I can't find the original source, but I remember reading a study showing that this rise was closely correlated to states which had legalised or loosened laws on gambling!
> In states that allowed online betting, the study reported a 10% increase in the likelihood of bankruptcy and an 8% increase in debt collection amounts — outcomes that tended to appear about two years after the practice was legalized.
I'd argue that, while a portion of this rise obviously consists of troubled/problem/addicted gamblers, a huge part of the rise of gambling is from desperation: The public's growing belief that the traditional wealth-producing ladders have all been pulled up, and that gambling is the last remaining hope that normal people have of making decent money.
"Work hard all your life and retire with a pension." - fantasy in 2026.
"Invent something new and capitalize on it." - not realistic in the face of gigantic, powerful, all-owning corporations who will squash you.
"Buy an existing business and live off the proceeds." - impossible without existing wealth.
"Become a famous pop star or sports hero." - as improbable as ever.
People have no hope anymore, and hopeless people turn to random chance as the last and only remaining option.
> "Become a famous pop star or sports hero." - as improbable as ever.
It's even more improbable. For both of those, your starting to see more and more of the current generation that are children/nieces/nephews of the already famous. They have the financial comfort to pursue it, and the family connections in the industries.
And for sports, the level at which you have to be competitive is getting younger and younger. So much more sports science/nutrition going in at the middle school/high school level.
Those were two fields that seemingly were still meritocratic, but that is fading fast, if it ever existed at all.
> while a portion of this rise obviously consists of troubled/[...], a huge part of the rise of gambling is from desperation
Is that really so? It's a get-rich-quick scheme and absolutely no one is under any illusions otherwise, including the people gambling their rent money. They know it's a very long shot and that most people don't make bank, but they hope it'll go different for them.
WallStreetBets, just another form of gambling, is filled with posts of people losing everything but it doesn't seem to stop newbies.
The gap between troubled/problem/addicted and "desperate" has to be paper thin, if it exists at all.
I think "huge part ... is from desperation" needs a citation. Gambling has been known to be a vice for millenia. There was an article on here not long ago where a reporter did sports gambling for a year for a story; he started off Mormon, disinterested in gambling, with $10k from the company, and after he lost it, he put himself on the state self-exclusion list because now he had a problem with gambling. The null hypothesis is that gambling is a vice, so to make it about desperation needs some evidence.
Also, "traditional wealth-producing ladders have all been pulled up" is nonsense. The stock market is available to all comers, and long investing is a traditional path. There was a story here a few years ago about a black janitor in NYC who died and left $7 million to the MoMA (or some such); he had invested $10k a year in the stock market. People in the trades still make good money. People on this site also tend to be in the making good money careers. I saw a bunch of young couples--and not the techy-looking ones, either--at the open houses this spring in the midwest. Also, one should not extrapolate one's situation at 25 to be the same at 45; if you've done reasonable savings, 45 should looking wealthier.
Highly liquid markets are good information compression systems, but existing financial markets tend to be impossible to disaggregate with regard to any discrete event you care about.
You can also ban 100% of gambling advertising and get 100% of the (dubious, but I'll humour the possibility) 'benefits' of gambling, while removing 90% of the downsides.
I can't speak for bankruptcy filings, but I've sat through small claims sessions on a few occasions and probably half are for credit card debt. Most of the time the defendant doesn't show and assuming the bank wins, damages can be trebled in my state.
And: Credit card rates are way, way up compared to just a few years ago. WSJ reported average APRs in the US were over 24% (https://www.wsj.com/finance/banking/the-credit-card-rate-cap...). Most people do not read the fine print on their credit card applications, or compare them to what rates used to be like.
If anyone is wondering how to escape this cycle, the solution is pretty straightforward; don’t buy things you cannot afford with cash/debit.
If putting your credit card balance on autopay is scary to you, you probably shouldn’t have a credit card. Also, having a credit card doesn’t mean you can ignore the charges and settle up at the end of the month. Credit is a tool that can be abused and misused like any other tool.
Personally, I’m anti credit in general and don’t have credit cards or a credit score. But I also moved to Europe where credit is not nearly as important as when i lived in the US.
Your mom: Why don't you have a credit card? It helped me so much when I was in your situation.
