The point isn't to just cover the tax bill, it's that by shifting the burden up the class ladder, there is more capital available to the classes that spend and circulate their money in the economy rather than merely accumulate it
In a way it almost seems good? It seems like opportunistic capital that takes flight so easily probably wasn't seriously integrated into the local economy anyway.
Spiritually different intention, but both yield lots of unread material at hand. The parent's is "bought with best intentions" but letting it pile up despite that intention, Taleb's is purposefully accumulating material that you don't intend to read unless a future you finds it helpful to explore that book
This is what I do. When I see a free PDF that seems well written, or was suggested to me, I save it in the bucket “maybe someday I might need that” but l know I will 99% never read. My experience is that it is useful. At least 10 books that were deep in that bucket were useful for me, and ended reading them. I must have 10000 though.
Not necessarily. Ours would work down the list of numbers she had for me, my wife, and other emergency contacts without leaving a message. My wife got pulled out of a meeting at work once despite me being the parent at home because I missed a call from the school and they didn't bother to leave a message.
They might not.. But you'd very likely have their number saved on your phone. Might even have them as an un-mutable contact. My wife/kids and their school are all on the "never mute" list.
> But you'd very likely have their number saved on your phone.
I certainly don't. Every call I get from the school seems to come from a different number. And the camp she was at when she hurt her leg and had to be taken for immediate medical attention.
I get it, in your world, in your experience, it all works out. But in mine, it just doesn't. From experience, I _know_ this is true.
How much of it can you mount on a wall? Wall mounted artifacts and art require trivial maintenance effort and don't clutter up the floor, while honoring those objects and making them visible and enjoyable.
I would contest the idea that this construction isn't happening - it's largely just resulting in sprawl at the periphery of existing cities. America has a lot of space available and a lot of space actively being developed.
As to why new cities aren't being built in completely empty areas, I would have to know where you're talking about to make a guess as to why they aren't being developed. Off the top of my head:
1) Environmental concerns
2) Expropriation concerns making projects politically untenable
3) The concerns of aboriginals
4) Cost of infrastructure development
5) Lack of market demand
To elaborate on the fifth point, I would posit that people don't tend to populate such greenfield cities unless there is a compelling reason to do so; either by being pulled (e.g. by resource extraction opportunities, a growing economy, educational opportunities, etc.) or by being pushed (e.g. fleeing a war, the effects of climate change, or political persecution). China is the example to look at here. They spent most of the 2010s buying up an enormous amount of resources to build cities that ended up just sitting empty before eventually being demolished. A lot of this was just fraud (the buildings weren't constructed to be habitable to begin with), but at least some proportion of it had to do with the factors I mentioned above. The cost of physically moving to a new city, as well as the loss of social capital resulting from such a move make relocating to a new city both undesirable and prohibitively expensive for most people.
I do (becuase I've heard it from a buddy of mine who's an MD at a Bulge Bank) - there is no capital to invest in consumer real estate anymore.
Large portions of that industry died out in 2008-12, and capital for large real estate projects like a housing community tend to be allocated 2-3 years before ground breaking, and then an additional 1-2 years to build.
So to build a brand new community by 2020, you should have done all the leg work in 2014-16. And to build a new one today, it should have been done in 2019-20.
Any pipeline that even existed is now dead, because manufacturing construction was the asset class of choice in the 2022-24 period along with high interest rates (making projects much more expensive) and tariffs on Canadian lumber, so the housing shortage is about to get even worse.
European colonization of the world is a unique enough phenomenon to not hand wave it away as business as usual. Further, the industrial intensification and financialization of this colonization through the 18th-20th centuries alone is singular on its impact on human civilization with no precedent.
How does $2k spread across a couple of checks make people feel they were "COVID rich" is something I just can't wrap my head around. Even for someone with a low income this would amount to at most a paycheck or two extra
I struggle adjusting my tone when responding to comments like this, so just know any snarkiness is purely accidental and colored by many years living in an extremely high cost of living area at a joke of a minimum wage.
