of 16.88%. Over the last decade, auto debt has gone up 40%, and the average auto loan for a new car is a whopping $32,199. In April 2019, Americans reported borrowing $88 billion over the previous year just to cover medical costs. The middle class is going deeper and deeper into debt to maintain the expenditures of middle-class identity. The working class has done the same — borrowing for cars, for tuition, for everyday expenditures — only often at much higher interest rates.”

– May 27, 2020 at 08:07AM – via Instapaper

this is shocking amounts of debt. follow the link to see the original sources.