It’s the Economy, Stupid!

Everyone .

People working for hourly wages. $15 an hour seems to be the prevailing starting wage. You can say "get a better job", but a huge amount of people are not capable of that. The average Joe has to work for three hours to buy a meal for two at a restaurant, for example.

If the catalytic converter on their car fails, where do they come up with the thousand dollars to fix it? Hit a deer? How do they pay the $1,500 dollar deductible on the only car insurance they could afford?

So, while many people are like the OP and doing fine, many more people are not. The Archie Bunkers of the world used to be able to buy a house. I don't think that is the case any more.

A recent survey from PNC bank shows 67% of people are living paycheck to paycheck. Household debt is at record levels. The average person has little invested in the stock market so does not benefit from high stock prices.

There was a recent report from Goldman Sachs about retirement savings that said that 40% of people making more than $300k are living paycheck to paycheck. THREE HUNDRED THOUSAND. That's not the economy. That's not to belittle the guy trying to get by on $50k in CA, who is legitimately going to struggle. But there's a lot of stupidity out there.

It is probably variable by state to a degree. Some local economies are doing better than others. OP is in Florida, which is a well run state. In Illinois, for example, many people have to dedicate a few months of their annual pay just to paying their property taxes on their house or condo. Car insurance seems to go up ten to twenty percent every year. Getting illegals and Indian truck drivers off the roads would decrease accidents.

This should be in the politics forum: tuscl.net
A surprising number of people think Trump is not like other politicians. They took it seriously when he promised dramatic improvements, even to the point of reversing inflation with price rollbacks.
Real estate "running high" can be good if you have some, bad if you need some: fred.stlouisfed.org . Most people would be better off if housing was getting built faster, making it more affordable. That's not a new problem with Trump. But deporting a big chuck of the construction workers is not going to help get more housing built.
When you jump off a 50 floor building, things are OK for 49 floors. With tariff costs and instability, the disruptions to major industries that rely on illegal immigrants, and the pressure on companies to hire white male idiots to avoid sanctions for "reverse discrimination", it makes sense to think we're headed for a crash. Rule of law is an economic issue as well as a moral and safety issue. There is no private enterprise without private property rights, which only truly exist under rule of law. Having a President who rules by decree and whim is not rule of law.
When the stock market is high but P/E ratio is low, that's investor anticipation of economic strength in the future, not current economic strength. Investment is dominated by wealthy people, who often think the more non-wealthy people get shit on, the better the economy will be for stock holders. But that often works out like a dairy farmer cutting costs by not feeding the cows.

Should have said P/E ratio also high.

@casey your point is valid, but not as strong as you may think. Households with that income level are mostly in high-tax states. They are probably pulling in under $200K net all taxes, federal, state and local. Then throw in high housing costs. When people are at peak earnings, that often coincides with the age where one or more of your kids are in college.

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Ironically, it seems that Trump is proving Harris right about one thing. The estimates I've seen are that companies are absorbing 40+% of the new tariff costs by cutting profit margin. Harris had said that a lot of inflation was due to padded company profit margins, that should be taxed at a higher rate. So the tariffs are somewhat doing that, but also adding a regressive sales tax. But it's not clear how much is being absorbed by foreign versus US companies. Trump had promised 100% of the cost would be absorbed outside the US.

@ibbaicni thank you for saying new tariffs. Sometimes it’s getting reported as if this is the first time the USA has put tariffs on things but reality is tariffs are far from new. They date back to the 1780s.

Thanks for the thoughtful feedback (and not devolving into insults). It sounds like I really am out of touch with working America - as I watch the Ferraris and Lamborghinis whiz by me on Collins Ave. I didn’t mean to sound insensitive, I just don’t see any recession on my Main Street.

One thing I will know is, at least for some industries, they have responded to this recession differently than previous ones. Back in 2008-09 hotel is where dropping their rates like crazy, hoping to get any kind of occupancy. The next downturn/recession hotels were doing the same thing. Today you can see the same hotels still struggling to find occupancy with pre-pandemic rates. And in most major metro areas, supply has increased not contracted. This is probably a gross generalization, but I’ve been in this industry for 20 years and worked for three of the largest brands globally.
Other industries have the same thing. My perspective is, the response to this recession is not the same as previous ones.

I represent middle class people and below, representing very few people who make real money. The people I represent are getting killed by inflation. One of my client's put it best when she said: "hot dogs on the grill used to be a guilty weekend pleasure and now they are the main meat portion of our diet." My partner filed for bankruptcy for one of my clients today. Three houses, 5 cars two boats and credit card debt approaching 400k and that 275k salary looks skimpy.

