The US Kill Line Model
Understanding the methodology behind the financial fragility thresholds.
What is the "Kill Line"?
The "US Kill Line" is a financial metaphor originating from gaming culture, now applied to household economics in the post-2024 economy.
In gaming, a "kill line" is a health threshold (often hidden) below which a character can be instantly executed regardless of their remaining defenses.
In economics, we define the Kill Line as the Financial Fragility Threshold where a household's liquid assets and income flow become insufficient to withstand a standard deviation shock (e.g., a $400 emergency, a medical bill, or 2 months of unemployment). Below this line, financial collapse is not a slow decline but a rapid, non-linear cascade (default, eviction, bankruptcy).
Core Metrics
1. Distance to Death (DTD)
Adapted from the Altman Z-Score for corporate bankruptcy, we calculate a household's DTD in days.
- Formula:
(Liquid Savings + (Monthly Surplus * Reliability Factor)) / Daily Burn Rate - Meaning: How many days can you survive if your primary income stream stops today?
2. The ALICE Threshold
We utilize data from United For ALICE (Asset Limited, Income Constrained, Employed).
- Survival Budget: The bare minimum cost to live in a specific county.
- Stability Budget: The cost to live with a safety net (savings, health insurance). The "Kill Line" is often found just below the Survival Budget.
3. Inflation & Erosion
We adjust all "safe" thresholds dynamically using real-time CPI (Consumer Price Index) data from FRED (Federal Reserve Economic Data). The line moves up as purchasing power moves down.
Data Sources
- FRED (Federal Reserve Economic Data): Macro indicators for inflation and interest rates.
- MIT Living Wage Calculator: County-level baseline costs.
- Census Bureau: Household income distributions.