Trillions in Debt, Can the Middle Class Hang On?

By James Scurlock, AlterNet. Posted April 3, 2007.

How do we stop the credit industry's predatory business model and get Americans out of debt when incomes aren't rising as fast as the costs of healthcare and housing?

Last week, the FDIC and the Federal Reserve Board were forced to remind the nation's bankers to verify their customers' incomes -- adding that it might be a good idea to determine whether or not said customers could afford their mortgage payments. The new guidelines are expected to have a chilling effect on what the industry calls "home ownership." Many esteemed economists have expressed hope that the resulting declines in home values, which have been inflated by the lack of such guidelines, will not stop too many Americans from cashing out the equity in their homes to keep consumer spending up. In other words, the "new economy" is based on people slowly losing home ownership, not gaining it.