Bankruptcies increase 11.9 percent(uscourts.gov) |
Bankruptcies increase 11.9 percent(uscourts.gov) |
https://www.npr.org/2026/04/04/nx-s1-5773354/legal-sports-be...
after smart money then moves to predicting the period of the oscillations, …
"Work hard all your life and retire with a pension." - fantasy in 2026.
"Invent something new and capitalize on it." - not realistic in the face of gigantic, powerful, all-owning corporations who will squash you.
"Buy an existing business and live off the proceeds." - impossible without existing wealth.
"Become a famous pop star or sports hero." - as improbable as ever.
People have no hope anymore, and hopeless people turn to random chance as the last and only remaining option.
That being said: I'm more likely to believe inflation to be the cause; and I think it's a bad idea to use this to fan moral panic
based on what?
And: Credit card rates are way, way up compared to just a few years ago. Earlier this year WSJ reported average APRs in the US were over 24% (https://www.wsj.com/finance/banking/the-credit-card-rate-cap...). Most people do not read the fine print on their credit card applications, or compare them to what rates used to be like.
However, with the tables going back to 2022, it's almost 100% increase of businesses and 50% increase for Non-business filings, which I find more interesting.
Would be great to see the totals as population adjusted against historical context though.
1. A lot of companies got used to ZIRP money (not to mention the trickle-down effect to the rest of the economy).
2. The COVID printing spree/helicopter money had a knock-on effect of rising inflation (more dollars/demand competing for the same resources, or less). That was made even worse by tariff fluctuations.
3. The delta between revenue/investment money vs. cost increases relative to inflation likely exceeded the threshold for these companies to stay solvent (or to make it worth it to keep the business operational).
I hope there are jobs for company liquidators though it is usually the job of a junior solicitor/lawyer I reckon, as they will certainly have more demands amid this bankruptcy wave
1. Economy gets worse and some people are no longer able to keep up with their credit card payments. They default.
2. Credit cards increase rates to compensate for the increased risk since a greater fraction of their users are failing to pay.
3. People who are financially stable and literate see the increased rates and put fewer things on credit.
4. The remaining pool of people using credit now has an even greater fraction of people who aren't financially solid.
5. Go to 1.
These people also don't make the cards much money, so loosing them wouldn't have that much of an effect anyway.
If anyone is wondering how to escape this cycle, the solution is pretty straightforward; don’t buy things you cannot afford with cash/debit.
If putting your credit card balance on autopay is scary to you, you probably shouldn’t have a credit card. Also, having a credit card doesn’t mean you can ignore the charges and settle up at the end of the month. Credit is a tool that can be abused and misused like any other tool.
Personally, I’m anti credit in general and don’t have credit cards or a credit score. But I also moved to Europe where credit is not nearly as important as when i lived in the US.
I've had credit cards for 30 years. Use cards for all expenses when I can, have always paid the bill in full every month, have never spent a dollar of interest in my life, so I don't even look at the interest rate when getting a new card. I don't spend anything I know I won't be able to pay for at the end of the month (and yes, that does mean we've postponed purchases for months or even years).
But the allure of buy now pay later is pushed so heavily that it's hard for many people to resist.
Financially stable and literate people don’t pay credit card interest at all.
Credit cards are useful for fraud protection and rewards, the people that use them to finance purchases at 24% APR are wildly irresponsible or desperate.
You, a young adult who doesn't check: I'll get one! runs up debt with an interest rate 4x what your mom had to deal with thirty years ago HELP I'M SUPER BROKE AND BANKRUPTCY IS A LOT HARDER THAN IT WAS THIRTY YEARS AGO TOO
You, a young adult who checks: The interest rates are 4x what they were when I was in your situation. This looks like a much shittier deal than it was for you.
The problem has to effect a majority of society. 12% sounds devastating (it is), but it is not a wide enough umbrella.
