Peter St Onge Podcast
Ep 85 Weekly Roundup: Bankruptcies Soar 61%
Sep 30, 2024
Bankruptcies are skyrocketing, with a staggering 61% increase driven by inflation and high interest rates. Confidence in college education is plummeting, prompting many to skip it altogether. A debate brews over the actual value of a degree in today’s economy. Meanwhile, personal finances are in crisis with slumping savings and rising debt. Lastly, a former chief economist warns about the dangers of financialization and the need for urgent reform to stabilize the financial system.
21:45
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Quick takeaways
- The sharp 61% increase in small business bankruptcies underscores the heavy financial burden from rising inflation and COVID loan repayments.
- The declining value of a college degree is prompting more Americans to consider vocational training as viable employment alternatives.
Deep dives
Increase in Small Business Bankruptcies
Small business bankruptcies have surged by 61% this year, driven by rising inflation, high interest rates, and the repayment of COVID-related loans. A significant number of small enterprises are struggling to meet the terms of the $380 billion in economic injury disaster loans they received during the pandemic, with about 80% of these loans still outstanding. Consequently, many are facing financial distress, leading to a wave of bankruptcies among commercial establishments. Major retail chains, especially those in consumer discretionary sectors like restaurants, are particularly hard-hit, marking a troubling trend in the economy.
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