AP: Personal Bankruptcies Way Up

by Jonathan Singer, Fri Mar 24, 2006 at 02:32:15 PM EST

One of the lines that Republican talking heads have been parroting on national television in recent weeks is that voters will be contented this fall by the strong economy. Why turn out the party in power when everyone is benefiting from such impressive economic growth? Turns out, things aren't quite as rosy as GOPers would have us believe.

Included in a document dump this Friday afternoon is a very telling statistic that the government did not want people to hear about: personal bankruptcies were up 30 percent in 2005 from the previous year. The Associated Press has the story.

Bankruptcy petitions filed in federal courts totaled 2,039,214 in 2005, up from 1,563,145 in 2004, according to data released Friday by the Administrative Office of the U.S. Courts.
[...]
The new figures showed that last year there were 1,631,011 personal bankruptcy filings under Chapter 7, up from 1,117,766 in 2004. Chapter 13 filings declined to 407,322 from 444,428.

While it's true that this increase was affected by changes to bankruptcy law that went into effect in October making it more difficult to file for bankruptcy -- the number of bankruptcies in the fourth quarter of 2005 were up about 300,000 from the same quarter in previous year -- this massive increase in filings nevertheless indicates softness in the American economy overlooked by Republicans.

The number of billionaires worldwide has increased by nearly two-thirds just in the last three years and the list of American billionaires grew by 14 percent in the last year alone to 363, according to Forbes. Clearly, wealth is being created in this country. But rapid growth among those 363 Americans means little to the 1,631,011 Americans who declared bankruptcy in 2005 or the millions of unemployed and underemployed or the 45 million Americans without healthcare.

President Bush and the Republican Party might not care about these people -- they certainly aren't talking about them when they claim the economy to be the strongest in American history -- but they do exist and they do vote. What's more, they're relatives vote, too, and when your* brother just filed for bankruptcy or your family friend suffers a debilitating injury but doesn't have health insurance to cover medical costs, you probably won't have much faith in claims of a strong economy.

There are a lot of issues that Democrats are going to want to talk about this fall, many of them highly salient with voters. Hurricane Katrina. The situation in Iraq. Healthcare. A woman's right to privacy and choice. Illegal wiretapping. The list goes on. But it would greatly behoove Democratic candidates not to forget and forsake talking about economic equality in America, even if George W. Bush and the GOP believe that there is no economic problem in this country today.

Tags: bankruptcy, Economy, Republicans (all tags)

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Re: AP: Personal Bankruptcies Way Up

You're right. There are a lot of things to be pissed at the Republicans about, but the only one that has affected me personally is this Republican economy, which is structured to move wealth from the poor and the middle class to a few incredibly rich people. I make good money, but my wife has been very ill. We have health insurance, but with cutbacks in my corporate health plan, we can't afford to pay our deductibles and co-pays.

by gunnar 2006-03-24 02:45PM | 0 recs

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Re: AP: Personal Bankruptcies Way Up

I think there are literally tens of millions of Americans that think the same way as you. One of the frustrating thing for me as a progressive is how little the blogosphere spends talking about issues that really matter to people "out there." The number one example is the economy.

Despite the Republican hype, the economy is not doing well according to the only measurement that really matters: are most people's economic lives getting better. Simply, they are not. Wages for average Americans have stagnated or declined really since Reagan took office. This trend has worsened under Bush (what hasnt).

Democrats need to talk about "kitchen table" issues more and focus less on Bush's latest over reach of power.

by Andy Katz 2006-03-24 05:23PM | 0 recs

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Urge to kill... rising...

and when you're brother just filed for bankruptcy

Your! YOUR!!!

by Geogriffith 2006-03-24 04:19PM | 0 recs

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But what will the Dems do?

Let's suppose they win control of both houses in November. (Still unlikely, no longer pure fantasy.)

While the netroots will be screaming for impeachment, the Dem Congressional leadership will have a budget resolution and appropriations bills to pass, which will have a bearing on whether inequality increases or not in the US.

I'm assuming (triumph of hope over experience!) that detailed planning is going into Dem strategy on these matters.

Will the aim be to negotiate hard with the administration to reduce some of the more egregious tax breaks for the mega-rich and their corporate equivalents, and divert some corporate welfare into repairing Medicaid, say?

Or will they be prioritizing giving as little ammunition as possible for the inevitable tax and spend gibes? (Never underestimate the GOP's ability to make do as I say, not as I do criticisms of Dems stick!)

And - will there be a Dem K Street Project? Will the attitude of the Dem leadership be, It's our turn for the gravy train? Because, if so, it's hard to see economic inequality being compatible with proving to prospective sources of finance that they are just as good as the GOP at extorting corporate welfare dollars from the middle class!

by skeptic06 2006-03-24 05:21PM | 0 recs

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Re: But what will the Dems do?

