The Faces of Americans Living in Debt
November 5, 2020 12:31 PM   Subscribe

(New Yorker article) [A] good deal of the power in the new book “The Debt Project: 99 Portraits Across America,” by the photographer Brittany M. Powell, comes from a kind of transgressive mundaneness. Powell set about photographing ninety-nine Americans who owe money ... and asked them to handwrite accompanying text about how much they owe, and to whom.

Previously on the Blue:

If debt is invisible, how do you photograph it? : Inspired by Flemish portrait paintings, in which the wealthy would have themselves painted with all their worldly possessions around them, photographer Brittany M. Powell realized that, by photographing indebted people in their households, she was also capturing their debt.

Debtors of the World, Unite! Debt’s ubiquity is a burden, but also an opportunity. "Millions of debtors, isolated, are owned by the banks. But if you’re part of a collective that owes $14.15 trillion, you all own the banks."

The Face of Student Debt: Natalia Antonova stopped paying when she realized that it was the loans or her child.

One-Fifth of Detroit's Population Could Lose Their Homes: Many families could stay put for just a few hundred dollars, if only they knew how to work the system.
posted by MiraK (14 comments total) 18 users marked this as a favorite
 
Wow many of these hurt to read. If you have $30k in credit card debt that you are "paying off slowly" then you will never pay it off; the interest will always drag you back under. Does that person realize this? They said they got that by paying for college on a credit card - do they mean living expenses, I wonder, or did they do this instead of taking out student loans? Maybe it's a better way - there is some hope, at least, of getting out from credit card debt by bankruptcy, but I don't think you can discharge student loan debt that way.

So many of these people tried to better themselves and advance their education and ended up with this......how the hell are you supposed to service $70k of loans as an art therapist?
posted by thelonius at 1:13 PM on November 5, 2020 [4 favorites]


re: student loans, Australia's system seems fairly reasonable: university fees are regulated, the federal government allows students to defer payment of fees with a special kind of student loan. The balance of the loan accrues no interest, but is indexed by the cost of living, that is, unpaid balances increase in line with the consumer price index for an effective 0% real interest rate. There is no requirement for a former student to ever repay this loan unless their income exceeds a particular threshold, after which repayments are taken out of income -- starting from an additional 1% income tax and ramps up to an additional 10% income tax for individuals with high incomes.

For a patch in the mid 70s-80s Australia briefly had free tertiary education, but that was rolled back as being unsustainable. The current student loan & repayment scheme has been roughly in place for the last ~30 years, although course fees have been ratcheting up in recent years
posted by are-coral-made at 1:55 PM on November 5, 2020 [2 favorites]


I'm a patent lawyer, but I've done a bit of pro bono work on consumer bankruptcies (these are for people who can't even afford the few-hundred-dollar filing fees, let alone the couple thousand a regular private bankruptcy attorney would charge).

One of the requirements of the bankruptcy process (for all consumer debtors, I believe) is to complete a financial education course. (Those are also run by for-profit companies, and they seem to be like the driver-education courses you have to take to get a break on a speeding ticket -- short on education, long on "you can't proceed to the next page unless you've been looking at this one for 38 seconds.")

Anyway, I imagine this is the sort of education people should get before being allowed to have a credit card. (Suppose the CC companies made it a condition of opening an account, perhaps in exchange for better treatment in a subsequent consumer bankruptcy?)

Too many people -- inexplicably -- have no idea that if they get some Nice Thing by charging it on their card, they must somehow pay for it later. Of course, everyone here understands that, but it boggles my mind that some people can apparently rationalize getting stuff with no thought to paying for it, maybe because all their friends have the same stuff? It just doesn't make sense to me.
posted by spacewrench at 2:13 PM on November 5, 2020 [3 favorites]


Coincidentally, I've been watching a bunch of David Graeber videos lately. He points out that debts between friendly equals are always forgivable or renegotiable. It's when there's a massive power imbalance between creditors and debtors that we insist that debt is an unchangeable moral obligation. That's when we insist that debtors become slaves (sometimes figurative, sometimes literal) to their debts.

