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June 28, 2015

The State of Ordinary Americans' Debt

Professional photographer Brittany Powell was so burdened by debt that she filed for bankruptcy. The shame of the experience contrasted sharply with the ease of the process.
“Debt carries so much weight in your life and then you file and nothing changes. It’s a weird phenomenon, something almost that never existed,” said Powell to Slate.
The experience inspired her to create “The Debt Project,” a series of portraits and stories capturing Americans from a variety of economic classes and backgrounds burdened by personal debt.
Pictures include “Debt Portrait #1,” featuring a hair stylist over $12,000 in debt. Other subjects have much more debt, with the highest amount being $244,000.
What’s most notable about these subjects is the ordinariness of their circumstances. Many have student loan debt. Some took out loans to start businesses. Others lived off credit cards while unemployed.
The reality seems to contrast our typical image of fiscal irresponsibility and living above one’s means.

The State of American Debt

Over the past 20 years, household debt in the United States has skyrocketed.
Debt levels reached their peak in 2008 during the recession. According to the Federal Reserve, total household debt clocked in at $13,957,152. Since then, the amount of total debt in the country dropped slightly, but has been creeping back up over the past three years. In the first quarter of 2015, U.S. household debt reached $13,568,444. 
Interestingly, total consumer credit debt in the United States dropped after the recession as lending slowed down. But it rose sharply in mid-2010 and has been on the rise since. Today, credit card debt sits at $3,363,922.
Student loan debt is another major source of overall debt, and a hot-button issue lately.
Wall Street Daily’s Chief Income Analyst Alan Gula reported recently that the cost of tuition and fees has risen over 1,200% since 1978.
“Compare that to an increase in the consumer price index of around 280%. And total U.S. student loan debt outstanding has now eclipsed $1.3 trillion due,” Gula wrote.
Gula emphasized that educating students on financial literacy has never been more important, due to the state of things.
If Powell’s project proves anything, it’s that large debts have become an everyday issue.
Courtesy Samantha Solomon, Editor in Chief, Commodities for Wall Street Daily (Article Archive Here)
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters. © EconMatters All Rights Reserved | Facebook | Twitter | Free Email | Kindle

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