Why the Long Face?
Richard Quinn | Sep 25, 2023
AS I READ ARTICLES and comments on HumbleDollar, I see concerns about taxes, Medicare, Social Security, health care costs, college, inflation, investing—and the anxiety caused by the complexity of it all. I also see very different views on what's earned and deserved. In some ways, it's about what we consider fair.
I suspect the HumbleDollar community is more aware and more involved in their overall financial life than the majority of Americans, but nevertheless generally representative. If we step back and consider our collective views on money and all that goes with it, have we lost our perspective? Do we realize how good we have it?
Even our poor are comparatively fortunate. If you earn $50 a day, or about $13,100 per year, you're in the world's top 20% for income. The average household income in the world is $12,235, while the median (or typical) per-capita household income is $2,920.
Americans have more stuff and larger homes than citizens of just about any other country. There are 300,000 items in the average American home, or so says an article in the Los Angeles Times.
The average size of U.S. homes has nearly doubled since the 1950s, according to National Public Radio. It's still not large enough for many. A quarter of people with two-car garages say they don't have room to park cars inside them, and 32% only have room for one vehicle, according to the Department of Energy. No wonder one out of every 10 Americans rents offsite storage—the fastest growing segment of the commercial real estate industry over the past four decades, reports The New York Times.
A Bloomberg article reveals that, when surveyed, even wealthy people—those with incomes in the top 10% of tax filers—say they're poor. These are people earning at least $175,000 a year. A quarter of these folks say they are "poor" or "just getting by." Half say they're just "comfortable." They've achieved the American dream, but as the article notes, it's not enough.
We lament the demise of the traditional pension and yet not even 50% of working Americans ever had one. We also forget that a pension's value lies in longevity as an employee. Our tendency to change jobs every four years or so makes the 401(k) plan more valuable than a pension for most workers, especially those whose 401(k) includes an employer contribution. Yet I don't think I can convince today's workers of that.
Where does all our money go? I know one place. A new survey says 32% of Americans have a tattoo and 22% have more than one—at an average cost of about $200. A quarter regret their tattoos. Oh well, too late. Based on my back-of-the-envelope calculation, we've spent at least $16.5 billion on skin ink. It seems some Americans are filling their bodies faster than their garages.
Meanwhile, our COVID-19 exuberance for pets has left some families struggling to afford their fur babies. They're going into debt to keep their pets or giving them to shelters. How much emotion is involved in financial choices like these?
About our tax situation: The U.S. is not in the top 10 highest-taxed countries for income, corporate or sales taxes. As of 2021, the U.S. ranked 32nd out of 38 democracies as measured by taxes paid relative to gross domestic product. Although we all want government programs, our taxes are too low to support them.
We also seek legal ways to pay less tax, even as the deficit is growing fast. Each household's share of federal interest payments on our collective debt is roughly $3,035 per year.
Our lack of appreciation for our good fortune extends beyond money. I had a health issue in 2022 that was quite routine and resolved using a robot. My father had it 60 years ago and spent a week in the hospital. Sixty years before that, he—and I—would have died.
I have a friend in England in need of a hip replacement. She's been suffering since February and is now told she should have the surgery by Christmas. Don't get me wrong, Americans wait for health care, too. It's just that we seem to complain louder based on our unrealistic expectations. We also want lower health care costs with no consideration for the consequences, such as longer waits and less flexibility.
One of my unusual habits while on Cape Cod is visiting old graveyards. The tombstones can teach us a lot, including what we should appreciate. By far the most moving headstones are those of families. One I've visited a few times has headstones for 11 children, all of whom died in infancy or when they were just a few years old.
In the U.S. today, the infant mortality rate is 6.2 per 1,000 births. That's a far cry from what families endured in the past. But sadly, it's not as good as Belarus, Cyprus, Estonia, Iceland and many other developed countries.
What should we make of all this? I'd say we Americans could do better at appreciating what we have, and be a bit more prudent with our financial planning and discretionary spending.
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