Debtor Nation Chapter Summary

There is a widespread concern about rising levels of debt. Debt can become disastrous for those who live alone or those families who are already having problems with supporting their family. The people who might be struck by debt, they might have trouble recovering. Debt can cause Americans to lose their homes and stability they need to feed, and shelter their families. Although debt comes upon us Americans quickly, people can see debt as terrible thing to be stuck with. It has many disadvantages that can devastate to people.

Peñaloza, L., & Barnhart, M. (2011). Living U.S. capitalism: The normalization of Credit/Debt. Journal of consumer research,38(4), 743-762.

Back in 1920’s the countryside began to fall as it gave way to the Urban Sprawl. Cities were growing, and more immigrant faces were showing. Immigration was in was in a full charge, but before the population could become too large, the Quota System put an end to them. With the immigration stalled, Nativism was set upon the wall. People favored their own country, so the Fordney-Mccumber Tariff came to be. Tariffs rose to sixty percent, with prices so high, some money needed to be lent. The Installment Plan let you borrow today and wait till tomorrow, but at the disappearance of funding left the economy’s long term in sorrow. While we can forget about debt for now, let us never forgetti Sacco and Vanzetti. They were Italian immigrants on a job, but became the first suspected to rob.

The world is full of financial hardship, and American society possesses a great deal of controversy concerning lending. Unfortunately, short term lending, such as payday loans or title loans, creates a structural void within American society. According to Wikipedia, “Structural inequality is defined as a condition where one category of people are attributed an unequal status in relation to other categories of people” (wilipedia.com). When working class Americans apply for a payday, the unequal status between upper and middle class possess a bigger separation financially. The never-ending process of a short term financial fix becomes lifelong debt. Thus, middle class society becomes lower class society. Eventually, working class society will struggle to say above the poverty line. In addition to an imbalance in society classes, short term lending targets consumers who life paycheck to paycheck. In Rigging the Game by Michael Schwalbe, the author explains the reproduction of inequalities. Schwalbe discusses the different kinds of capitals human, social, and cultural (10). The three capitals unknowingly shape Americans social system. Many businesses capitalize on these capitals knowing no laws or regulation exists to stop them from capitalizing on individuals who no faults of their own were born into these unfair capitals. As a result, short term lenders possess the ability to have extremely high interest rates and outrageous fine print penalties because there is little

In the book Hamilton’s Blessing, Gordon uses economic history and theory to explore the start, rise and decline of the United States debt. Gordon opens his book by stating that this country was born in debt, and this debt has become so high that concerned individuals no longer think of it. Throughout the book, he traces the history of the national debt dating back from 1791, when the central bank of the United States was created, up to modern days. The intellectual architect of this creation was Alexander Hamilton, the first Treasury Secretary as well as a central figure who had a deep impact on the economic development of the United States. The title of the book clearly recalls Hamilton's statement that a national debt, "if not excessive,

Debt became standard across the country. Beder explains that mortgages and credit were so common that “over half the furniture, cars, and household appliances… were bought using hire purchase,” this debt was taken on to help Americans maintain or increase their status within their society (230). As a result, anyone could purchase anything and everything on credit in the 1920s, eventually leading to a catastrophic failure of the economy, known as the Great Depression.

As of 2016, the average college graduate owes thirty-seven thousand dollars in loans (Glum). As a whole, Americans owe a grand total of 1.3 trillion dollars. These are figures that grow every year, and worse, the number of people who are defaulting on their payments grows as well. The issue of the student loan crisis is serious, which is why potential solutions are now being discussed. Presidential candidates for the election of 2016 have discussed solutions that range from Hillary Clinton’s debt-free college plan to Bernie Sanders’ free tuition plan funded by taxing Wall Street, while numerous scholars and business intellectuals have suggested amending the bankruptcy code to allow for discharging student loans as a solution to the crisis (Josuweit). In this essay, I will primarily discuss the numerous but limited ways amending the bankruptcy code can alleviate the crisis, and then I will offer alternate solutions to supplement the aforementioned solution.

“Three out of every four radios were purchased on the installment plan, 60 per cent of all automobiles and furniture.” (Document H) So many Americans were installment buying and gathering debt even though sixty percent of Americans were living at, or below the property line of two thousand dollars. (Document K) Since consumers were unable to pay off the debt the companies inevitably lost money.

Our nation faces many problems, and has for many years. Today’s generations, and especially the mainstream media, seem most concerned with social issues such as abortion and same sex marriage. While these issues are important, our economic situation should receive more urgent attention. Americans are desperate for better days, but lack a meaningful understanding of how our financial system works. Almost 100 years ago, the creation of the Federal Reserve Banking System was instated. One could argue that this system is the base of why we are 18 trillion dollars in debt, and rising. The Federal Reserve Banking System has contributed

We hear about the debt almost every day: news talks about it, politicians argue about it, even President Obama gives speeches on it. So what is the significance behind it? In this article I am going to explain briefly what the national debt is, how big it is, and what it has to do with us.

When banks began asking for payments from the people who had been loaned money, many “…farmers and business men who could not repay declared bankruptcy…” (Foner 366) “The depression lingered for two years. It was the first of several severe downturns that would tarnish America 's otherwise vigorous economy throughout the 19th century.” (Reynolds)

The National Debt consists of the total debt accrued by local, state and federal. Public debt is essentially the federal debt, thus compiling the staggering number that already exists. The debt deficit to me is astonishing. Currently, the total public debt in the United States, as of December 16, 2015, is $18,788,138,221,346.49. This includes $13,600,726,418,253.26 debt held by the public and $5,187,411,803,093.23 by intergovernmental holdings (usgovermentdebt, 2015). High GPD is not anything new to the United States. The all-time high was 121.70 percent ($18827323.00) in 1946 and a record low of 31.70 ($253400.00) percent in 1974 (United States Government Debt to GDP, 2015). The way we are spending, and the debt we are accruing, it would

“The average American owns 3.5 credit cards and $15,799 in credit card debt… totaling consumer debt of $2.43 trillion in the USA alone.” (Beckner). Debt forces many people into depression and worrying lives. People struggle to discover happiness through financing goods, but struggle even more to find a way out of debt. Through consumerism, people lose their finances in department stores, car dealerships, and much more. Most of the possessions people buy with credit cards become impractical within a few months. The void they search for is never really filled. Consumerism is just a way to get the economy going, without thinking of a person’s individual finance

Throughout most of the country’s history, the United States’ federal government maintained a reasonable level of national debt. For example, the total national debt in 1981 was $998 billion. Since then, however, the government has generated significant budget deficits, and the level of debt has risen to $16.7 trillion in 2013 (Calleo, 39). Budget deficits are caused

Currently, there is a lot of controversy surrounding mini-banking and subprime lending practices, which include “payday loans” and high interest credit cards, because some feel these financial practices are not fair. The purpose of usury laws is to place a cap on excessive interest rates. It has become commonplace for many unsavory lenders to take advantage of current laws, which charge on excessive fees and rates, all in the name of profit. According to Elizabeth Warren, the government should return to usury laws, laws that go back to biblical times, and colonial times, where strong usury laws were in place. In 1979, a new law was discretely changed allowing financial companies to remove limits on rates. (Maher & Warren, 2010) By examining the strengths and weaknesses of usury laws, from a consequentialism and contractarianism perspective, we can see how there needs to be a balance in how companies engage in lending practices.