The role of debt in America today

Credit is more central to American financial life than ever. I mean, wages are not rising yet. Prices are rising and so people are borrowing to just get by. And you know, that's a kind of scary position to be in. Um, so thinking about that way in which, you know, people are not able to really handle and maintain that standard of living that they had just a few years ago. There's another aspect to this too that's less discussed which is income volatility. So we talk a lot about income inequality but you know for the average household you know I think about the last time I saw a good study on this about half of the average household had month-to-month fluctuations of income of 30%. And so try to imagine budgeting for that and where should you aim for? Should you aim for the top? Should you aim for the bottom? Should you aim for the middle in terms of what you spend? And for a lot of people, getting from month to month requires borrowing to smooth out that swing in income that comes from basically shift work. Um whether or not you get enough hours that month. And so you see a real gap between the salaried and the non and the hourly class in America in terms of their relationship to debt. Um and so I think a lot of our contemporary politics is based around that around based around that different experience of debt. For the one hand you have the salaried class who has access to mortgages and they can see the debt being erased by inflation and they can see assets appreciating. On the other hand you have people for whom debt is very expensive. debt is necessary to get by and they can't write it off their taxes. Um, and so it's right at the center of our conversation, but it's not just a moral question. It's about, you know, what do we want out of our economy and for whom? And this is where debt has always played an interesting role because it is rolled up into these questions of, well, why did you borrow if you didn't need to borrow? It's like, well, sometimes you do and sometimes people don't have a choice. Um and that question of why they do or don't have a choice and what kinds of choices they have has been, you know, an important part of the political discussion for a 100 years.