Every working person has spending habits, and an income. Unfortunately, these two things do not normally occur in people's lives in proportionate numbers. This often leads to large debt, and a long life filled with personal liability. Many Americans work hard only to spend more money, and increase their debt. They look forward to their next pay raise, or promotion, so they can earn more money, spend it, and subsequently go deeper into debt.
Debt could include credit cards, mortgages, car payments, or anything else owed to another party, usually a bank or lending company. People are normally able to continue, at the very least minimum payments on these debts. This allows them to maintain and enjoy these various luxuries, only to find that they need to work and pay for them at a later time. When these people loose their jobs, due to downsizing, or any number of other reasons, they find it impossible to maintain their unpaid for accessories in life with no income.
How should people handle their unemployment? The decision for many Americans is dictated to them because of this indebted and dependent lifestyle. What are these people dependent on? These people are dependent on, not alcohol, or some other vice, but on their jobs and occupations. They must go out and seek to locate another "safe and secure" job to replace the "safe and secure" one they lost. In their minds, this would allow them to be making money again only to continue to spend it again and also accumulating more debt. As the reader can see, the vicious cycle continues.
Unfortunately, over 90% (and I would guess this is a conservative value) of Americans find themselves heavily reliant on their income from their occupations. The people that are ...
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...hese jobs are lost, it is easy for the laid off to cry, and try to gain the sympathy of others. In reality it is normally their own responsibility because that they refused to plan intelligently for the future. "Rainy days" will happen to all people. For some people it only amounts to a light mist, for others it becomes a substantial flood. The real solution to the problem is to build your house on higher ground, and on solid rock.
References
Textbook Reference:
The Study of Economics principles, concepts, and applications 6th edition, Mings, Turley, and Marlin, Matthew
Outside References:
Hazlitt, Henry (1962) Economics in one Lesson Three rivers press; New York, New York.
Kiyosaki, Robert T. (1997) Rich Dad, Poor Dad Warner books; New York, New York.
Tracy, Brian (2003) Goals! Berrett-Koehler Publishers, Inc.; San Francisco, California.
Brue, S. L., Flynn, S. M., & McConnell, C. R. (2011).Economics principles, problems and policies. (19 ed.). New
Modern day American capitalism is founded on the concept of credit. Credit, as defined by Dictionary.com, is “ Confidence in a purchaser’s ability and intention to pay,displayed by entrusting the buyer with goods or services without immediate payment,” (Online Etymology Dictionary. Retrieved April 23, 2014, from Dictionary.com website). This pent up credit is what causes consumer debt to swallow individuals whole, robbing them of their financial security. This consumer debt, defined as “ Money owed by individuals, generally for goods or services that they have purchased,” has become a norm among our society (Consumer Debt. (2010). The reason as to why consumer debt is becoming a prime concern for Americans is the inability to make payments, predation of citizens by credit card companies, and how immediate relief leads to disastrous long term results.
21st Century Economics (Vol. 1, pp. 58-59. 163-172. Thousand Oaks, CA: Sage Reference.
The effect debt has on young adults is severe. More and more young adults today battle with debt and how to deal with it. I know many people who pay cash for everything they purchase, while this a admirable ambition it is often difficult for most Americans. I see debt a lot like cramming for a test. Although you may get the problem fixed in a short-term matter, it comes back up later and often tends to be more serious than before. This is why taking care of debt now is crucial. There are many ways to avoid debt but the first ones I can think of are not impulse buying. This is something I struggle with recurantly, and often times with clothing. I may not be in need of a new shirt nor can I afford one but I get sucked into the
We now live in a society where kids start their adult lives “in the red”, as their debt exceeds their income. (Draut, 2005) 60 years ago this wasn’t the case, as told by Studs Terkel in Hard Times-An Oral History of The Great Depression, “I had no idea how long $30 would last, but it sure would have to go a long way because I had nothing else. The semester fee was $22, so that left me $8 to go.” (Turkel, 1970) Imagine that! 60 years ago tuition was $22 dollars a semester! Furthermore, 45% of adults under 35 state they find themselves resorting to credit card use for basic living expenses like rent, groceries and utilities, (Draut, 2005) adding to their mounting debt. This use of credit puts them into an entirely different category of indebtedness: survival debt. (Draut, 2005) Imagine being forced to borrow to live! (Draut, 2005) If a car breaks down or someone gets sick, the only option available is using a credit card. (Draut,
F. Y. Edgeworth, Review of the Third Edition of Marshall's Principles of Economics (socsci.mcmaster.ca) The Economic Journal, volume 5, 1895, pp. 585-9.
Debt: a word that seems to strike fear in the hearts of Americans. Unfortunately, that fear is being faced. Most of the people who lived through the Great Depression have a distrust for banks and credit cards. These people learned from trusting the bank with large amounts of money, and now go to extreme measures to protect their money. In 2008, a similar recession hit the United States and caused many people to lose money. Credit card debt continually increased throughout the 20th and 21st century. However, credit card debt decreased greatly after the recession of 2008 because Americans stopped spending freely, similar to the 1930s. It is commonly believed that people would be wiser spenders after the recession of 2008, but now in 2015, credit card debt has actually increased almost back to what it was in 2007.
3. Glahe, Fred R. Macroeconomics Theory and Practice. USA. Harcourt Brace Jovanovich Inc. 1992. Websites 1.
Tragakes, E. (2012). Economics for the IB diploma (2nd ed.). Cambridge, UK: Cambridge University Press.
O'Sullivan, A., & Sheffrin, S. (2005). Economics. Upper Saddle River, New Jersey: Pearson Prentice Hall.
Mortgages, car loans, student loans, and having children, are all situations that can drive families to the overwhelming doom of debt. Debt is mostly overlooked for the simple reason that it may be considered normal. Certain types of debt like car and mortgage payments are almost expected. Debt is sometimes very difficult to evade, especially if money is not managed sensibly. Many families accumulate debt due to overspending, medical bills, and unemployment.
The crucial importance and relevance of economics related disciplines to the modern world have led me to want to pursue the study of these social sciences at a higher level. My study of Economics has shown me the fundamental part it plays in our lives and I would like to approach it with an open mind - interested but not yet fully informed.
Credit card debt is a big problem in America. America is becoming a materialistic place.
The idea that everyone’s ideal lives are the same is a farce. Individuals create different worlds for themselves to live in thus generating situations with different solutions. These solutions drive them to reach their own specific goals and dreams to attain the ideal life. As they accomplish these feats, their impression left behind to create a reputation of their character. For an everyday use, one of those impressions left behind by the ability to handle debt. It is impossible to live debt-free; most borrowers cannot pay cash for homes or their children 's college
Sullivan, A., & Steven M., (2003). Economics: Principles in action. Upper Saddle River, New Jersey : Pearson Prentice Hal