Americans' median income is $60,000 — but the average American couldn't stump up $500 to bail themselves out of an emergency, and a third of Americans can't afford food, shelter and healthcare.
It's a paradox: Americans have a relatively high level of income, and consumer goods are cheaper in the USA than they are almost anywhere else in the world, but Americans are poorer and more indebted than people in any other wealthy country.
It's because the US has deregulated the basics for human survival: housing, education, transport, finance, and health-care, and turned them over to unfettered rent-seeking and profit-taking by the private sector, allowing them to grow to consume all the money Americans take home and more, leaving them indebted and precarious.
People in wealthy countries with comparable median incomes have higher standards of living than their American counterparts, with higher levels of savings and lower levels of debt — despite paying more for consumer goods.
America has invented a new kind of poverty: wealthy poverty, where high earnings and low prices still leave you indebted and precarious.
Yet all that is the straightforward effect of giving, for example, hedge funds control over drugs, or speculators control over housing, healthcare, and education — they will of course maximize profits, whereas investing in these things socially, or at least regulating them, minimizes real costs, and maximizes accessibility, affordability, and quality.
So the average American, who is left high and dry, must borrow, borrow, borrow, just to maintain a decent quality of life — because handing capitalism control of the basics of life has caused massive, skyrocketing inflation in necessities, while flatlining his income. Healthcare didn't used to cost half of median income even a decade ago, after all — but now it does. So what happens when, in a decade or two, healthcare costs all of median income? How can an economy — let alone a society — function that way?
Well, what happens if the average American steps over the line? Misses a mortgage payment, gets ill and is unable to pay a few bills on time, can't pay the costs of healthcare? Then they are punished severely and mercilessly. Their "credit rating" (note how banks and hedge funds don't have them) is ruined. They can easily find themselves out on the street, without finance, without a second chance, without access to any kind of redress or support . And then they are rejected, shunned, and ostracized. They might not have an address anymore — so who will hire them? They are no longer a part of society — they have fallen through the cracks, and finding one's way back is often next to impossible. Asymmetrical risk — corporations and lobbies and banks bear no risk at all, precisely because the average American bears them all now.
Why America is the World's First Poor Rich Country [Umair Haque/Eudamonia]
(via Naked Capitalism)
(Image: Donkey Hotey, CC-BY)