Do Americans Know What a Massive Ripoff American Life Really Is?

I’ve recently moved to the States — shudder — for a year or two. And I’m shocked at how expensive just life is. For no good reason at all.

When I put my economist hat on, a fact becomes clear to me. American life is a gigantic rip-off, one of the world’s biggest, and that’s why America is now effectively a country of poor people, and that makes it a nation of angry, cruel, and selfish ones, too.

But I’m getting ahead of myself. Let me start over. American life is the biggest ripoff in the worldOr at least one of the biggest, in the top five, certainly. Just…existing. It costs way, way more than it should. So much so that America cannot ever move forward as a society. So, trapped in a cycle, which economists call a “poverty trap,” Americans now stay poor.

Americans don’t quite get this, though. Why would they? They’ve never lived anywhere else. So let me give you a few examples which, especially if you’re American, might be illuminating. We’ll begin with basic bills, and then zoom out from there.

How much do I pay for internet and TV in Europe? About thirty dollars, give or take. How much do I pay in America? $150. That’s five times as much. And what I get in America is way, way worse. At least half of the junk on TV is ads, I don’t get the wonderful and illuminating and sparkling stuff that European TV makes on a regular basis, from good coverage of global affairs to politics to economics to ground-breaking shows and movies. I’m getting massively, massively ripped off. Why? Let me answer, with another example.

Let’s take utility bills. They’re astronomical in America compared to the rest of the rich world, and even much of the rest of the world period. Heating, electricity, gas, water? These things can easily add up to $500 to $1000 dollars per month. That’s not even factoring in property taxes and maintenance costs and whatnot. Americans have no idea, but in Europe I’d pay maybe — maybe — half that, if even that much.

Why are these sets of bills so much bigger? Because of gigantic private monopolies. Internet and TV are monopolies in most of the country. Utilities in most states have similarly been privatized. What happens when you create private monopolies? They profiteer.

That’s a theme that runs through American life — which only gets more expensive from here.

How much does it cost to just…have a place to live? The average American rental is about $1200That’s for an apartment. Again, that’s a particularly high figure. It doesn’t cost that much to rent in Europe. In France, the the average house rental costs less than that — it’s about 800 euros, or maybe $1000 dollars.

It’s true that rents are high in cities like Paris and London, sure — but we’re talking about averages across society.

Now we’re going to pause and look at how just the bills above already mean the average American is going to be effectively poor. Not might be, not could be, but “is,” in the sense of “inescapable, iron-clad, destiny.”

The average American income is about $35K per year. That’s about $2400 a month, if you’re lucky, after taxes. What bills are we up to? $1200 for a crappy apartment. A few hundreds, let’s call it two or three, for connectivity. And another $500 or so for basic utilities. That leaves you with about $400 for the month, or just $100 dollars a week.

That’s American life. That’s why Americans feel so poor. Because they areAmerican life is a gigantic rip-offf.

The average American — after subtracting basic bills of shelter and utilities — has just $100 to spend on food, clothing, kids, medicine, all the other necessities.

Do you think you could do it? Think it’d be easy? Think it’s just some matter of “personal responsibility?”

The sad truth is that nobody can afford to live that way, at least not in a modern society. We know that because the average American doesn’t. They go into debt. Deeply into debt. So deep that the average American now dies underwater to the tune of about $60,000. They’ve spent a lifetime paying off debts that they can never fully make good on — precisely because the system is rigged against them. In what sense?

Well, we’re already at just $100 a week left after shelter and utilities for the average person. But the bills hardly stop there.

Now you need healthcare. In Europe and Canada and even Australia, with its crazy climate change denying PM, that’s free. In America? Take a deep breath, and shudder. The average annual healthcare cost is about $7500. Bang. You just went from having a $100 a week to try and live on — to being deeply, deeply financially underwater. $7500 a year is about $600 a month.

Now you’re $200 in the hole, every single month. That is how much you owe, because you cannot afford to live on what you make.

Maybe you’re lucky enough to have healthcare through your job, like most Americans. Phew. You don’t have to pay this massive expense. No, you just have to pay a…slightly smaller one. “Co-pays.” That means that even if you have “health insurance,” you still have to “co-pay” with the company which is supposed to be “covering” you. How much is that? “A routine visit to a doctor’s office, in network, ranges from $15 to $25; for a specialist, $30-$50; for urgent care, $75–100; and for treatment in an emergency room, $200-$300.”

You’d better hope you don’t get sick — at all. Because if you need the slightest, slightest bit of healthcare? Bang. You’re underwater all over again. Need to see a doctor? There goes one quarter of your monthly disposable income. Need to go to the ER because you broke a finger or got food poisoning? Boom. You’re underwater for three months, three months worth of average disposable income gone.

So what do Americans do to cope with this? If they can’t live on what they earn…then how do they live? We all know the answer to that. CreditCredit cards, to be precise. Only those charge more than 10% interest. Profits are being made — huge ones — on the fact that Americans can’t make ends meet, so they have to go into debt. Have to. The system really is rigged against them, because of course if you have to go into debt because you don’t earn enough to live on, and that debt is compounding interest, then of course you can never pay it off. Which is just where most Americans are.

How deep in credit card debt are Americans? The industry itself will tell you that the average American owes about $6500 or so, though other sources report that the average American is in debt for almost $30K, excluding mortgages — and the majority of that is credit card debt. And maybe even $6500 doesn’t sound like a lot, until you realise that for a family of four, that’s more than $25,000.

