The U.S. economy¶

The U.S. economy is barreling toward an economic disaster worse than the Great Depression.

https://t.co/ppU5yTJzz7 https://t.co/gz4DUUxmdK Financial capital is so thoroughly out of ideas for how to inflate short-term profits that they are willing to invest in a form of housing gambling that makes "subprime mortgages" look like penny slots. A ticking time bomb of insolvency. Consumer credit has long been a staple for counteracting the effects of depressed purchasing power on consumption habits: workers might be less able to afford to keep up normal spending, but with credit, they can defer that spending to a theoretical financially stable future. Even if they can afford immediate expenses, they're incentivized to use credit anyway, so they can build up "credit-worthiness," allowing them to make larger purchases, such as homes. This is valuable to the lender because enough people end up paying interest to make a profit. In seeking profits this way, lenders always take on a degree of risk. They balance the potential of some people never being able to pay back their debt against the payout of those who pay them back with interest. The ideal borrower is one who consistently makes payments with interest. That interest is essentially money created out of nothing, siphoned from the borrower, who must continue to toil to pay for not only their necessary expenses, but the interest on being able to pay for them. In other words, the reason rent credit cards exist at all is because lenders believe they can make a profit on them, which necessarily comes from borrowers being occasionally unable to pay their full balance. It's a profit stream engineered around the promise of financial strain. As housing costs continue to skyrocket, far outstripping wage growth, "I always pay the full balance" becomes rare, which is the precise goal of this venture. The second you fall behind, your rent essentially increases by 28% overnight -- but you can pay it back over time! Until you can't. Enough workers start missing payments (say, unemployment), they get written off as losses, and institutions invested in this form of housing gambling start taking massive losses. Slight perturbations in the labor market ripple out quickly into financial crises. (This, of course, would be compounded by landlords who will have been capitalizing on the ease of making payments by raising rents even faster: "Can't afford $3,000? Just get a credit card!") Evictions soar, banks crater, loans dry up, unemployment skyrockets, etc. All of these things are already in the cards; they just get exacerbated by attaching interest-seeking to already untenable housing costs.