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Venezuela has defaulted on its sovereign debt 11 times. Ecuador has defaulted 10 times in modern history. Brazil has defaulted 9 times over the past 200 years. Costa Rica and Uruguay have also defaulted 9 times each over the past 200 years. Italy defaulted once during World War II. Spain has defaulted 6 times. Greece has defaulted 5 times since achieving independence in the 1820s. China has defaulted twice. Russia/Soviet Union defaulted back in 1917. More recently, Russia has defaulted - but blamed financial sanctions from The West in response to the war in Ukraine. Russia has money to repay its debt, but that money is frozen in foreign banks, so they claim.
It's wrote off because the Central bank repurchase these bonds away from the Fed essentially writing it off the Fed books.
I thought I'd start a thread regarding the lives of Middle Class Americans - have they improved?
And, of course, "Middle Class Americans" is ill-defined; there is no universally agreed definition of what is middle-class (from an economic perspective), so that is up to the poster to define.
There has been a tremendous amount of change these past 4 years, and much of that change has been induced by the pandemic, and by technical innovation. The pandemic is behind us, and technical innovation continues to accelerate. Product quality and availability are excellent and it seems everything now has bluetooth.
Residential real estate values have gone bananas in most locations - so home owners have benefited while those who rent have seen their monthly costs escalate. (Ignore NYC with its unique rent control laws and regulations). Owners of office real estate are taking it in the shorts because of work-from-home. Prices of most all goods are very high but the data say price increases are stabilizing; prices of services are very high and continue to go higher as labor costs go up, up, up. The traditional "kitchen table discussion" of the prices of food, gasoline, natural gas, electricity, automobile prices, automobile insurance, homeowner insurance, daycare services, veterinary services -you name it - "kitchen table economics" sux right now.
So... do you think the lives of Middle Class Americans have improved?
I think yes for the upper middle class. And they are driving our economy.
I would say there's two answers to the OP's question:
Yes, the lives of middle income folks HAS improved for those who are homeowners who bought prior to the 2022 interest rate rise. They are all sitting on a lot of equity, have (relatively) low mortgage payments for the most part, and have generally benefitted from decent wage growth over the past few years.
No for those who bought after the 2022 interest rate increases or didn't buy. They either have had to deal with high interest rate mortgages with little to no growth in equity, or severely escalating rents in most markets. For renters especially it's tough because in most major markets rent growth outpaced wage growth, putting even more of a strain on them and making it even less likely they'll be able to afford to buy a home anytime soon, especially given prices didn't go down in most places and have started rising again combined with the the highest interest rates in a generation.
I can only speak for our middle class family and our situation has improved in the last 4 years. June 2020 we moved into a recently renovated home that I had formally rented out. My wife then sold her old house and benefited by the increase in housing costs. In 2023 I sold a house I co-owned with my brother. My half of the proceeds I used to pay off the 40k loan left on my primary residence. We worked hard to reduce our debt load and controlled our household expenses even though our household grew. Without debt we've been able to weather inflationary forces for now.
We are invested in the stock market through workplace retirement accounts, IRA/Roth as well after tax brokerage accounts. We've benefited from the rise of the stock market.
I think the challenge for most is the increased costs in housing, goods and services. My auto, home and liability insurance have all gone up. Even though my cars age, the insurance cost and property taxes go in the wrong direction.
Those who are just starting out their careers though will have a tough time to establish themselves. Even though salaries, prices have really ballooned.
Worse. We used to be able to save a decent amount of money, now that amount has been cut in half or more. Everything costs more - food, car insurance, electric, products and services. I am thinking I may have to delay retirement even further.
Most people self-identify as middle class. People don't want to say they are upper class, because that's not politically correct and clearly, unless you are very downtrodden, no one wants to say they are lower-class.
Interestingly, "working class" was usually reserved for "lower class", but apparently the Gallup organization now feels that working class is middle class. Who knew?
"Among Americans, 73% say they belong to the middle or working classes, according to an April 2022 survey from Gallup.
Additionally, 14% identify themselves as upper-middle class and 2% categorize themselves as upper class. In determining their social classes, people often don't think only about income, experts say, but about other factors like education, location and family history.
The majority of participants in a 2023 poll by the Washington Post, for instance, said that Americans need to do the following to be considered part of the middle class:
Own a home.
Have a secure job.
Be able to save money.
Have the time and money to take vacations.
Have health insurance.
Be able to afford a $1,000 emergency.
Be able to pay all your bills on time.
Have a job with paid sick leave.
Be able to retire in comfort.
No. But we have gone through some ****e. Mainly the pandemic.
Have the middle class weathered that storm better than most other countries? Yes.
Am I good with that fact? Yes.
I served on a state pandemic planning board back in the 2000's, so I knew what kind of things to expect.
We got off super easy.
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