35% of Americans Facing Debt Collectors
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EDIT: Well, not the MOST broken and fucked up... but pretty fucking broken and pretty fucking fucked up.
Summary: Born in a concentration camp as punishment for family members defecting ("three generations punishment"). Turns in his mother and brother for trying to escape. Witnesses their execution. At age 23, inspired by the idea of being able to eat chicken and pork, he escapes. Manages to reach China with no prior knowledge of the outside world.
As an American, what's fucked up to me is that in some other countries, you can actually be imprisoned for debt.
Job prospects can be threatened by many things that seem, at first glance, like they might not be related... and that may not be a bad thing in all cases. Let markets make their own decisions.
Medical care is not free, however in every country that has socialised healthcare (i.e. every developed country except the us) it is free at the point of use.
And if you're going to complain that it's more expensive because everyone's paying out of taxes, in 2012 the US actually spent more in taxes per person than e.g. the UK on healthcare[1]
Healthcare in the US is fucked up, and free markets are not the solution to every problem.
[1] http://wdi.worldbank.org/table/2.15Whether an actual free market would be better or worse than any of the current systems remains to be seen. But I'd rather have someone else try it :)
But centrally planned European health care systems are far from perfect.
I am familiar with the Swedish system and it is unable to diagnose problems because of administration. Afaik, international benchmarking comparisons supports this. The doctors at the "sharp end" don't have enough minutes per patient to find problems that aren't obvious.
People have to try to go to multiple doctors, until they find someone that isn't just too traumatized by the system to do their job.
I would guess somewhere between 0.5 and 5 percent (this has not been examined) of the Swedish population walks around with some simple to cure problem which lowers their life quality for years and decades. From myself and people I know -- knees, food allergies, lack of some vitamin/mineral, bacterial infections, thyroid problems, etc.
I have quite often heard the expression about someone with problems -- "too sick to get well". That is, that person is too ill to make enough noise that the medics have to take the energy and diagnose, just to get rid of him/her.
It's also "free at the point of use" in a free-market system. I just present my medical aid membership card and I get whatever I need; hospital, pharmacy, ambulance, etc. Yes, that is a present-day thing, not some fairytale future.
Not only that, but these "free-market" companies give out stuff for free because it is profitable to keep their members healthy. Gasp, benefits for free. They sometimes send out free traffic "officers" to congested intersections / accidents to help traffic along to prevent accidents, for non-paying individuals. Just a small taste of what a free-market system could do if left to its own devices.
I find it seriously scary how many People on the internet are totally brainwashed into thinking the free market is some sort of personified evil boogey-man and socialism is the panacea for all the world's ills. Both have their flaws, and both have benefits. How about you let people choose what they prefer?
What this works out to in reality, divested of all the religious narrative, is that free markets are better than what were called "royal patents". This goes directly back to Adam Smith's "Wealth of Nations" and SFAIK, nobody's really improved on it.
"Wealth of Nations" was an expansion on economics from his "Theory of Moral Sentiments".
I would submit that a reasonable comparison between the U.K. and the U.S. is vanishingly close to impossible. Especially with the NHS; that was formed after the War when the country was in pretty poor shape. People had trouble getting 1500 calories a day. In the US around the same time, we ensconced employer based insurance. That was fine so long as large, monolithic corporations ruled.
The people you are probably decrying the most are those who hold that the Efficient Markets Hypothesis ( see, it's not even a theory yet ) always holds no matter what. We dunno. Modulo the EMH, free markets generally perform better. The only debate is whether or not health care is a public good. SFAIK, that is unsettled, too.
I'm thinking this should only for people whose job involves handling large amounts of cash, like bank tellers, armored car drivers or casino employees. The checkout at Walmart or your local greasy spoon, not so much.
According to a friend a lot of local and international banks were quite happy to make Spanish loans since no matter what happens the debtor has to pay. In the US, a bad debt leaves your credit report after 7 years, and personal bankruptcy after 10 years. Since there is no financial reset button in Spain all the bad shit that happened in 2009 is still making waves 5 years later. The worst affected, small business owners, committed suicide or self-immolation realizing they had no escape and no future.
