Wallet Watch

Kudos to the folks at Demos, a New York-based think tank for not only documenting the root causes of debt but also offering solutions. Their new book “Up to Our Eyeballs” is a must-read for anyone studying the world of young Americans being in so much debt.

A summary in their words:

Up to Our Eyeballs is a lively and timely exploration of the causes and consequences of the explosive rise in consumer debt, and of the fast-spreading financial and economic crisis. After explaining how we got into our credit fix, the authors sketch out a plausible escape route, based on proven good ideas that our political and economic elites have temporarily forgotten, at the expense of the rest of us.

Particularly impressive was the authors’ documentation that the middle class of the 1950s-1980s — which is now being fractured by increasing wealth inequality — was built by deliberate public policies that are now being eroded. That is, the prosperity that so many families experienced during those decades was the result of public-sector programs such as the GI Bill that made college affordable, the Federal Housing Administration that made homeownership a reality, social security that made it easy to save for retirement, and so on. But as our economy started to change, these programs have slowed eroded, and in part have been deliberately shredded by conservative politicians.

While they make an excellent case for implementing a solution, the book is a bit thin on specifics. walletwatch was very impressed by the authors’ knowledge and categorization of recent legislative moves, and with their principles for reform. Specifically, they echo the call for a Financial Product Safety Commission, an idea put forward prominently by Harvard Law Professor and debt guru Professor Elizabeth Warren.

 walletwatch added this book to its Reading List (link above).