As we work our way through the longest government shutdown in U.S. history, a lot of things are coming to light. Most of them are not good. It reveals the true financial health of Americans as over 800,000 people were furloughed. It wasn’t too long ago, two weeks at most when most laid-off workers received their last paycheck.
Most federal workers are well paid. Nearly 100,000 of them make over $150,000 per year. This is far more than the citizen average of $51,000. Yet, these workers couldn’t go two weeks without waiting in lines to receive free bread. You see them on the news talking about how difficult it’s been since.
Sure, a lot of the government shutdown talk is most likely political maneuvering, but there’s probably truth to it as well. Americans are not prepared for any kind of emergency. A lot of that has to do with the previous recession. Here we are, ten years later, and the vast majority of us with almost no savings.
In fact, 60% of Americans have less than $1,000 saved in their bank account. 80% of us are living paycheck-to-paycheck. Nearly 13% have no health insurance. Because people aren’t saving money, nor do they have the ability to, they are woefully unprepared. The future is scary with talk of another recession on the horizon.
What Does the Government Shutdown Reveal?
The government shutdown revealed what happens to Americans when they don’t have a steady paycheck coming in. It’s always suggested that people have enough savings to live off of for at least 6 months. If they lose their job or need to take time off, then it’s okay. Financially, you won’t suffer.
When the government shutdown, it showed what even upper-middle-class Americans are dealing with. No savings. Already behind on bills. Relying on friends and family to chip in. Applying for food stamps and other benefits. Many are even quitting their federal jobs or calling in sick to work at other places.
The reality is, Americans have become complacent when it comes to saving. As they make more money, they would rather spend it. When the tax return comes in, it doesn’t go towards paying back debt. Instead, they put a down payment on acquiring new debt. They end up setting themselves back even further.
Nowhere to Go
Thankfully, the unemployment rate has dropped to record low numbers. The problem is, that doesn’t translate to much if people aren’t saving money. If the majority of Americans don’t have much in savings, how far will they get? What about the next recession? What would happen if you lost your job tomorrow?
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The government shutdown is showing the major vulnerability Americans are struggling with right now. Thankfully, they aren’t totally out of the water, as they will have backpay once they return. Still, if they’re suffering after only missing one or two paychecks, how are they prepared for a major crisis?
The next crisis won’t be a government shutdown. It will be another major recession. The best thing anyone can do is to prepare for it. Learn how to save your money, even if times are tough. Be prepared for all outcomes, even if things are going well for you today.
