I can't find the original source, but I remember reading a study showing that this rise was closely correlated to states which had legalised or loosened laws on gambling!
> In states that allowed online betting, the study reported a 10% increase in the likelihood of bankruptcy and an 8% increase in debt collection amounts — outcomes that tended to appear about two years after the practice was legalized.
after word spreads of easy pickings, funds swell into bankruptcy rate contracts. the success stabilizes average losses across Kalshi portfolios; the bankruptcy rate falls.
after smart money then moves to predicting the period of the oscillations, …
I'd argue that, while a portion of this rise obviously consists of troubled/problem/addicted gamblers, a huge part of the rise of gambling is from desperation: The public's growing belief that the traditional wealth-producing ladders have all been pulled up, and that gambling is the last remaining hope that normal people have of making decent money.
"Work hard all your life and retire with a pension." - fantasy in 2026.
"Invent something new and capitalize on it." - not realistic in the face of gigantic, powerful, all-owning corporations who will squash you.
"Buy an existing business and live off the proceeds." - impossible without existing wealth.
"Become a famous pop star or sports hero." - as improbable as ever.
People have no hope anymore, and hopeless people turn to random chance as the last and only remaining option.
I think "huge part ... is from desperation" needs a citation. Gambling has been known to be a vice for millenia. There was an article on here not long ago where a reporter did sports gambling for a year for a story; he started off Mormon, disinterested in gambling, with $10k from the company, and after he lost it, he put himself on the state self-exclusion list because now he had a problem with gambling. The null hypothesis is that gambling is a vice, so to make it about desperation needs some evidence.
Also, "traditional wealth-producing ladders have all been pulled up" is nonsense. The stock market is available to all comers, and long investing is a traditional path. There was a story here a few years ago about a black janitor in NYC who died and left $7 million to the MoMA (or some such); he had invested $10k a year in the stock market. People in the trades still make good money. People on this site also tend to be in the making good money careers. I saw a bunch of young couples--and not the techy-looking ones, either--at the open houses this spring in the midwest. Also, one should not extrapolate one's situation at 25 to be the same at 45; if you've done reasonable savings, 45 should looking wealthier.
You're asking for a citation on an intentionally speculative comment, offering your own wall of unqualified anecdotes that come up every time someone claims young people are desperate, and mean nothing unless someone fills in details with whatever they want to believe.
Usually what it comes down to is that the ladder hasn't been pulled up if you've got a step ladder to the new starting point, or have already been a tradesperson with a scarce skillset in a low cost of living area that only exists because it's cheap (midwest) for long enough to not have to destroy your body doing it on an ongoing basis.
COVID and the subsequent two years have literally halved the value of money, which was great for people who already owned homes or had a huge amount in the stock market, but otherwise many will be waiting another 5-10 years before income from work catches up with what it used be worth. Major layoffs have been happening every year since.
The rise in gambling isn’t caused by “desperation.” It’s caused by the loosening of social taboos against gambling. Gambling isn’t common in say Bangladesh even though conditions there are much more desperate than anywhere in the U.S.
> "Become a famous pop star or sports hero." - as improbable as ever.
It's even more improbable. For both of those, your starting to see more and more of the current generation that are children/nieces/nephews of the already famous. They have the financial comfort to pursue it, and the family connections in the industries.
And for sports, the level at which you have to be competitive is getting younger and younger. So much more sports science/nutrition going in at the middle school/high school level.
Those were two fields that seemingly were still meritocratic, but that is fading fast, if it ever existed at all.
> And for sports, the level at which you have to be competitive is getting younger and younger. So much more sports science/nutrition going in at the middle school/high school level.
For endurance-based sports, online coaching has really accelerated this as well.
For skills, you still really need in-person coaching.
Eh I dunno. In my experience the “working class” sports gamblers who very likely should not be engaging in regular betting are not participating in bets that would be remotely life changing. And they know that. They are putting down $5-20 bets with maybe $100 payouts on parlays or whatnot. They talk about it maybe paying a utility bill or pay for drinks at the bar for game day.
Multi-state lotteries seem to be far more of the “hopeless” case where there is actually a life changing amount of money up for grabs. But far less consistent dopamine hits. The regular low stakes sports gamblers who piss away their paychecks in small chunks over time are doing it for those small wins and chasing the next one.
That’s not to invalidate the point people feel hopeless, I just don’t think the average “degenerate” Fanduel bettor really is chasing that sort of thing.
In most forms of gambling you could drop your whole paycheck on gambling and still not end up terribly off. You'd be in about the position you would be in if you had to go to a check cashing place to cash your paycheck, although with more volatility. Dropping your entire paycheck worth of volume on slots and you are down what, like 5-10% on average -- most people have that much margin to spend on savings/discretionary/retirement.
Where you get in trouble is where you're cycling through multiples of your paycheck on wagers, recycling your bets. Then you're getting eaten for multiples of the house take on your income.
> while a portion of this rise obviously consists of troubled/[...], a huge part of the rise of gambling is from desperation
Is that really so? It's a get-rich-quick scheme and absolutely no one is under any illusions otherwise, including the people gambling their rent money. They know it's a very long shot and that most people don't make bank, but they hope it'll go different for them.
WallStreetBets, just another form of gambling, is filled with posts of people losing everything but it doesn't seem to stop newbies.
