Only if you use “borrowing” so broadly that it stops meaning borrowing. A current-account deficit implies a net capital inflow. Some of that can be debt, but some is equity, FDI, real estate, and other assets. “A trade deficit is matched by net foreign investment in U.S. assets” is accurate; “we borrowed the trade deficit” isn’t.
Wow, there's so much wrong with this "statistical analysis" to the point of absurdity. Goes to show that even a 30-year economics professor can be duped by AI.
It looks like his results are taken from the Federal Reserve 2022 Survey of Consumer Sentiments. https://www.federalreserve.gov/econres/scfindex.htm The data is publicly available. I don't think that this was hallucinated.
I was born and grew up in the states and am living outside the country (near Europe) and the smallest things made me realize how truly rich Americans are compared to the rest of the world, in real terms. Even things like fast food or Walmart are a testament to the abundance the US has (not saying it is right or wrong). And these systems are supported by the simple fact you just have a lot of rich people walking around relative to the global population.
To put it more succinctly, I know engineers/lawyers/doctors in this country I’ve been living in that make 2k a month and it’s good. They work hard, it’s stressful. A fast food worker in the US can make $15/hr and bring in 2.4k a month.
And for that 2k/mo they barely make rent, can't save and are one health issue away from $100k debt. Not really a shining example of either wealth or freedom.
Are you also comparing benefits and cost of living? That fast food worker cannot afford an apartment, groceries, or healthcare after taxes. God help them if they have children. Further, what little safety nets that exist in the United States are being gutted by the current administration and the likes of DOGE, which was run by a billionaire who paid a massive sum of money to the current administration to be put in a position to cut government benefits.
Seems fringe and out of touch with my reality and everyone I know. Does anyone have any info on who the author is and what sorta school of though he's involved with?
The numbers aren't fake but the analysis glosses over a lot.
The author's data says the median net worth for 65–74 year-old households is about $410,000, but 56% of it is home equity. Exclude the house and the median net worth drops to $171,000 and the median financial assets (the part that could actually be converted to cash easily) are only about $115,000. At the 25th percentile, wealth excluding home equity is under $30,000 for every age bracket from 55 up. So basically the net worth number looks best for the people whose wealth is least spendable.
That calls into question the author's claim that "given their current net wealth, a solid majority of Americans can comfortably retire without Social Security." Back of the envelope math: safely drawing 4% on $115,000–$170,000 provides just $5,000–$7,000 a year versus a median SS retirement benefit in the low $20,000s.
For a typical retiree, SS is worth more than every financial asset they own combined. The author says that downsizing or reverse mortgages count as "doing fine" but that's just his opinion. Reverse mortgages are expensive and you lose your equity quickly, and downsizing in the current market basically means that you pay way more for way less.
From what I can tell, it's basically the top third who could do without SS comfortably. Not at all a "solid majority."
The article has the author listed at the top. If you click on it, you'll see which university he works for. With his name and university, you can Google to find his wikipedia page.
Looking at a generation that benefited from both an epic housing price run up and same for stock market and observing that the old people seem to be very rich is A) stating the obvious and B) not a sign of the system being healthy and sustainable
The chart there is deceptive—to be fair, we should be showing 1 and 5 percentile as well. Saying “walking around a mall you might encounter a few decamillionaires” is shifting focus from the fact that 1 in 10 people are experiencing near zero net worth and the bottom 1 percentile likely are suffering way more than the top 1 percent are enjoying their riches.
It annoys the heck out of much of the rest of the world but the truth is that Americans are staggeringly wealthy compared to nearly every other place on the planet. The US GDP per capita figures do translate into significant wealth for a large portion of the population.
Most don’t live like it and frankly the ones that show off typically are nowhere are wealthy as they’d like you to believe. Meanwhile the person driving an older model car and mowing their own grass has millions in the bank and doesn’t think twice about it.
Many are simply very wealthy but not materialistic.
> Trade deficits represent borrowing
Only if you use “borrowing” so broadly that it stops meaning borrowing. A current-account deficit implies a net capital inflow. Some of that can be debt, but some is equity, FDI, real estate, and other assets. “A trade deficit is matched by net foreign investment in U.S. assets” is accurate; “we borrowed the trade deficit” isn’t.
