Over the last 10 years many Americans have overindulged when it comes to spending on credit. Today’s generation has learned through watching reality TV, the misconception of to live for today and not think about tomorrow. This cultural idea has gone into our financial markets also. People have bought homes they couldn’t afford and tapped out credit cards that they never should have been able to get. The average American today has in the neighborhood of $20,000 in credit card debt. When you consider that the average American household only makes $40,000 a year, it’s easy to understand why filing bankruptcy is taking on a new popularity. In the past, Americans used to save to buy a new car or a new TV or take that family vacation once a year. Now, people are just out of touch. Because of the availability of credit, people that can’t afford it are jetting around the world like a rock star. Little did they know that .
I think the popularity and growth of the television has helped begin the slide down the slippery slope of the American culture. Watching reality TV you see women wearing the designer clothes and driving luxury automobiles, but they don’t show how many of them end up filing bankruptcy, in foreclosure and getting divorced. All that can be found in the tabloid magazines. Reality TV in no way portrays the true reality of life.
The increase of the numbers of those filing for bankruptcy continued to rise through 2010. The numbers for the first half of 2011 came in with a reduction in bankruptcy filings for this year. Many people are perplexed because the debt ratios are still at record highs and unemployment continues to stay above 9% nationwide. The many experts are predicting this is the calm before the storm. With the Fed implementing QE1 and QE2 many speculate that this freed up some money in the credit market to lend to people struggling. The problem is, it’s just kicking the can down the road. When someone is overwhelmed with that and not working, giving them more credit is not going to fix the problem, but instead make it worse. With 2012 fast approaching, only time will tell if these people will end up having to file for bankruptcy.