You may be biased as a WFH/silicon valley type (continuing to produce income despite shelter at home). The median checking account balance was $3,400 in 2019, and that was before COVID19 struck.
There's a lot of people who were already barely hanging on, and now covid and demonstrations have pulled the rug out from under them.
We're only 2 months in. Things will get worse before they get better.
Yeah, most of the US is one medical emergency from absolute financial ruin. It's amazing to see how disconnected the economy is from the lived experience of the majority of people.
If I have 3,400 to my name and my deductible is 2,000 (common from what I've seen). And my rent is 1,500 due next week, I'm not in good shape financially.
1. Insurance only pays some fraction of what can be very high bills, and providers notoriously send bill-like invoices trying to get you to pay for things which were paid in full by your insurance company. Many people will be pressured to pay things and uncomfortable standing up to a huge provider’s legal department.
2. Many employers have favored plans which increase deductibles, and the people with the worst plans are also paid the least and so will struggle to have enough cash in reserve for those larger payments.
3. Hospitals commonly have unrelated specialists show up for a couple minutes to add billable consultation hours. If one of those doctors isn’t covered by your plan, you get the bill even if the hospital itself is in network or you were, say, unconscious at the time or unaware that you could turn down their “help”.
4. Insurance is tied to employment: if you have a medical emergency which affects your ability to work, guess what happens to your coverage?
This is entirely unresponsive to the parent and really only further demonstrates the point that deflationary pressure is the real risk here, not absurd claims of "hyperinflation."
I think your parent comment meant that people are trimming their expenses, not that they are sitting on so much income that they can't spend it fast enough.
People need capital to invest. A lot of people are floating by with that 3,400, not strategically holding only 3,400 in their bank account while they make their fortune on risky investments.
I wonder how useful that statistic is. I have a checking account and I move funds into it when I need to pay someone and otherwise I leave it empty. And I have other empty accounts that I just don't bother closing.
