Politics and Finance Relation
The statistics of consumer debt in the USA do not make great reading. Some debt is good. If a long term mortgage at a low rate of interest can help a family build up a significant asset over the years then a mortgage will work for its benefit. Likewise a student loan to fund education is a good investment in that it can improve a student's prospect of a well-paid job after graduation. However the level of debt on such things on credit cards paints a different picture of society.
The American Media is full of news about the candidates vying for their Party's nomination for this winter's Presidential Election. It is largely the same every four years although this year the coverage seems more intense. There will be a new President next year because Barack Obama has served his two permitted terms. The extra dilemma this time round is the current success of a maverick runner, Donald Trump seeking the Republican nomination. One thing is certain. If Trump ends up in the White House there is little chance of extra Federal assistance for the poorer sections of American society.
This is reflected in analysis that is looking at demographics and where the individuals are getting their current support. The analysis is also examining the credit scores of that support. It is important to remember that credit scores are a way to judge reliability, not just for safe no-1 $5000 installment loans , and some refer to them when judging a person's suitability for a job. The recession hit many people's credit scores and some have never recovered.
It is not surprising that Hilary Clinton, the Democratic front runner appears to be getting the greatest support from those with a poor credit score. The Democrats are certainly more likely to try to help the low paid than the Republicans whose core support is likely to be white, older and wealthier. Older people tend to have better credit scores for the reason that they have long histories as well. The young and minorities are less likely to be in that position.
Ironically Trump rates the lowest in the Republican candidates for attracting those with a good credit score. Does it suggest that his policies are not quite as popular among the fairly silent majority as he thinks? Clinton and Bernie Sanders, the other Democratic candidate, actually score better amongst those with high credit scores than Trump does.
What are the implications of the Election from a financial stand point?
Many members of society live from pay check to pay check with little prospect of saving. They are often in need of welfare and certainly will have problems in retirement because they may be totally reliant on Social Security benefits. Even the average monthly check for a retired couple is only $2,000 a month from which all the bills have to be paid. It is not surprising that the Democrats who are more sympathetic to such problems are attracting voters that are in financial difficulty.
The Republican Party has a majority in both the House of Representatives and the Senate. Even if the next President is Democratic, as the current one Barack Obama is, that President will still face problems getting legislation through a potentially hostile Congress.
Unfortunately the problems in American society go far beyond the poor.
There is an enormous amount of consumer debt and fairly poor retirement savings amongst people as a whole.
Half of Americans have credit card debt that is being carried forward month after month and do not remotely have an emergency fund that could pay off the balance. The average credit card debt of those in trouble is $15,000 and every month that will incur a high level of interest. Anyone that wants to help themselves, the sort of thing that Republicans demand could apply for a typical personal loan to pay off that $15,000 over 3 or 5 years and get rid of a real headache. There will usually be arrangement fees but rates can be as competitive as 6%, meaning a monthly instalment of $300 over 60 months to pay that figure off in full.
Those in financial trouble with a poor credit score are unlikely to get a rate as good as 6% but unless they act their troubles will only increase. It is time for a budget that includes every piece of income and expenditure to see how the figures look. It may be bad news and professional help may well be required; it should be sought as a matter of urgency. Whoever becomes the next President will have a number of issues to face and that includes the financial health of citizens. It will be quite a task get people to act for themselves.Read more Comments