Americans are ‘entrenched’ in financial stress amid debt and price pressures

520 points by TACO_Orange_3098 7 hours ago on reddit | 79 comments

myturn19 | 7 hours ago

A massive divide is between people who owned or bought major assets before inflation, like homes pre/early covid, and people who didn’t. The money printing and inflation from 2020-2024 inflated asset prices so aggressively that it created two completely different financial realities.

artvandalaythrowaway | 5 hours ago

We are in the K’est of K shaped economies.

slippery | an hour ago

K-mart was ahead of its time.

zxc123zxc123 | 3 hours ago

We have a very K-shaped economy but it's exacerbated by the fact that we saw wide ranging government benefits for all during the pandemic and friendly government+fed policies during the pandemic. Then we also had the Biden admin which chose to spend/invest heavily on the lower and middle class, while also supporting unions/jobs/DEI, trying both to regulate/bust monopolies or at least block additional mergers, debt was cheap for a good while before inflation hit, and even when inflation hit there was still jobs (with wage rises).

It's not like we never had K-shape before. K-shape is the default of human society and even nature. It's better to define it as matter of more K-shaped or less K-shaped.

Trump 2.0 is just about political revenge, quid-pro-quo cronyism with billionaires/corporations to ensure Trump's post-political protection, and unfettered chaos. Inflation is back, wage increases are the least of your worries when jobs are scarce, debt is no longer cheap, and power laws apply to concentration to winners harder making the K-shape clearer: the ELI5 MAG8 will mog the S&P500 which mogs the total market, CEOs will get 1000x the pay of the average worker, those working in AI/healthcare/HVAC will do great while restaurants/uberdrivers/teachers get fucked, Elon will reach $1T even as many Americans starve, etc.

artvandalaythrowaway | 3 hours ago

That’s why I said the K’est

zxc123zxc123 | 3 hours ago

That's why I didn't disagree with that statement. Merely adding that we notice/feel it a lot more cause we are coming off a less K-shaped period.

Celestrael | 6 hours ago

I got so fucking lucky.

I closed on my house on the first day of COVID Lockdown, locking in pre-COVID price with a nothing-down ARM through a credit union.

I then refinanced into a conventional mortgage when rates bottomed out, 3% and only had to pay closing costs.

I had sold my car to be able to make the debt-to-income ratio clear. After closing I turned around and bought a 2018 Tacoma with 25k miles on it for 35k. At this rate I’ll drive it until I die. My dad had one he used for work and he put 500k miles on it. My mom sold it around a year ago to a local farmer. It’s still scooting around the county.

I paid it off a few months ago.

I’ve been shielded from the worst of all this, so far.

kyach25 | 4 hours ago

That's how I feel with a Corolla purchased in 2019. Limited miles on it since I have been WFH since as well. Car is 11 years old and just hit 80k miles on it. No reason to sell it and just good to have around.

khearan | 4 hours ago

Same. We bought our house in late 2021 just as interest rates started to rise but were able to secure a sub 3% loan. Bought our car just before Jan 1, 2019 and it’s now paid off. I plan to drive it until the wheels fall off.

VivianneCrowley | 3 hours ago

Although we are in a very different position my husband and I speak similarly about ways we are “shielded” from it. We bought our house post - Covid, but he’s a disabled veteran and his monthly payout covers the mortgage and his insane truck payment. By the time his truck is paid off I will likely need another car and that cycle continues. He’s a cop now, and basically gets free health insurance through his job for me, another major cost for most Americans we don’t have to worry about. Sad that our “luck” is going to be his injuries that affect him somewhat now, but will cause a lot more problems as he ages. God bless America 🫠

dragant123 | 5 hours ago

Wow! Amazing! Great on you to do all this! Kudos! You weren't lucky. You were smart. You saved. You had a plan. You didn't live paycheck to paycheck. Kudos. Please share you story so others can learn from it.

BroughtBagLunchSmart | 4 hours ago

boomer nonsense.

RyouKagamine | 4 hours ago

What 0% interest rates for 12 years will do to a country…

Ihate_reddit_app | 4 hours ago

It's so wild that society didn't learn absolutely anything from the '08 recession aside from pumping money into the economy to push the can down the road. I wonder where we would be if COVID didn't come around to finally force us to increase rates.

That 12 years of rapid grow absolutely killed any chance of young people getting into the housing market. Then the COVID pump and dump was the final nail in the coffin for it.

