As the U.S economy shudders, families in individualistic regions generally have far less room to maneuver than their counterparts in communitarian cultures
By Colin Woodard
With the U.S. facing an economic downturn – largely created by the new Trump administration’s multi-front trade war, mass public sector layoffs, and the illegal impoundment of federal funds, grants, and other payments – we thought it would be timely to produce some baseline data on regional differences in household debt, credit, and loan delinquency. People who were already on the edge will be especially vulnerable in the chaotic times ahead, and the fact they’re concentrated in specific regions will greatly amplify knock-on political effects.
Here at Nationhood Lab we’ve previously shown how the characteristics of the rival colonization streams that spread across this continent in the 17th, 18th, and early 19th century begat and explain contemporary divides over politics, gun control, abortion, immigration, climate change, and a wide range of health and well-being metrics, from life expectancy to diabetes. But the regional divides described in the American Nations model can also be seen in microeconomics, including consumer habits, behavior and creditworthiness.
A couple of years ago, I saw this map in the Washington Post showing the mean FICO credit score by county:
It’s remarkable because there are many extremely wealthy counties in that big gold blob, and lots of really poor ones in the blue one, like Washington County, Maine, at the easternmost extreme of the country, which is one of the most impoverished in the entire Northeast. Yet counties whose residents have relatively bad and good credit scores are sorted not by poverty, but by geographic region. “Even some of the South’s biggest, most dynamic cities — think Atlanta or Dallas — have the same below-average credit scores as their more rural Southern neighbors,” the Post’s Andrew Van Dam said in his piece. “Within every income bracket, the typical Southerner has a lower credit score than someone who lives in the Northeast, Midwest or West.”
Using the underlying data from the Urban Institute, we did a rough calculation of what the mean FICO score was in each American Nations region in 2020. (Ideally we would have weighted each county by how many borrowers are in it, but that figure not being available we used overall population, which is likely pretty close to the same.) The mean figures ranged from 737 in Left Coast to a low of 595 in First Nation. As seen in health and wellness metrics, the aggressively individualistic regions were clustered at the bottom of the list, with New France and Deep South at 674 and Greater Appalachia at 688. The aggressively communitarian ones (excepting First Nation) monopolized the top. Greater Polynesia, at 727, was second only to Left Coast, and Yankeedom (723) and New Netherland (722) were not far behind. The other regions, as is often the case, fell in between.
What was driving these low creditworthiness scores? The rich county-level data from the Urban Institute’s “Debt in America” project provided some answers. At the top of this post you’ll see a map of the percentage of borrowers who were 60 or more days delinquent on an auto loan or lease or a retail installment loan as of August 2023. This is a relatively good metric because, unlike mortgage or student loan, it’s more likely to be “bad” debt, in the sense that it’s not an investment in a (hopefully) appreciating asset or one’s future earnings potential. As you can see, there’s almost a more than two-to-one difference between the delinquency share of borrowers in Left Coast and that in Deep South or between Yankeedom and New France. Once again, the best performing regions have aggressively communitarian dominant ideologies, the worst performing ones, an aggressively individualistic ethos. (Close followers of our work will notice Tidewater – despite its 21st century transformation into a highly progressive region via the “federal halos” effect — has statistics comparable to its erstwhile individualistic Dixie bloc partners, Greater Appalachia.) First Nation, for once, is at the top of the heap, but that may be because relatively few people own cars in the remote communities of northern and western Alaska.
We also looked at the share of people with credit reports who had medical debt in collections, based on August 2023 credit agency data shared with the Urban Institute. It revealed a very similar pattern, with New France, Deep South, and Greater Appalachia all coming in with more than double Yankeedom’s rate and more than triple that of New Netherland or Left Coast. Notice Far West and First Nation also perform quite well in this metric.
Of course, unlike buying a car, one’s access to insurance has a big role in paying for medical care. So we were curious how the spatial pattern for medical debt matched up with that of the share of people lacking medical insurance. Here’s that latter data set, based on the Urban Institute’s analysis of Census Bureau estimates from 2018-2022:
You can see the effect of state-level insurance polices here, as with the outlines of states like Arkansas, Texas, Louisiana and Missouri very obvious in the county map. It’s also clear that residents of communitarian regions are benefiting from having much broader access to health insurance. But there are some intriguing anomalies like: why does the Far West have such low medical debt delinquency when the proportion of uninsured people is as high as it is? And why does Spanish Caribbean have a middle ranking in terms of medical debt, but the second highest rate of uninsured in the federation? I don’t know the answers, but if I were a researcher in this field, I’d want to find out. (As for the situation in First Nation, note that 76 percent of that region’s population are Alaska Natives, who receive their health care via the US Interior Department’s Indian Health Service.)
The general pattern is clear. Regions with communitarian inclinations – where there is a greater emphasis on investing in shared infrastructure and public goods – have fewer families struggling with debt than the individualistic ones, which prefer low tax/low service environments. The communitarian regions tend to be wealthier, healthier, and more educated, the result of centuries of shared investment. They’re starting in a much stronger position as the U.S. descends into an era of economic, political, and constitutional uncertainty.
Thanks to our partners at Motivf, Tova Perlman (for her electoral data wrangling) and John Liberty (for the maps and graphics herein.)
— Colin Woodard is the director of Nationhood Lab at Salve Regina University’s Pell Center for International Relations and Public Policy.