Why Is Everyone Talking About Debt These Days?
In the past few years people have been talking about debt nearly nonstop. Charts and studies have been erected to monitor even the slightest movement in personal debt. Everything from credit cards and personal loans to even utility bills has been dissected and likened to how we spend money as a country. But why is debt on everyone’s tongue? While it is a very important part of our lives (individually and as a nation), before the last decade of life it wasn’t mentioned nearly as much as it is now.
One reason for the increased attention debt receives these days is due to the housing crisis back in 2008. As an institution that had never failed before, it was hard to believe that the housing market would do anything other than what it had been doing for years: going up. The idea was that since the housing market constantly grew due to the people constantly paying their mortgages, the housing market would never fail. Once the market failed, many banks and individuals ended up losing money, jobs and their homes.
Debt has always existed, but once the housing market crashed the microscope became further fixated on financial obligations. It would have been akin to a strong wakeup call to all Americans in dealing with debt. Having the debts that you allow to pile up on you will result in history repeating itself. And the fact of the matter is that history is slowly beginning to repeat itself. Since the movement of credit products has shown, in the past, the ability to fail, the idea would be to prevent this from happening. Unfortunately, with a high level of delinquency and payment defaults in any one area of credit, a major scale financial crisis may seem unavoidable.
What Can Be Done About This Debt?
The main issue with the crisis of nine years ago was the inability to see the effect of what would happen if the debt remains unpaid. Now that we understand what the effects can be, we can be better prepared for the future. Many of the same markers that have shown themselves during and around the crisis in 2007 – 2008. The good thing to note is that we have grown diligent in the face of debt related crisis. To be plain, the idea of another financial crisis is possible, but not a certainty. While the markers do point to the same outcome, it isn’t set in stone. However, it isn’t the worst thing to tackle your debts before they get outta hand.