A stunning report in the Washington Post 1 in 3 U.S. adults have 'debt in collections'
An estimated 1 in 3 adults with a credit history -- or 77 million people -- are so far behind on some of their debt payments that their account has been put "in collections."
That's a key finding from a new Urban Institute study. It examined non-mortgage debt, including credit card bills, car loans, medical bills, child support payments and even parking tickets. The debt in collections ranged from as little as $25 to a whopping $125,000. But the average amount owed was $5,200.
"It’s a stunning number," said Caroline Ratcliffe, senior fellow at the Urban Institute and author of the report. "And it threads through nearly all communities."
Researchers relied on a random sample of 7 million people with data reported to the credit bureaus in 2013 to estimate what share of the 220 million Americans with credit files have debts in collection. About 22 million low-income adults who did not have credit files were not represented in the study.
We've never fully recovered from the financial crisis that began in 2008. In fact, the The Typical Household, Now Worth a Third Less
The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.
For households at the median level of net worth, much of the damage has occurred since the start of the last recession in 2007. Until then, net worth had been rising for the typical household, although at a slower pace than for households in higher wealth brackets. But much of the gain for many typical households came from the rising value of their homes. Exclude that housing wealth and the picture is worse: Median net worth began to decline even earlier.
The song 16 tons is one of the most covered songs in history, but it was Tennessee Ernie Ford who first topped the charts with it
But we can't blame the company store anymore, it's the government's doing as Monty Pelerin writes in Government Is Destroying our Standard of Living
The Great Recession had a serious impact on all percentiles in the graph above. All are down from 2007. Liberals want to focus on how much better the "rich" are doing versus how poorly the "poor" are doing. The implication is that the rich are getting richer at the expense of the poor. This ideological nonsense is politically convenient and diversionary. There is no fixed pie where someone who gets a larger piece does so at the expense of someone receiving a smaller piece. That is only possible where government determines who the winners are….Posted by Jill Fallon at July 29, 2014 1:06 PM | Permalink
The distribution at the top is not independent of government. The more government controls the economy, the more important it is to "have a friend in government." It used to be what you knew enabled you to succeed. Today, it is increasingly who you know. ….
Were the economy and its components growing at a real rate of 2 - 3%, then median net worth presumably would be growing at a similar rate….American's median net worth has been reduced by 60% to 70% from what might have been expected. How is this possible?
There are several reasons. I would argue that most of the blame goes to government:
Government is taking a much bigger share of the economy.
Government understates inflation which results in an overstatement of real GDP.
Taxes are higher, especially on capital gains which are unadjusted for inflation and taxed as if they were true gains.
Government interventions have destroyed the economy's ability to grow.
Government transfer payments have reduced the workforce, spreading a reduced output over more people.
Government's encouragement of the use of debt has created behavior not in the best interests of unsophisticated citizens.