Equifax Data Breach

Hawkeye10 said:

Global debt is now 325% GDP, most of it not backed up by any assets that will hold up in a crash, what happens when you try to carry three times your yearly income on your credit cards?

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Seriously?

Much of that is government debt, which operates completely differently than private credit card debt. Governments default all the time; the US is the exception, not the rule. Investors and creditors have an obligation to know that they are taking a risk, and that no one and no thing can guarantee absolute security. They take their lumps, and a few years later loan funds to some other risk-prone government.

A great deal of that debt is, well, held by insanely wealthy people, and is capital that's sitting on the sidelines. They won't be happy if they lose it, but it won't have a serious economic effect. E.g. Argentina's default wound up being painful for Argentinians, but did not capsize the economies of the nations that loaned money to them.

Defaults are unquestionably painful. They can certainly cause economic downturns. If the US defaulted, it would be a global disaster. But eventually, we'd pick ourselves up and get back to work.

Meanwhile: In the US, the private debt-to-GDP ratio is close to 200%, which is down from a peak in 2009 (213%). Much of that is corporate debt, which is secured by cash hoards by those companies.

Household debt to GDP in the US is, again, significantly down from a peak of 100% in 2008-2009, to 80% today. Most of THAT is mortgages, meaning it's secured by homes; that people typically have 30 years to pay it off; and we've seen and recovered from exactly that type of crisis. Another big chunk is student loans.

Household mortgage debt to GDP is around 50%, by the way, down from (take a guess when!) 2009 highs of over 70%.

So by that particular yardstick, private debt is much better off than it was in 2007.

The principle never gets paid is what happens, and once we are out of this manufactured low interest rate environment which will happen we are all ruined.

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Or, not.

The Fed is not going to whack 5% on interest rates over night. There is massive agony over every basis point increase. The Fed overnight rate is currently 1.25%, and it will take years to get to 5%, assuming it ever gets there.

Sorry, but I don't share your pessimism.

Hawkeye10 said:

Global debt is now 325% GDP, most of it not backed up by any assets that will hold up in a crash, what happens when you try to carry three times your yearly income on your credit cards? The principle never gets paid is what happens, and once we are out of this manufactured low interest rate environment which will happen we are all ruined.

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Global debt vs GDP isn't remotely comparable to a credit card. I really wish people would stop with these comparisons.

Deuce said:

Global debt vs GDP isn't remotely comparable to a credit card. I really wish people would stop with these comparisons.

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Unsecured debt is unsecured debt where the rubber meets the road, and inflating the currency to cover it is still a default.

Hawkeye10 said:

Unsecured debt is unsecured debt where the rubber meets the road, and inflating the currency to cover it is still a default.

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Quantify the "unsecured" aspect.

Captain Adverse said:

I say to hell with credit scores; and that the Social Security system should never have been used as an identifier beyond it's original purpose. That purpose was to collect funds for retirement from an employer tax.

Now banks, apartment rentals, almost every financial transaction requires this number...and it is used not only to trace sources of income, but how we spend our money.

Credit scores are a direct result of our credit based economy.

Easy credit has been the bane of that economy as far as I am concerned. People are living from check to check just to cover their existing debt.

I remember back when Visa sent out "introductory" credit cards with a $200.00 limit to just about everyone. That was the first hook in the credit system line.

Now we have Credit Reporting companies who collect all this information and we can't rent, or buy anything on credit of any value without their approval.

They aren't the only ones with all our information. Credit companies (Visa, MasterCard, American Express), Google, Bing, Amazon (if you buy from them), email providers, Steam, Paypal, etc..

There are even Data Mining companies who buy our civil and criminal records from city and state governments, our financial information from Google et al, and from any other source willing to sell (schools, Universities, etc.)

They then sell our "Backgrounds" to anyone willing to pay. I am hardly surprised that hackers are able to get and use it.

I don't know what we can do about it. Sometimes I wish the movies could be real (Destroying all the Credit Info):

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You get a rep for citing one of my favorite movies.

You should watch Mr. Robot and sees what he does about credit card debt and corporate greed.

I hope you consider what most conservatives don't--that corporate tyranny can be just as if not more oppressive than government tyranny.