2016-04-21theatlantic.com

Since 2013, the federal reserve board has conducted a survey to "monitor the financial and economic status of American consumers." Most of the data in the latest survey, frankly, are less than earth-shattering... But the answer to one question was astonishing. The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew? Well, I knew. I knew because I am in that 47 percent.

...this concept that people aren't making ends meet or the idea that if there was a shock, they wouldn't have the money to pay, that's definitely a new area of research"--one that's taken off since the Great Recession. According to Johnson, economists have long theorized that people smooth their consumption over their lifetime, offsetting bad years with good ones--borrowing in the bad, saving in the good. But recent research indicates that when people get some money--a bonus, a tax refund, a small inheritance--they are, in fact, more likely to spend it than to save it. "It could be," Johnson says, "that people don't have the money" to save. Many of us, it turns out, are living in a more or less continual state of financial peril. So if you really want to know why there is such deep economic discontent in America today, even when many indicators say the country is heading in the right direction, ask a member of that 47 percent.

...

The Bankrate survey reported that nearly half of college graduates would not cover that car repair or emergency-room visit through savings, and the study by Lusardi, Tufano, and Schneider found that nearly one-quarter of households making $100,000 to $150,000 a year claim not to be able to raise $2,000 in a month.



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