The gap between troubled/problem/addicted and "desperate" has to be paper thin, if it exists at all.
I'll be honest as someone who doesn't gamble my perception is the prediction markets are just people with inside information using that to con money out of people. I don't see the value in it.
Well if you think of the point as "winning money" then that really sucks (which I've discussed in prior comments as a big problem for overall participation). If the point is instead to extract and compress information into a simple numerical prediction, then the insider trading is arguably a feature more than a bug.
Not to say it shouldn't be viciously punished, to be clear.
Highly liquid markets are good information compression systems, but existing financial markets tend to be impossible to disaggregate with regard to any discrete event you care about.
You can also ban 100% of gambling advertising and get 100% of the (dubious, but I'll humour the possibility) 'benefits' of gambling, while removing 90% of the downsides.
I can't speak for bankruptcy filings, but I've sat through small claims sessions on a few occasions and probably half are for credit card debt. Most of the time the defendant doesn't show and assuming the bank wins, damages can be trebled in my state.
And: Credit card rates are way, way up compared to just a few years ago. Earlier this year WSJ reported average APRs in the US were over 24% (https://www.wsj.com/finance/banking/the-credit-card-rate-cap...). Most people do not read the fine print on their credit card applications, or compare them to what rates used to be like.
I think the death spiral breaks at step 3. Financially stable and literate people do not pay credit card interest. They pay off the full balance every month resulting in 0 interest payments. In cases where they need credit beyond the short term float the above gives you, they have access to lower interest loans.
These people also don't make the cards much money, so loosing them wouldn't have that much of an effect anyway.
If anyone is wondering how to escape this cycle, the solution is pretty straightforward; don’t buy things you cannot afford with cash/debit.
If putting your credit card balance on autopay is scary to you, you probably shouldn’t have a credit card. Also, having a credit card doesn’t mean you can ignore the charges and settle up at the end of the month. Credit is a tool that can be abused and misused like any other tool.
Personally, I’m anti credit in general and don’t have credit cards or a credit score. But I also moved to Europe where credit is not nearly as important as when i lived in the US.
>Personally, I’m anti credit in general and don’t have credit cards or a credit score.
if only people could choose to have or not have a credit score. that would be cool. unfortunately, equifax/transunion/experian are some of the original data vacuums and assign one whether you want one or not.
Yep. I'm old enough to remember when credit agencies were considering dubiously legal. It was illegal (in my state at least) for a group of merchants to run a shared 'blacklist' of customers back in the day. The credit agencies side-stepped this. It was pitched as an "opt in" sort of situation where if you wanted cheaper credit or to finance a car or some optional thing in life, you could do so. They were not even used (as much, at least) for house mortgages - the bank would go through financial records and check income vs. debt and your banking history instead. Your credit score (or lack of it) was irrelevant.
Then they slowly became endemic to simply participate in life at all. Good luck renting a spot with a poor credit score even in the early 2000's. My second apartment I had to show my (private mom and pop) landlord a great reference from my previous rental plus supply him with a 3mo security deposit since I had zero credit. I learned then that it was a non-optional part of society and I had better play ball or go entirely off grid hermit style.
Then credit agencies started even more BS like putting in your salary history (mined from employers), any criminal records, etc. It's a social credit score in everything but name and likely implemented far broader and wider in society than anything China currently has. You will literally be frozen out of many careers and entire areas to live if you do not maintain it.
Yours is also a good theory, but there are plenty of people that find themselves in a situation where income can lag behind expenses.
When it comes to the choice of being responsible with debt or making sure your kid has calories today, there isn’t really a choice in reality.
There is a lot to be said for better financial education, but there is also a lot to be said for services like credit cards that allow someone to smooth out a cash flow issue.
It all seems so obvious until you find yourself in that situation. Most (or many at least) people in debt aren’t stupid or reckless, although they may be ignorant of their options for spending better and for borrowing better.
I strictly use it to accrue points, but general advice is that credit is useful to smooth out the lumpiness of pay cycles, but if you can’t pay the debt back on necessities within the credit cycle, you shouldn’t use it at all.
Since credit is the primary means used for discretionary spending, I firmly believe that the accessibility of quick (but not necessarily cheap) interest allows inflation to go unchecked.
I was deliberately debit-only for years. Someone on a podcast explained why they used credit cards for extra protections from banks beyond debit cards. I don't know the accuracy of what was said, but the show is hosted by three smart people and neither of the other two disagreed that credit cards have more protection than debit cards so I assume it was generally accurate. I got a credit card right away and use it for most purchases and pay it off in full every month.
I sort of agree although I am for credit cards if they help me with deals since I am frugal personally but even I am thinking to just use credit cards of my close cousins/family if they already have one.
I am giving a transcription of the situation in the video[0] but buy now pay later apps have on average 300% apr (yes this is not a joke) and even ask for tips and have so many dark patterns, both these industries are really similar/the one basically.
