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I think the non-legal reasons of this post are less reflective of some of these working peoples lives.
60% of Americans Now Living Paycheck to Paycheck and now have to make loan payments that will accrue in interest as they don't have the money to pay down the principle upfront. I believe it would have been significant for them.
20k is a significant sum of money for most working Americans but especially to young people just starting out with high debt accruing interest and a mid to low income. For every year they can't pay that 20k down at 5-8% interest, it's another 1k minimum added on top. A high debt(>60k) maximum repayment period is 30 years, so 20k early could turn into 50k-68k in total relief. The average student loan debt is currently $37,338 meaning for both the average and above average borrower, it would be significantly impactful.
I'd say multimillionaires in the 1% are better able to pay off their doomed submarines. Didn't stop the government from granting Oceangate $447,000 in PPP Loans all forgiven by the American taxpayer, and not just for payroll but for things like mortgage interest, rent, utilities, supplier costs and expenses for operations. Bailouts for the rich, pull yourself up by your bootstraps for everyone else. Because they know how to work the system for mutual benefit.
At an 8% interest rate (charged only to grad students) and 30 years of repayments, that's $146/month. ($167 at 20 years, and $242 at 10 years.) Undergrads pay 5%, which means it's $107/month. If college doesn't increase your income by $107-146/month post-tax, you shouldn't go.
https://www.bankrate.com/loans/student-loans/current-interest-rates/#best-rates
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I do not believe this. Number one: it's survey data. Number two: the link states, "As of January 2023, 60% of United States adults, including more than four in 10 high-income consumers, live paycheck to paycheck"
What I take this to mean is that 40% of Americans will say they are living paycheck to paycheck on surveys regardless of how much money they make.
If you buy a House that is three times larger than the house your British equivalent buys and then get two massive SUVs that you use for all your transportation needs being broke is kind of expected. I work as a software engineer in Europe, and I can't really afford a massive house or a car. Yet, I am able to save 20% of my salary every month.
Hello fellow software engineer in Europe who can’t quite afford such things. What do you do with your savings?
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That could be true, but that is also the least charitable interpretation of these people/families plight. As is the opinion that it is survey data thus unreliable.
More than half of Americans (58%) describe themselves as living paycheck to paycheck
Americans Rely on Credit Cards to Make Ends Meet As 64% Admit to Living Paycheck to Paycheck
two different surveys from 2023 for reproducibility, as all I see are surveys for paycheck to paycheck data. Full disclosure, on one of the surveys only about a 1/4 believe they would benefit from student debt forgiveness, 14% don't know. I actually don't doubt that they are living pay check to paycheck but perhaps the disagreement is that the phrase implies they aren't able to afford to put money away after rent,food,childcare,ect. at the most minimal level possible as opposed to where they live or currently spend? Zip codes would have been valuable to collect, as it is possible someone making 100k as a single person living in a rural area is misrepresenting themselves vs. a couple each making a 50k in a San Francisco type city where they work, struggling with rent and child care costs.
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Alternatively, many people, as they make more money, use the opportunity to spend more money, instead of to be more fiscally secure.
This seems like the correct answer. The definition of paycheck-to-paycheck is extremely loose. All that needs to happen is that the household spend all the money. It’s useful to those who want to gin up support for welfare programs and wealth transfers because it sounds like poverty.
Additionally, many who would report themselves as paycheck-to-paycheck have assets and are saving money. A friend of mine describes himself as such while putting 30% of his money into an investment account each check. To him, that money does not count because it is not available for spending (by his self imposed rules).
Which is hilarious mental accounting.
In which case, I too, live paycheck-to-paycheck. After paying for housing, utilities, food, bills, miscellaneous expenses, and putting the rest into brokerage accounts, I also have nothing leftover. Hmph! Weird.
I can actually relate to your friend. After the brief dopamine hit of buying some ETFs wears off each time I get paid, there's post-purchase-clarity and a general feeling of, "ugh, now I have to wagecuck for another whole pay-cycle to have more money to throw at the stock market." In that sense, it does feel irrationally like living paycheck-to-paycheck, even if it's hardly a central example of the concept (to say the least).
Good for him, though. It would probably be better for most people's financial health to have an attitude like your friend, to treat savings/investments as a recurring, necessary expense and rigidly put money into savings/investment accounts rather than consooming it all away.
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Of course, PPP loans were created because government was preventing people from working and the PPP loans were designed to keep businesses afloat to pay their employees.
Student loan forgiveness is totally the same thing…
My example was a business that did not need the PPP loan to keep the business afloat but got that money anyway. It was to juxtapose the above poster arguing why aid isn't needed for these working class people because they have been able to buy cars before, while rich people allow other rich people to benefit from government subsidies even though they have been and are currently able to finance their submarines. Even if not all of rich people directly benefit from the bailout, they support their fellow rich people, and in turn will get support in the future, unlike you and I unfortunately.
I think you may have skimmed over the comment too fast so I will relink it. things like mortgage interest, rent, utilities, supplier costs and expenses for operations. They payed a privately owned company, so a guy as he owns that company, for much more than his employees.
The deal was “we will give you this loan if you don’t fire your employees.” Quid pro quo.
It was also done quick and dirty as it was thought needed to prevent mass layoffs. Also PPP isn’t the first of many.
Whether it was a good policy or executed correctly is entirely different compared to your point about welfare for the rich but not the poor.
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