Can this really be true?

#1
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hndog609

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#1
Half of Americans don't have $2,000 for a rainy day - May. 24, 2011

A new study by the National Bureau of Economic Research shows 50% of Americans would struggle to come up with $2,000 in a pinch, for example in the event of an unanticipated car or home repair, a large medical bill or legal expenses.
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And it isn't just here either.

The National Bureau of Economic Research also surveyed seven other countries including the United Kingdom, France, Germany, Canada, Italy, Portugal and the Netherlands.
Of those, people in the Netherlands were the most optimistic, with 57.7% of their respondents saying they were "certain" they could handle a $2,000 emergency.
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Assuming this information is in any way accurate in it's representation am I overreacting to be a little shocked by this? I don't consider 2k to be chump change but to think it would at least "probably" put 1/2 of Americans on the ropes just looks bad.

(Obviously Cubans never have to worry about such things but for the rest of us...)
 
#2
#2
I think a lot of people lied when they said they could and I think a lot of people who would say no to this aren't even on the radar to be polled (i.e. don't have a phone)..

The reason you think it shouldn't be that tough is because of who you are used to hanging around. I am sure there are some neighborhoods in or near your city that, if you think about it, you'd be amazed to find 1 out of 10 that could find $2,000 in a single day if it was needed.
 
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lawgator1 said:
I think a lot of people lied when they said they could and I think a lot of people who would say no to this aren't even on the radar to be polled (i.e. don't have a phone)..

The reason you think it shouldn't be that tough is because of who you are used to hanging around. I am sure there are some neighborhoods in or near your city that, if you think about it, you'd be amazed to find 1 out of 10 that could find $2,000 in a single day if it was needed.
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It's not so much that I'm surprised there aren't people currently in that financial situation (I've been through some rural AR areas where it looks 3rd world) but how many. And the polling queries were more generous than what you thought because it apparently wasn't a "$2,000 in a single day if it was needed" scenario.

Roughly 28% said they "certainly" would not be able to cope with an unexpected $2,000 bill if they had to come up with the money in 30 days, and another 22% said they "probably" would not be to able to cope.
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And note the high point including the UK, Germany, France, Italy, Canada, Portugal and the Netherlands is the last one at 57%.
 
#5
#5
Oh, ok,missed that. But, its potentially even worse for a medical emergency if they aren't insured.
 
#8
#8
#10
#10
I had a $2,500 fund, then had an emergency. Unfortunately, it will be some months before it's back. A second setback would certainly hurt. I mean, there's always the credit card, but you hate to finance too much.
 
#11
#11
Between people not understanding the importance of saving and the job market right now, I believe it.
 
#12
#12
Doesn't surprise me a bit. Saw a stat today that the average Tennessee state college tuition has risen from about $2300/ year in 1988 to around $6500/ year in 2008 while wages have slightly declined from $33000/ yr to $32500/yr over the same period. All amounts were adjusted for inflation. Prices of almost everything are growing rapidly while wages, if you are fortunate enough to have a job, are stagnant to declining.
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#13
#13
I am going to be royally pissed, and will vote against, any candidate for any federal office that affirmatively uses the phrase "means testing" or its equivalent when discussing SS.

I've been paying the max into it for awhile now, and (hopefully) will until I retire. I'm okay with delaying it until 66 or even 67 if we have to. But if they want to on top of that cap my draw down because I also saved into my 401k? Its go time.
 
#14
#14
lawgator1 said:
I am going to be royally pissed, and will vote against, any candidate for any federal office that affirmatively uses the phrase "means testing" or its equivalent when discussing SS.

I've been paying the max into it for awhile now, and (hopefully) will until I retire. I'm okay with delaying it until 66 or even 67 if we have to. But if they want to on top of that cap my draw down because I also saved into my 401k? Its go time.
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SS has never been a retirement plan. or at least not for your lifetime. it's a tax. plain and simple. you aren't "owed" squat.
 
#16
#16
What age group is this study focusing on? The way the economy has been the last 3-4 years this does not come as a surprise. Most people age 22-27 are unemployed or just recently found a job withing the last year or so.
 
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#17
droski said:
SS has never been a retirement plan. or at least not for your lifetime. it's a tax. plain and simple. you aren't "owed" squat.
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how do you see it then..
I'm with LG on this one...
When 67 rolls around, I want my money
 
#18
#18
jwells said:
I had a $2,500 fund, then had an emergency. Unfortunately, it will be some months before it's back. A second setback would certainly hurt. I mean, there's always the credit card, but you hate to finance too much.
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That qualifies as having funds for a rainy day.
 
#19
#19
vol_in_il said:
how do you see it then..
I'm with LG on this one...
When 67 rolls around, I want my money
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I'm assuming what Droski means, and this has been touched on in other threads, is that there isn't some LG or vol_in_il account up there in DC faithfully holding your money for you. You are paying into something where the money goes nowhere but to pay out somewhere else. At least in that regard it sounds an awful lot like a tax.

As I understand it there is no pile of money set aside for any of us nor a guarantee of how much, if any, we're entitled to down the road.
 
#21
#21
The amount of people living paycheck to paycheck so they can have what they want when they want it (i.e. on credit), added to the people who are barely getting by living week to week, is probably higher than a lot of people think. People don't have savings accounts like they used to. They contribute to a 401K and figure that's savings enough. Doesn't do anything to help you in the short term when emergencies come up.
 
#22
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droski said:
SS has never been a retirement plan. or at least not for your lifetime. it's a tax. plain and simple. you aren't "owed" squat.
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That's exactly what it was made for. It's original purpose states that it is was not to be used as a tax.
 
#24
#24
droski said:
and that was changed before the overwelming majority of people here were born.
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Probably so, but if one was to go back and read what SS was original for and how it was funded I could see why they would think they are 'owed' something.

as a side comment: One thing that would shock most people is SS#'s were specifically forbidden for identification purposes.
 
#25
#25
SS is a perfect example of what Congress will do with a big pot of money and steady flow that isn't being immediately spent. They are in transfer business, not the investment business.
 
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