Americans are mired in debt they don't understand, according to a new working paper.
Not only do many Americans not have a financial plan in place for emergencies or even foreseeable expenses, but a "sizable" number also don't understand the terms of their own mortgages and credit cards, the National Bureau of Economic Research report found.
And it seems Americans are also ignorant of their financial ignorance. Although many haven't mastered basic economic concepts, such as inflation, nearly 40 percent of gave themselves high scores when asked to rate their own financial literacy. Just 14 percent rated their knowledge level three or worse on a seven point scale.
It's looking pretty simple to trap most people into debt peonage and expose them to financial ruin. Moreover, creditors like it this way and want financial reform off the table.