You, a young adult who doesn't check: I'll get one! runs up debt with an interest rate 4x what your mom had to deal with thirty years ago HELP I'M SUPER BROKE AND BANKRUPTCY IS A LOT HARDER THAN IT WAS THIRTY YEARS AGO TOO
You, a young adult who checks: The interest rates are 4x what they were when I was in your situation. This looks like a much shittier deal than it was for you.
Kind of. I want to yes, but its not directly how this works or how it sounds. A large increase in poverty or loss of property is insufficient to stoke revolution on its own. The increase of poverty in favor of the rich devastates the economy for multiple reasons, such as: opportunity contraction, less spending, loss of motivation/mobility, and more. When the economy loss becomes wide spread enough, regardless of bankruptcy/poverty/homeless or whatever rates is when revolution happens.
The problem has to effect a majority of society. 12% sounds devastating (it is), but it is not a wide enough umbrella.
It took 25% of the nation being out of work to, not revolt, but popularly elect someone willing to to spend a little government money on healthcare and welfare.
So it will get much worse before Americans finally read a book and figure out we should maybe do something different.
> So it will get much worse before Americans finally read a book and figure out we should maybe do something different.
You better forget about the books. Don't count on the media either; the abolishment of the fairness doctrine and financial incentives via corporate ownership can and will distort reality in a strata-optimized way. Social media is overrun by bots and influence ops as we speak. New threat: people will ask their LLM. Journalists will source their LLM. Next question: Who trains the LLM?¹
I read Grapes of Wrath recently on a recommendation from a friend and it’s one of the few great books I’ve read and felt was genuinely great. It feels incredibly relevant today with both inequality and automation. Would highly recommend it.
Bankruptcy won't even discharge the kind of debt many/most of the lower-middle class fall broke upon. Alimony, child support, student loans, "restitution."
This claim is simply false. The cause of bankruptcy in the U.S. has been extensively studied and absolutely none of the criteria you list comes even close to the number 1 reason that people in lower or middle class declare bankruptcy: medical bills.
What? You mean to tell me people file bankruptcy over the kinds of debt they can actually discharge and less so over the kinds of debt they can't?
That doesn't prove anything other than people filing bankruptcy aren't morons.
If the only thing you could discharge were gambling debts, there would be an equally specious claim that people aren't going broke over medical debt because 80% of bankruptcies cite gambling debts as the cause.
Bankruptcy won't even discharge the kind of debt many/most of the lower-middle class fall broke upon.
The whole point was that bankruptcy wasn't a remedy discharging these forms of going broke. It's unsurprising the bankruptcy data leans towards a 'cause' that will actually discharge their debt, otherwise the incentive for a broke person to file bankruptcy is lowered.
Bankruptcy at this point is just a way to signal to creditors not to lend more money to this individual. As you said alimony, child support, student loans, restitution are a must so the filing simply is a formal notice that "every penny this person ever earns is already earmarked, heed this warning before lending"
It's quite convenient though that it actually discharges the kind of debts rich people and businesses are more likely to accrue, while not discharging the kind of debts the middle/lower classes are likely to accrue when they're unable to pay them.
That's possibly every state in the last 400 years, with the possible exception of the soviet union and Maoist China, and those exceptions are arguably just a technicality.
I think what's different is that we actually have democracy, yet for whatever reason, the masses of poor people keep voting for governments that overtly and openly only care about rich people.
Maoist china certainly and famously murdered many rich people. It's true that the state that emerged had deep corruption and that life remained difficult for the poor, but murdering rich people is an allegation difficult to deny.
That's a relatively new idea. It was fundamental to the American and French revolutions, and it was brand new at the time. (The Americans were heavily cribbing off French thinkers, though it took most of a century for the French to implement it.)
It's been the basic claim of liberal democracies for the past 250 years, and they were so successful that people thought it would become universal. But it reached a peak around 30 or 40 years ago -- right about the time that the Soviet Union fell and the "tech age" really got going.
The US in particular saw that as victory for America, and in particular victory for its wealthy class. So it has been leading everything away from liberal democracy.
The tables in the link do a good job of outlining this, 11.9% while an interesting headline number, 11.9% increase over nothing is still basically nothing.
However, with the tables going back to 2022, it's almost 100% increase of businesses and 50% increase for Non-business filings, which I find more interesting.
Would be great to see the totals as population adjusted against historical context though.