Living paycheck to paycheck, truly, and I mean truly in that sense where you need to wait for checks to clear before buying groceries occasionally - is extremely common. When you live like this long enough, "big" costs start adding up. That funny sound in your car that you can't afford to get fixed gets worse. Your tooth hurts super bad, but can I afford a $1000 dentist bill? I'll just hope it doesn't get worse. Maybe your kid gets really sick, forcing you to take time off you cannot afford to (not everyone is salaried or has vacation/PTO policies), adding to the strain. You go to credit cards to stretch things out, but of course that has a limit to how far it can go, especially when you're barely treading water. Eventually you will drown, something has to break. What it is varies and will probably largely determine the long-term outcome of the situation.
Anyway, all this to say, there have been many times in my life where these nagging, lingering problems that caused significant strain and hardship in my life that I simply could not afford to fix would have been solved immediately with a few thousand dollars, or whatever "trivial" amount you want to put as a value here. $2000 can actually be a lot more than that when you consider interest and paying down a credit card debt. I can think of one very specific time in my life where $500 being loaned to me was the difference between where I am now and being out on the street, and that is not an exaggeration whatsoever.
The reason you cannot wrap your mind around it, and why this bothers me, is that comments like this come from people that truly cannot imagine how massive swaths of the united states, and more broadly live day to day - it comes from a position of enormous privilege, even if you may not realize/acknowledge it. To me, I struggle to imagine how this comment I am responding to can be made at all, but I know our life experiences probably differ in a drastic way.
As a more personal note, and without responding to some other victim-blamy comments in the larger thread that kind of irritate me, the only way I got out of my situation was a big (to me, a similar amount as being discussed in this thread) financial gambling windfall that led me to being able to purchase a cheap vehicle and expand the hours I was able to work due to having semi-reliable (it was a cheap ford piece of crap that constantly broke, but it was something) vehicle. From there I was able to enroll in community college, which luckily was free-ish for the income I was at, which is way too low of a threshold. I could not qualify for any kind of government aid whatsoever despite living in "welfare state" CA because at $15,032 a year I was well, well over the limit of what qualified you for food stamp assistance or anything like that. Pre-ACA healthcare was completely out of the question and I amassed $200,000 in medical debt that sidelined me for many years before it fell off my credit report.
I am very lucky in that things panned out (relatively, I still deal with residual issues due to living that way for as long as I did, about 15 years) and I was somehow able to finish school due to traits I believe not many people are lucky enough to have. I don't believe at all that many people in this situation are there of their own fault, and I'd die on that hill, but I can only provide my own brief story and some really basic cost of living statistics that are very easy to look up. It's bleak out there.
I read the original reply as "how can extra 2k change your habits or expectations", your interpretation seems to be "how can extra 2k make a difference".
Only the author can detail on what he really means, but do you think the extra 2k would significantly influence the people's behavior on the medium / long term (I do agree that for many it can have a significant impact on the short term and really help them) ?
I don’t know what you mean “influence people’s behavior” which implies you think that people who are in this situation are there because of behavioral issues, which I fundamentally disagree with and see no evidence for. I also provided personal examples and could provide many more where this amount was life changing in the long term. To me it’s silly to call this “short term help” when short term problems can cause a massive irrecoverable collapse of a financially vulnerable person’s life in a very short amount of time.
I very much agree with your responses and can relate to them on some level, but I do also disagree with your interpretation that the other person's interpretation necessarily means that a person needs to be in whichever financially dire situation they're in because of poor financial behavior; quite a mouthful, I know.
For example, I've been at absolute zero and living in my car largely because I just couldn't find a job and literally ran out of money trying (I guess count the car and laptop as an asset, w/e, but actually in the red), and if I'd been given 2x $2k cheques, I'd have a hard time finding a way that it would change my habits for positive or negative for longer than a few months, except if I'd looked for a quick source of substance based relief, which I didn't and wouldn't but assume that's irrelevant for now. I'd probably just try to stretch as far as possible and maybe get a few more calories, or a shower, or temporary gym membership. I can sympathize with the confusion somewhat, because to influence my decision making long-term, I'd have to be set back or set forward in a more reliable way than sudden burst of cash. Like I'm not going to get a loan or a 1 year apartment lease, it would be more like a campground instead of the street for a week every month. I do think worst case scenario, back to the substance topic, is that if you're in a really bad place financially, for no fault of your own (which I absolutely agree that this applies to a majority of people in those situations), it's that you become addicted to something, but everyone's dealt a different hand from a different deck and I do believe I'm way off the mark in terms of what other people might do.
