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News Link • Economy - Economics USA

Debt-Serfdom Is Now The New American Norm


Trapped assets that generate no income streams in the present are not capital; the value of such non-productive assets is illusory. Strip away these trapped assets and the reality is revealed: most American households toil to service their debts.

The typical American household is insolvent: its debts exceed its assets. There is nothing fancy about calculating insolvency: if debts exceed assets, the enterprise is insolvent. By this measure, most American households are insolvent, if their real assets are marked to actual market.

For example:

Auto loan balance: $9,000

Actual market value of auto: $6,000

Credit card balance: $6,000

Street value of stuff purchased with credit card: $300

home mortgage: $250,000

Auction value of house: $200,000

Student loans: $60,000

Market value of education: Not applicable, as it cannot auctioned off or securitized

And so on.


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