Qufan Wu
Prof. Eileen Stillwaggon
ECON 103-C
10/31/2014
Maxed Out

Facing this world with various credit card companies, investors and pawnshops, we feel like that as the middle class, we live at the bottom of the society, squeezed by the high rate of interest and stressed by the reality. However, we cannot get rid of this serious and terrible situation since people always need to survive, and many abuse it. This so-called “Money chain”, like the food chain that gradually consumes the energy in nature, also runs out people’s live capabilities. Imagining that someone from the middle class has the a relatively high initial credit record. Then he is willing to take advantage of it and get a credit card. With this invisible money, he never buys second-hand things because anything new is always better. For him, the opportunity cost of buying new things with credit is much less than buying old things with money he owns already. As time passes, he spends too much. To maintain his credit record, he has to pay for it on time. At this moment, problems come in. This middle class citizen must repay, not only what he borrowed before, but also the high rate of interest, which he cannot handle well with his current economic strength. Helplessly, he will sell off his property to avoid the a bad credit record. He may even commit suicide to evade repayment. In contrast, the credit card company can obtain the money it lent out and the extra interest paid by borrowers. This is a vicious circle that makes the poor become poorer and poorer as well as the rich richer and richer. The impact of credits on individuals is not the only serious thing. It also causes a subprime crisis in the USA. With mortgages, when the rate of interest was relatively low, lending institutions continuously lend money to people who have bad credit or earn little money. However, as interest rates increase, these borrowers cannot pay off their loans on time, sowing the seeds of the subprime crisis in America. So, does the severe situation of mercenary financial services and the complex debt relationship around the USA make the government rethink deeply? To some extent, the answer is yes. From the movie,