> She had just switched to this remote job, which was a pay cut, but it let her stay home and care for her son at the time. And then after she went back to her normal job, she actually stopped using Earnin for nearly two years. She got on a stable financial footing. She even bought this house. But housing costs are expensive and for a bunch of complicated reasons, her child support payment is less this year than it was before. And that put Runeda in this really precarious position, where if one thing went wrong, it would completely throw her off financially. And about two weeks ago, that's exactly what happened. My son wakes up really early sometimes, and it was, like, 5:00 in the morning, and I went to try to, like, open an app on my phone, and it wasn't loading, and I was like did they turn my internet off? And I checked the router, and it said your service has been interrupted for nonpayment, and I'm like, what the heck are you talking about? The bill used to be on auto pay, but for some reason wasn't anymore. they told me I had to pay, like, over $200. I had like 50 bucks in my bank account. That was the first domino, and everything fell apart from there. Runeda borrowed $150 from Earnin to pay the internet bill, the $20 reconnection fee and the $6 Earnin fee.
> 3. People who are financially stable and literate see the increased rates and put fewer things on credit.
Financially stable and literate people don’t pay credit card interest at all.
Credit cards are useful for fraud protection and rewards, the people that use them to finance purchases at 24% APR are wildly irresponsible or desperate.
Your mom: Why don't you have a credit card? It helped me so much when I was in your situation.
You, a young adult who doesn't check: I'll get one! runs up debt with an interest rate 4x what your mom had to deal with thirty years ago HELP I'M SUPER BROKE AND BANKRUPTCY IS A LOT HARDER THAN IT WAS THIRTY YEARS AGO TOO
You, a young adult who checks: The interest rates are 4x what they were when I was in your situation. This looks like a much shittier deal than it was for you.
There needs to be a name for the way people think the world hasn't changed since they were a young adult. I'm not convinced it's just boomers; it's just that they had it so good the contrast is higher. Gen Xers do the same thing, I'm sure, for example assuming that kids ride their bikes to school and have textbooks and the leading cause of death isn't GSWs.
Seems like an appropriate term would be the opposite of recency bias; primacy bias. I definitely see it in older Gen Xers who basically coasted their whole lives while ironically idolizing boomers, didn't think about the future at all, and seem to hate trying hard at anything.
Obviously not all GenX, just like not all boomers, but those people in both generations anecdotally seem to be fairly characterized as accumulating as much material garbage as possible. The Gen Xers in my life went to school for no reason and then held it up as a bastion of prosperity despite their degree having very little to do with the jobs they had
The tables in the link do a good job of outlining this, 11.9% while an interesting headline number, 11.9% increase over nothing is still basically nothing.
However, with the tables going back to 2022, it's almost 100% increase of businesses and 50% increase for Non-business filings, which I find more interesting.
Would be great to see the totals as population adjusted against historical context though.
Kind of. I want to yes, but its not directly how this works or how it sounds. A large increase in poverty or loss of property is insufficient to stoke revolution on its own. The increase of poverty in favor of the rich devastates the economy for multiple reasons, such as: opportunity contraction, less spending, loss of motivation/mobility, and more. When the economy loss becomes wide spread enough, regardless of bankruptcy/poverty/homeless or whatever rates is when revolution happens.
The problem has to effect a majority of society. 12% sounds devastating (it is), but it is not a wide enough umbrella.
It took 25% of the nation being out of work to, not revolt, but popularly elect someone willing to to spend a little government money on healthcare and welfare.
So it will get much worse before Americans finally read a book and figure out we should maybe do something different.
> So it will get much worse before Americans finally read a book and figure out we should maybe do something different.
You better forget about the books. Don't count on the media either; the abolishment of the fairness doctrine and financial incentives via corporate ownership can and will distort reality in a strata-optimized way. Social media is overrun by bots and influence ops as we speak. New threat: people will ask their LLM. Journalists will source their LLM. Next question: Who trains the LLM?¹
I read Grapes of Wrath recently on a recommendation from a friend and it’s one of the few great books I’ve read and felt was genuinely great. It feels incredibly relevant today with both inequality and automation. Would highly recommend it.
Bankruptcy won't even discharge the kind of debt many/most of the lower-middle class fall broke upon. Alimony, child support, student loans, "restitution."
This claim is simply false. The cause of bankruptcy in the U.S. has been extensively studied and absolutely none of the criteria you list comes even close to the number 1 reason that people in lower or middle class declare bankruptcy: medical bills.
No, it isn’t that well studied; and I’d be interested to see your source and confirm that it doesn’t trace back to a study that says something more like “A new study from academic researchers found that 66.5 percent of all bankruptcies were tied to medical issues —either because of high costs for care or time out of work”. (https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most...)
What? You mean to tell me people file bankruptcy over the kinds of debt they can actually discharge and less so over the kinds of debt they can't?
That doesn't prove anything other than people filing bankruptcy aren't morons.
If the only thing you could discharge were gambling debts, there would be an equally specious claim that people aren't going broke over medical debt because 80% of bankruptcies cite gambling debts as the cause.
Average medical debt per person in 2020 was $430 per [0].
By comparison, in year 2006, there was 2.55B$ in arrears in my state of Arizona when it had ~5.5 million people, or an average of $463 per person. Not even adjusted for inflation. [1]
If you set the bar at medical debt, which you seem to have, it seems to have passed it on child support alone. And that is with a quite uncharitable handicap against me, as I'm comparing the 2006 child arrears numbers I found against 2020 dollars of medical debt.
Bankruptcy won't even discharge the kind of debt many/most of the lower-middle class fall broke upon.
The whole point was that bankruptcy wasn't a remedy discharging these forms of going broke. It's unsurprising the bankruptcy data leans towards a 'cause' that will actually discharge their debt, otherwise the incentive for a broke person to file bankruptcy is lowered.
