The Squeeze
by digby
I’ve long felt that this was one of the most potent political issues that nobody ever talks about. It was the main reason why I thought those Democrats who supported the Bankruptcy Bill were prostituting themselves so cheaply when you considered the stakes for ordinary people — and the political bounty for those who have the imagination and the will to take it on:
In a survey of 1,000 adults, we find a public widely aware of the problem of growing household debt and overwhelmingly supporting solutions to this issue. The public’s concern over this issue results from perceptions of an economy performing unevenly, from perceptions of rising costs of living, and for a surprising and pressing number, from first-hand experience with excess or unmanageable debt. Despite the prominence of pay-day loan artists and other debt merchants in low-income neighborhoods throughout the country, the public does not see this is as a “lower class” problem, but a growing threat to the American middle class and the American dream.
Several lenders draw intense criticism of the public, including pay-day lenders, car finance companies and credit card companies. The practice of universal default—where credit card companies can raise your interest rates even if you never missed a payment, based on your behavior in other areas—is near universally condemned by respondents in this study.
At the same time, the public does not discount the importance of individual responsibility when it comes to solving this problem. More so than the lenders or even the economy, respondents hold individual borrowers responsible for the debt problem, and, naturally, the public responds enthusiastically to solutions that attempt to educate borrowers and improve financial decision-making at the household level.
This is one of those water cooler issues, like health care, where you hear tales of woe from everyone who isn’t making a healthy six figure income. (And I suspect that there are plenty of those too who have similar problems.)
Household debt is crippling people in a stagnant economy where nobody is really getting ahead. With the housing market finally coming back down to earth this is going to be a big issue for a lot of ordinary Americans. I know a bunch of them personally.
Key Findings
* The public recognizes the seriousness of the debt issue. Nearly half describe household debt on items like credit cards, car loans, home mortgages and payday loans a very serious problem in this country and 82 percent describe it as at least a somewhat serious problem.
* By a whopping 79 to 19 percent margin, the public insists this is a problem for middle class families, rather than a problem primarily for lower income families.
* The public is more worried about falling into debt, particularly through medical bills, than about being the victim of a terrorist attack or natural disaster.
It isn’t taxes that are keeping American up at night and it probably isn’t jobs, at least on a massive scale. It isn’t even terrorism or the war.
It’s debt. People are going to be looking for some help with this problem and one place to start would be to rein in these avaricious credit card companies who got a nice handsome payoff with that heinous bankruptcy bill. This is an issue to which average Americans can relate: greedy credit card companies who can literally raise your rates for any reason at all causing your debt to cascade from manageable to overwhelming overnight. It wouldn’t be hard to fix. There used to be laws against usury — we can just dust them off.
This would require, of course, going up against the banking and finance lobby. The votes are waiting for the guy or gal who has the nerve to take a populist stance on this. Who out there has the juice to do that?
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