[0] https://www.marxists.org/archive/marx/works/1848/11/06.htm
its a rhetorical question.
the question is asked to make a point rather than to be answered.
(This is generally the cause that economists blame for increases in bankruptcy)
It's been the basic claim of liberal democracies for the past 250 years, and they were so successful that people thought it would become universal. But it reached a peak around 30 or 40 years ago -- right about the time that the Soviet Union fell and the "tech age" really got going.
The US in particular saw that as victory for America, and in particular victory for its wealthy class. So it has been leading everything away from liberal democracy.
Obviously not all GenX, just like not all boomers, but those people in both generations anecdotally seem to be fairly characterized as accumulating as much material garbage as possible. The Gen Xers in my life went to school for no reason and then held it up as a bastion of prosperity despite their degree having very little to do with the jobs they had
It took 25% of the nation being out of work to, not revolt, but popularly elect someone willing to to spend a little government money on healthcare and welfare.
So it will get much worse before Americans finally read a book and figure out we should maybe do something different.
> So it will get much worse before Americans finally read a book and figure out we should maybe do something different.
______
if only people could choose to have or not have a credit score. that would be cool. unfortunately, equifax/transunion/experian are some of the original data vacuums and assign one whether you want one or not.
Then they slowly became endemic to simply participate in life at all. Good luck renting a spot with a poor credit score even in the early 2000's. My second apartment I had to show my (private mom and pop) landlord a great reference from my previous rental plus supply him with a 3mo security deposit since I had zero credit. I learned then that it was a non-optional part of society and I had better play ball or go entirely off grid hermit style.
Then credit agencies started even more BS like putting in your salary history (mined from employers), any criminal records, etc. It's a social credit score in everything but name and likely implemented far broader and wider in society than anything China currently has. You will literally be frozen out of many careers and entire areas to live if you do not maintain it.
When it comes to the choice of being responsible with debt or making sure your kid has calories today, there isn’t really a choice in reality.
There is a lot to be said for better financial education, but there is also a lot to be said for services like credit cards that allow someone to smooth out a cash flow issue.
It all seems so obvious until you find yourself in that situation. Most (or many at least) people in debt aren’t stupid or reckless, although they may be ignorant of their options for spending better and for borrowing better.
Since credit is the primary means used for discretionary spending, I firmly believe that the accessibility of quick (but not necessarily cheap) interest allows inflation to go unchecked.
I am giving a transcription of the situation in the video[0] but buy now pay later apps have on average 300% apr (yes this is not a joke) and even ask for tips and have so many dark patterns, both these industries are really similar/the one basically.
> She had just switched to this remote job, which was a pay cut, but it let her stay home and care for her son at the time. And then after she went back to her normal job, she actually stopped using Earnin for nearly two years. She got on a stable financial footing. She even bought this house. But housing costs are expensive and for a bunch of complicated reasons, her child support payment is less this year than it was before. And that put Runeda in this really precarious position, where if one thing went wrong, it would completely throw her off financially. And about two weeks ago, that's exactly what happened. My son wakes up really early sometimes, and it was, like, 5:00 in the morning, and I went to try to, like, open an app on my phone, and it wasn't loading, and I was like did they turn my internet off? And I checked the router, and it said your service has been interrupted for nonpayment, and I'm like, what the heck are you talking about? The bill used to be on auto pay, but for some reason wasn't anymore. they told me I had to pay, like, over $200. I had like 50 bucks in my bank account. That was the first domino, and everything fell apart from there. Runeda borrowed $150 from Earnin to pay the internet bill, the $20 reconnection fee and the $6 Earnin fee.
[0]:Billionaires Found a New Way to Steal Your Paycheck:https://www.youtube.com/watch?v=hBI_FLYfwmM
<https://www.wisdomlib.org/definition/kalashi> is best I can find, doesn't seem relevant.
Not to say it shouldn't be viciously punished, to be clear.
That doesn't prove anything other than people filing bankruptcy aren't morons.