Illustrious-Lime-878 | 3 hours ago

At a certain point you wonder whether after 08 a depression for say, 10 years, would have just been better than what we got (many economists will hate this statement) which may have lead to this massive concentration of wealth which now, almost 20 years later, I think is hurting economic planning where large portions of the economy are entirely influenced by singular ultra-giga-billionaires, who often seem to me literally insane or at best completely ungrounded, and then has created this spiraling effect of wealth concentration where these wealthy interest get more power and influence to corrupt institutions to further protect their positions. On the other hand, maybe a great depression would have led to worse things like WWII era.

GLGarou | an hour ago

Including many "economists" on this very subforum.

The response to the 2007/2008 financial crisis was truly the canary in the coal mine.

JitteryJoes1986 | 3 hours ago

A lot of people will get a hard reality check from unfettered spending in the past 2-4 years. From bang up average family of two teachers taking vacations to Europe to people buying expensive luxury goods, people will get a shock sooner than later.

I remember when consumer goods were created for the below to average consumer class in the 80s and 90s. I think its why people are nostalgic of that area. Hence the consumer sentiment.

From Pizza Hut to Block Buster to Camping vacations, people lived more cheaply back then. However, the dollar was much stronger in those days.

It was unheard of for average people to take trips to Italy in the 80s and 90s.

PapayaMysterious6393 | 4 hours ago

If we hadn't bought prior to COVID, we would never be able to buy. We make decent money, but things are just so expensive now.

t_rexXray | 2 hours ago

2022, still locked in rates under 3.5% for 30 years. Saving hundreds of thousands of dollars.

dollarstoresim | 7 hours ago

The American economy has been putting off a recession too long and is past overdue for correction, if they deficit spend their way out of the current lending crisis, it will be a depression not a recession, and it will be hard not look back and say you deserved it ignoring every warning sign and voting in a con artist felon to loot the treasury.

Delicious-Plastic-44 | 7 hours ago

It’s in recession. It just happens that the wealthy in the US don’t need the US economy to do well to keep making and spending. For blue collar, from those I talk with, it’s in recession.

So stocks should do fine.

xanadumuse | 7 hours ago

People on this sub often confuse the economy with the stock market.

AbelardsChainsword | 6 hours ago

Our leaders often make the same mistake too

rabble1205 | 4 hours ago

Is it a mistake when they do it though? Seems very intentional when they signal it.

Contren | 4 hours ago

One of Kai's favorite sayings on Marketplace is "The stock market is not the economy and the economy is not the stock market"

They are often correlated, but they can diverge.

secretaire | 6 hours ago

White collar too. So many layoffs this year. Walmart and Costco are both sounding the alarm regarding consumer spending changes.

paxinfernum | 3 hours ago

I'm kind of in that position. I'm well enough off for the state I live in; my salary is comfortable, and my job is unlikely to be replaced, even by AI. That's not to say everything is wine and roses. I still have some debt I'm paying down, but I'll probably be entirely debt-free in two years.

I'm not ultrarich. I still feel the pinch occasionally and have to moderate my spending. I just put off buying a new car due to expenses. But I know people who are struggling to make it through each month, while I have a surplus to pay down my debts. I grew up poor, so I know I'm really lucky. I've voted against this shit every single election, but the people in my state will literally put their balls under a hammer if it means creating a christofascist state.

PapayaMysterious6393 | 4 hours ago

Unfortunately, this. The middle class and lower and struggling, but the rich make enough money and spend enough money to make up the differences. We aren't important enough.

iDontSow | 6 hours ago

By what markers are we in a recession right now?

1098duc_w_the_termi | 6 hours ago

We’re def not in a recession. What’s happening though is that large enough segments of the economy are not growing for it to feel like a recession. We see it every month in the job data, where only healthcare and construction are growing.

The economy is becoming increasingly stratified. This last inflation report is showing that wages have begun to lose ground against inflation. Not a good thing.

iDontSow | 5 hours ago

100% agree. We just have to be careful about how we talk about these things and call them what they actually are. Accurate information and framing are crucial rn.

t_rexXray | 2 hours ago

Yeah tech sector employees have been DECIMATED. tech employees who were thriving pre COVID are doing tiktok streams, getting real estate licenses and becoming substitute teachers. Even the strippers are having a hard time. That’s how you know.

SardScroll | an hour ago

Tech sector employees have been decimated every time there's been a persistent raise in interest rates. At least in the last 20 years of me looking at things. Tech companies expand when rates are cheap, throwing developers at projects both internal and external with minimal rate of return (or uncertain return).

When interest rates rise, paying for these developers becomes more expensive, while the income of the main "cash cows" dries up, so companies lay off employees to become leaner.

