The Racialized Politics of American Debt Relief Policy

Session Submission Type: Full Paper Panel

Session Description

Borrowing has become the American way of life. From credit and debit cards to student, auto, mortgage, or payday loans, most of us rely on financing to pay for everything from a cup of coffee to a college education. On the one hand, access to credit can act as a resource for many, helping Americans to afford daily necessities, to build assets, and to achieve social mobility in the absence of better wages or more robust government social support. On the other hand, access to those resources comes with a steep cost. According to the Federal Reserve, non-mortgage consumer debt currently exceeds 4.5 trillion dollars and Americans also owe an additional 19 trillion dollars in mortgage debt.

Credit and its underlying debt have thus become critical features of an American-style welfare state. As a result, policies that provide borrowers with debt relief are also a key institutional pillar of the welfare state. And as with the racialized nature of other forms of welfare provision, debt and debt relief are stratified, with borrowers of color typically paying a steeper price to borrow while incurring less generous debt relief remedies. Despite the centrality of consumer debt relief to the political and economic development of the American state and to the everyday fortunes of ordinary Americans, political scientists have not paid sufficient attention to the politics of debt relief. And with new forms of debt relief—like student loan cancellation—prominent on the policy agenda, understanding the racialized politics of debt relief is an incredibly salient topic. The papers on this panel employ multiple methods to examine the socioeconomic and political consequences produced by racially stratified debt relief policies.

The first two papers explore the politics of emerging forms of government debt relief—particularly those that have accelerated in response to the Covid pandemic. In “Race and the Emerging Politics of Personal Debt Relief,” Mallory SoRelle and Serena Laws use original conjoint experiments to examine how borrower characteristics influence public preferences for government debt relief across multiple types of credit. The second paper, “Exploring the Race and Class Consequences of Financial Precarity” by Patricia Posey, employs archival ethnography to consider how government safety net programs enacted in response to the pandemic converge with fringe banking to shape people’s perceptions of government. The final two papers explore the racialized practice of Chapter 13 bankruptcy, a key debt relief mechanism. In “Debt Relief and the Politics of Predatory Inclusion,” Emily Zackin and Chloe Thurston explore the political development of wage earner bankruptcy as a form of predatory inclusion, producing racialized disparities in borrowers’ experiences with debt relief. And Tess Wise, in “Critical Racialization Theory and the Political Development of Wage-Earner Bankruptcy,” draws on critical theory to demonstrated how intersectionally-advantaged versus disadvantaged populations are constructed and centered in the development of chapter 13 bankruptcy. Collectively, these papers shed light on how racialized identities determine whether a person is granted the full financial citizenship necessary to survive and thrive in the American political economy.

Sub Unit

• Division 61: American Political Economy

Cosponsor

• Division 32: Race, Ethnicity, and Politics

Individual Presentations

• Race and the Emerging Politics of Personal Debt Relief - Mallory E. SoRelle, Duke University; Serena Laws, Trinity College, Hartford CT

• Exploring the Race and Class Consequences of Financial Precarity - Patricia Posey, University of Chicago

• Critical Racialization and the Political Development of Wage-Earner Bankruptcy - Tess Elizabeth Wise, Wake Forest University

• Paycheck Protection Program's Path to Inclusive Lending - Michael Schwan, University of Groningen; Mark Cassell

Chair

• Amber Wichowsky University of Wisconsin-Madison

Discussants

• Rhea Myerscough Butler University

• Grace Elizabeth Beals Cornell University