Bankruptcy at this point is just a way to signal to creditors not to lend more money to this individual. As you said alimony, child support, student loans, restitution are a must so the filing simply is a formal notice that "every penny this person ever earns is already earmarked, heed this warning before lending"
It's quite convenient though that it actually discharges the kind of debts rich people and businesses are more likely to accrue, while not discharging the kind of debts the middle/lower classes are likely to accrue when they're unable to pay them.
That's possibly every state in the last 400 years, with the possible exception of the soviet union and Maoist China, and those exceptions are arguably just a technicality.
Maoist china certainly and famously murdered many rich people. It's true that the state that emerged had deep corruption and that life remained difficult for the poor, but murdering rich people is an allegation difficult to deny.
I think what's different is that we actually have democracy, yet for whatever reason, the masses of poor people keep voting for governments that overtly and openly only care about rich people.
You forget the French, who inspired Marx's exhortations to practice "revolutionary terror," the "only way," [0] with their own public executions of the rich [1].
That's a relatively new idea. It was fundamental to the American and French revolutions, and it was brand new at the time. (The Americans were heavily cribbing off French thinkers, though it took most of a century for the French to implement it.)
It's been the basic claim of liberal democracies for the past 250 years, and they were so successful that people thought it would become universal. But it reached a peak around 30 or 40 years ago -- right about the time that the Soviet Union fell and the "tech age" really got going.
The US in particular saw that as victory for America, and in particular victory for its wealthy class. So it has been leading everything away from liberal democracy.
There's no reason to believe this will reverse or improve under the current administration. Grifting is celebrated and policy is decided by and for the wealthy. Meanwhile, tech leaders are promising even more job losses spurred by AI.
AI is sucking money out of other sectors. Unfortunately many of which a degrow means a decrease in living standards (unless you can afford the premium). I think they call it K shaped economy. It's bad right now.
I don't know if this is his point, but a decent amount of cash went to individuals as part of Covid relief in different forms, and this caused a delay in bankruptcies because people were able to pay their bills. Pick your moral quandry.
1. A lot of companies got used to ZIRP money (not to mention the trickle-down effect to the rest of the economy).
2. The COVID printing spree/helicopter money had a knock-on effect of rising inflation (more dollars/demand competing for the same resources, or less). That was made even worse by tariff fluctuations.
3. The delta between revenue/investment money vs. cost increases relative to inflation likely exceeded the threshold for these companies to stay solvent (or to make it worth it to keep the business operational).
And no wonder why the job market is so booming right now because there are less companies alive and more people got laid off, thus shrinking demand and increasing supply in workforce recruiting. We all have to thank Trump and Anthropic/OpenAI/blah-blah-blah for this win-win situation.
I hope there are jobs for company liquidators though it is usually the job of a junior solicitor/lawyer I reckon, as they will certainly have more demands amid this bankruptcy wave
I can't find the original source, but I remember reading a study showing that this rise was closely correlated to states which had legalised or loosened laws on gambling!
> In states that allowed online betting, the study reported a 10% increase in the likelihood of bankruptcy and an 8% increase in debt collection amounts — outcomes that tended to appear about two years after the practice was legalized.
https://www.npr.org/2026/04/04/nx-s1-5773354/legal-sports-be...
kalashi is coming
Are there markets where people can bet on bankruptcy rates too? Gambling increases bankruptcies, and then people gamble on the bankruptcies.
Relevant snl skit: https://youtu.be/wXZNuwY_5-U
after word spreads of easy pickings, funds swell into bankruptcy rate contracts. the success stabilizes average losses across Kalshi portfolios; the bankruptcy rate falls.
after smart money then moves to predicting the period of the oscillations, …
Double or nothing!
I can see the potential link there, but my intuition says that the SKYROCKETING cost of living is probably more to blame.
i think you mean the ever increasing greed of the 1%
The old adage of bread and circuses ?.
TV and social media have been the modern bread and circuses for a while now. Gambling continues to be a vice.
Not to mention fools and their money parting.
It's so disgusting watching how much sports gambling and "prediction markets" have exploded in recent years
I'd argue that, while a portion of this rise obviously consists of troubled/problem/addicted gamblers, a huge part of the rise of gambling is from desperation: The public's growing belief that the traditional wealth-producing ladders have all been pulled up, and that gambling is the last remaining hope that normal people have of making decent money.
"Work hard all your life and retire with a pension." - fantasy in 2026.
"Invent something new and capitalize on it." - not realistic in the face of gigantic, powerful, all-owning corporations who will squash you.
"Buy an existing business and live off the proceeds." - impossible without existing wealth.
"Become a famous pop star or sports hero." - as improbable as ever.
People have no hope anymore, and hopeless people turn to random chance as the last and only remaining option.
I think "huge part ... is from desperation" needs a citation. Gambling has been known to be a vice for millenia. There was an article on here not long ago where a reporter did sports gambling for a year for a story; he started off Mormon, disinterested in gambling, with $10k from the company, and after he lost it, he put himself on the state self-exclusion list because now he had a problem with gambling. The null hypothesis is that gambling is a vice, so to make it about desperation needs some evidence.