The strippers are a well known metric, but they're a metric of consumer confidence in the future, which isn't necessarily are a hard data point (though it easily become a self-fulfilling prophesy).

crazyk4952 | 5 hours ago

Stagflation here we come.

po_panda | 5 hours ago

It's not a recession, but it's a reversal in growth. Coming off the covid rebound and the pent up demand, we've realized that was a blip and this is the new normal. Today everyone (96%) has a job, but hardly anyone can get a job offer.

MyLittleGurl | 5 hours ago

People are so sure of themselves that the stock market is going to be fine. I find that extremely interesting.

themiracy | 7 hours ago

What definition of recession are you using? Since, under the normal definition of recession this comment makes no sense. Sure a “vibecession” or a “permacession” based on emotional sentiment can work this way but a traditionally defined recession cannot.

RoyHamshack | 4 hours ago

And most of the people that got the con man elected will be gone within the decade as well.

kyach25 | 5 hours ago

I was driving around town the other day and saw one SUV that I owed which was a Mercury Mountaineer. In 2010, it was about $32K.

As we were going home, I saw a 2026 RAV 4 and looked at the price. Base model is going for roughly $33K, but in 2010 it was $25k roughly.

It’s insane how much assets have gone up in price versus folk’s income.

falafalful | 5 hours ago

Don't disagree with your point, but the RAV4 price in your example increased at 1.7% annually since 2010 which seems pretty sane to me.

CharlotteRant | 5 hours ago

The ‘26 is also hybrid only, so there’s that, too.

Few_Move_4594 | 4 hours ago

The emission/fuel economy standards are insane now. I want a non-hybrid vehicle because they are far less mechanically complex and hybrid batteries last 10 years plus are expensive to replace. I replaced the hybrid battery in my old hybrid and it easily wiped out the gas millage advantage.

HaloFever117 | 4 hours ago

“hybrid vehicles have fewer problems than gas-only cars”

https://www.consumerreports.org/cars/car-reliability-owner-satisfaction/electric-vehicles-are-less-reliable-than-conventional-cars-a1047214174/

You can also find data on long term tests of hybrid batteries. They do great. What you want to look at is when a hybrid will break even versus a gas-only car. https://best-calculators.com/automotive/hybrid-break-even-calculator/ The recent rise in gas prices make that break even point come sooner.

Few_Move_4594 | 4 hours ago

I bought 3 tanks of gas last year and have bought 1 this year. I'm an extreme outlier because I live walking distance (less than two miles) from work. My old but low millage hybrid's battery died and the replacement was $3.5k on top of it being a more expensive car.

HaloFever117 | 3 hours ago

This is why I recommend the cost calculator for gas versus hybrid. For some folks, a plug-in hybrid will be the cheapest long term option. For some folks, all electric will be the winner. Math it out before you buy.

nefrina | 5 hours ago

33k is cheap for a new vehicle today too, most are closer to 50k+

dragant123 | 5 hours ago

We are NOT in a recession. In fact, GROWTH is accelerating! Corporate profits are rising and that is why stocks are rising. Price to Earning ratios are not too elevated compared to Dotcom bust. THERE WILL BE NO BUST OR large STOCK MARKET decrease. The decrease in consumer spending has been offset by infrastructure spending to support AI. The MAIN issue is that TARIFFS, INTEREST RATE increase, and other inflationary measures are being passed down to CONSUMERS. This is very regressive and that is why folks are "stressed". The RICH are NOT STRESSED. The RICH are seeing double digit increases in stocks, single digit increases in housing (depending on where you live), and if you are blessed to be in AI field, a SHIT ton of money

dThink_Ahea | 4 hours ago

THANK YOU FOR YOUR ATTENTION TO THIS MATTER

Final-Carry2090 | 2 hours ago

So tax the rich and subsidize everyone else?

Dependent_Ad_1270 | 7 hours ago

Really sad that you have to try to spread your propaganda on Reddit since nobody watches your programming and nobody goes to your website

Just get a different job, you are better than this

You aren’t being a real journalist and this is helping nobody, do better

Have some self respect

Green_L3af | 6 hours ago

Found the pedo Russian MAGA bot.

[OP] TACO_Orange_3098 | 7 hours ago

yeah , and like people that block all their own posts , who does that !!

LOL !!!!

bye bye 😃

frawgster | 7 hours ago

The number of private accounts on Reddit has increased exponentially. Personally, I’d love to see subs implement a mechanism to delete comments and posts from accounts set to private, if the moderators choose to do so. It’s sad when people are afraid to show their true colors on here.

They are better than this.

They are not being real users and they are helping nobody. They can do better. They should have some self respect.

