Given a Shovel, Americans Dig Deeper Into Debt
July 21st, 2008Via: New York Times:
Years of spending more than they earn have left a record number of Americans like Ms. McLeod standing at the financial precipice. They have amassed a mountain of debt that grows ever bigger because of high interest rates and fees.
While the circumstances surrounding these downfalls vary, one element is identical: the lucrative lending practices of America’s merchants of debt have led millions of Americans — young and old, native and immigrant, affluent and poor — to the brink. More and more, Americans can identify with miners of old: in debt to the company store with little chance of paying up.
It is not just individuals but the entire economy that is now suffering. Practices that produced record profits for many banks have shaken the nation’s financial system to its foundation. As a growing number of Americans default, banks are recording hundreds of billions in losses, devastating their shareholders.
The New York Times does a great job blaming the victim, to color the article you quote and then does a little reporting. What it doesn’t mention is that the general U.S. price level (CPI) has risen 6.2 times because of monetary inflation since 1968. That saved 1968 dollar lost over 80% of its purchasing power —rational decision: save it or spend it?
‘Given a Shovel, Americans Dig Deeper Into Debt’
“Just two generations ago, America was a nation of mostly thrifty people living within their means…” and “By contrast, the nation’s savings rate, which exceeded 8 percent of disposable income in 1968, stood at 0.4 percent at the end of the first quarter of this year…”
Bet the depression will be our fault too?