Wow, there's so much wrong with this "statistical analysis" to the point of absurdity. Goes to show that even a 30-year economics professor can be duped by AI.
It looks like his results are taken from the Federal Reserve 2022 Survey of Consumer Sentiments. https://www.federalreserve.gov/econres/scfindex.htm The data is publicly available. I don't think that this was hallucinated.
Source: Chat GPTs calculations.
This whole article is giving off "PragerU"
Is this chart based off personal or household net worth?
I was born and grew up in the states and am living outside the country (near Europe) and the smallest things made me realize how truly rich Americans are compared to the rest of the world, in real terms. Even things like fast food or Walmart are a testament to the abundance the US has (not saying it is right or wrong). And these systems are supported by the simple fact you just have a lot of rich people walking around relative to the global population.
To put it more succinctly, I know engineers/lawyers/doctors in this country I’ve been living in that make 2k a month and it’s good. They work hard, it’s stressful. A fast food worker in the US can make $15/hr and bring in 2.4k a month.
And for that 2k/mo they barely make rent, can't save and are one health issue away from $100k debt. Not really a shining example of either wealth or freedom.
Are you also comparing benefits and cost of living? That fast food worker cannot afford an apartment, groceries, or healthcare after taxes. God help them if they have children. Further, what little safety nets that exist in the United States are being gutted by the current administration and the likes of DOGE, which was run by a billionaire who paid a massive sum of money to the current administration to be put in a position to cut government benefits.
Seems fringe and out of touch with my reality and everyone I know. Does anyone have any info on who the author is and what sorta school of though he's involved with?
The numbers aren't fake but the analysis glosses over a lot.
The author's data says the median net worth for 65–74 year-old households is about $410,000, but 56% of it is home equity. Exclude the house and the median net worth drops to $171,000 and the median financial assets (the part that could actually be converted to cash easily) are only about $115,000. At the 25th percentile, wealth excluding home equity is under $30,000 for every age bracket from 55 up. So basically the net worth number looks best for the people whose wealth is least spendable.
That calls into question the author's claim that "given their current net wealth, a solid majority of Americans can comfortably retire without Social Security." Back of the envelope math: safely drawing 4% on $115,000–$170,000 provides just $5,000–$7,000 a year versus a median SS retirement benefit in the low $20,000s.
For a typical retiree, SS is worth more than every financial asset they own combined. The author says that downsizing or reverse mortgages count as "doing fine" but that's just his opinion. Reverse mortgages are expensive and you lose your equity quickly, and downsizing in the current market basically means that you pay way more for way less.
From what I can tell, it's basically the top third who could do without SS comfortably. Not at all a "solid majority."
> who the author is
The article has the author listed at the top. If you click on it, you'll see which university he works for. With his name and university, you can Google to find his wikipedia page.
https://en.wikipedia.org/wiki/Bryan_Caplan
He is the living, breathing stereotype of what I would expect from an "economics professor for almost 30 years."
"I got in early to the ponzi and life is good can't see what the ungrateful young'uns are whining about!"
Looking at a generation that benefited from both an epic housing price run up and same for stock market and observing that the old people seem to be very rich is A) stating the obvious and B) not a sign of the system being healthy and sustainable
The chart there is deceptive—to be fair, we should be showing 1 and 5 percentile as well. Saying “walking around a mall you might encounter a few decamillionaires” is shifting focus from the fact that 1 in 10 people are experiencing near zero net worth and the bottom 1 percentile likely are suffering way more than the top 1 percent are enjoying their riches.
Oh boy, here come the armchair economists with their anti-American rage posts.
It annoys the heck out of much of the rest of the world but the truth is that Americans are staggeringly wealthy compared to nearly every other place on the planet. The US GDP per capita figures do translate into significant wealth for a large portion of the population.
Most don’t live like it and frankly the ones that show off typically are nowhere are wealthy as they’d like you to believe. Meanwhile the person driving an older model car and mowing their own grass has millions in the bank and doesn’t think twice about it.
Many are simply very wealthy but not materialistic.