by:
Matt Stoller, Naked Capitalism
| News Analysis
I went through the Federal Reserve’s Quarterly Release on Household Debt and Credit released
today, and there were two notable trends. One is that the amount of
consumer debt is declining, but that delinquency rates are stabilizing
above what they were before the crisis. And the second is in this
graph, which is that the number of people subject to third party
collections has doubled since 2000, from a little less than 7% to a
little over 14% of consumers. Ten years ago, one in fourteen American
consumers were pursued by debt collectors. Today it’s one in seven.
The experience of debt collection can be chilling, as this 2007 ABC News report suggests.
Consumers around the country have taped threatening phone calls from collectors who have called in the middle of the night, used abusive language and have threatened to have people fired from work or thrown in jail. All of these tactics are illegal under federal law.
One of the characteristics of the new social contract ushered in by
both George W. Bush and Barack Obama is the increasing power of
creditors to govern outright, from tax farming by banks to the use of
credit checks to access employment opportunities.
There are now thousands of people
legally jailed because they aren’t paying their bills, ie. debtor’s
prisons have returned. Occasionally elites let it slip that this is not
an accident, but is their goal – former Comptroller General David
Walker has wistfully pined for debtor’s prisons overtly (on CNBC, no less).
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