The challenge of managing unpaid debt has long been a concern for government officials, with initiatives like President Joe Biden’s attempt to forgive student loan debt and two Michigan counties planning to eliminate medical debt for over 300,000 residents. However, the debate around eliminating debt continues, with economist Richard Vague, author of “The Paradox of Debt,” advocating for it as a natural solution.
In recent discussions on Created Equal, Vague shed light on how debt functions and who it primarily benefits. He pointed out that lower-income individuals tend to carry a higher proportion of debt compared to their income. Over the past few decades, debt-to-income ratios have remained relatively stable for higher-income groups but have skyrocketed by 75 to 80% for those in lower income brackets. This disproportionate debt burden on lower-income individuals makes it challenging for them to accumulate wealth or meet everyday expenses.
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