We’ve lived so long under the spell of hierarchy—from god-kings to feudal lords to party bosses—that only recently have we awakened to see not only that “regular” citizens have the capacity for self-governance, but that without their engagement our huge global crises cannot be addressed. The changes needed for human society simply to survive, let alone thrive, are so profound that the only way we will move toward them is if we ourselves, regular citizens, feel meaningful ownership of solutions through direct engagement. Our problems are too big, interrelated, and pervasive to yield to directives from on high.
—Frances Moore LappĂ©, excerpt from Time for Progressives to Grow Up

Monday, April 10, 2017

US debt problems: three reports

by Ron Horn for this website.

Debt appears to be increasing for most sections of our society: small business, consumers, and those paying off student loans. This suggests that the Fed's low interest rate policy as a way of restoring the economy is not working. It seems that most ordinary people are sinking deeper in debt in order to survive. On the other hand, capitalists in commercial and bank corporations appear to have benefited by using the free money they have borrowed from the Fed to buy up their own stock and to add other corporations to their ever expanding corporate empires.

From ZeroHedge we learn that personal and commercial bankruptcies soared last month. I suspect that the latter bankruptcies consisted primarily of small businesses.
The Fed’s monetary policies have purposefully encouraged businesses and consumers to borrow. But debt doesn’t just go away. It accumulates. By now, an increasing number of businesses and consumers are suffocating under this debt overhang in an economy that never developed the “escape velocity” needed – and hyped by Wall Street for years – to outgrow this debt. Rising bankruptcies are a turning point in the “credit cycle.” They’re not exactly a positive mile-marker for the economy.

The irony is thick: In all major sentiment surveys, economic confidence has soared since November: consumers, owners of small businesses, and corporate executives are riding high on their own ebullience. But the economic reality is tough for businesses and consumers struggling under the hangover from eight years of ultra-low interest rates.
And also from ZeroHedge we learn that "US Credit Card Debt Rises Above $1 Trillion For The First Time In A Decade".
...there was one notable milestone: in February, following modest prior revisions, total revolving/credit card debt, has once again risen above the "nice round number" of $1 trillion for the first time since January 2007....
And from World Socialist Web Site we learn that the "Number of Americans defaulting on student loans reaches 4.2 million" and that...
In addition to more borrowers defaulting on their loans, both the number of borrowers and the average amount borrowed continues to increase rapidly. The new analysis shows that the total amount of student debt owed adds up to a staggering $1.3 trillion, triple what it was a decade ago. [my emphasis]

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