The Country is Broke: America’s Reality Check Bounced
Shopped for a cell phone lately? Have you noticed that brand new devices cost between $600-800? If you’re wondering who can afford that, you’re not alone.
Alan Colberg, CEO of Assurant was on Bloomberg TV to explain why demand for his services is going up. Assurant is one of the chief cell phone insurance providers.
Alan Colberg illuminated:
“If you think back five years ago, you as a consumer didn’t know how much that cell phone cost, you thought it was free or close to free, now you’re paying $600, that’s a lot. So we’ve actually seen the attachment rate, or the number of people buying the product, going up a little bit in the last couple of years.”
Makes sense, right?
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Now that we know these phones costs the average Joe a week’s pay, we better make sure they have coverage for those ‘uh-oh’ moments. It’s one thing to save up for a new phone. Then to break it, and have to dig into one’s savings account to get another one is a fate more unfortunate than death for some of us. Or worse yet, the grocery budget.
How do we end up making these choices between Facebook and food? Because we don’t have any money. We are broke. America’s reality check has bounced, when as Colberg noted: “…half of America can’t afford to write a $500 check!”
Colberg is right. Obama hit us where it hurts: our pocketbooks.
According to a recent survey, 57% of Americans are not prepared for the expense of breaking a cell phone. Nor are they ready for a doctor bill or a car repair. Anything more than day to day expenses can leave half of America with no wiggle room financially. (Or a doctor bill or car repair- anything more than the expected day to day expenses.) Last year that number was 63%- which suggests a slight improvement is underway.
What happened to that economic recovery Obama boasted about? Well, to be blunt, that was just another lie.
According to Tyler Durden:
The survey’s findings have shed light on how the so-called recovery of the past 8 years has skipped about half of the US population, which literally live paycheck to paycheck, and reflects a country in which many households continue to struggle with their basic finances more than seven years after the official end to the recession.
Putting the numbers in context: despite steady job growth during the Obama administration – which have been focused on minimum wage industries – wages have been predictably slow to recover, with the typical American household still earning 2.4% below what they brought home in 1999, when income peaked. Meanwhile, costs for essentials such as housing and child care have surged faster than the rate of inflation, placing stress on household budgets and making the accumulation of wealth, i.e., savings, impossible.
The bottom line: About four out of 10 Americans said they had enough in savings to cover a surprise $500 expense. Another 21% said they would rely on a credit card, while 20% said they’d cut back on other expenses. Another 11% said they’d turn to family or friends for the money.
President Trump was elected partly because Americans are tired of being broke.
Moreover, we have tired of the lies. Obama sat around saying the economy was making great strides. Wall Street feasted, as Main Street starved.
I know I can’t afford another setback. Sadly, I’m one of those Obama era sufferers. I can’t even afford a new cellphone if I drop mine. And most of the families I know are sitting in the same predicament.
Trump has already brought back jobs, shaved our debts, and started a true economic stimulation. Soon the doubters will see the proof of Trump’s word. All they will have to do is check the bank balance. When the haters have enough to buy a new cell phone, they will thank Trump.