Also, "traditional wealth-producing ladders have all been pulled up" is nonsense. The stock market is available to all comers, and long investing is a traditional path. There was a story here a few years ago about a black janitor in NYC who died and left $7 million to the MoMA (or some such); he had invested $10k a year in the stock market. People in the trades still make good money. People on this site also tend to be in the making good money careers. I saw a bunch of young couples--and not the techy-looking ones, either--at the open houses this spring in the midwest. Also, one should not extrapolate one's situation at 25 to be the same at 45; if you've done reasonable savings, 45 should looking wealthier.
You're asking for a citation on an intentionally speculative comment, offering your own wall of unqualified anecdotes that come up every time someone claims young people are desperate, and mean nothing unless someone fills in details with whatever they want to believe.
Usually what it comes down to is that the ladder hasn't been pulled up if you've got a step ladder to the new starting point, or have already been a tradesperson with a scarce skillset in a low cost of living area that only exists because it's cheap (midwest) for long enough to not have to destroy your body doing it on an ongoing basis.
COVID and the subsequent two years have literally halved the value of money, which was great for people who already owned homes or had a huge amount in the stock market, but otherwise many will be waiting another 5-10 years before income from work catches up with what it used be worth. Major layoffs have been happening every year since.
The rise in gambling isn’t caused by “desperation.” It’s caused by the loosening of social taboos against gambling. Gambling isn’t common in say Bangladesh even though conditions there are much more desperate than anywhere in the U.S.
> "Become a famous pop star or sports hero." - as improbable as ever.
It's even more improbable. For both of those, your starting to see more and more of the current generation that are children/nieces/nephews of the already famous. They have the financial comfort to pursue it, and the family connections in the industries.
And for sports, the level at which you have to be competitive is getting younger and younger. So much more sports science/nutrition going in at the middle school/high school level.
Those were two fields that seemingly were still meritocratic, but that is fading fast, if it ever existed at all.
> And for sports, the level at which you have to be competitive is getting younger and younger. So much more sports science/nutrition going in at the middle school/high school level.
For endurance-based sports, online coaching has really accelerated this as well.
For skills, you still really need in-person coaching.
It’s also kinda the case for sports too — I literally just watched LeBron throw an alley oop to his kid a few nights ago.
Spot on. Gambling is their Hail mary shot at getting the life they were promised.
Eh I dunno. In my experience the “working class” sports gamblers who very likely should not be engaging in regular betting are not participating in bets that would be remotely life changing. And they know that. They are putting down $5-20 bets with maybe $100 payouts on parlays or whatnot. They talk about it maybe paying a utility bill or pay for drinks at the bar for game day.
Multi-state lotteries seem to be far more of the “hopeless” case where there is actually a life changing amount of money up for grabs. But far less consistent dopamine hits. The regular low stakes sports gamblers who piss away their paychecks in small chunks over time are doing it for those small wins and chasing the next one.
That’s not to invalidate the point people feel hopeless, I just don’t think the average “degenerate” Fanduel bettor really is chasing that sort of thing.
In most forms of gambling you could drop your whole paycheck on gambling and still not end up terribly off. You'd be in about the position you would be in if you had to go to a check cashing place to cash your paycheck, although with more volatility. Dropping your entire paycheck worth of volume on slots and you are down what, like 5-10% on average -- most people have that much margin to spend on savings/discretionary/retirement.
Where you get in trouble is where you're cycling through multiples of your paycheck on wagers, recycling your bets. Then you're getting eaten for multiples of the house take on your income.
> while a portion of this rise obviously consists of troubled/[...], a huge part of the rise of gambling is from desperation
Is that really so? It's a get-rich-quick scheme and absolutely no one is under any illusions otherwise, including the people gambling their rent money. They know it's a very long shot and that most people don't make bank, but they hope it'll go different for them.
WallStreetBets, just another form of gambling, is filled with posts of people losing everything but it doesn't seem to stop newbies.
The gap between troubled/problem/addicted and "desperate" has to be paper thin, if it exists at all.
> and absolutely no one is under any illusions otherwise
Having a gambling addiction kinda requires that you operate under a lot of illusions in your reasoning.
yeah it seems winning the lottery is now our best chance for survival.
IMO prediction markets are an interesting tool but you can just ban sports gambling and keep 100% of their value and remove 90% of their downsides.
Prediction markets are 90% sports gambling.
So?
So prediction markets solely exist as a way to sidestep regulation of sports gambling (mostly) and insider trading secondarily. It's just grift.
That conclusion doesn’t follow from the premise at all lol.
Low-effort complaining, not interested.
I'll be honest as someone who doesn't gamble my perception is the prediction markets are just people with inside information using that to con money out of people. I don't see the value in it.
Well if you think of the point as "winning money" then that really sucks (which I've discussed in prior comments as a big problem for overall participation). If the point is instead to extract and compress information into a simple numerical prediction, then the insider trading is arguably a feature more than a bug.
Not to say it shouldn't be viciously punished, to be clear.
Can you explain the value you're talking about?
Highly liquid markets are good information compression systems, but existing financial markets tend to be impossible to disaggregate with regard to any discrete event you care about.
You can also ban 100% of gambling advertising and get 100% of the (dubious, but I'll humour the possibility) 'benefits' of gambling, while removing 90% of the downsides.
Agreed with that too
Having recently seen a thread here where a lot of people threw a lot of shade on gambling: I really recommend finding that source.