British_Rover | 7 hours ago

They aren't better than this. They probably aren't even real people. Hiding your post history makes it much more difficult to find out if someone is a bot.

iDontSow | 6 hours ago

I find it strange that there is such strong pushback to private accounts on Reddit. All of my social media accounts are private. What is the issue with that?

Froggn_Bullfish | 6 hours ago

This is already an anonymized social media. There is no reason to hide your activity unless you have ulterior motives.

iDontSow | 5 hours ago

sometimes people just don’t want every random stranger building a dossier on them from years of comments and post history. There is a fair bit of detail in my post history with respect to my personal beliefs and private life. Medical issues, location, work details, relationship history, hobbies. There is no issue with wanting a bit of privacy in that regard. What, exactly, do you think my ulterior motives could possibly be?

Froggn_Bullfish | 5 hours ago

Bots dude. That’s what we’re talking about. Astroturfing campaigns and ad bots are everywhere and they’re killing Reddit faster than ever with AI. Asking users to be careful what they post for their own privacy is a small price to pay for preserving an organically human discussion space.

iDontSow | 5 hours ago

Privacy and authenticity are not mutually exclusive, dude. Its on the platform to regulate fake accounts. And the people that are making those bots are data scraping your profile to train their AI.

Also, sophisticated bots can mimic real profiles easy, anyway. Forcing all accounts to become public would not solve the issue you are complaining about.

Froggn_Bullfish | 5 hours ago

I disagree, it was much, much easier before. Hell, at least we had a chance to find them, now every comment is a black box.

iDontSow | 5 hours ago

I disagree with your disagreeal and I am not making my profile public

Froggn_Bullfish | 5 hours ago

Didn’t mean to sound like I was pressuring you personally to change, one person making their private account public won’t fix the problem of course.

Happy_Feet333 | 6 hours ago

Gen Z are Victorian prudes... and I love porn and kink sex.

I also like to comment on economics, world events, and politics.

I keep my profile private so shitty prudes don't comment things like "Your comment is invalid because you like shibari rope bondage, lesbian three-ways, and cosplay."

And yes, I could make another account, but that's unnecessarily complicated when the "set profile to private" is an option.

Froggn_Bullfish | 5 hours ago

That’s what multiple profiles are for dude. But either way fuck those people, not caring about the opinions of shitheads is becoming a lost art.

Private accounts come with serious drawbacks for the community that multiple accounts don’t.

frawgster | 3 hours ago

The issue is context. Context matters if discourse is meant to be meaningful. Context is impossible to gather when a profile has zero information.

I get it…privacy matters, too. But any expectation of being taken seriously is eliminated when a profile is empty.

iDontSow | 3 hours ago

Sure, but a lot of my post history contains intimate facts about my life like my medical history and stuff about my job. I don't know that any of that is particularly relevant to the topic at hand in this post. You do not need to know that my wife has celiac disease to discuss economics with me.

Besides, I don't want data farmers scraping my profile to train their AI.

Debatablewisdom | 2 hours ago

I’ve noticed a massive uptick in “people” saying “you are a lame-o piece of crappola if you have a hidden profile!!”

1- because Facebook and IG are ghost towns they have nowhere else to go

2- these accounts seem to avoid swearing (in comical ways), which is why I think they are bots and/or bad actors from the right. They frequently have cars or tech in their profile and that’s it. Massive, massive counts on their profiles that I theorize they bought or took from someone else. Anyway, that’s my .02.

Final-Carry2090 | 2 hours ago

Because they were always public. Twitter removed anonymity briefly and exposed most magats as foreign actors. They quickly turned that off. Reddit is trying to get on that same shit and people are understandably pushing back.

iDontSow | 55 minutes ago

identifying coordinated bot networks and forcing ordinary users to expose years of personal activity are two different things. Platforms can analyze behavior patterns, posting velocity, IP clusters, account creation patterns, etc. without making every user fully transparent to the public.

Also, “some bad actors exist” isn’t a great argument against privacy generally. By that logic we should all post under our real names everywhere online. Most people pushing back probably just don’t want strangers, employers, AI scrapers, or obsessive weirdos combing through a decade of comments. The very bots you are arguing against are trained on your publicly available data.

digitalghost1960 | 5 hours ago

Do you seriously think that nobody in the USA is having financial challenges with the high inflation and cost of everything?

Just for clarity, not everybody gets generational money, inheritance or comes from a financially secure environment. Many of us are actually 100% self made - and speaking from experience - It's hard as hell in any economy to build financial security from scratch.

I'm curious, what is you think most Americans are financially experiencing in todays economy?