Russian “middle class” drowns in debt

One day the bubble will explode

According to a research conducted by Romir holding, 90% of Russians with average income using debt cards, while quarter of them use it to pay for car loan. Russian minister of economic development Maxim Oreshkin claims that debt bubble will explode before 2021.

This data is based on a consumer behavior patterns of more than 40 thousands Russians from 15 thousands households in 220 cities throughout the country. Citizens were divided in 3 groups depending on their level of income. One of the factors that put participants in middle class group was average spending on food near 20-30% of salary. Only 17% of citizens fit this criteria. Turns out that almost all of them using debt cards, and 20% of them use this debts for urgent needs.

It means that so-called “middle class” is in most precarious state today. If such tendency will continue, it will lead to mass impoverishment and proletarisation.

The situation with mortgages also looks awful. Rich russians use them lesser(4,6%), than their “middle-class” fellow citizens (5,1%). It is much popular solution among the poorest russians (7,9%). But all this percentage bleak in comparison with absolute numbers. In August 2019 total accumulated mortgage debt of russians reached 7 trillions roubles! This is absolute record for our country. Analysts started to speak loudly about huge mortgage bubble, which will inevitably explode, as buying power of majority of people continues to crumble. It is no surprise that almost 40% of Russians consider themselves poor.

Moreover, if we are to add up to mortgage debt burden all other citizens debts for banks, total debt stock will reach more than 12 trillions of roubles. More than 6 mln of Russians are unable to pay for their debts. Some of households budgets are even not enough to pay for sending a kid to school! Most indebdebted professions are security guards(34%), doctors(33%) and social workers(33%).

Such debt slavery, aside from giving to moneylenders tremendous profits, also makes for an important social control function, keeping millions of people on a short leash. Every man or woman that has a debt becomes much more content with abusing of his rights at work and is reluctant to stand up for his rights, because he is afraid to lose his source of income which allows him to pay up his debts. It is natural that ruling class is interested to enforce such order on maximum amount of people. All poor naïve citizens that bought into bright consumerist propaganda of “taking it all from life, spend today, think tomorrow” mentality, had found themselves under a pressure of massive burden, that they cannot get rid of on their own. With each day, number of those unfortunates continues to grow.

It is impossible to overcome debt slavery in the framework of capitalism, because it makes for an important source of income for a banking sector. Only way to solve this problem lies in radical change of social order, when private debt will be wiped away along with private banks themselves.