With more than half of American consumers classified as having subprime credit scores,1 it is no surprise that subprime lending is once again on the rise. Making expensive loans to the underemployed and overextended may help fuel economic growth2; however, it is neither just nor sustainable. Dependence on higher-risk subprime loans to boost spending seems to be a symptom of larger problemslow wages and income volatility.
With nearly all Americans, other than the ultra-wealthy living paycheck to paycheck,3 families have too little savings, if any, to cushion downturns.4 It is a paradox. Taking on more debt becomes necessary to afford essentials (such as a reliable car to drive to work), and increased private sector spending supports j…
Read the full article at: http://www.globalresearch.ca/expensive-loans-to-poor-and-unemployed-the-subprime-specter-returns-high-finance-and-the-growth-of-high-risk-consumer-debt/5505382