new. The debt load for the poorest 20% of Americans is up nearly 300% in the past 20 years. Debts of this magnitude cannot be financed normally. Remember, debts that can’t be paid won’t be paid. In other words: It’s not just the size of Americans’ debts that’s the problem. It’s who owes the money that’s the bigger concern. When the rich – a tiny percentage of the population – get in trouble with debt, it’s an economic problem. But when the poor and middle class get in trouble with debt – a huge percentage of the population – it’s a political problem. What happens when the least educated, least “vested,” members of society make up the largest demographic block... and have the largest debts (relative to income) with zero ability to pay back these debts or discharge them through bankruptcy? Forty-four million people carry a student loan. Most of them can’t afford these loans. Nor can they default. They can’t restructure. They’re stuck – many with $100,000 loans that absorb more than 100% of their disposable income. According to a report from the Federal Reserve Board, most of the voting households in our country can’t handle a $400 emergency. Millions and millions of them have a debt burden they can’t afford... a ballooning debt that has no political affiliation. And big, expensive “solutions” to this problem will play a major role in the coming 2020 presidential election.
30 years ago. Virtually all of this money was borrowed in only the last 10 years. A lot of it is not even being used to pay for school, but for students to pay for virtually everything in their lives. And these debts have ballooned to absurd amounts. The number of students with debts totaling more than $100,000 has quadrupled in the last 10 years. And then there’s consumer debt... U.S. consumers owe more than $1 trillion on their credit cards. These debts carry interest rates as high as 28% annually. It’s gotten so bad, 73% of Americans now die in debt... leaving behind an average total of more than $60,000. If you look carefully at the debt statistics of the United States, you’ll discover a terrifying change over the last 20 years or so. The poor – and especially the young and poor in our country – have no hope of being able to afford the American dream anymore. Not when the average college debt is more than $35,000 per student. Not when the average American family owes nearly $9,000 in credit-card debt. Not when the average family with debt owes more than $137,000. Not when the median price of all the homes listed for sale in America today is over $200,000. Here’s what’s critical to understand: This kind of debt burden for the poorest Americans is
The poor – and especially the young and poor in our country – have no hope of being able to afford the American dream anymore.
52 October 2018
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