There's no reason to believe this will reverse or improve under the current administration. Grifting is celebrated and policy is decided by and for the wealthy. Meanwhile, tech leaders are promising even more job losses spurred by AI.
I don't know if this is his point, but a decent amount of cash went to individuals as part of Covid relief in different forms, and this caused a delay in bankruptcies because people were able to pay their bills. Pick your moral quandry.
And no wonder why the job market is so booming right now because there are less companies alive and more people got laid off, thus shrinking demand and increasing supply in workforce recruiting. We all have to thank Trump and Anthropic/OpenAI/blah-blah-blah for this win-win situation.
I hope there are jobs for company liquidators though it is usually the job of a junior solicitor/lawyer I reckon, as they will certainly have more demands amid this bankruptcy wave
I can't find the original source, but I remember reading a study showing that this rise was closely correlated to states which had legalised or loosened laws on gambling!
> In states that allowed online betting, the study reported a 10% increase in the likelihood of bankruptcy and an 8% increase in debt collection amounts — outcomes that tended to appear about two years after the practice was legalized.
https://www.npr.org/2026/04/04/nx-s1-5773354/legal-sports-be...
kalashi is coming
Are there markets where people can bet on bankruptcy rates too? Gambling increases bankruptcies, and then people gamble on the bankruptcies.
The old adage of bread and circuses ?.
Not to mention fools and their money parting.
It's so disgusting watching how much sports gambling and "prediction markets" have exploded in recent years
I'd argue that, while a portion of this rise obviously consists of troubled/problem/addicted gamblers, a huge part of the rise of gambling is from desperation: The public's growing belief that the traditional wealth-producing ladders have all been pulled up, and that gambling is the last remaining hope that normal people have of making decent money.
"Work hard all your life and retire with a pension." - fantasy in 2026.
"Invent something new and capitalize on it." - not realistic in the face of gigantic, powerful, all-owning corporations who will squash you.
"Buy an existing business and live off the proceeds." - impossible without existing wealth.
"Become a famous pop star or sports hero." - as improbable as ever.
People have no hope anymore, and hopeless people turn to random chance as the last and only remaining option.
> "Become a famous pop star or sports hero." - as improbable as ever.
It's even more improbable. For both of those, your starting to see more and more of the current generation that are children/nieces/nephews of the already famous. They have the financial comfort to pursue it, and the family connections in the industries.
And for sports, the level at which you have to be competitive is getting younger and younger. So much more sports science/nutrition going in at the middle school/high school level.
Those were two fields that seemingly were still meritocratic, but that is fading fast, if it ever existed at all.
> while a portion of this rise obviously consists of troubled/[...], a huge part of the rise of gambling is from desperation
Is that really so? It's a get-rich-quick scheme and absolutely no one is under any illusions otherwise, including the people gambling their rent money. They know it's a very long shot and that most people don't make bank, but they hope it'll go different for them.
WallStreetBets, just another form of gambling, is filled with posts of people losing everything but it doesn't seem to stop newbies.
The gap between troubled/problem/addicted and "desperate" has to be paper thin, if it exists at all.
yeah it seems winning the lottery is now our best chance for survival.
I think "huge part ... is from desperation" needs a citation. Gambling has been known to be a vice for millenia. There was an article on here not long ago where a reporter did sports gambling for a year for a story; he started off Mormon, disinterested in gambling, with $10k from the company, and after he lost it, he put himself on the state self-exclusion list because now he had a problem with gambling. The null hypothesis is that gambling is a vice, so to make it about desperation needs some evidence.
Also, "traditional wealth-producing ladders have all been pulled up" is nonsense. The stock market is available to all comers, and long investing is a traditional path. There was a story here a few years ago about a black janitor in NYC who died and left $7 million to the MoMA (or some such); he had invested $10k a year in the stock market. People in the trades still make good money. People on this site also tend to be in the making good money careers. I saw a bunch of young couples--and not the techy-looking ones, either--at the open houses this spring in the midwest. Also, one should not extrapolate one's situation at 25 to be the same at 45; if you've done reasonable savings, 45 should looking wealthier.
IMO prediction markets are an interesting tool but you can just ban sports gambling and keep 100% of their value and remove 90% of their downsides.
Prediction markets are 90% sports gambling.
So?
Can you explain the value you're talking about?
