Let’s just say a lot has happened this past week, from the historical to the unprecedented. My bet is on “unprecedented” as the winner of the 2020 Oxford Word of the Year. But it is already 2021 — who knew!

Global policymakers are worried about debt sustainability and are troubled by the prospect of the next financial crisis. According to a report released this week by the World Bank, global debt hit a new high of 230% and government debt rose to a historic 83% of GDP in 2019. This follows on the heels of the past 10 years of mounting emerging-market and developing economies’ debt, called the “fourth wave of debt accumulation.” Prior waves — the Latin American debt crisis in the 1970s, the Asian financial crisis in the 1990s and the Great Recession of 2007 — left a series of financial and economic disasters in their wake. 

Of course, by the 1970s, we were already 4,560 years into the story of debt, as the anthropologist David Graeber reveals in his stimulating book, “Debt: The First 5,000 Years.”  

Meanwhile, back in the valley, the calls for emergency assistance to pay for rent and other essentials continue unabated. In recent months, though, emergency fund requests have a new urgency — debt buildup. Manuel’s story encapsulates this:

“I am a father supporting my family. I can’t work because I am in quarantine together with my family, waiting for COVID results because of exposure. I am extremely anxious because my wife has lupus. I need to pay rent and bills, and I already owe a month’s rent. I have hospital debts. I’ve never asked for help before, but...”

According to a 2019 Bell Policy Center report, 45% of Coloradans do not have savings to cover three months of expenses, a figure consistent with nationwide studies. In 2018, Manaus-LaMedichi surveyed families in the Roaring Fork Valley and learned that more than 60% of our Hispanic, Latinx community lived paycheck to paycheck and, if an emergency arose requiring an immediate $200, would not be able to come up with the money. Half of our immigrant families — before the pandemic — were living one problem such as a car repair, medical or dental issue away from not having money for rent, food or other essentials.

Typically, to cover an unexpected expense or emergency, people take on additional work. It is not uncommon for two working adults to have five jobs between them. The problem is that many workers in low-wage industries such as hotels and food services have lost their first jobs. For those still working, it is choppy and intermittent at best, punctuated by periods of no work and no pay due to COVID-19 shutdowns and quarantine. There is almost no prospect of finding additional work.

Absent extra employment and trying to bridge the period between paying an expense and getting back to work, people often turn to borrowing from family or friends. This kind of debt is generally preferred because usually someone close to you will not harass, abuse or threaten violence if you are late on a payment. Still, such debt does bind people together in peculiar ways, and obligations may extend beyond the financial and into the social and moral realms. 

Moral debt is not limited to the interpersonal sphere. It applies to nations. Ta-Nehisi Coates’ Atlantic article, “The Case for Reparations,”is a must read on this subject. The headline: “Two hundred fifty years of slavery. Ninety years of Jim Crow. Sixty years of separate but equal. Thirty-five years of racist housing policy. […] Until we reckon with our compounding moral debts, America will never be whole.”

Predatory lenders — payday, car title lenders, pawnbrokers, loan sharks — target people who do not have access to safe and fair credit or financial services from banks. They charge extortionate fees to borrow money, pay bills, access paychecks, etc. And, in some instances, they exert undue power and leverage over debtors. Think Don Corleone in “The Godfather.”

We are not, however, defenseless against predatory lenders. In passing Proposition 11, Coloradans placed a 36% cap on the interest rates and fees of payday loans. It may sound high, but consider that the interest and fees on such loans can surpass 500% in other states. Colorado has also tackled egregious debt collection practices and restricted other lending products that lead borrowers into an unending cycle of debt. Colorado leaders also continue to press toward statewide solutions to stay ahead of predatory lenders’ new mendacious schemes. 

Nonetheless, our local debt buildup is situated within the broader occurrence of the fourth wave of debt accumulation. So, once again, we are on the precipice. A global pandemic is intensifying the potential ramifications of a decade of swelling debt and threatening the lives and livelihoods of millions globally, particularly people living in the most vulnerable circumstances. Are the events leading to a possible financial crisis truly “unprecedented,” or have the deck chairs just been renamed and reshuffled?

We know what needs to be done. Preventing the fate of previous debt crises requires immediate and ambitious action from our global and local leaders.


The topics of Money Matters will be compilations and reflections from Barbara Freeman’s extensive work with government and intergovernmental agencies and the nonprofit and private sectors across five continents. Her primary focus is on creating innovative, evidence-based solutions designed to improve the real-life chances of youth and families living in disadvantaged and difficult circumstances. To reach her, email Barbara at