One Reason Why There Might Be Economic Discontent

It’s the net worth, stupid. Recently, Kevin Drum has written several posts wondering why U.S.-ians are so cranky about the economy when, based on the statistics he cites, things seem to be doing pretty well. Well, here’s a simple table that might explain a lot:

networth

If your net worth is less than it was fifteen years ago, this might be a source of discontent. Not only do you have less stuff, but, as importantly, you have less security. And this seems to have much to do with increased debt (boldface mine):

What has increased significantly is debt. The survey shows that:

•Three-quarters of U.S. families owed money in 1998 and 2013, but the median amount climbed 30%, to $60,400.
•Two-thirds of working-class households had debt in both years, while the median amount jumped 48%, to $21,300.
•Among lower-class households, debt jumped 68% to $10,600. The percentage of families with debt also rose, from 47.3% in 1998 to 52.1% in 2013.
•Increases were less dramatic for the middle class. About 80% had debt in either year, but the amount rose 9%, to $39,900.

The culprit isn’t credit card debt, by the way. The percentage of families owing on their cards shrank, sometimes dramatically, in every income bracket. What rose is mortgage and installment loan debt. When you don’t have savings to pay for homes and cars and college, you take on more debt.

Basically, people are having to borrow more to remain in the middle class.

Yet we wonder why there is anger.

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3 Responses to One Reason Why There Might Be Economic Discontent

  1. John Danley says:

    Paul Ryan promises that our lack of net worth will at least be unified.

  2. LucyM says:

    Don’t bite my head off for this, but I feel like the big red line not to cross today, is about mass displacement level immigration into all Western countries. You don’t this and yet it changes our societies forever, and there is no debate on offer and no choice. People are shamed and shouted down for expressing the mildest concern or being at all sceptical. You complained about being shouted down as a traitor for your stance on the Iraq war, but is your complaint against the tactics that were used, which were/are inherently coercive and antithetical to freedom and true democracy. Or was it just that they weren’t correct in that instance in your view? Or was it just that it happened to you? Donald Trump has been vilified from the start in unfair ways. Now the vilifiers are saying he got lots of free airtime as if he was being supported. Don’t get me wrong, I am aware of unsavoury elements in and around him. I wouldn’t say that he was presidential material. But the people voting for him, aren’t doing so because they think he’s great. They have reasons that are not discussed sympathetically at all. They are delegitimized. For the most part, he’s getting support because people are desperate because they know democracy and freedom have already been lost. They vote him because at least he’s not owned. Saunders and Trump are actually on the same page when it comes to the really important things, like bringing jobs back, and intractable – unrecoverable – conditions in Washington and the media.

  3. Pingback: In 15 years, most Americans grow poorer | Phil Ebersole's Blog

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