He also points out that many revolutions are triggered by too much debt, enforced too harshly.
posted by clawsoon at 2:16 PM on November 5, 2020 [11 favorites]


Too many people -- inexplicably -- have no idea that if they get some Nice Thing by charging it on their card, they must somehow pay for it later.

Well, it's also easy to delude yourself that it won't be too hard to pay for Nice Thing later. I have certainly done that, and gotten into debt trouble because of it. I was never in a state of thinking "I won't have to pay for this later" but instead I wildly overestimated my willingness to actually slash my spending later so that I could pay off my debts before they really got out of control.
posted by thelonius at 2:18 PM on November 5, 2020 [6 favorites]


I recently (like just last month!) got out of debt (minus about ~$1,000 on a credit card that I pay way more than the minimum on every month). My credit card debt was a combination of dental work, auto repair work on a series of really crappy cars & being furloughed and losing 20% of my (already very low) salary in 2009. And then I had student loans (which, all things considered, weren't that much).

I was only (only?) $40,000 in debt when I made a plan to pay it off at some point last year (I also had a car payment so my total debt was maybe $45,000-47,000).

Do you want to know my secret of how I was able to pay off my debt? I got a job that paid me a lot more. That's it. That's the secret.

I absolutely understand that's not something everyone is able to do which is why I always want to be clear about it. But so much financial "advice" ignores that the answer for so many people is just to make more money. Instead, we're told if you just stop going to Starbucks, you'd be able to get out of debt (except, say you buy a $5 coffee drink every single day of the year, that's $1875. That's basically nothing in terms of the debt a lot of people face).

I am tired of debt being treated like it's a major moral failing when our economy is set up in such a way where often people have no choice but to be in debt. I had to pay for car repairs because I had to get to my job (that didn't pay me enough). (And things like "why didn't you live closer to your job/take mass transit/etc./etc." assume there's affordable housing near my job and it's accessible by mass transit, etc. etc.).

Did I sometimes use credit to buy some small indulgences? Sure. I admit that and I know those things did add up. But I also know what it's like being miserable and unhappy because you're broke despite everything you're doing not to be. For me, it was never "Let me buy that fancy expensive thing so I can keep up with my friends" as much as it was "This $20 T-shirt will make me feel OK for a little bit and I'm already in so much debt that it doesn't really matter."

I am planning on saving for a down payment on a house (or just ... save, I guess). And yeah, houses are another kind of debt, but ... well.
posted by edencosmic at 3:03 PM on November 5, 2020 [32 favorites]


well said, edenscomic
posted by thelonius at 4:35 PM on November 5, 2020 [3 favorites]


ah sorry I failed to see I misspelled
posted by thelonius at 5:16 PM on November 5, 2020


Certainly if most jobs paid more, it would be less likely so many people would be in debt. I’d love to have a job that paid more than $[redacted].
posted by computech_apolloniajames at 6:46 PM on November 5, 2020 [2 favorites]


I was going to make a comment but I cannot afford a New Yorker account.......
posted by IndelibleUnderpants at 9:42 PM on November 5, 2020 [1 favorite]


I was trying to find out what kind of debt people have in various countries, because the plain old "household debt as percentage of GDP" says little about how much people struggle to stay on top of it. There's a big difference between credit card debt and mortgages, after all.

Even similar categories of debt can be wildly different, it seems like. Here in socialist hellhole Norway, we also have student loans even though our higher education is free. You still need to pay your living expenses and buy some books and stuff. However, student loans are low interest, forgiven if you work for a while in less-desirable parts of the country, stricken if you happen to die or go personally bankrupt, and no interest accrue in case of financial hardships and some other cases like pregnancy / maternity or even while incarcerated (cue gasps from the US audience). And my impression is that in the US the student loans have pretty harsh terms and conditions.

During the course of my searching I also noted that the US has a Gini index that's wedged between Haiti and the Ivory Coast. That's certainly something.
posted by Harald74 at 3:56 AM on November 6, 2020 [3 favorites]


Do you want to know my secret of how I was able to pay off my debt? I got a job that paid me a lot more. That's it. That's the secret.