Highly liquid markets are good information compression systems, but existing financial markets tend to be impossible to disaggregate with regard to any discrete event you care about.
You can also ban 100% of gambling advertising and get 100% of the (dubious, but I'll humour the possibility) 'benefits' of gambling, while removing 90% of the downsides.
Agreed with that too
Having recently seen a thread here where a lot of people threw a lot of shade on gambling: I really recommend finding that source.
That being said: I'm more likely to believe inflation to be the cause; and I think it's a bad idea to use this to fan moral panic
>I'm more likely to believe inflation to be the cause
based on what?
Based on how much they like gambling.
I can't speak for bankruptcy filings, but I've sat through small claims sessions on a few occasions and probably half are for credit card debt. Most of the time the defendant doesn't show and assuming the bank wins, damages can be trebled in my state.
And: Credit card rates are way, way up compared to just a few years ago. WSJ reported average APRs in the US were over 24% (https://www.wsj.com/finance/banking/the-credit-card-rate-cap...). Most people do not read the fine print on their credit card applications, or compare them to what rates used to be like.
I wonder if there's a death spiral there:
1. Economy gets worse and some people are no longer able to keep up with their credit card payments. They default.
2. Credit cards increase rates to compensate for the increased risk since a greater fraction of their users are failing to pay.
3. People who are financially stable and literate see the increased rates and put fewer things on credit.
4. The remaining pool of people using credit now has an even greater fraction of people who aren't financially solid.
5. Go to 1.
This is a good theory.
If anyone is wondering how to escape this cycle, the solution is pretty straightforward; don’t buy things you cannot afford with cash/debit.
If putting your credit card balance on autopay is scary to you, you probably shouldn’t have a credit card. Also, having a credit card doesn’t mean you can ignore the charges and settle up at the end of the month. Credit is a tool that can be abused and misused like any other tool.
Personally, I’m anti credit in general and don’t have credit cards or a credit score. But I also moved to Europe where credit is not nearly as important as when i lived in the US.
What good would it do to compare rates to what they used to be?
Your mom: Why don't you have a credit card? It helped me so much when I was in your situation.
You, a young adult who doesn't check: I'll get one! runs up debt with an interest rate 4x what your mom had to deal with thirty years ago HELP I'M SUPER BROKE AND BANKRUPTCY IS A LOT HARDER THAN IT WAS THIRTY YEARS AGO TOO
You, a young adult who checks: The interest rates are 4x what they were when I was in your situation. This looks like a much shittier deal than it was for you.
If you've had credit cards in the past, your minimum payments and debt servicing will be a lot more expensive than before.
Are we the first state to openly care more about our rich than the people who live here?
No, but historically speaking, the societies that operate this way tend to invite revolution
Kind of. I want to yes, but its not directly how this works or how it sounds. A large increase in poverty or loss of property is insufficient to stoke revolution on its own. The increase of poverty in favor of the rich devastates the economy for multiple reasons, such as: opportunity contraction, less spending, loss of motivation/mobility, and more. When the economy loss becomes wide spread enough, regardless of bankruptcy/poverty/homeless or whatever rates is when revolution happens.
The problem has to effect a majority of society. 12% sounds devastating (it is), but it is not a wide enough umbrella.
For America specifically, it is somehow worse.
It took 25% of the nation being out of work to, not revolt, but popularly elect someone willing to to spend a little government money on healthcare and welfare.
So it will get much worse before Americans finally read a book and figure out we should maybe do something different.
______
1. https://en.wikipedia.org/wiki/Grokipedia
I read Grapes of Wrath recently on a recommendation from a friend and it’s one of the few great books I’ve read and felt was genuinely great. It feels incredibly relevant today with both inequality and automation. Would highly recommend it.
Bankruptcy won't even discharge the kind of debt many/most of the lower-middle class fall broke upon. Alimony, child support, student loans, "restitution."
This claim is simply false. The cause of bankruptcy in the U.S. has been extensively studied and absolutely none of the criteria you list comes even close to the number 1 reason that people in lower or middle class declare bankruptcy: medical bills.
What? You mean to tell me people file bankruptcy over the kinds of debt they can actually discharge and less so over the kinds of debt they can't?
That doesn't prove anything other than people filing bankruptcy aren't morons.
If the only thing you could discharge were gambling debts, there would be an equally specious claim that people aren't going broke over medical debt because 80% of bankruptcies cite gambling debts as the cause.
