Saving More

Tyler Cowen discusses how the government shut down discussion brings to light an issue: Americans don't save enough.

Indeed a higher savings rate is possible, and not just for the wealthy. Most Mormons in the U.S., for example, manage to tithe at least 10 percent of their incomes. This suggests it is possible to curtail one’s consumption without losing the best things in life. Mormons also tend to have especially large families, making tithing all the more difficult. If Mormons can tithe so much, is it so impossible for the rest of us, including government employees, to save more?

Just in my own life, probably 50% of my expenditures could be accurately described as "wants" versus "needs." If you're an adult with other people relying on you, ie family, etc., it's ridiculous to be living paycheck to paycheck. I'm sorry. It just is. Obviously people get in difficult situations and Cowen rightly points out --

To be sure, in any individual case we should be reluctant to criticize someone for ending up with low or zero savings. It’s hard to know the full details of any person’s life, and an unexpected catastrophe or medical emergency can wipe out even the most conscientious savings plan.

But the larger point remains, you should be ready for "black swan" events like losing a job, a medical emergency, etc. And as far as major events go, a government shutdown and losing 1 month of pay is pretty small. Most people in life will suffer a much worse event - a debilitating illness, accident, sudden job loss, a career gone, a spouse dying, a divorce, a sick child, a fire, etc.

Most of the outrage over the employees and government shutdown is what everything is about these days: a reflection on people's feelings toward Trump.