@Iknowbetter

I will play along and comment on your discussion titled It’s the Economy, Stupid!

Q: What am I missing? Other than Federal Government workers, who’s getting hurt in “this economy”?

THE UNDENIABLE ECONOMIC REALITY…

It has never been about the economy that is just supposed to be the system of production, distribution, and consumption of goods and services within a geographical area now a global phenomenon.

“More like 0.1% of regular ass humans tricking the rest of us into fighting and competing among ourselves and focus on acquiring material possessions beyond basic needs, while they rob us blind.”

~ SanchoRG, Texas ~ Nov, 2021

THE UNDENIABLE REALITY

“It is the sufferings of the many which pay for the luxuries of the few.”

Wealth inequality in the world, also known as the wealth gap, is the unequal distribution of assets among residents of the world.

I'm not a Trump fan, but I couldn't honestly claim I've been affected personally. I'm still debt-free and spending $10-12K per month, more than half of it on strippers. I just figure the Dems only lie on lucky, well-off people, who then laugh all the way to the bank. Whereas Trumpers lie on vulnerable people. Which results in those vulnerable people getting kicked around when they're already barely up off the ground.

@ilbbaicnl

Pics and Vids and receipts of the $10-12K per month, more than half of it on strippers, you claim you are spending.

:D

Good Times, Good Times.

I forgot; Pics and Vids and Receipts or it Didn’t happen.

:D

Here is a standard recommendation of how to spend based on income. How many people can realistically stay within the recommendations? I might look up average costs later. But recent years have seen jumps in housing, food, and insurance for sure.

@skibum609: "My partner filed for bankruptcy for one of my clients today. Three houses, 5 cars two boats and credit card debt approaching 400k and that 275k salary looks skimpy." Hmm. Inflation has been a bitch the last few years. But I don't think it's inflation that is killing that particular client.

Nope 0% for strippers, can't do it.
I pretty much buy all store brands at the grocery store, but there's at least as much as name-brand stuff on the shelves. I don't know how the gubment can control prices when so many people will pay more for no logical reason I can see.
I think Florida tried to have government-run home insurance. But when they tried to have lower premiums, they didn't have enough money to pay all the claims.
Housing is cheaper in red states generally, but it's getting more expensive at about the same rate as in blue states.

I see problems mainly in food costs. The other areas that were a pain year years ago all all mitigating, but the inflation jump in 23, 24 was brutal and things still haven't normalized. Someone mentioned housing, but with an actual drop in us population this year, I wonder if that might improve soon. We added somewhere between 10 and 15 million to the population under Biden. That is 3 or 4% of the total population. That pushes up housing prices. If self deportation continues and that open up 1 million housing units, and the prime rate drops a percent, which IMO it should, the housing market should loosen up in 27.

It's the MAGA American Dream. Buying a used mobile home that deported immigrants used to live in. Best American Dream ever, everybody's saying so. It's the RADICAL LEFT DEMOCRATS making you live in houses you can't even put on wheels.

Having undocumented leave the country only opens up some elbow room for the ones that are left in the tiny home occupied by 14 people and they open up jobs picking strawberries and cutting up chickens for $10 an hour. I can just see the stampede of home grown gen z rushing to fill the voids left open.

Casey - He had variable rate loans, so when interest rates went up, so did the loans. My point is that even people with money are impacted by this terrible economy, which has been coming for decades. The final wooden stake through America's heart is the national debt.

“Three houses, 5 cars two boats and credit card debt approaching 400k and that 275k salary”

These people are definitely running around in South Florida, making a decent living but with a lifestyle waaay beyond their means. It’ll eventually catch up to them, they’ll file for bankruptcy, leave creditors holding the bag, and then do it all over again. It’s just like ‘08-‘09 when people just walked from mortgages they never could afford - after they sucked all the equity out by serial refinancing.

Florida and Texas have the most loan defaults per capita currently.

Car repossessions are up the 2nd highest lest since 1990, only second to January 2025. Economists watching car defaults are particularly weary because it’s a precursor to worse things to happen.

I was in the grocery store the other day and had to pay $9 for a pint of heavy whipping cream. After that I had the realization of why my money situation is different now than just 5 years ago.

Since 2020 for me:

Every utility has gone up at least 25%

Cellphone bill up 25%

HOA fees up $33%

Home insurance up 100%

Car insurance up somewhere between 30-40%

Medical insurance doctor cost copay up 100%

Medical insurance premium up around 30%

Dining out, casual or upscale has gone up about 75-100% on average.

