A phantom debt menace

Make Me Smart May 8, 2024 Transcript

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Kimberly Adams 

Hello everyone, I’m Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense.

Amy Scott 

And I’m Amy Scott filling in for Kai Ryssdal today. Thanks so much for joining us. It’s Wednesday, May 8. And you know the drill. Today we’re going to do some news, then some smiles. And as Kai says, we’ll get out of your hair.

Kimberly Adams 

I actually have two news items. The first one is sort of following up to the conversation we were having yesterday about, you know, things getting a little bit easier on the consumer debt side of things and whether or not people were carrying as much debt as, you know, they used to be. And then I saw after the show this interesting article in Bloomberg about “Buy Now, Pay Later” loans, and how there is not much transparency around these sorts of short-term loans. You think like a firm and Klarna and Afterpay. Those sorts of things. And because we don’t have as much transparency around loans like that, as we do with some other types of debt, it’s making it more difficult to get a full picture of what the consumer debt landscape looks like right now. And so, here in this article, it says “Time and again, these companies have resisted calls for greater disclosure, even as the market has grown each year since at least 2020 and is projected to reach almost $700 billion globally by 2028. That’s masking a complete picture of the financial health of American households, which is crucial for everyone from global central banks to US regional lenders and multinational businesses. Consumer spending in the world’s largest economy has been so resilient in the face of stubbornly high inflation that economists and traders have had to repeatedly rip up their forecasts for slowing growth and interest rate cuts. Still, cracks are starting to form. First, it was Americans falling behind on auto loans than credit card delinquency rates reached the highest since at least 2012. With the share of debt 3060 and 90 days late all on the upswing. There are signs that consumers are struggling to afford their Buy Now, Pay Later debt too. A recent survey conducted for Bloomberg News by Harris poll found that 43% of those who owe money to BNPL services said they were behind on payments.”

Amy Scott 

Wow. You know, we were talking about how Gen Z has higher credit card balances than Millennials did a decade ago. I wonder if they’re also more likely to be using these Buy Now, Pay Later services, which wouldn’t be showing up in that data. That’s really interesting.

Kimberly Adams 

It is. So, the other news item is related to sort of this rush of policymaking that’s happening under the Biden administration in the last couple of weeks, and some of it is regulations. And they’re trying to get ahead of you know, the Congressional Review Act, which we discussed on the show a couple of weeks ago. But Politico has a really cool interactive piece today looking at not just the policies they’re trying to get out the door, but the money they are trying to get out the door. And if you put together the inflation Reduction Act, the American Rescue Plan, the bipartisan infrastructure law, and the CHIPS and Science Act all together. I’m going to read here from the Politico playbook newsletter. “Between them, they contain $1.6 trillion in ‘loans, grants and tax credits, meant to green the economy, revive the country’s manufacturing base, repair its roads and bridges, and challenge China for technological supremacy.’” And so, they are trying to get hundreds of billions of dollars that are have been approved by Congress out the door, so that if Trump wins in November, the money isn’t leftover for Trump to spend the way that he wants to or to cancel it. And they broke down and they’ve got some really cool graphics showing this. “Of the $1.1 trillion those four laws ‘provided for direct investments on climate, energy and infrastructure,’ less than 17% has been spent as of April.” When it comes to the American Rescue Plan, “of the $884 billion, only $125 billion has been spent. Of the $54 billion from the CHIPS Act, less than $700 million has been awarded — ‘though the Commerce Department has announced $29 billion in tentative awards.’” So, you know, it’ll be very interesting to see how the Biden administration tries to get the rest of this money out the door. And what may happen if Trump wins, and some of these funds have not been allocated yet.

Amy Scott 

Well, you also wonder like, it seems like trying to spend money really fast could lead to a lot of problems.

Kimberly Adams 

Remember the Paycheck Protection Program?

Amy Scott 

Right? Yeah, I mean. What’s the knock-on effect of the rush? I wonder if we’ll be seeing that for several years to come.

Kimberly Adams 

Well, I’ve asked folks at the Commerce Department about sort of the speed of getting this money out the door, and they pointed out that they took a long time to start awarding the money. And the reason that it’s all kind of seems like you’re hearing an announcement about some new factory or some new award every week now is because they spent a lot of time on the run up to it, making sure they had the vetting in place and the systems in place. And now, they say they’re in a position to very quickly now make decisions and actually allocate the funds. So, I imagine we’re going to see a lot more of this coming up. I highly recommend the Politico interactive. What you got?

Amy Scott 

All right. Well, a very sad story, but I promise I have a good smile later. So, bear with me. I read this on Axios, but it’s about a study published today in JAMA Psychiatry. You were talking about words we’ve only read.

Kimberly Adams

I think it’s JAMA.

Amy Scott

Yeah, the Journal of the American Medical Association, their psychiatry journal. And this study showed that between 2011 and 2021, more than 320,000 children in this country lost a parent to a drug overdose. And over that decade, the rate of children losing a parent more than doubled. So, as often happens with these things, there were significant disparities across racial and ethnic groups. Children of American Indian and Alaska Native parents have the highest rate of loss. 187 per 100,000 children, which is just really staggering. That’s more than double the rate of white and Black children losing parents to overdose. But Black children experienced the highest increase in the loss over the decade. Most of these deaths involved opioids. And it really just speaks to the huge cost of this ongoing epidemic. So yeah, that really stood out stood out to me because the loss of any individual is, of course, tragic. But when you think about children, and the trauma they’re going to carry forward into the next generation. It’s just really sobering.

