A study in contrasts

A real look at America’s haves and have-nots that goes beyond partisan bickering:

The National Foundation for Credit Counseling (NFCC) released a report this past week stating that 64 percent of Americans cannot come up with $1,000 to cover an emergency situation.

Internal Revenue Service (IRS) tax data for 2009 shows there were 235,413 taxpayers who earned $1 million or more that year.

According to the non-profit NFCC, of the 2,700 survey respondents, 17 percent of those who could not meet a $1,000 emergency expense said they would borrow money from friends or family. Another 17 percent said they would neglect other financial obligations, such as a credit card or mortgage payment, to meet the emergency.

The IRS data just released shows that in 2009, "incomes fell, unemployment claims rose and the U.S. economy shed nearly 2 million taxpayers."

A previous NFCC study found that “30 percent of Americans have zero dollars in non-retirement savings. A separate study by the National Bureau of Economic Research found that 50 percent of Americans would struggle to come up with $2,000 in a pinch.”

According to the IRS, of the 235,413 taxpayers who earned $1 million or more in 2009, 1,470 paid no taxes.

From a news report in The New York Times: Standard & Poor’s “based its downgrade and its negative outlook for America’s credit rating partly on the assumption that Bush-era tax cuts for high incomes would be extended past their 2012 expiration, ‘because the majority of Republicans in Congress continue to resist any measure that would raise revenues.’ S.& P. said it could change its outlook to stable if the tax cuts ended.”


Ahab said...

In the event of a major crisis, this will have devastating repercussions for a large chunk of the population ... and it won't be pretty.

Lynn said...

Yes, there is great disparity. That has always been the case and always will be. However, I suspect that many who can't come up with $1,000 for an emergency have all the latest electronic toys and gadgets,go out, drive cars, eat fast food, and on and on. The point being that we have our needs and wants confused.The things I thought were treats as a child (such as soft drinks) are now considered every day items.There hasn't been a culture of 'saving for a rainy day' in this country for many years.

Leslie Parsley said...

Lynn, I mostly agree with you. I often wonder how these young people and most, not all, of the poor who live in my complex, can have all these fancy electronics, go to movies 3 and 4 times a week, eat in fast foods 24/7, and go to sports events and over-priced concerts. God forbid any of them should check out a free book from the library, much less read one.

But not all poor people are like this. My computer, which is my life blood, was a gift, along with my basic cable and Internet connection, and a basic cell phone on my daughter's plan. Without them, I would have none of these things. As it is, I cannot afford needed eye surgery - not because I don't have insurance (I do) but it doesn't cover eye wear. Like so many others, I sure as heck couldn't come up with $1000 in an emergency. As far as saving, there isn't anything left to save after paying rent, utilities and buying meds. And I have it a lot better than others.

Jerry Critter said...

You may say that there has always been a "great disparity", but the facts are that the disparity has grown greatly over the past few years as shown here. The rich continue to get richer by leaps and bounds, while the poor and middle class just get poorer and poorer.

B.J. said...

All: I agree with Lynn and Leslie: there are always people who either live beyond their means or game the system. I feel pity for them, because they make their own prisons.

There are also others, through no fault of their own, who because of unforeseen circumstances find themselves suddenly with reduced or no income. In the blink of an eye anyone can lose a job or become disabled. But, I do believe a great deal of the problem is “instant gratification:” people who cannot wait until they can pay cash and run up credit card debt.

I am as poor as a church mouse, but I live frugally and comfortably and am able to save money. Like Leslie, my computer was a gift from my son. My Internet connection is $9.99 a month (AOL Basic Plan); I don’t have TV (cannot justify paying $60-plus a month for crap), and I never make long-distance calls, because people with toll-free call me. I keep a credit card of necessity, but pay off the balance each month. I do splurge on groceries – name brands are a vice – but I am able to save for a rainy day.

As some of you know I am finishing up listening to ALL of John Grisham’s books on Talking Books, and a recurring theme in his books is greed. He really exposes how the filthy rich just cannot get enough. If, as conservatives insist, they got their money through entrepreneurship and hard work, they should be willing to give a little back to the country which enabled them to do so.

Also mentioned frequently in Grisham’s books are “wire transfers” and banks in the Cayman Islands and Switzerland.


Tiny said...

Tiny agrees with Lynn, Leslie and BJ, but she also knows that instead of buying groceries for a month, people jump into their cars and drive to the stores on an almost daily basis.

But for those who have lost their jobs, homes, health, health care benefits, unemployment etc are in need of the basics for daily living. Does the greedy care about them and their needs? Not one whit!

For those who would like to know a bit more of what is behind the greed and where it got a giant leap forward this time, you can read the article posted at the below link. It is an eye opener for those who are not familiar with this author. You might learn a few more things. Check it out:


Good post BJ.

Lynn said...

Everyone's comments are interesting.Certainly I wasn't turning a deaf ear to those who are poor. They can not save. I get that. I guess I'm considered poor. I don't even know what the threshold is, but I, like BJ and Leslie, live within my means.There are different reasons people are poor as there are different reasons people don't save. Our culture (mostly TV) proclaims that if you don't have XYZ, you are not hip, cool, smart, sexy, etc. Unfortunately many people buy into that, leaving them nothing to save.

Anonymous said...

Awesome survey, I like your post.

Japanese Zojirushi Bread Machine zojirushibreadmachine.com

Frodo, ain't no mountain high enough said...

The unemployment rate, nationally, among those with a four-year college degreee is 5.4%.

As one considers the existence of "Two Americas," or the fact that some would endorse the directive to "Let them eat cake," let us continue to add perspective to our environment. There will be no more jobs for Americans in factories that make socks or underwear. Telephones are going to be answered by people who speak multiple languages, from here on out. For those who seek to settle for less, or are forced to accept the limitations of life, there is little Frodo can say to assuage their fear. There are however, inventions uninvented, books unwritten, roads not traveled, and questions not answered in sufficient numbers to fully occupy the imaginations of dreamers and doers alike.
There is an "American exceptionalism," if we choose to believe that it is so. To believe otherwise is to hand the Ring to Sauron.