With all these increases, my salary hasn’t doubled!

If we had pre2020 interest rates I think a lot of this wouldn’t be more manageable but that’s not the case.

^ good observations It’s different today. When we bought our first house in 1985 our mortgage interest rate was 8.5% and that, real estate taxes, homeowners insurance and utilities took up about 40% of my income. There were no cell phones, no WiFi, no cable tv/streaming services - so no bills/expenses. We couldn’t afford to eat out and we had a used economy car with minimal liability insurance only. Our kids went to public school. It never occurred to me to bitch about the economy.

Several things have been happening. Biotech is in a cyclical recession. This is going to hit certain areas (e.g. Cambridge/Boston, San Diego, North Carolina) a lot more than most of the country. Big tech has been going through round after round of layoffs, which is nationwide suppressing wages for programmers, PMs, analytics, etc and in particular is harming the labor markets in Seattle, the Bay Area, Boston, SLC, and Austin.

International tourism (that is international visitors to the USA) is way way down. Vegas the poster child for this, but it is more common. On the flip side, Canadian tourism is booming.

Foreign enrollments at US universities are way down. This is causing a lot of layoffs for university staffs. (Note: colleges have become bloated with admins, so this might not be a terrible thing long term if they learn to run leaner, but it certainly hurts). Colleges tend to hire pretty bright people, so that is creating a lot of pressure on white collar job markets in college towns.

Restaurant prices have gone up dramatically. Used car prices are up quite a lot as well.

On the flip side, strip clubs near me started raising prices in 2004, but some have walked back the high prices in the last few months.

The Amex Platinum was $550 in 2001 and now it is $895. The Chase Sapphire Reserve has gone from $550 in 200 to $795. Delta Skymiles reserve also went up by $100 this year.

Why do you use credit cards with such high fees? For the miles? At that rate it’s probably cheaper to just buy the plane tix outright.

^ easier to buy a coach seat and use 30k frequent flier mils to upgrade to first class.

Definitely a tale of two economies. Those older people who e been in their homes for a while and paid off their vehicles haven’t seen the effects of inflation as much because they’re not buying those big ticket items allowing them to spend more on recreation and travel. I make less than I did 10 years ago, but save twice as much because I have my costs mostly controlled. It’s sucks for the younger generation but that always been the case. When I was in my 20’s and 30’s I worked 3 jobs and had little time to vacation. If your old and seasoned your fine, and there’s more old people than young.

43 years of delving into people's finances and my conclusion is that anyone who ever buys a car that requires more than 3 years of affordable payments is a moron. I have owned 2 cars since 2002 and have not had a car payment since 2016. That 5-600 a month? After tax income. You're spending $800+ of your gross every month just to own something.

@skibum609 I couldn’t agree more. I don’t think people understand the cumulative effect of debt, and how this is an obstacle to being able to build wealth. I paid off my mortgage many years ago (despite the fact that many “smart money” guys telling me me that I could arbitrage my mortgage and make more by investing the equity), and I’ve never had a car payment (although I leased my Tesla since I didn’t know if I wanted to own an EV - and EVs tend to depreciate rapidly). But even without debt my property taxes are now more than most people’s annual salary and my insurance premiums have gotten so high that I no longer carry windstorm coverage.

People are living with less discretionary income, ie hand to mouth or paycheck to paycheck, because we expect too much. Noone had to pay for cell phones, internet, streaming, and prime subscriptions 20 or 30 years ago. The UAW went on strike and now no one can afford the cars to pay their exorbitant wages. Everyone wanted $15/hour for menial, unskilled labor and the cost of everything went up 20%-25%. Many democrat politicians are lawyers, and lawyers pass laws to encourage lawsuits against doctors and hospitals and everyone else, so insurance costs more. Construction companies are hiring unskilled illegal aliens who do shoddy work, and homeowners/renters/commercial insurance is increasing (because of lawyers turned lawmakers). Politicians want to make careers out of "public service" and vote themselves exorbitant salaries which strain public budgets and increase taxes. There so many things to fix, but there is not enough will to make the sacrifices that the change will require.

@iknowbetter those cards pay for themselves if you travel a lot and take advantage of all the perks. I think one of the united cards had like $150+ hotel coverage… $100+ uber credits.. even $100+ dunkin credits

America used to cater to the best, the brightest, the hardest working. We were successful beyond belief. Now we cater to the failures, the lazy and the inept. People wonder why we failed lol. Mental health = excuse for lazy people failing.