Tag Archives: debt

Creditocracy or Democracy?

Creditocracy or Democracy?
The formula used to trap personal debtors today is much the same as the International Monetary Fund’s formerly controversial lending arrangements to poor countries — loan installments are made so that borrowers can service existing debts, while the principal is rolled over. With average incomes stagnant or falling, households have no alternative but to follow the same path. The likely consequence is that they end up performing a lifetime of ... Read more

The State of Lending: Debt Collection and Debt Buying

The State of Lending: Debt Collection and Debt Buying
The debt collection industry is a rapidly expanding business, with revenue increasing up to 600 percent between 2003 and 2012. Private companies buy billions of dollars of charged-off debt from banks each year. The most common type of debt purchased comes from credit cards, but debt buyers also buy student loans, medical debt and more. As the industry has grown, abuses and illegal — predatory — practices have proliferated. Companies are ... Read more

Worst. Anniversary. Ever. #TrillionDollarDebt

Worst. Anniversary. Ever. #TrillionDollarDebt
This week marks the two-year anniversary of student loan debt topping $1 trillion nationally — and another year of missed opportunities to address this growing crisis. That $1 trillion represents the second-largest personal debt in the United States. But even that jaw-dropping reality doesn’t tell the stories of millions of borrowers who are hamstrung by federal student loan policies and the lack of meaningful action to address this crisis. ... Read more

Where is the protest? A reply to Graeber and Lapavitsas

Where is the protest? A reply to Graeber and Lapavitsas
Last week, two commentaries appeared in The Guardian — one by David Graeber and the other by Costas Lapavitsas and Alex Politaki — basically asking the same question: given that we’re under such relentless assault by the rich and powerful, why are people not rioting in the streets? What happened to the indignation? The screws of austerity are only being tightened. So where are the protests? The two pieces provide two very different answers ... Read more

In each other we trust: coining alternatives to capitalism

In each other we trust: coining alternatives to capitalism
At last, an international project is starting to take shape to research and experiment with concrete alternatives, laying the groundwork for a world in which the means of production are held in common and both the form and creation of money are subject to direct-democratic control by newly empowered communities of users. Read more

Ukraine’s IMF Deal: Heading Toward a Greece-like Depression?

Ukraine’s IMF Deal: Heading Toward a Greece-like Depression?
On March 27, 2014, the IMF released the broad outlines of its terms and conditions for loans and other measures for the Ukrainian economy. What those terms and conditions mean is less a rescue of the Ukrainian economy than the onset of a Greece-like economic depression for the Ukrainian populace. The ‘IMF Standby Agreement with Ukraine’ text released March 27, acknowledges the current severe economic instability of the Ukrainian economy. ... Read more

Payday lending: the loans with 350% interest and a grip on America

Payday lending: the loans with 350% interest and a grip on America
Drive down the main streets of the more depressed cities in America, and you probably won’t encounter the logos of Bank of America, Wells Fargo or JPMorgan Chase. Instead, you’ll be bombarded by signs that read more like demands: Instant Loans Here! No Credit Necessary! Payday Advance! These billboards turn out to be a good way to find customers. People are broke: payday lending and other high-cost, small-dollar loan businesses have grown ... Read more

Welcome to the Creditocracy, Where Your Debt Piles Up Forever

Welcome to the Creditocracy, Where Your Debt Piles Up Forever
Last month, the Federal Reserve confirmed the ominous news. The decline in US household debt from sky-high 2008 levels has halted, and the figures are on the rise again – up by $241bn (or 2.1%) in the fourth quarter of 2013, following a smaller increase in the third quarter. Unlike auto loans, mortgages, and credit card balances, student debt never fell at all, and is fast approaching $1.2 tn. Economists seem to have decided that the “debt ... Read more

“Vulture Funds” Seek Dangerous Precedent In Argentine Debt Case

“Vulture Funds” Seek Dangerous Precedent In Argentine Debt Case
Argentina this week requested that the U.S. Supreme Court review a lower court ruling that would compel the country to pay more than $1.3 billion to U.S. “holdout” bondholders that the Argentine president has called “vultures.” The case is being widely watched due to its immediate, as well as long-term implications. On one hand, economists worry that the lower court’s ruling could force Argentina back into default, potentially leading the ... Read more

THE SUBPRIME EDUCATION CRISIS

THE SUBPRIME EDUCATION CRISIS
Oh dear. We appear to have what might be termed sub-prime student loans on which there are rising defaults. In fact it is possibly worse than sub-prime mortgages, because unlike mortgages, delinquent student loans cannot be written off in return for asset seizure. The borrower is stuck with the debt – possibly for life – while the lender, i.e. the US government, receives nothing. Really it is the worst of all possible worlds. Read more