How much “interest,” by the way, does that amount to as a society? Somewhere on the order of $100 billion dollars a year. That’s more than the entire federal education budget. Over ten years? That’s a trillion dollars. Which is more than enough to, say, give every kid in America as much education or healthcare or entrepreunerial investment they’d ever need.

By now, you should be angry. The credit card industry — aka Wall St — is making $100 billion dollars a year by profiteering on the backs of Americans because they don’t earn enough to live on. But that money is more than enough to fix the problem it deliberately doesn’t solve, or go a long way to fixing it.

What is that problem? Well, why is European life so much more affordable? Because Europeans enjoy generous public goods. Healthcare? Public. Media? Public. Education, retirement, utilities? All public. They don’t get by huge, massive bills for any of those things, which are then recycled into profits, by gigantic private monopolies, that then only enrich a tiny few, and keep the rest of society effectively — deliberately — too poor to live a decent life, so they have to into debt, and the whole dumb, rotten, grotesque machine just keeps on remaking itself. No, Europeans and Canadians? They’re the lucky ones. Their lives aren’t a rip-off.

Meanwhile, in America, because profiteering means that the problem of not having enough to go around affordably never gets fixed, because of course profiteers are hardly likely to fund public goods. If that doesn’t make sense, let me spell it out. Wall St alone is making a trillion dollars every ten years off credit card debt alone. One industry, one product. That money isn’t being invested in the things Americans need — healthcare, education, retirement. One effect is, yes, it goes into billionaires’ pockets. But another, more pernicious one, is that Americans never get public goods and systems — and they stay poor because they get exploited and preyed on by private monopolies.

Americans think that Europeans pay higher “taxes.” In some overly technical sense, that’s true. But Americans pay taxes, too — only if we expand the definition to include mega-monopolies, Americans pay a far, far higher tax rate than Europeans do.

In Europe, your taxes go to fund utilities and universities and hospitals and so forth. Now just flip it: imagine that the costs Americans pay for all those things reflect the true American “tax” rate. What is it?

It’s more than Americans earn. Americans have a true “tax” rate of more than 100%, at least if we take “taxes” to mean “the costs of stuff you need to live a basically decent life, like healthcare and education and utilities and a place to live.” That is why Americans are effectively poor.

I keep using the words “effectively poor.” What do I mean? Well, that Americans are forced to live like poor people. Hand to mouth. No savings. Little disposable income. Exploited and abused, taken advantage of at their most vulnerable moments, like being charged a million dollars (LOL) for an operation. It sucks to live that way. It changes you. How? Why?

Americans are notoriously angry, hostile, aggressive, selfish people. Sorry if you don’t want to hear that — but the rest of the world will tell you it’s true. What makes them that way, though? Well, they’ve fallen into poverty. They’ve become effectively poor. And poverty will make anyone rightly angry, desperate, and afraid.

America’s descent into becoming a country of poor people goes hand in hand with its plunge into becoming a nation of idiots, fascists, theocrats, and assorted other kinds of fanatics. Poverty makes people fanatics and extremists. Maybe your church gives you a bit of money and a place to leave your kids — the price is you come to believe you’re the chosen ones. Maybe you come to hate everyone who’s not true of faith or pure of blood like you — bang, the classic Weimar descent into fascism. Maybe you just get driven crazy and begin believing whatever crazy conspiracy theory explains your woes in the way that’s the most fantastical and easiest to believe.

America becoming a poor country isn’t just an economic problem. It’s ripped America’s social fabric and cultural values and norms apart. Americans don’t like each other, trust each other. They hate and despise each other. Aggression and hostility are now norms — nobody expects anyone to be kind or gentle or nice, the way Canadians and Europeans are. Social bonds? If you’re so busy trying to make ends meet, what room is left over friendship, relationships, ties? Bang. America’s collapse into stupidity, hate, despair, and rage has everything to do with it’s decline into poverty for the average person.

American life is one of the world’s most gigantic rip-offs. It’s eminently clear if you’ve lived elsewhere — and then you live in America for a while. The sad fact though is that’s never going to be true for most Americans. They have a sense, maybe, some of them, that they’re getting ripped off. But as a whole, American society and culture has no idea. How much of a rip-off American life really is.

Words fail. When a nation is paying enough every decade in credit card interest alone to have funded good healthcare and education and retirement for everyoneforever…over and over again…what adjective can possibly suffice?

Colossal, titanic, epic? All these seem like only giant understatement to describe the utterly mind-boggling scale of this cycle of folly, violence, stupidity, ruin.

So let me say it again, so that you get it this time. I haven’t even covered mortgage debt and medical debt and so forth. I don’t need to. How much of a rip-off is American life?

America is paying enough in credit card interest aloneevery decade….over and over again…to have built a functioning, modern society for everyoneforever.

You go ahead and tell me the right adjective to describe that level of grinding, mindless death machine.

That should change, but…it won’t, and it’s not. Because in America, there’s no better business than ripping someone off with one hand, while you promise them the moon and stars with the other, and, incredibly, they cheer you on for making them poor.

Sadly, Americans still believe, more or less, whole-heartedly in the very systems and institutions which rip them off and laugh all the way to the bank — the average American still won’t support public systems and institutions like healthcare or media or education, and will choose the weird, idiotic system of private monopolies and billionaires over it, the very one which keeps them poor every time — and so the average Americans stands there, left holding the crumpled empty bag that held all their possibilities, dazed, bewildered wondering: hey, what happened to my life?

Umair
September 2021

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