[lbo-talk] Warren: How illness bankrupts people *with* healthinsurance

Doug Henwood dhenwood at panix.com
Mon Feb 21 07:50:52 PST 2005


Jordan Hayes wrote:


> >> To our surprise, half said that illness or medical
>>> bills drove them to bankruptcy.
>
>That can't be right!
>
>Doug said it was because these people "didn't know what they were
>thinking" and that they were "nuts" to be buying houses and running up
>huge credit card bills!
>
>Feh.

Really, Jordan. The metaphor that Elizabeth Warren often uses is that debt is like a heavy backpack - ok if you're walking on smooth terrain, but a disastrous burden if the ground gets rough and you trip. So if you get sick and face medical bills and work interruptions, then the debt service that seemed just on the right side of ok when everything was going well suddenly becomes disastrous. I think it's nutty to take on debts that require that everything not only stay ok, but get continuously better (like the people who take out huge home equity lines of credit that can be serviced only if house prices keep rising and/or interest rates don't rise).

Doug



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