That being said: I'm more likely to believe inflation to be the cause; and I think it's a bad idea to use this to fan moral panic
>I'm more likely to believe inflation to be the cause
based on what?
Based on how much they like gambling.
I can't speak for bankruptcy filings, but I've sat through small claims sessions on a few occasions and probably half are for credit card debt. Most of the time the defendant doesn't show and assuming the bank wins, damages can be trebled in my state.
And: Credit card rates are way, way up compared to just a few years ago. Earlier this year WSJ reported average APRs in the US were over 24% (https://www.wsj.com/finance/banking/the-credit-card-rate-cap...). Most people do not read the fine print on their credit card applications, or compare them to what rates used to be like.
I wonder if there's a death spiral there:
1. Economy gets worse and some people are no longer able to keep up with their credit card payments. They default.
2. Credit cards increase rates to compensate for the increased risk since a greater fraction of their users are failing to pay.
3. People who are financially stable and literate see the increased rates and put fewer things on credit.
4. The remaining pool of people using credit now has an even greater fraction of people who aren't financially solid.
5. Go to 1.
I think the death spiral breaks at step 3. Financially stable and literate people do not pay credit card interest. They pay off the full balance every month resulting in 0 interest payments. In cases where they need credit beyond the short term float the above gives you, they have access to lower interest loans.
These people also don't make the cards much money, so loosing them wouldn't have that much of an effect anyway.
This is a good theory.
If anyone is wondering how to escape this cycle, the solution is pretty straightforward; don’t buy things you cannot afford with cash/debit.
If putting your credit card balance on autopay is scary to you, you probably shouldn’t have a credit card. Also, having a credit card doesn’t mean you can ignore the charges and settle up at the end of the month. Credit is a tool that can be abused and misused like any other tool.
Personally, I’m anti credit in general and don’t have credit cards or a credit score. But I also moved to Europe where credit is not nearly as important as when i lived in the US.
>Personally, I’m anti credit in general and don’t have credit cards or a credit score.
if only people could choose to have or not have a credit score. that would be cool. unfortunately, equifax/transunion/experian are some of the original data vacuums and assign one whether you want one or not.
In the US, credit score is used for hiring and rental agreements. It is not something you can opt-out of.
Yep. I'm old enough to remember when credit agencies were considering dubiously legal. It was illegal (in my state at least) for a group of merchants to run a shared 'blacklist' of customers back in the day. The credit agencies side-stepped this. It was pitched as an "opt in" sort of situation where if you wanted cheaper credit or to finance a car or some optional thing in life, you could do so. They were not even used (as much, at least) for house mortgages - the bank would go through financial records and check income vs. debt and your banking history instead. Your credit score (or lack of it) was irrelevant.
Then they slowly became endemic to simply participate in life at all. Good luck renting a spot with a poor credit score even in the early 2000's. My second apartment I had to show my (private mom and pop) landlord a great reference from my previous rental plus supply him with a 3mo security deposit since I had zero credit. I learned then that it was a non-optional part of society and I had better play ball or go entirely off grid hermit style.
Then credit agencies started even more BS like putting in your salary history (mined from employers), any criminal records, etc. It's a social credit score in everything but name and likely implemented far broader and wider in society than anything China currently has. You will literally be frozen out of many careers and entire areas to live if you do not maintain it.
Yours is also a good theory, but there are plenty of people that find themselves in a situation where income can lag behind expenses.
When it comes to the choice of being responsible with debt or making sure your kid has calories today, there isn’t really a choice in reality.
There is a lot to be said for better financial education, but there is also a lot to be said for services like credit cards that allow someone to smooth out a cash flow issue.
It all seems so obvious until you find yourself in that situation. Most (or many at least) people in debt aren’t stupid or reckless, although they may be ignorant of their options for spending better and for borrowing better.
I strictly use it to accrue points, but general advice is that credit is useful to smooth out the lumpiness of pay cycles, but if you can’t pay the debt back on necessities within the credit cycle, you shouldn’t use it at all.
Since credit is the primary means used for discretionary spending, I firmly believe that the accessibility of quick (but not necessarily cheap) interest allows inflation to go unchecked.
I was deliberately debit-only for years. Someone on a podcast explained why they used credit cards for extra protections from banks beyond debit cards. I don't know the accuracy of what was said, but the show is hosted by three smart people and neither of the other two disagreed that credit cards have more protection than debit cards so I assume it was generally accurate. I got a credit card right away and use it for most purchases and pay it off in full every month.
I sort of agree although I am for credit cards if they help me with deals since I am frugal personally but even I am thinking to just use credit cards of my close cousins/family if they already have one.
I am giving a transcription of the situation in the video[0] but buy now pay later apps have on average 300% apr (yes this is not a joke) and even ask for tips and have so many dark patterns, both these industries are really similar/the one basically.
