40% of Americans can’t cover a $400 emergency expense

That is a scary statistic. $400 isn’t a huge sum. But for many it might be the difference between scraping by and falling behind.

If this stat is true, and I sense that it likely is, one can understand why so many people are given to utopian visions of an all pervasive welfare state. Insecurity breeds all sorts of nasty things in the human psyche and one of those things is a tendency to look for answers from “leaders” who promise things like “free” college or other taxpayer financed programs.

We have restricted commerce in this country for too long. We’ve made it hard to start a business. We’ve attached expensive licenses to all sorts of occupations. We’ve expanded welfare of all forms further encouraging dependency on one’s fellow citizens who are in turn forced to pay higher taxes.

All the while the political class, the crony class, continues to do well.

Fundamentally we have sapped too much of the economic lifeblood of the day to day economy. We have restricted it too much. The engine must be allowed to breathe if we expect it to create wealth.

If we don’t let the economy breathe desperate people are going to look to the state more and more for salvation.

(From CNN Money)

Four in ten Americans can’t, according to a new report from the Federal Reserve Board. Those who don’t have the cash on hand say they’d have to cover it by borrowing or selling something.

The bright side? That’s an improvement from half of adults being unable to cover such an expense in 2013. The number has been ticking down each year since.

Overall, the financial situation of American households has improved during the past five years, according to the Economic Well-Being of U.S. Households report. It shows that in 2017, 74% of adults reported feeling at least “okay” financially, an increase of 10 percentage points from the first survey four years earlier.

“This year’s survey finds that rising levels of employment are translating into improved financial conditions for many but not all Americans,” Federal Reserve Board Governor Lael Brainard said in a press release, “with one-third now reporting they are living comfortably and another 40% reporting they are doing okay financially.”

Click here for the article.