A lot of people have very un-even incomes too. Traditionally those folks build up a cash reserve they draw dawn in the lean time and build up at 'harvest'; but for those starting out they almost always have used either a gift or a loan.
If you are a farmer you have to buy the seed for *at least* your first planting and you won't have income until you have grain ready for market. Some more white collar careers feature these booms and busts too. If you are sales person marketing stuff large business you might see huge swings in commission q1 when buyers have new budgets, and again in q4 when they spend due to use it or lose it policies. Meanwhile in q2-3 you have people on vacations, managers holding back spending in case of surprise expenses or shifting upper management priorities. My point is not everyone even relatively successful high earners get consistent paycheck every 2 weeks.
what is different here or appears to be, is that so many people are down the wire, and expenses are rising faster than their forward planning allowed for. That leaves additional short term borrowing to fill in the gap. The problem is the gap plus the additional interest expense leaves them with even less to store up for the next slow period. - Which brings is to the real problem for society at large
Fundamentally savings (that make return of principle certain) are pretty inefficient. That usually means capital that simply can't be employed because to do so implies some risk. So the whole economy slows down because assets must sit idle. This is why stable inflation, reliable legal frameworks, and debated negotiated policy with good forward guidance is so important. These are really the secrets to America's post war boom. Not the only factors but the things that let us take maximum advantage of the environment.
Increasingly we have been breaking these rules with one moral crisis after another, where we have abandon principle and the chickens are coming home to roost. It started with with 07/08 financial crisis response and it has been one thing after another slowly boiling the frogs until COVID hit and we really went completely bat-shit crazy, and then spent the next 3 years letting crazy ride. At this point their IS going to be a train crash. You can see it when the treasury department is trying to game the yen carry trade because they have to prevent bond yields from going nuts, but can't actually manage to pull it off mostly for lack real value to inject.
Its going to get ugly but you also can't sell. Because its going to get ugly no matter what you swap into. One thing I am pretty sure of if you have a lot cash assets you will burned badly. People need to recognize "sell the news", front running it will see you punished not intentionally but because the real estate and corporate markets HAVE to be bailed out if at all possible. The government does not want to see people turned out of their homes in mass, or empty grocery store shelves. Even if they wipe out equity values with forced stock issuance they going to be doing the injection more printed money and FED balance sheet expansion. So it is going wipe out the value of cash and nuke the return on debt at the same time. You might think the rest of the world won't let us get away with it but that is also not true. Sure Japan/China/Others can sell those bonds, but that money then must go somewhere, it could only go to the EU, where again it would have to go somewhere lest it trigger hyper inflation there, which would mean wait for it, they'd probably be back buying US bonds.. The dollar still is the reserve currency, so at least for one round here the US Treasury will 'get' to revalue it radically. I could not hazard a guess what happens after that 'singularity' nor do I know when it arrives. Might be a two weeks or 10 years, my advice to any still reading, is do that read the damn news every day because this will happen slowly then very quickly. Know your account numbers, your brokers phone number, how to make 401k withdrawls etc so you can act when it is time to act.