> She had just switched to this remote job, which was a pay cut, but it let her stay home and care for her son at the time. And then after she went back to her normal job, she actually stopped using Earnin for nearly two years. She got on a stable financial footing. She even bought this house. But housing costs are expensive and for a bunch of complicated reasons, her child support payment is less this year than it was before. And that put Runeda in this really precarious position, where if one thing went wrong, it would completely throw her off financially. And about two weeks ago, that's exactly what happened. My son wakes up really early sometimes, and it was, like, 5:00 in the morning, and I went to try to, like, open an app on my phone, and it wasn't loading, and I was like did they turn my internet off? And I checked the router, and it said your service has been interrupted for nonpayment, and I'm like, what the heck are you talking about? The bill used to be on auto pay, but for some reason wasn't anymore. they told me I had to pay, like, over $200. I had like 50 bucks in my bank account. That was the first domino, and everything fell apart from there. Runeda borrowed $150 from Earnin to pay the internet bill, the $20 reconnection fee and the $6 Earnin fee.
[0]:Billionaires Found a New Way to Steal Your Paycheck:https://www.youtube.com/watch?v=hBI_FLYfwmM
> 3. People who are financially stable and literate see the increased rates and put fewer things on credit.
Financially stable and literate people don’t pay credit card interest at all.
Credit cards are useful for fraud protection and rewards, the people that use them to finance purchases at 24% APR are wildly irresponsible or desperate.
What good would it do to compare rates to what they used to be?
Your mom: Why don't you have a credit card? It helped me so much when I was in your situation.
You, a young adult who doesn't check: I'll get one! runs up debt with an interest rate 4x what your mom had to deal with thirty years ago HELP I'M SUPER BROKE AND BANKRUPTCY IS A LOT HARDER THAN IT WAS THIRTY YEARS AGO TOO
You, a young adult who checks: The interest rates are 4x what they were when I was in your situation. This looks like a much shittier deal than it was for you.
There needs to be a name for the way people think the world hasn't changed since they were a young adult. I'm not convinced it's just boomers; it's just that they had it so good the contrast is higher. Gen Xers do the same thing, I'm sure, for example assuming that kids ride their bikes to school and have textbooks and the leading cause of death isn't GSWs.
Seems like an appropriate term would be the opposite of recency bias; primacy bias. I definitely see it in older Gen Xers who basically coasted their whole lives while ironically idolizing boomers, didn't think about the future at all, and seem to hate trying hard at anything.
Obviously not all GenX, just like not all boomers, but those people in both generations anecdotally seem to be fairly characterized as accumulating as much material garbage as possible. The Gen Xers in my life went to school for no reason and then held it up as a bastion of prosperity despite their degree having very little to do with the jobs they had
If you've had credit cards in the past, your minimum payments and debt servicing will be a lot more expensive than before.
Was higher prior to Covid, we are just reverting to the prior situation.
https://www.debt.org/bankruptcy/statistics/
Is this what they meant by a return to normalcy?
Steadily increasing for five years
The tables in the link do a good job of outlining this, 11.9% while an interesting headline number, 11.9% increase over nothing is still basically nothing.
However, with the tables going back to 2022, it's almost 100% increase of businesses and 50% increase for Non-business filings, which I find more interesting.
Would be great to see the totals as population adjusted against historical context though.
Still not very high by historical standards. In fact, it really just seems like we're approaching the pre-pandemic norm.
https://www.congress.gov/crs-product/IN12536
An interesting analysis would be to see how many and how often these posts of social order/societal breakdowns are making it to the FP here over time.
Are we the first state to openly care more about our rich than the people who live here?
No, but historically speaking, the societies that operate this way tend to invite revolution
Kind of. I want to yes, but its not directly how this works or how it sounds. A large increase in poverty or loss of property is insufficient to stoke revolution on its own. The increase of poverty in favor of the rich devastates the economy for multiple reasons, such as: opportunity contraction, less spending, loss of motivation/mobility, and more. When the economy loss becomes wide spread enough, regardless of bankruptcy/poverty/homeless or whatever rates is when revolution happens.
The problem has to effect a majority of society. 12% sounds devastating (it is), but it is not a wide enough umbrella.
For America specifically, it is somehow worse.
It took 25% of the nation being out of work to, not revolt, but popularly elect someone willing to to spend a little government money on healthcare and welfare.
So it will get much worse before Americans finally read a book and figure out we should maybe do something different.
______
1. https://en.wikipedia.org/wiki/Grokipedia
I read Grapes of Wrath recently on a recommendation from a friend and it’s one of the few great books I’ve read and felt was genuinely great. It feels incredibly relevant today with both inequality and automation. Would highly recommend it.
Bankruptcy won't even discharge the kind of debt many/most of the lower-middle class fall broke upon. Alimony, child support, student loans, "restitution."
This claim is simply false. The cause of bankruptcy in the U.S. has been extensively studied and absolutely none of the criteria you list comes even close to the number 1 reason that people in lower or middle class declare bankruptcy: medical bills.
No, it isn’t that well studied; and I’d be interested to see your source and confirm that it doesn’t trace back to a study that says something more like “A new study from academic researchers found that 66.5 percent of all bankruptcies were tied to medical issues —either because of high costs for care or time out of work”. (https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most...)
What? You mean to tell me people file bankruptcy over the kinds of debt they can actually discharge and less so over the kinds of debt they can't?
That doesn't prove anything other than people filing bankruptcy aren't morons.
If the only thing you could discharge were gambling debts, there would be an equally specious claim that people aren't going broke over medical debt because 80% of bankruptcies cite gambling debts as the cause.
I'm not trying to prove anything. I am pointing out that your claim about the cause of many/most lower and middle class people's bankruptcy is false.
They never made that claim.
