The Indebted Society: Anatomy of an Ongoing Disaster

In a landmark inquiry into the corrosive effects of debt--personal, corporate, public--on American society, Harvard economist Medoff and economic consultant Harless assert that debt is the underlying cause of the economic insecurity felt today by most Americans. In their rigorous analysis, high levels of business debt have given firms the leeway to treat employees like commodities, resulting in widespread layoffs, wage take-backs, erosion of benefits and excessive unpaid overtime hours. For families awash in consumer debt, increased stress and alienation from spouses and children contribute to domestic violence and divorce, the authors maintain. They further argue that government and institutional policies favorable to lenders--for example, high interest rates--add to the burden of government debt while hurting the general public by raising unemployment levels. Their battery of prescriptions includes tax-sheltered personal savings, legal job protection for older workers, extension of unemployment benefits and drastically slashing the federal deficit by further taxing the top fifth of U.S. households. John Kenneth Galbraith, in a foreword, calls this report ""economics at its concerned and empirical best,"" an endorsement echoed in advance testimonials from noted economists, politicians and pundits. (Oct.)