Paycheck to paycheck generally means that there is little money left for “discretionary” spending, and even assuming there is a large percentage of people who spend when they shouldn’t, 61% is staggering and can’t be explained by that reductive argument alone. Assuming it is correct, to be that high indicates more systemic issues in the system.

Paycheck to paycheck means that there is no savings. How much does it hurt to cut spending is a completely different variable, not measured at all.

It's normal that a lot of people live paycheck to paycheck even when they are well-off. Yes, the increase is probably all caused by worsening of the standard of life, yet it does not measure into what kind of bad it has descended.

(By the way, number of people living paycheck to paycheck is a very weird number. Confidence about the future increases it too.)

My point is that people's non-discretionary spending can grow to meet income, rendering "paycheck to paycheck" kind of meaningless.

The family of 4 making $150k and spending not-cheapest-option $40k on childcare and not-cheapest-option $40k on groceries from Whole Foods (or wherever), while paying $30k annually in not-cheapest-option rent, may also believe they have no discretionary income. But that doesn't mean the same thing.

Sure, but most families don’t make that much money so it’s kind of a false dilemma and so I disagree that “paycheck to paycheck” is rendered meaningless because in many cases discretionary spending simply can’t just increase because there is little left after the nondiscretionary money is spent.

I think you missed my point, as it’s not about the amount of money. Unless your claim is that 61% of Americans simply cannot move to a location with cheaper rent, or eat less expensive food, my point is that nondiscretionary spending also captures fluctuates with discretion, and that’s not captured here.

The idea that most American households are perched precariously on the edge of financial ruin is a favorite trope of politicians, but it is pure fiction. Just look at consumer household data since the COVID crash in Q2 2021. If folks were on the edge of bankruptcy, the 2020 crash (which sent unemployment through the roof--briefly into the teens!) should have wreaked havoc, right? What should have happened to credit card debt? It should have skyrocketed, right?

Instead, as of Q2 2021 (a year after unemployment peaked), consumer credit card debt was DOWN by $106 billion and Home Equity debt was down $64 billion. Over the same period, Auto Loan debt went up by $70 billion, and mortgage debt went up by 730 billion!

In other words, during the worst economic crisis in a decade, Americans were paying off debt and buying cars and houses! Does this sound like the behavior of people who are struggling to make ends meet?

[0]https://www.cnbc.com/2021/08/03/household-debt-jumps-by-the-... [1]https://fred.stlouisfed.org/series/UNRATE

Wouldn’t debt going down generally mean people were unable to leverage more debt?

In that instance of home equity debt going down - wouldn’t it mean that the mortgages were being paid off faster than they were being made? (In absolute dollar sense) To me - that sounds like people stopped getting mortgages… Which is an affordability crisis.

Same with credit card debt.

> Wouldn’t debt going down generally mean people were unable to leverage more debt?

People were clearly able to leverage more debt based on the auto- and mortgage debt figures. Credit Card debt would not go down if people were strapped for cash. If you're worried about making rent next month, why would you be paying more than the minimum on your credit card? You wouldn't. Hence, if credit card debt is going down, it's because people had cash on hand and weren't immediately concerned about their ability to pay the bills--hence my point; falling cc debt indicates that people were not in a precarious position.

> In that instance of home equity debt going down - wouldn’t it mean that the mortgages were being paid off faster than they were being made? (In absolute dollar sense) To me - that sounds like people stopped getting mortgages… Which is an affordability crisis.

You're confusing Home Equity debt with Mortgage debt. HE debt is when someone borrows against their home equity so that they can 'spend' the equity they have in their home. It's low-interest, collateral-backed consumer debt. This type of debt went DOWN, indicating (again) that people had cash on hand and didn't have an immediate need for it.

Auto- and Mortgage debt went UP, indicating that people were buying cars and houses.

This is evidence of something, but it's not evidence that the American people were struggling to make ends meet during the crash. The fact that Americans were paying down debt and buying cars and houses during an economic crisis clearly belies the idea that most American households are on the verge of financial ruin. They said the same thing before the crisis, and folks clearly did just fine.

from the perspective of many in the middle class it wasn't the worst economic crisis in a decade, it was the biggest windfall of a life time. which exactly aligns with the fact that people were reducing debt.

Who exactly was this period such a crisis for? The crisis is coming now for the people who need to buy inflated goods as the stimulus is wearing off.