Kimberly Adams 

Yeah, I’m trying to get this term. So, there’s a term called ACES. Adverse childhood experiences. And there’s all this research showing that when children are exposed to traumatic events, it has these knock-on effects on their health, their education, their outcomes, their risk of incarceration, and all sorts of other things. And you know, these adverse childhood experiences of trauma have generational consequences. So, when we’re talking about a kid losing their parent to an overdose, you have to also imagine that that is going to leave a lasting damage on that kid. And we don’t necessarily have the mental health infrastructure or even, you know, the care infrastructure when it comes to the foster care system to give these kids what they need. Yep, definitely need the smiles now.

Amy Scott 

Yeah. Yours looks fun. Do you want to go first?

Kimberly Adams 

Yeah. Did you watch any of the Met Gala? Or the red carpet for the Met Gala?

Amy Scott 

No. I’ve looked at some pictures, but no, I didn’t watch.

Kimberly Adams 

Yeah, I didn’t watch it live either. I don’t have the time for it. But I always like to go back and look at the pictures of the gowns. And, you know, they’re so beautiful, but they’re often very complicated and difficult to move in.

Amy Scott 

Very uncomfortable looking.

Kimberly Adams 

And you know, sometimes you’re looking at those dresses and you’re like, how do you move in them? And it turns out, in large part, you do not.

Amy Scott 

Yeah. I’m always like, how do you pee? Like, can you go to the bathroom? Nope.

Kimberly Adams 

Right. And so, there’s a South African singer named Tyla, who really is being discussed as having one of the best looks of the night. Her hourglass themed, sand themed dress to you know, evoking sort of the Sands of Time by a designer whose name I’m probably mispronouncing. Balmain And it’s her first time at the Met Gala. And the gown was just beautiful. It fit her wonderfully and everything, but she could not move in it. And so, she got to the stairs and couldn’t go up the stairs in the gown. And so, there’s video of her literally being carried up the stairs, and not like swept up into someone’s arms and carried. Like the dude is lifting her by her waist, and carrying her up the stairs, and her feet are kind of like lingering over.

Amy Scott 

Like you would carry a child who’s pretending to be paralyzed to avoid going to bed. Yeah.

Kimberly Adams 

Wow, that was specific. Don’t have that experience. But I bet every parent can all imagine.

Amy Scott

We can all imagine it. Yes.

Kimberly Adams

And so, that’s funny. And then, what made me even pay attention to the movement in this dress was because I came across this video online of her after she made it up the stairs and into the event in order to be able to sit down, they cut the bottom half of the dress.

Amy Scott 

Did anyone think this through?

Kimberly Adams 

It was a plan. It was a plan. And so, there’s this astonishing video of the designer, like on his knees with a pair of scissors, free handing a cut across this gown, and it comes out and it’s like this adorable little mini dress. And then she’s just like cute the rest of the night.

Amy Scott 

I feel like we need to play some sound of this. Can we mix that in post? This is too good.

Kimberly Adams 

Well, it doesn’t make much sound. Like, he’s sitting there cutting, and he cuts this like perfectly straight line around the dress while she’s wearing it. And you know, then it’s a whole other outfit. Just the skill. Wow. But it was cute. But it also kind of hurts your heart to see such a beautiful gown just chopped.

Amy Scott 

Well, because it’s made of sand. I’m looking at these pictures.

Kimberly Adams 

It’s not made of sand. It has three kinds of stone on it. It has three kinds of sand on it.

Amy Scott

Okay, okay.

Kimberly Adams

Instead of a purse she had like a very pretty little hourglass hand thing that was really adorable. Anyway, that’s my smile. What’s yours?

Amy Scott 

That is artistry. Okay, well, mine is. I sat in The Baltimore Banner, which is the nonprofit news site here by one of my favorite reporters, Tim Prudente, and Stokely Baksh. I hope I’m saying that right. I don’t know Stokely’s work that well. But anyway, a story about a woman in Baltimore who was renovating her bathroom in an old historic neighborhood. Like the houses from 1910 or something. And she found a trove of love letters in the plumbing in this little box, and the letters are from the 1920s. There were dozens of them. And I don’t want to tell you too much because she ends up turning over the letters to reporters at The Banner and it leads them on this, you know, investigation to figure out who exactly they were from. It involves, quote, “a celebrated Johns Hopkins scientist, a famous mountaineer and a trailblazing female journalist.” There’s an illicit affair involved. It’s just a super fun story and shows you never know what you will find if you open the walls of your house.

Kimberly Adams 

Wow. I wonder how hard it was to find someone who could actually read cursive.

Amy Scott 

That’s part of it. The woman who owns the house got so tired of reading this hard to read cursive that she was like, I want to know, but I give up. And thus, turned it over to reporters who apparently there was a whole team who would stop by the table and try to make out a different section. And yeah, people wrote differently back there. And the language was different too, which is interesting. A lot of old fashioned, but very, very poetic letters, I must say.

Kimberly Adams 

What I love though is the lines on the paper that they use. It’s the same from when we were in elementary school, like the blue lines and the red line on the side. It’s like those, a lot of it is similar paper to that. Wow, this is so fascinating. I have to go back and read this. This is cool, Amy.

Amy Scott 

Yeah, it’s fun.

Kimberly Adams 

Yay, history. All right. That is it for us today. I will be back with Sabri Ben-Achour tomorrow. Until then send us your thoughts, questions, comments, or any audio you think we should talk about to makemesmart@marketplace.org. Or you can leave us a voicemail at 508-U-B-SMART.

Amy Scott 

Make Me Smart is produced by Courtney Bergsieker. Ellen Rolfes writes our newsletter. Today’s program was engineered by Jay Siebold. Thalia Menchaca is our intern.

Kimberly Adams 

Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts. And Francesca Levy is the executive director of Digital.