Millions of credit-card customers can’t pay their bills

Re:Millions of credit-card customers can’t pay their bills by dehrmann on Saturday April 25, 2020 @04:02PM (#22980963)

There's this thing that people have finally been talking about--slack in supply chains. It's basically the same idea as people living paycheck-to-paycheck. 95% of the time, it's much more efficient to run that way because inventory isn't free. The problem is there's no buffer against supply chain disruptions.

Companies are always going to try to squeeze out those inefficiencies. This is a place markets will fail, so it's somewhere for governments to step in. Maybe that means government stockpiles, maybe it means governments pay companies to have excess inventory of certain critical products.

It's the same for personal finances. It's actually inefficient for people to save for a rainy day because everyone has a rainy day fund when only 5% of people need it in a given year. This is where you want to have a strong social safety net so that people can spend.

I don't think the situation's "mad," it's just that the US has a weak social safety net and people are encouraged to spend.

[ Parent | on HN ]

Re:Millions of credit-card customers can’t pay their bills by gruez on Sunday April 26, 2020 @12:14AM (#22984349)

> It's the same for personal finances. It's actually inefficient for people to save for a rainy day because everyone has a rainy day fund when only 5% of people need it in a given year.

I get why it’d be inefficient to store inventory, but why is it inefficient to save? You get paid for it and you’d want to have money lying around anyways for retirement.

[ Parent | on HN ]

Re:Millions of credit-card customers can’t pay their bills by dehrmann on Sunday April 26, 2020 @01:21AM (#22984709)

Retirement is probably the best example. If you have to save for retirement (so no SSI), you need to plan for your 95th (or 99th?) percentile life expectancy/spend rather than your mean expenses. Since retirement is about doing what you want and not just working for money, that means you have to work extra years so that on the off chance you make it to 100, you still have money.

[ Parent | on HN ]