So I found this video very interesting. It discusses the problem with our middle class today, arguing that the media portrays the middle class to worse off than it really is. This video argues that the middle class can afford hummers, 50 ft boats, and spend time vacationing. All while having everyday mediocre jobs. This is a false premise also. The question that was not addressed was “You have all this, but what amount of debt are you in?”
The middle class is on this bubble of false wealth that soon will burst. Yes, middle class people are living better than they ever have, but at a much higher price. The amount of debt and the rate at which people are being charged for their debt is alarming.
Here are some stats from creditcard.com
Total US consumer debt (which includes installment debt, but not mortgage debt) reached $2.46 Trillion in June 2007, up from $2.398 Trillion at the end of 2006 (Source: Federal Reserve)
• Total US consumer revolving debt reached $904 Billion in June 2007, up from $879 billion at the end of 2006 (Source: Federal Reserve)
• The median U.S. household income is currently $43,200 and the typical family’s credit card balance is now almost 5 percent of their annual income. (Source: Federal Reserve)
• Of the households that do owe money on credit cards, the median balance was $2,200 — meaning half owe more, half less. (Source: MSN Money)
• 8.3 percent of households owe $9,000 or more on their cards (Source: MSN Money)
• Approximately 40 percent of credit card users paid their balance in full each month in 2006 (Source: Federal Reserve Bank of Philadelphia)
Considering this, debt is affecting people now at a much earlier age. The cost of education and the drive to have the latest and greatest, add to that the ease and convienence of student loans and credits, you have a growing debt among young adults.
USA Today posted an article about this and here is some of what they had to say;
Student-loan balances rose 16% to an average of $14,379; revolving debt, including credit cards, surged 24% to $5,781; and total installment debt, including student and personal loans, rose 4% to $17,208. (Comparisons are adjusted for inflation.)
Among all twentysomethings, the fastest-growing group owes $20,000 or more in student-loan debt. Though it’s a small group, its proportion has doubled in the past five years to 3%.
“This debt-for-diploma system is strangling our young people right when they’re starting out in life,” says Tamara Draut, author of Strapped: Why America’s 20- and 30- Somethings Can’t Get Ahead. “It’s creating a sense of futility that no matter what they do, they’re not going to be able to get ahead. It’s a sense of hopelessness.”
The middle class is not in great shape, and they are not in bad shape, but they are trapped in the middle class life that most long to be out of. The credit companies have exploited the middle class far too long and it is about to catch up with them. Take the recent burst in the housing market. The bad practices of exploiting the average home buyer has caught up with them and caused many companies to enter a period of distress.
The news isn’t completely wrong, nor completely right. The day of middle class is ongoing, but when it comes to an end, this nation is going to be hurt and in need of a lot of repair. Can our politicians do something to fix this now? We will have to wait and see.
Filed under: politics, society | Tagged: politics, social, society
Very, very interesting. And not at all surprising either.
It seems to be socially acceptable to have large amounts of debt these days. I almost feel like a total rebel by actually trying to get rid of my debt.
With crap like this on the rise, it’s no wonder our economy is balanced on the head of a pin. Maybe I should sell my stock.
yea, i have debt and it really stresses me out. I can only imagine somebody with a family and how much it stresses them out. Also, the average consumer spends 110% of their annual income i have heard as well. I could say that it is the cause of aggressive marketing and the view that if you don’t have possessions you are nothing. But in reality it is each of our own faults. Budgeting is hard