This claim is false:
>Bankruptcy won't even discharge the kind of debt many/most of the lower-middle class fall broke upon.
Most of the lower-middle class do not go broke upon the listed criteria.
Average medical debt per person in 2020 was $430 per [0].
By comparison, in year 2006, there was 2.55B$ in arrears in my state of Arizona when it had ~5.5 million people, or an average of $463 per person. Not even adjusted for inflation. [1]
If you set the bar at medical debt, which you seem to have, it seems to have passed it on child support alone. And that is with a quite uncharitable handicap against me, as I'm comparing the 2006 child arrears numbers I found against 2020 dollars of medical debt.
[0]https://pmc.ncbi.nlm.nih.gov/articles/PMC8293024/
[1]https://www.opnff.net/Files/Admin/Assessing%20Child%20Suppor...
I did not make that claim. I made the following:
The whole point was that bankruptcy wasn't a remedy discharging these forms of going broke. It's unsurprising the bankruptcy data leans towards a 'cause' that will actually discharge their debt, otherwise the incentive for a broke person to file bankruptcy is lowered.Most of the lower-middle class do not fall broke upon the things you listed.
Looks like there's equivocation about "bankrupt" and "broke". To me you can be broke without going through the legal bankruptcy process.
Bankruptcy at this point is just a way to signal to creditors not to lend more money to this individual. As you said alimony, child support, student loans, restitution are a must so the filing simply is a formal notice that "every penny this person ever earns is already earmarked, heed this warning before lending"
It's quite convenient though that it actually discharges the kind of debts rich people and businesses are more likely to accrue, while not discharging the kind of debts the middle/lower classes are likely to accrue when they're unable to pay them.
Agree. Also convenient that the warning I mentioned benefits those in the business of extending credit
What restitution is the average american on the hook for these days?
That's possibly every state in the last 400 years, with the possible exception of the soviet union and Maoist China, and those exceptions are arguably just a technicality.
Maoist china certainly and famously murdered many rich people. It's true that the state that emerged had deep corruption and that life remained difficult for the poor, but murdering rich people is an allegation difficult to deny.
I think what's different is that we actually have democracy, yet for whatever reason, the masses of poor people keep voting for governments that overtly and openly only care about rich people.
You forget the French, who inspired Marx's exhortations to practice "revolutionary terror," the "only way," [0] with their own public executions of the rich [1].
[0] https://www.marxists.org/archive/marx/works/1848/11/06.htm
[1] https://en.wikipedia.org/wiki/Reign_of_Terror
That has been pretty normal throughout history. Caring about non-rich people has been pretty rare.
Sure, but states typically at least pretend and allege to benefit their constituents. We haven't tried to do that since at least reagan.
That's a relatively new idea. It was fundamental to the American and French revolutions, and it was brand new at the time. (The Americans were heavily cribbing off French thinkers, though it took most of a century for the French to implement it.)
It's been the basic claim of liberal democracies for the past 250 years, and they were so successful that people thought it would become universal. But it reached a peak around 30 or 40 years ago -- right about the time that the Soviet Union fell and the "tech age" really got going.
The US in particular saw that as victory for America, and in particular victory for its wealthy class. So it has been leading everything away from liberal democracy.
Definitely not?
No but maybe the first state with a constitution that is supposed to stop that kind of thing happening again.
Not by far
It should be obvious that the answer is no. So obvious that I'm not sure why the question is even being asked.
>So obvious that I'm not sure why the question is even being asked.
its a rhetorical question.
the question is asked to make a point rather than to be answered.
So obvious I don't know why you had to say it
How exactly do we care more about rich people? If anything, the few rich people completely subsidize the existences of poor people
There's no reason to believe this will reverse or improve under the current administration. Grifting is celebrated and policy is decided by and for the wealthy. Meanwhile, tech leaders are promising even more job losses spurred by AI.
AI is sucking money out of other sectors. Unfortunately many of which a degrow means a decrease in living standards (unless you can afford the premium). I think they call it K shaped economy. It's bad right now.
Friendly reminder the US Gov printed ~4 trillion dollars during the Covid years.
feel free to elaborate on the relationship you are drawing between that and the article
I actually don't understand how this would affect bankruptcies — why?
I don't know if this is his point, but a decent amount of cash went to individuals as part of Covid relief in different forms, and this caused a delay in bankruptcies because people were able to pay their bills. Pick your moral quandry.
Speculation/personal read on this.
1. A lot of companies got used to ZIRP money (not to mention the trickle-down effect to the rest of the economy).
2. The COVID printing spree/helicopter money had a knock-on effect of rising inflation (more dollars/demand competing for the same resources, or less). That was made even worse by tariff fluctuations.
3. The delta between revenue/investment money vs. cost increases relative to inflation likely exceeded the threshold for these companies to stay solvent (or to make it worth it to keep the business operational).
Businesses focused more on seeking out easy government money than building good products.
And no wonder why the job market is so booming right now because there are less companies alive and more people got laid off, thus shrinking demand and increasing supply in workforce recruiting. We all have to thank Trump and Anthropic/OpenAI/blah-blah-blah for this win-win situation.
I hope there are jobs for company liquidators though it is usually the job of a junior solicitor/lawyer I reckon, as they will certainly have more demands amid this bankruptcy wave
Got to love that golden age.