Consumer, corporate debt could cause next crisis - Democratic Presidential Candidate Warren

Consumer, corporate debt could cause next crisis - Democratic Presidential Candidate Warren

Sen. Elizabeth Warren (D., Mass.) on Monday warned that the country faces an imminent economic crisis if the government fails to quickly pass legislation to "regulate the financial sector and significantly reduce middle class household debt". Politifact deemed Warren's claim true that she sounded the alarm on the looming crisis years before it happened, but that not enough people in power listened. "Now I'm seeing serious warning signs in the economy again - and I'm calling on regulators and Congress to act before another crisis costs America's families their homes, jobs, and savings", she wrote.

"I see the manufacturing sector in recession". I see a precarious economy that is built on debt-both household debt and corporate debt-and that is vulnerable to shocks.

The senator wrote that she's anxious about several factors she says are contributing to the beginning of a financial crisis - including growing household debt, growing corporate debt and a manufacturing recession.

To address the corporate debt issue, the senator argued that federal regulators should enforce leveraged lending guidance that is meant to stop banks from issuing risky loans. However, her new column made no mention of today's housing market or the origination and underwriting practices by mortgage companies. "If we take bold action now to address the underlying problems in the economy". Warren painted a gloomy picture of today's US economic foundation, which is argued was "fragile" and could collapse easily. "A single shock could bring it all down", she wrote. "And the Trump administration's reckless behavior is increasing the odds of just such a shock", the Massachusetts Democrat wrote in an op-ed in Medium.

The remainder of Warren's plan amounts to a compilation of other policy proposals meant to help "working people" -including largely eliminating student debt, raising the minimum wage to $15 per hour, strengthening unions and a handful of other initiatives - that the MA senator has released since announcing her candidacy. She detailed a plan last week to rein in Wall Street that included limiting compensation for corporate leaders.

She also said the trade dispute with China threatens American manufacturing and has already hurt American companies, adding that a no-deal Brexit - which she said the Trump administration is seeking - will have a spillover effect on the USA economy.

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