A phantom debt menace
Make Me Smart
Marketplace
4.6 • 5.5K Ratings
🗓️ 8 May 2024
⏱️ 16 minutes
🧾️ Download transcript
Summary
Increasingly popular buy now, pay later services allow shoppers to split their purchases into smaller, recurring payments. We’ll get into why these loans are blurring economists’ understanding of today’s consumer debt landscape. We’ll also discuss President Joe Biden’s climate and infrastructure spending spree, and the knock-on effects of parents dying from drug overdoses. Plus, singer Tyla’s sandy Met Gala look, and forgotten 100-year-old love letters make us smile.
Here’s everything we talked about today:
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- “Playbook: Biden’s race to Trump-proof his legacy” from Politico
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- “‘Buy Now, Pay Later’ Has Americans Racking Up Phantom Debt” from Bloomberg
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- “When to use buy now, pay later services” from Marketplace
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- “Hidden love letters spark historical mystery in Baltimore” from The Baltimore Banner
We love to hear from you. Send your questions and comments to makemesmart@marketplace.org or leave us a voicemail at 508-U-B-SMART.
Transcript
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| 0:00.0 | Hello everyone. I'm Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense. |
| 0:11.0 | And I'm Amy Scott, filling in for Kai Risdahl today. |
| 0:14.5 | Thanks so much for joining us. It's Wednesday, May 8th and you know the drill. |
| 0:18.8 | Today we're going to do some news, then some smiles and as Kai says, well get out of your hair. |
| 0:25.0 | Yes. |
| 0:27.0 | I actually have two news items. |
| 0:30.0 | 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. |
| 0:45.0 | And then I saw after the show this interesting article in Bloomberg about |
| 0:51.0 | by now pay later loans and how there is not much transparency around |
| 0:59.1 | these sort of short-term loans that you think like affirm and |
| 1:03.3 | after pay those sorts of things and because we don't have as much transparency |
| 1:09.7 | around loans like that as we do with some other types of debt it's making it more difficult |
| 1:14.5 | to get a full picture of what the consumer debt landscape looks like right now |
| 1:19.1 | and so here in this article it says time and again these companies have resisted calls for greater disclosure |
| 1:26.5 | even as the market has grown each year since at least 2020 and is projected to reach almost |
| 1:31.8 | 700 billion dollars globally by |
| 1:33.7 | 2028. That's masking a complete picture of the financial health of |
| 1:37.8 | American households which is crucial for everyone from global Central Banks |
| 1:42.0 | to US regional lenders and multinational |
| 1:45.0 | businesses. Consumer spending in the world's largest economy has been so |
| 1:50.2 | resilient in the face of stubbornly high inflation that economists and traders have had to repeatedly |
| 1:55.7 | rip up their forecasts for slowing growth and interest rate cuts. Still, cracks are starting |
... |
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