US$1.9 billion lottery in the United States exposes the population’s financial distrust

It’s easy to scold Americans obsessed with the Powerball lottery jackpot, which recently reached a world record $1.9 billion. Yes, the chances of being struck by lightning are much higher than winning the lottery. But the need to escape financially is understandable.

The fall has not been particularly pleasant in terms of financial confidence in the United States.

While jobs are still plentiful and the Biden administration maintains an upbeat tone, there is a growing sense that serious economic problems lie ahead. Rumors of recession are inescapable. Interest rates continue to rise. Markets are falling. High inflation causes the money in your bank account to lose value. Consumer confidence is at a low. There is a war and an energy crisis in Europe. Fears over COVID variants and a new flu epidemic add to tension. As we approach the midterm elections, only 19% of Americans say the economy is on track.

With their 401(k) plans offering little relief, many Americans have turned their attention to the Powerball jackpot, which has been growing for months. Although the chances of winning the top prize are one in 292.2 million, Americans are trying to find out how to receive their prize if they win: the option of paying in cash or an annual fee. Worrying about such a pleasant problem—as absurd as it may seem—is itself a form of financial escapism. And, as evidenced by a viral tweet about how to maximize paid vacation days, people are hungry for any optimistic alternative in these dark times.

Interest in the Powerball jackpot is so high that minor problems with ticket machines are highlighted on local news broadcasts, and residents in the five Powerball-free states feel serious envy.

Winning the prize would allow winners to leave their jobs and become much less vulnerable to economic forces beyond their control. But failing that, many people are still interested in work strategies that can help them take a little more control over their lives, especially if the widely predicted recession leads to mass layoffs (watch out, remote workers) and the employers begin to regain the advantage.

Consider Twitter user @afashola_, whose October 24 tweet racked up 35,000 retweets and nearly 200,000 likes. Their strategy revolves around taking vacation days right after or before company holidays. If applied correctly, according to the tweet, it would be possible to get 46 days off in 2023.

Many commentators have pointed out flaws in this strategy, but the unexpected popularity of the tweet suggests that employees are eager for more control over their work-life balance.

Powerball craze amid falling confidence

The Americans wouldn’t do without a push. The middle class has taken a hit in recent months. As of mid-October, the average wealth of the middle 40% of income earners in the United States had fallen 7% since March, according to new data made available by Bloomberg and produced by economists at the University of California, Berkeley. This kind of decline in wealth — estimated at about $27,000 — hasn’t been seen since the 2008 global financial crisis.

Additionally, activities that might have provided a sense of financial escapism in the 2010s have proven less reliable recently. Think of the cryptocurrency investor or meme stock trader whose big profits turned into steep losses.

And, not surprisingly, U.S. consumer confidence fell in the October reading of the Conference Board’s Consumer Confidence Index. THE Present Situation Index (based on consumers’ assessment of current business and job market conditions) fell sharply from 150.2 to 138.9. THE Expectations Index (based on consumers’ short-term outlook on income, business and labor market conditions) fell to 78.1 from 79.5.

“The Present Situation Index fell sharply, suggesting that economic growth slowed at the start of the fourth quarter. Consumer expectations regarding the short-term scenario remain gloomy. The Expectations Index still remains below the 80 mark — a level associated with recession — suggesting that recession risks appear to be increasing,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement.

Just 17.5% of consumers said business conditions were “good,” down from 20.7%, and 24% said they were “bad,” up from 20.9%. And looking ahead, 23.3% expect business conditions to worsen over the next six months, an increase from 21.9%.

Perhaps all this pessimism helps explain another type of escapism: nostalgia, which has recently gained traction in an unexpected place: McDonald’s. The fast-food giant, which beat Wall Street estimates in its third quarter despite higher prices, launched “happy meals” for adults designed to look like those from decades past, with almost psychedelic versions of mascots like the Papa-Búrguer and the Shake. Demand was so strong that McDonald’s employees in online forums begged customers to stop ordering the meals, which were in short supply.

The idea of ​​evoking childhood memories among older customers worked like a charm. With many top economists and CEOs bracing for a tough recession, the longing for simpler times, like the strategy for an unlikely prize, may be hard to resist.