Although the word ‘debt’ has become the most common term in America’s financial world, but their definitely are several other aspects that are ingrained in its country’s economical system since ages. One of the most striking features is the unequal wealth and income distribution in US and this dismal wealth distribution is the key factor behind the roots of major economic crisis in the country. However the debt relief companies and debt relief programs try hard to provide debt cure to a large and increasing numbers of debtors, the basic economic disparity still continues to be the major cause behind the age-old financial disasters.
Now here goes the full report
A shocking report states that 85% of America’s wealth or total assets of the country is held by the country’s richest 20%, with the poor and the lower class holding a mere 0.3% of wealth share. This means that in terms of actual money, the average non-income holdings of the richest section is $2.3 million per person, whereas the per person holdings in lower class is only $22,000. In terms of income as well, the distinction is significant. The rich enjoy a median income of $259,700, while the lower section is making ends meet with a meager $20,200 only. As a matter of fact, such a Mal-distribution of wealth is useless for a society based on buying and selling goods, as the super-rich plutocrats does not need much of the products and the rest of the lower class who have the needs cannot afford to purchase the finished goods because of their lowered purchasing power. And thus debt has to sustain the market economy, with the growing disparity of wealth distribution over a long period of time.
The faulty system has therefore created an array of consumer debt mechanisms like subprime mortgage, payday loan, intricacies of credit card debt etc. With the inability of a massive number of people and the working class, to pay the expensive sub-prime mortgages and overwhelming credit card bills, a number of financial institutions that was founded on the basis of consumer debt have collapsed and the rest required unprecedented federal financial funds to remain afloat. This in turn has crumbled the housing market and new residential construction, consumer goods market, automobiles, appliances, electronics, which led to colossal destruction of employment opportunities and retirement savings of million Americans. This crash which represented a structural crisis had its roots into the grossly unequal wealth distribution in society, as the industry had to pull the brakes when millions had lost their purchase power or afford-ability. The irony lies in the fact that this super-poor mass of humanity which is the production ground of minerals, agricultural wealth, raw material and hard labor, is excluded from taking part in the world’s market economy, as they cannot spare time from fighting their own personal and ever-increasing burdens of debt and deficiencies.