How American debt in the private sector affects wealth creation

As the author of A Brief History of Doom (2019) and The Next Economic Disaster (2014), Richard Vague established himself as a clear and independent voice in the ongoing conversation about the role of private sector debt in the global economy. His illustrated business history of the United States offers a more general audience a clear-eyed view of 250 years of wealth creation and the people and personalities who drove that growth — and hold it today. And now, Richard's new book, The Case for a Debt Jubilee, offers a compelling case and policy recommendations for new forms of consumer debt relief. Following a career that has spanned fields as varied as banking and energy, credit, and the arts, Richard has served since 2020 as Secretary of Banking and Securities for the Commonwealth of Pennsylvania. In this episode, Richard explains the current state of American debt in the private sector, how that affects the economy, what the government response to COVID adds to this calculation, and how investors should be looking at their relationship to debt while building their portfolios.   Episode Links: https://www.richardvague.com/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today I'm joined by Richard Vague who serves as the Pennsylvania Secretary of Banking and Securities and he's going to be talking to us today about debt and the American household. So let's get into it.   Hey, Richard, thank you so much for coming on and chatting with me today. I really appreciate you taking the time.   Richard: Well, it's a real privilege. You guys have a great show and I'm honored to be on it.   Michael: Thank you, appreciate that. So we are here today to talk about something that I think is on every real estate investors mind. And well, most real estate investors might…, and that's debt and you've got a really unique position to be able to talk about debt. So for anyone who doesn't know who you are, where you're come from, and what your background is, you can give us a quick intro, a quick insider's peek into what those things are.   Richard: Well, I was in the banking industry forever and ever, which included some amount of mortgage lending a lot of consumer lending. I spent about the last 10 years in venture capital, which obviously includes more equity than debt, but includes both but kind of as an outgrowth of the Great Recession of a decade plus ago, I've written a series of books, including: The next economic disaster and a brief history of doom and more recently, the case for a debt jubilee that really get deeply into debt and both the positive and negative aspects of debt. So it's a topic that remains heavy on my mind.   Michael: It's your… sounds like and for anyone interested, where could they find those, that book?   Richard: Well, if you go to my own website, which is https://www.richardvague.com/ , and Vegas, spelled V as in Victor AG, UE, you can see all those books.   Michael: Okay, fantastic. So let's dive right in and I'm curious, Richard, in your opinion, I mean, how and why is debt such an issue in in the states in this country?   Richard: Well, you know, over the course of pretty much my own lifetime, certainly in the last couple of generations, you know, let's call it World War Two forward, household debt has tripled, you know, in 1950-ish. Household debt, if expressed as a percent of GDP was about 50% and today, it's about 160%. So there's a lot of it around and a lot of