Wolf here: occasionally I highlight comments that add a different angle or flavor or an illustration or more depth to an article published on Wolf Street. This comment by “Desertmer” is in response to This Chart Is a True Picture of What’s Dragging on the American Economy
We are a one-income family with a professional income and a very safe job. I am a woman with two degrees who chose, when my kids were born, to stay home with them fulltime and who never wanted to get back into the corporate world. No one is laying off my spouse or will be.
We have a son in college – a large expensive state school with an excellent rep in the East – graduating next year. Our daughter is graduating in December after many years in school with an MA and a PhD and a lot of papers published and with excellent peer reviews and substantial lab and supervisory experience as well as the boffo computer skills required by her field (it is not a STEM field however).
We, the parents, have dramatically cut back our spending in order to be available to help our kids. First we pay all four-year college costs so our son and daughter will have no loans for that. Lucky we have an income that easily allows us to do that. But our daughter insisted on taking charge of her own grad school (MA and PhD) and has approximately $100K in loans now. She is ABD and so eligible for professorships. And, with this great and growing economy, she has had little luck in finding a full-time job with benefits job in her field, at least so far.
She is adjuncting full time at two premier private universities where tuition costs above $45k a year, but she is making less in total than she would make as a full time waitress in a nice restaurant…. Let that sink in. That is the real America now folks. And she actually waitresses on the weekends as well.
Her health is starting to suffer. Lucky that we pay through the roof for a good health policy, and have been since she fell off our excellent insurance (pre ACA )at 22. She has a spinal condition that requires expensive care and the uni policies available were too basic.
The point is: you do not have to be anywhere near ‘low income’ or have an insecure job to not be spending.
We have a reasonable good upper middleclass income and have never had a problem buying what we want, taking our kids abroad every year when they were young or buying cars or houses or pools etc. until the last few years when we looked at what was going to greet our kids when they were out in the world starting their lives and decided it was necessary to stop all unneeded major expenditures (and an awful lot of minor ones as well, like eating out) in order to be ready to assist our kids if needed.
We had every intention of buying a smallish beach house strictly for our family to use (no renting) as we are not all that far from a coast. We can afford the prices – not an issue. But we are not going to do it – likely ever now – unless things turn around dramatically. Just in case our kids have a financial crisis, we want to be liquid.
We are not doing our usual regular car replacement either and instead are keeping the ones we have. We are not vacationing on our usually two-each-year cycle, just in case. Our daughter is marrying next year. We are not having the blowout wedding we all always hoped for at our daughter’s request because she says she may need our help in other areas. Our soon to be son-in-law is a dedicated and nationally recognized teacher… in a very low income school and even with the extensive recognition, his job is on the bubble every year. And of course his pay is abysmal. They despair of ever buying a home and are also worried they will not be able to afford even one child and the associated costs.
I bring all this again around to my main point. Not everyone who is not spending is ‘poor’ or ‘low income’ or uneducated. This economy is ruined for everyone, and sensible people are altering their behavior at all income levels in order to be ready for what may happen. For example, Golf club memberships at our private and may I say prestigious club are being turned back at a staggering rate and not because of age or job loss but from uncertainty. Ours is going to be next at the end of playing season this fall. We just cannot justify it despite the fact that we play every weekend, and I play during the week nearly every day.
This country is in serious, serious trouble and the financial powers that hold sway as well as our government policy makers better get their sh** together and actually see what is going on, on the ground and in real families, and take action or we are going to be a banana republic before the end of this decade…. By “Desertmer” is in response to This Chart Is a True Picture of What’s Dragging on the American Economy