Establishment Press Lectures Masses On Debt
Many observers pay attention when the NY Times and the WS Journal go an a publicity run, as this article continues. "More and more Americans are turning to debt to pay for lifestyles their current incomes can't support."
"'I felt insecure. I was an hourly-paid worker in this fancy neighborhood,' said Benjamin Baggett. Twice he used a home-equity loan to pay off his credit-card debts, and twice he ran up steep credit-card bills again. When his debts reached $30,000 and he ran out of home equity, he filed for bankruptcy in 2003. He has sold his home, and is divorced."
"Last year, 28 of every 1,000 Utah households filed for bankruptcy, twice the national average and nearly triple Utah's rate a decade earlier. In April, Thomas Monson, the (Mormon) church's second-ranking leader, said he was 'appalled' at advertising for home-equity loans that is 'designed to tempt us to borrow more in order to have more.' He repeated the words a Mormon elder spoke during the Depression: 'Interest never sleeps nor sickens nor dies. Once in debt, interest is your companion every minute of the day and night.'"
"Outstanding household debt doubled to more than $10 trillion between 1992 and 2004, after accounting for inflation. Since 1990, income for the median American household has risen only 11 percent after adjusting for inflation, while median household spending has jumped at 30 percent."
"Americans spent half the money from refinancing their homes in 2001 and early 2002 to pay for home improvements, cars, vacations and other consumer expenses, the Federal Reserve reports. U.S. households with at least one credit card owed $9,205 in 2003, a 23 percent increase from five years earlier after adjusting for inflation." Notice that credit card use went up, at a time when we were led to believe the home equity cash-out was being used to pay down consumer debt.