I'm not trying to prove anything. I am pointing out that your claim about the cause of many/most lower and middle class people's bankruptcy is false.
They never made that claim.
I did not make that claim. I made the following:
The whole point was that bankruptcy wasn't a remedy discharging these forms of going broke. It's unsurprising the bankruptcy data leans towards a 'cause' that will actually discharge their debt, otherwise the incentive for a broke person to file bankruptcy is lowered.Bankruptcy at this point is just a way to signal to creditors not to lend more money to this individual. As you said alimony, child support, student loans, restitution are a must so the filing simply is a formal notice that "every penny this person ever earns is already earmarked, heed this warning before lending"
It's quite convenient though that it actually discharges the kind of debts rich people and businesses are more likely to accrue, while not discharging the kind of debts the middle/lower classes are likely to accrue when they're unable to pay them.
Agree. Also convenient that the warning I mentioned benefits those in the business of extending credit
What restitution is the average american on the hook for these days?
That's possibly every state in the last 400 years, with the possible exception of the soviet union and Maoist China, and those exceptions are arguably just a technicality.
I think what's different is that we actually have democracy, yet for whatever reason, the masses of poor people keep voting for governments that overtly and openly only care about rich people.
Maoist china certainly and famously murdered many rich people. It's true that the state that emerged had deep corruption and that life remained difficult for the poor, but murdering rich people is an allegation difficult to deny.
That has been pretty normal throughout history. Caring about non-rich people has been pretty rare.
Sure, but states typically at least pretend and allege to benefit their constituents. We haven't tried to do that since at least reagan.
That's a relatively new idea. It was fundamental to the American and French revolutions, and it was brand new at the time. (The Americans were heavily cribbing off French thinkers, though it took most of a century for the French to implement it.)
It's been the basic claim of liberal democracies for the past 250 years, and they were so successful that people thought it would become universal. But it reached a peak around 30 or 40 years ago -- right about the time that the Soviet Union fell and the "tech age" really got going.
The US in particular saw that as victory for America, and in particular victory for its wealthy class. So it has been leading everything away from liberal democracy.
Definitely not?
No but maybe the first state with a constitution that is supposed to stop that kind of thing happening again.
Not by far
It should be obvious that the answer is no. So obvious that I'm not sure why the question is even being asked.
>So obvious that I'm not sure why the question is even being asked.
its a rhetorical question.
the question is asked to make a point rather than to be answered.
So obvious I don't know why you had to say it
How exactly do we care more about rich people? If anything, the few rich people completely subsidize the existences of poor people
Steadily increasing for five years
The tables in the link do a good job of outlining this, 11.9% while an interesting headline number, 11.9% increase over nothing is still basically nothing.
However, with the tables going back to 2022, it's almost 100% increase of businesses and 50% increase for Non-business filings, which I find more interesting.
Would be great to see the totals as population adjusted against historical context though.
Still not very high by historical standards. In fact, it really just seems like we're approaching the pre-pandemic norm.
https://www.congress.gov/crs-product/IN12536
An interesting analysis would be to see how many and how often these posts of social order/societal breakdowns are making it to the FP here over time.
Was higher prior to Covid, we are just reverting to the prior situation.
https://www.debt.org/bankruptcy/statistics/
Is this what they meant by a return to normalcy?
There's no reason to believe this will reverse or improve under the current administration. Grifting is celebrated and policy is decided by and for the wealthy. Meanwhile, tech leaders are promising even more job losses spurred by AI.
Friendly reminder the US Gov printed ~4 trillion dollars during the Covid years.
feel free to elaborate on the relationship you are drawing between that and the article
I actually don't understand how this would affect bankruptcies — why?
I don't know if this is his point, but a decent amount of cash went to individuals as part of Covid relief in different forms, and this caused a delay in bankruptcies because people were able to pay their bills. Pick your moral quandry.
And no wonder why the job market is so booming right now because there are less companies alive and more people got laid off, thus shrinking demand and increasing supply in workforce recruiting. We all have to thank Trump and Anthropic/OpenAI/blah-blah-blah for this win-win situation.
I hope there are jobs for company liquidators though it is usually the job of a junior solicitor/lawyer I reckon, as they will certainly have more demands amid this bankruptcy wave
Got to love that golden age.