Yeah, that's what's worked for me. That was why I hung on to a terrible job in 2019 - I was on an aggressive debt-paydown plan, and it was consistent income that would let me do that. It was killing me, though, so I finally realized it wasn't worth it and got myself into a job this March that's a major improvement all around, including financially.

That debt was racked up slowly starting in 1999, when the dot-com bubble burst, and then accelerated a bit in 2001 when work in NYC slowed for....obvious reasons, and then accelerated more in 2008/9. I went through phases of temp work and only getting part-time work, and had to take out loans on my credit card to make ends meet. My job situation didn't start really stabilizing until about 2016, by which time the credit card debt was in 5 figures. I started paying it down as aggressively as I could.

But that came at its own cost of not really living, you know? I almost never go to restaurants, I almost never go to the movies. It's all been because every last cent of disposable income went to paying the debt down so I could get rid of it faster. The boost I got in March largely helped me to occasionally go treat myself to a burger or something. And next week, on the 15th, I will be sending in my very last debt payment and will be free.

...I was recently approached by someone in my building to ask if i'd be interested in co-purchasing my building and going co-op. Doing the math, I wouldn't be able to afford the mortgage costs without a hefty raise - but I'm also somewhat reluctant to go right back INTO debt so soon after having finally come OUT. It's like, lemme at least have a year without that millstone.
posted by EmpressCallipygos at 4:49 AM on November 6, 2020 [7 favorites]


There's ways to fall into debt from bad decision making, and ways to fall into debt from bad luck. For the bad decision making side of things, it also isn't helpful to frame this as a failing of the individual -- a lot of the consumerist capitalist system is financially predatory and out to trick you into making bad decisions. Not everyone is exposed to financial education or good financial role models. There are opportunities to make bad financial decisions with lasting long term consequences at a young age. Many young people are not able to make good long term / short term tradeoffs. It's easier to make better decisions if you've got access to more resources and more time and sound advice -- if you're already relatively well off.

The consumerist capitalist world is out to get you: universities will let people who aren't independently wealthy saddle themselves with debt studying things with no market demand and no career prospects. Banks will happily let you borrow a huge mortgage to pay for much more house than you need provided they think there's a fair chance you can pay the debt off. Banks will happily let you run up a debt on credit cards or unsecured personal loans in order to spend money on non essential expenses.

As a rule of thumb, there are uses of debt that are financially "healthy", and uses of debt that are financially "unhealthy":

Financially unhealthy uses of debt:
* buying unnecessary consumer goods -- e.g. a top of the line new smartphone, more house than you need, new cars
* buying unnecessary consumer experiences (e.g. taking a loan to pay for a holiday or a fancy wedding)
* making financial investments where the expected return on investment is less than the cost of the debt
* buying education that is not likely to pan out into a sustainable career that can generate enough income to pay off the loans

Financially healthy uses of debt:
* dealing with unexpected emergency situations where it's the best (or only) alternative on offer
* buying or repairing essential tools or services required by your business, where your business generates enough profit to cover the expense of the debt -- e.g. if your "business" is working as an employee and you need your car to get to work, getting your car fixed falls into this category.
* making financial investments where the expected return on investment is greater than the cost of the debt. This could be some real estate investments, or some investments in education.

Once you fall into debt then you're caught fighting against the tide of the positive feedback loop of interest expenses causing the debt to grow, unless you do something. But conversely, in our capitalist world, if you manage to accumulate a surplus of wealth, and invest that wealth, then you've got that same positive feedback loop working for you, where your returns on investment cause your wealth to grow.
posted by are-coral-made at 3:02 PM on November 6, 2020 [2 favorites]


David Graeber again:
In the real world, how debt is distributed has very little to do with fiscal responsibility. It's mainly about power. The wealthy have a million ways to wriggle out of debt. The debt always gets passed off on those least able to pay.
posted by clawsoon at 3:56 PM on November 6, 2020 [6 favorites]


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