It seems to get steadily worse over time. I believe that the median resident's quality of life in this country is steadily falling in a lot of ways. The things that people used to believe made this country great (e.g. the first half of the 20th century) are today historical anomalies, completely foreign to the ages that came before and after.
The age of American exceptionalism is over and it's turning into just another place where everyone's backward and suffering.
Look, all across Europe there are economic problems, but America (and to a lesser extent the UK) is the only country that's actually just scrapping large parts of its own landmass into Third World substates.
The next most likely thing is another economic crisis, perhaps triggered by an oil crisis. Another war in the middle east, or cutting off the supply from Russia to Europe. Or the discovery that fracking decline rates are higher than expected.
Continued "Detroitization" is also likely - not collapse but a slow, painful decline into large areas of poverty and dysfunctionality.
I'm friends with a cop who has worked in downtown Toronto for over 20 years. He says suicide is "big right now, bigger than you think."
+ Noted because many sources of negative marks on a credit report (like a utility bill, mobile phone account, rent-to-own store, apartment lease, and so on) only report negative actions. If a person never pays late, the business doesn't report the favorable upside.
i.e. the difference between a real, and progressive VC environment and just another Wall Street magic trick
Imagine you'd like to buy something you don't have enough cash to pay up front. Assuming you're not in immediate necessity, you're faced with the choice of saving up the money and delaying the purchase or borrowing the money and buying now. If you delay the purchase you can invest or lend the money and earn capital gains or charge interest. If you buy now you have to pay the interest to someone else. This means the ultimate amount you spend is lower if you delay the purchase (your savings are augmented with capital gains or charged interest and you avoid paying the interest to someone else). The upshot seems to me that unless you're buying something out of immediate necessity you are better off delaying the purchase.
Is the central role of debt due to the fact that most shopping done in the US is done out of immediate necessity (which may suggest wide-spread poverty) or is it simply wide-spread impatience or somethings entirely different or more complex?
I recently watched a documentary about the state of debt in the UK. It was quite shocking, normal regular people that got addicted to debt, and just spent, spent, and spent. Meanwhile, the banks kept rewarding their "debt" with higher limits and more fresh cards. These people took out ridiculous sums of money, sums that they need to spend probably decades paying off simply because their salaries are so low.
I am proud to say, I am part of this 35%. I have owed $15 to a hospital for a long time. I also owed a bigger bill for a long time. Despite having the money. We moved, lost track of correspondence, had life happen to us etc.
I'm not sure, however, which employers reject you on such bases. When I worked at a hospital, we had background checks. At my present job, no such thing.
Could also blame the paperwork and complications we like to create for ourselves so some middleman, middle-company, or politician get their piece.
I guess you could call that some kind of inflation too, but it's pretty self-inflicted.
With a car you have to take into account whether it can be assumed to improve your likely hood of getting a better job/getting any job/keeping your current job or otherwise make you money.
A cell phone may very well be necessary to get a job. It likely doesn't have to be an iphone, but it may be the cheapest option if you can get one subsidized, especially since it allows you not to have to pay too much money right now.
In general debt can be a very good thing iff you can reasonably expect to make more money than you did before.
Obviously people are complicit in this.
I guess it is blamed if you buy a car (luxury) and blamed if you do not buy a car (car being a symbol) case.
If 35% percent of population do something, then it is better to look for structural reasons other then "population is stupid" simplification.
Note how I don't use the phrase "population is stupid", or that the reason is "stupidity". It could be a whole host/variety of reasons for people choosing to ignore possible life events. Everything from a misguided belief in a non-existent "safety-net", conscious decision to accept the risk, or plain not even remotely foreseeable life-altering event. Somehow, I doubt 35% falls under "unforeseeable".
An example: Bob takes out a credit card with a limit of $500 and charges $300 to it. Bob makes no payments. After three months (90 days), interest, late fees, and so on have pushed the total debt to $620 and Bob's credit card issuer decides that Bob is unlikely to pay. The debt is sold to a collection agency and is written off as a bad debt on the books of the credit card company. The collection agency pays $20 for the debt (so low because Bob is, through external methods, deemed to be unlikely to pay any debts, much less an unsecured credit card) and now hassles Bob for the next several years.
At the point that the debt was sold is when most people consider it to be "in collections." You exit collections by paying the debt.