Managing unpaid debt has been a challenge for government officials, with initiatives such as President Joe Biden’s attempt to forgive student loan debt and two Michigan counties planning to eliminate medical debt for over 300,000 residents. The debate around eliminating debt continues, with economist Richard Vague, author of “The Paradox of Debt,” advocating for it as a natural solution. Vague recently discussed the topic on Created Equal, shedding light on how debt functions and who it primarily benefits.
According to Vague, lower-income individuals tend to carry a higher proportion of debt compared to their income. Over the past few decades, debt-to-income ratios have remained relatively stable for higher-income groups but have skyrocketed by 75 to 80% for those in lower income brackets. This disproportionate debt burden on lower-income individuals makes it challenging for them to accumulate wealth or meet everyday expenses.
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