If the only thing you could discharge were gambling debts, there would be an equally specious claim that people aren't going broke over medical debt because 80% of bankruptcies cite gambling debts as the cause.
Also, "traditional wealth-producing ladders have all been pulled up" is nonsense. The stock market is available to all comers, and long investing is a traditional path. There was a story here a few years ago about a black janitor in NYC who died and left $7 million to the MoMA (or some such); he had invested $10k a year in the stock market. People in the trades still make good money. People on this site also tend to be in the making good money careers. I saw a bunch of young couples--and not the techy-looking ones, either--at the open houses this spring in the midwest. Also, one should not extrapolate one's situation at 25 to be the same at 45; if you've done reasonable savings, 45 should looking wealthier.
Usually what it comes down to is that the ladder hasn't been pulled up if you've got a step ladder to the new starting point, or have already been a tradesperson with a scarce skillset in a low cost of living area that only exists because it's cheap (midwest) for long enough to not have to destroy your body doing it on an ongoing basis.
COVID and the subsequent two years have literally halved the value of money, which was great for people who already owned homes or had a huge amount in the stock market, but otherwise many will be waiting another 5-10 years before income from work catches up with what it used be worth. Major layoffs have been happening every year since.
It's even more improbable. For both of those, your starting to see more and more of the current generation that are children/nieces/nephews of the already famous. They have the financial comfort to pursue it, and the family connections in the industries.
And for sports, the level at which you have to be competitive is getting younger and younger. So much more sports science/nutrition going in at the middle school/high school level.
Those were two fields that seemingly were still meritocratic, but that is fading fast, if it ever existed at all.
For endurance-based sports, online coaching has really accelerated this as well.
For skills, you still really need in-person coaching.
I know it's unpopular to ever say statistics show this generation is fine, because of course there's always a bunch of other troubling statistics, not to mention always people that are actually struggling.
But honestly, many people that feel hopeless can afford to put a few thousand in an ETF every year. That would likely be millions even adjusting for inflation after many years.
Multi-state lotteries seem to be far more of the “hopeless” case where there is actually a life changing amount of money up for grabs. But far less consistent dopamine hits. The regular low stakes sports gamblers who piss away their paychecks in small chunks over time are doing it for those small wins and chasing the next one.
That’s not to invalidate the point people feel hopeless, I just don’t think the average “degenerate” Fanduel bettor really is chasing that sort of thing.
Where you get in trouble is where you're cycling through multiples of your paycheck on wagers, recycling your bets. Then you're getting eaten for multiples of the house take on your income.
Is that really so? It's a get-rich-quick scheme and absolutely no one is under any illusions otherwise, including the people gambling their rent money. They know it's a very long shot and that most people don't make bank, but they hope it'll go different for them.
WallStreetBets, just another form of gambling, is filled with posts of people losing everything but it doesn't seem to stop newbies.
The gap between troubled/problem/addicted and "desperate" has to be paper thin, if it exists at all.
Having a gambling addiction kinda requires that you operate under a lot of illusions in your reasoning.
Low-effort complaining, not interested.
Bankruptcy won't even discharge the kind of debt many/most of the lower-middle class fall broke upon.
>Bankruptcy won't even discharge the kind of debt many/most of the lower-middle class fall broke upon.
Most of the lower-middle class do not go broke upon the listed criteria.
By comparison, in year 2006, there was 2.55B$ in arrears in my state of Arizona when it had ~5.5 million people, or an average of $463 per person. Not even adjusted for inflation. [1]
If you set the bar at medical debt, which you seem to have, it seems to have passed it on child support alone. And that is with a quite uncharitable handicap against me, as I'm comparing the 2006 child arrears numbers I found against 2020 dollars of medical debt.
[0]https://pmc.ncbi.nlm.nih.gov/articles/PMC8293024/
[1]https://www.opnff.net/Files/Admin/Assessing%20Child%20Suppor...