If the Democrats win this fall, it'll probably come in the form of taking one of the chambers back. If they get them both back, it will be a narrow margin. The big result will be the ability to hold hearings that will embarrass the Republicans, and to move highly inconvenient legislation that will embarrass the Republicans up to the 2008 elections.

If I were the Democratic leadership, I'd handle the so-called "Netroots" crowd -- a group of maybe 1,000 bloggers -- as I handle any other constituency group. I'd let them have their victory dance, which would surely include a series of vastly inflated claims for their influence. Then I'd figure out what's most important to them and throw 'em a few bones. Impeachment would not be one of them, though, because it would be pointless given Bush's lame-duck status and destabilizing to government.

In the event of victory, the challenge for the Democratic leadership will be to capitalize on it. If the so-called "Netroots" wanted to actually be effective rather than be the self-referential clique that it is, they'd be out there raising money and coordinating campaigns.

The other contribution the so-called "Netroots" can make is to try and push the Democratic Party toward formulating a simple and cogent message to reach the 20 million to 40 million potential voters who have dropped out of the system. Do the numbers, and you'll see that this is how many people represented by the drop in voting participation over the last 40 or so years.

Until voters can answer in 10 words or less why they are a Democrat, or what the Democratic Party stands for, the Democratic Party will be in trouble. When I look at the so-called "Netroots" websites, I see a bunch of people who are making this critical problem worse not better.

As for the bankruptcy law, as usual the Democratic Party failed to talk about it the way real people talk. Part of the problem is that, when Democrats don't know the three things they stand for and the one thing that makes them a Democrat, it's hard to talk about anything to anyone.

by cwilson 2006-03-25 07:13AM | 0 recs

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Ecomic Inequality is Bad for Growth

I wish the Democrats would repeat this mantra over and over. Creating an economy where all the benefits of growth are reaped by very few people is not just unfair, it is a recipe for a recession.

The truth of this assertion is easy to follow. Economic growth is powered by consumer spending. However, Republican policies starve the middle class and working poor by lowering wages of these groups. That is why you have seen the explosion of consumer debt. Average incomes arent rising, so Americans are maintaining their lifestyle through debt. Yet, this obviously cant last forever. Eventually the debt burden becomes too great. Spending is cut back dramatically. This is how recessions occur. The great wealth inequality of the 1920s probably lead to the depression of the 1930s.

Again, my point is that Democrats need to constantly attack Republicans economic policy not only for being unfair, but for being antithetical to growth. If you want economic growth, you need the consumers, wage earners, to earn more money. In today's economy, this will only occur under progressive policy initiatives like free trade, minimum wage increases and stronger unionization.

by Andy Katz 2006-03-24 05:31PM | 0 recs

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Re: Ecomic Inequality is Bad for Growth

Democrats need to figure out what three things they stand for. Not five, not 25. Three. Why three? Because there is a mountain of research showing that the human brain is rarely capable of holding more than three objects in mind simultaneously. Effective communicators know this instinctively, and they talk in threes.

So, what three things should the Democratic Party stand for?

- Economic security

Healthy communities
Government you can trust with your life

Economic security is about fair wages, fair taxes, keeping Social Security as it is.

Healthy communities means keeping Medicare and Medicaid as they are, pushing for health coverage for all working Americans, and protecting the environment.

Government you can trust with your life is about national security, and it's about not lying your way into wars, and it's about upholding civil rights and civil liberties.

ALL of these things should be under one slogan: "The Democratic Party exists to serve the needs of working Americans."

Bumper sticker: Democrats Work

No-no's:

- Economic inequality. Sounds too commie. Look, everyone wants to win the lottery.

- The working class. Sounds Stalinist at worst, old-time union at best. Sorry, but the unions only represent 8% of private-sector workers. Until they can make some gains, the union-style imagery has to go.

- The middle class. Kerry blew it big time. Every time he said "MIDDLE class," he sounded like an anthropologist who had just discovered some rare animal. Democrats have to talk about people who work for a living.

by cwilson 2006-03-25 07:30AM | 0 recs

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Re: AP: Personal Bankruptcies Way Up

WELL, SOFTNESS IN THE ECONOMY WASN'T "OVERLOOKED" BY THE REPUBLICANS, IT WAS SWEPT UNDER THE RUG BY THEM.

FORTUNATELY FOR THEM, THE CORPORATE MEDIA ARE AFRAID OF ECONOMICS.

AS YOU SAY, IT'S UP THE TO DEMS TO BRING THIS ISSUE TO THE FORE.

by Bush Bites 2006-03-24 08:58PM | 0 recs