If you had to make a sudden visit to the emergency room, would you have enough money to pay for it without selling something or borrowing the funds from somewhere? Most Americans may not realize this, but this is something that the Federal Reserve has actually been tracking for several years now. And according to the Fed, an astounding 47 percent of all Americans could not come up with $400 to pay for an emergency room visit without borrowing it or selling something. Various surveys that I have talked about in the past have found that more than 60 percent of all Americans are living to paycheck to paycheck, but I didn’t realize that things were quite this bad for about half the country. If you can’t even come up with $400 for an unexpected emergency room visit, then you are just surviving from month to month by the skin of your teeth. Unfortunately, about half of us are currently in that situation.
Earlier today someone pointed me toward an excellent article in The Atlantic that discussed this, and I have to admit that The Atlantic is one of the last remaining bastions of old school excellence in journalism that you will find in the mainstream media. Of course I don’t see eye to eye with them on a lot of things philosophically, but there are some really hard working journalists over there.
The article where I found the 47 percent figure comes from The Atlantic, and it is entitled “The Secret Shame of Middle-Class Americans“. It was authored by Neal Gabler, and he says that he can identify with the 47 percent of Americans that don’t have $400 for an unexpected emergency room visit because he is one of them…
I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. I know what it is like to have liens slapped on me and to have my bank account levied by creditors. I know what it is like to be down to my last $5—literally—while I wait for a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs. I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn’t know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil.
To me, this is yet more evidence that the middle class in America is dying.
Last year, it was reported that middle class Americans make up a minority of the population for the very first time in our history.
But back in 1971, 61 percent of all Americans lived in middle class households.
So what happened?
So the fact that 47 percent of Americans can’t even pay for an unexpected emergency room visit is not exactly a surprise. To be honest, a whole host of other surveys have come up with similar numbers. Here is more from Neal Gabler…
A 2014 Bankrate survey, echoing the Fed’s data, found that only 38 percent of Americans would cover a $1,000 emergency-room visit or $500 car repair with money they’d saved. Two reports published last year by the Pew Charitable Trusts found, respectively, that 55 percent of households didn’t have enough liquid savings to replace a month’s worth of lost income, and that of the 56 percent of people who said they’d worried about their finances in the previous year, 71 percent were concerned about having enough money to cover everyday expenses.
What all of these numbers tell us is that the middle class is disappearing. I tend to compare it to a game of really bizarre musical chairs. With each passing month more chairs are being pulled out of the circle, and those members of the middle class that haven’t fallen into poverty yet are just hoping that a chair will still be there for them when the music stops.
This is not the way our country is supposed to work.
It is supposed to be “the land of opportunity”.
It is supposed to be a place where anyone can live “the American Dream”.
But instead it has become an economic wasteland where the largest and most prosperous middle class in the history of the world is being systematically eviscerated.
So no, the U.S. economy is not doing “just fine” – anyone that tries to tell you that lie is simply peddling fiction.
Full article: 47 Percent Of Americans Cannot Even Come Up With $400 To Cover An Emergency Room Visit (The Economic Collapse Blog)