In all the discussion about how to regulate small-dollar loans -- how to preserve access to short-term credit, while protecting consumers from falling into cycles of debt -- one very important element is getting lost.

No person should be living so close to the financial brink that he or she has to borrow against future wages just to pay the bills.

This is not the kind of debt people take on to improve their earning potential, like a business or student loan. This is the kind of debt people take on because their tanks have hit empty, and there's nowhere else to turn.

And more people are finding themselves in that situation more often these days. Here are three things that have happened in conjunction in America over the past decade: Debt loads have increased. Real earnings have stagnated. And payday lending has exploded -- while storefronts have declined from a high of 22,000 in 2007 to about 18,000 today, online lending has tripled in volume, to almost equal the $5 billion that flows through brick and mortar establishments.



Debt loads have come down, but are still elevated. (Federal Reserve Bank of New York)



Wages have actually sunk for the bottom 20 percent (Economic Policy Institute)

The first two bear some relation to each other. Over the past half century, we've replaced healthy wages with robust access to credit: Even if you weren't earning much, you could at least borrow enough to make it feel like you were. While that problem has started to subside after the housing bubble burst, debt loads remain much higher than they were a decade ago, real earnings haven't caught up, and the U.S. personal savings rate remains half what it was in the 1960s and 1970s.

That's meant that the average American has very little financial leeway when something unpredictable happens -- or if he or she just needs to scrape together enough money to pay monthly expenses, which the Pew Charitable Trusts found was the biggest reason people use payday loans. And these aren't the poorest of the poor. These are people who actually have an income stream -- it's just too small to build up a cushion, and since they may have defaulted on some of that credit they took on earlier, they don't qualify for traditional loans. Now, the paycheck-to-paycheck crowd includes 38 million Americans who are sitting on some wealth, like a house or a car, that's hard to liquidate when a need for cash comes up.



(Pew Charitable Trusts)

So it's probably reasonable that regulators, the industry, and even some advocates agree that quick cash should be available in some form. At the moment, evidence suggests that payday loans actually make it harder for borrowers to pay their bills, but banning them outright might lead to the formation of an illegal market that could get people in bigger trouble, and there are ways to reform the market to keep that from happening.

But let's not act like everything is fine as long as the small-dollar option is relatively "safe." To make a slightly awkward analogy, even if you believe that safe abortions should be legal and easily accessible, they're not the optimal outcome: It would be better if women didn't find themselves in the position of needing one in the first place. The same goes for expensive emergency credit. Mitigating the negative side effects shouldn't erase the focus on root causes of the disease.

In this case, payday loans aren't the problem. The problem is poverty. And of course, it's a lot harder one to fix.