Edit: Actually, that sort of windfall might also make it feel way easier to start spending on food delivery bs, which I have to imagine is a somewhat crippling negative long-term financial habit, especially if you're already working like hell with a family and it's an obvious efficiency increase.
By influence people behavior I mean for example "make them thinking about spending more than they were spending before receiving the 2k, 6 months after they stopped receiving the aid". And I mean by this impulsive spending, not planning and the like. You will tell me "but they need that, it's not impulsive, etc.". But don't forget we started from the article that "defaults jump to...". This can be due to multiple causes: "people got actually poorer" (not related mainly to behavior, but more to economy) OR "people changed behavior and suddenly they do things they were not doing before" (possible).
To clarify my opinion (hopefully beyond doubt so that you can't imply things I do not think), I think that blaming people will not solve anything, people are not poor due to behavioral issues, people that are currently poor must just be aided (in multiple ways) to get out of the situation. But people do react differently to different ways of helping, and as we don't have infinite resources, we need to discuss how such interventions affect them on short/medium/long term.
If you prefer more to find points in which you disagree (points that were not clearly there or semantic points as "short term help") I don't think I can bring anything to the discussion. I remained without a formed opinion of why the jump in defaults appeared...
It's something like 4 post-tax paychecks for people at minimum wage, even better if they weren't full-time (more common than you might imagine even amongst people trying to move up, since low-wage employers tend to shove hours down so that you don't accumulate overtime if they have to call you in suddenly, and they all want you to work the same busy hours, making truly non-overlapping jobs challenging to come by).
I've been that poor before (never _truly_ struggling like some countries experience, but unable to comfortably afford both food and a roof), and some other units might make that check make more sense:
- 4.5 yrs worth of rice, flour, or beans (the bulk of my diet by weight and by cost)
- 5 months of rent
- 5.5 yrs of electricity (almost all of which went to cooking or refrigeration -- heat was unnecessary unless it was under 0F outside)
- a new-to-me car, enough money for the parts that I'll inevitably have to buy to fix any used car shortly after I buy it, and enough gas to drive to work for a year
When you're struggling paycheck to paycheck, that's a life-changing amount of money. I'd already escaped that life by the time covid hit, but if I hadn't then that might've been my ticket out.
As to how somebody in better circumstances might be "COVID rich"? I can only speculate, but even in the middle class people tend to have a number of "essential" payments: health insurance, mortgage/rent, newish clothes for their kids, you should probably eat a vegetable once in awhile, .... People are living "paycheck to paycheck" in those more comfortable lifestyles, and going from $0 to $2000 in discretionary income is huge. That's a year of weekly date nights at someplace better than McDonald's, a year of monthly date nights at a pretty good steakhouse or other gourmet opportunity, kayaks and road-trip money for the whole family, a very nice clavinova and a few months of lessons, ....
In either case, I suspect the key to understanding is to compare that $2k (really $2.2k-$3.3k in equivalent income depending on relevant tax details) to $0 rather than to total expenses.
You might not understand how precarious many people's spending habits are. After all of your bills and necessities are paid, many people only have a few hundred dollars per month spare. So if you get $2,000 popped in your lap, that might be the equivalent of 9 months of fun time money for them.
The weird thing to me is, that knowing full well how important every dollar is, most people in this sitution would blow that $2k on frivolities, rather than save it or try to make it last. It's part of the psychology of being poor. Money is something that never lasts, so when you have some, you're inclined to spend it immediately.
I think Walmart got some negative press (read: "business as usual") for having a bunch of sales on TVs and other electronics right there in the entrance way after the first stimulus checks were mailed, all priced at exactly the same amount as the check.
It wasn't just the stimulus checks, it was also the increase in income from job hopping, seeing my 401k and brokerage accounts explode, etc. I'm not saying it was rational or that stimulus checks weren't a good idea, I'm just reflecting on my own personal psychology. Not surprised it doesn't match everyone's!
> feel they were "COVID rich" is something I just can't wrap my head around.
