The Debt Economy Is Eating Everyone Alive
The Debt Economy Is Eating Everyone Alive
jacobin.com
The Debt Economy Is Eating Everyone Alive
For people locked out of homeownership, “Buy Now, Pay Later” has become a way to finance basic expenses — with future income that may not actually materialize. The Trump administration, meanwhile, is busy protecting the lenders.
By doing mass debt strikes where everyone stops paying at once.
It's like that meme about if you owe the bank a thousand dollars it's your problem but if you owe the bank a billion dollars it's the banks problem.
Everyone stopping payments at once in aggregate is the billion. Suddenly the lender is insolvent real fast and they are spending money to chase the money they are owed on top of it.
So who are the most vulnerable lenders?
According to the article, Klarna posted a nearly $100M loss in Q1. So I suppose people just keep doing what theyre doing, at the expense of their own credit I guess
Characterizing this as the lender’s fault is kind of silly though. Were talking about people buying door dash and cochella tickets on 0% interest credit. If anything its surprising the lenders are stupid enough to offer that in the first place. If you buy door dash on those terms and dont pay it back on time, its hard to see that as predatory in any way. Thats not remotely similar to a subprime loan on a car or a payday loan
I've read about people increasingly using these services not for leisure expenditures like delivery and concerts, but for basic needs like groceries. Salon said 25% of users are in this camp, and meanwhile 78% of Americans live paycheck to paycheck.
Yes, you're right that there's an element of personal responsibility in taking on debt. But the fact of the matter is that most people are pretty low in financial literacy, and also that declining real wages increasingly put people in a situation of using debt to pay for basic needs.
We can however blame the lenders for continuing the dumbass practice of Collateralized Debt Obligation bundling after 2008 though. With these damn loans that's really playing with fire if they start carrying down onto people's mortgages as credit card debt did in '08. Which seems likely given I think the Wall street types think Trump will give them a bailout instead of being a fucking saditst to people who he perceives as having wronged him.
buy not repaying debts owed.
Crazy opinion. But you can simply not buy uneccesery shit for borrowed money.
Before anyone busts out the good old "but people buy necessities!!!"
Sometimes sure. But often not.