I think that term ("Covid rich") isn't meant just for the checks, but for the general increase of disposable income.
If you are low income, $2-3k in checks can effectively be a pretty big windfall as people note in this thread.
If you were middle income, there was probably a bunch of discretionary spending on e.g. meals out, shows, vacations that you didn't spend compared to previous years. It's not hard to see that being an "extra" 5 figures for lots of families.
For higher incomes, people spend a lot on travel, the inability to travel for a period during Covid meant tens of thousands of dollars of available budget for other things. This is what these people used to do all their home remodeling.
On the lower end, assuming you were able to WFH the instant savings from not having to commute (gas, tolls, etc). Was a pretty big change to your budget.
Other things like childcare can be a significant expense for many families and it’s a huge change when kids were forced home and the expense was avoided. Some of these things came with reduced household incomes, layoffs, etc for other households. But if you were able keep your income and just reap the savings then you benefit. At first, before inflation kicked in, but since then if you’re income hasn’t increased ~30% or more since 2019 (very dependent on your locale) then you’ve probably been digging a hole the past ~2 years, unless you are a great with budgeting and cut back in real time as prices increased. My feeling is it’s been had to do for many people as most people don’t budget and I know for many income hasn’t grown enough to keep pace with inflation.
I’m pretty pessimistic about Covid economics/politics. My opinion is it should have triggered a global recession, likely worse than the financial crisis. There’s still a ton of inflation that needs to flush through the financial system. While we talked about flattening the curve of the virus, we really just flattened the curve of the economic fallout of such a large event. I think a period of austerity is likely going to be required. Rates and prices have a lot of people locked in their houses or out of home ownership, average vehicle age is at a record high, people are dining out less, even cutting back on their beloved Starbucks, etc so I think the signs of this are ramping up. I’m not quite sure how it plays out, especially with the US political leadership changes coming up; but I feel like the majority of Americans (at least) have some financial strains coming their way, likely uncomfortable changes will need to be made and will feel like a type of austerity to us.
citation needed by me (sorry) but a few years ago I was surprised by an apparently validated assertion that something like 60% of all US households would be unable to come up with more than $2k cash given a month's time
$2k is massive sum for most US households. Many are a flat tire away from bankruptcy, they lean on cash advances and their communities to help them through simple things like a flat tire.
I grew up kinda poor and lived this as a kid, my family was always helping or being helped by a neighbor or something. Through my friends and some extended family I knew these things were like a sign of our “class” and even slightly more secure people would never do them, it would even be a social faux pas to even ask for help. Now, at middle aged, I’ve done pretty well for myself and sometimes make other types of faux pas statements like “just buy a new car instead of dealing with that”. I have to be somewhat mindful that even a 10 year old used car is a huge purchase for many people. Even if it’s in good shape and can get another 5-10 years out of it, and would technically be the best move, it’s not viable if they can’t afford it or have to subject to some usurious loan.
TBH I generally like to just take the “it’s impolite to talk about money” approach unless I know the person well enough. Although I’m a financial professional so people tend to like asking my opinion/advice on a lot of things, even if I barely know them, I have found that I prefer to avoid those types of conversations altogether until I know you pretty well.
I think what you wanted to cite is "Financially Fragile Households", Lusardi et al, 2011. But, instead of getting the conclusion from the opinion page of the WSJ it would probably be better to read the paper and especially the notes by reviewers at the end of the article, particularly the comment of Pence which is almost a rebuttal.
Me neither. I've just accepted that a majority of people are horribly bad at finance, what the reasons are, I don't care to find out. I'm sure it's a huge list of things thay are not solvable. You know what I mean of you've ever tried to help someone by lending them money.
A lot of people are just financially illiterate. I grew up poor and the other comments here are super foreign to me. I agree that a couple of grand would be useful but not for buying toys, mostly for fixing stuff.
Especially the idea that money just disappears so spend it whilst you have it. That’s like saying your legs might disappear so cut them off now to avoid the surprise.
In addition to what the other commentors have said, regularly going out to eat or have a drink or two adds up quick, and being unable to do that during the pandemic forced people to save all the money they would otherwise have spent on that. This left people with a bunch of cash to spend on other things.
