4 ms·

While the household debt is lower now (still high, though), you conveniently omitted: 1. the student loan debt, which, in $ terms, recently exceeded the "regul

by jazzyk 11y ago

While the household debt is lower now (still high, though), you conveniently omitted: 1. the student loan debt, which, in $ terms, recently exceeded the "regular" household debt. 2. the gross federal debt (April 2015) is $18.15 trillion. Went up from 10.63 trillion in the last 7 years (under Obama's administration) 3. reflating real-estate prices back to absurd levels 4. while not a debt indicator, an important factor: Record LOW number of people in the work force (the lowest in 30 years or so). If you don't work, it is hard to pay down your debt, no?

adventured 11y ago
Student loan debt is $1.2 or so trillion. Household assets are $86 trillion. It's not an issue compared to the vast household assets. The median student loan debt, for adults with student loans, is around $13,000 - not a menacing sum, even if it has climbed a lot in the last ten years. Gross federal debt only gets included if we're going to count gross national assets: $225 or so trillion. Not to mention, that public debt is backed by the global reserve currency, which grants immense privileges to the US economy. A 100% GDP to debt ratio, while high, is manageable (and yes, we'll see what happens in the future given entitlement costs). The US also has spare taxing capacity when it comes to the upper 25%, versus most other developed nations (the US has among the highest disposable income levels). Most of the developed world has expensive real estate, a consequence of relatively low interest rates. In no way is it unreasonable to compare apples to apples. Full-time employment has increased by seven million in 3.5 years. While the drop in the labor force participation rate is a drag on the economy (some of that is legitimate boomer retirement and an aging population), the US participation rate is still very healthy compared to peers (it's 10 points higher than Belgium by comparison).
- jazzyk 11y ago
  Not sure which assets you are talking about: 1. Half of US households have no retirement savings: http://www.bloomberg.com/news/articles/2015-03-12/the-retirement-savings-gap-between-haves-and-have-nots-is-getting-bigger http://www.bloomberg.com/news/articles/2015-03-12/the-retire... 2. One third of households making > $75K live paycheck-to-paycheck and are essentially one or two months of unemployment from bankruptcy: http://www.washingtonpost.com/news/get-there/wp/2015/04/16/one-third-of-households-making-more-than-75000-live-paycheck-to-paycheck/ http://www.washingtonpost.com/news/get-there/wp/2015/04/16/o... 3. Disastrous healthcare costs (roughly $20K per family per year). You may or may not be paying it directly out of pocket (your employer may be paying for you, or you my be subsidized), but that's what it costs. Also remember that asset (mostly housing and stocks) values are on paper and may (and will) go down if the economy keeps slowing down as it has been since the dead-cat bounce of 2010-2011.
  - jazzyk 11y ago
    One more thing: asset ownership is heavily concentrated in the hands of the 1%.So out of 100 students, 1 can pay many times over, the next 9 too, with more pain. At least 50 students are penniless and with the job market paying what it is paying, they may never pay back their student loans - what could possibly go wrong?

by jazzyk 11y ago

adventured 11y ago

Student loan debt is $1.2 or so trillion. Household assets are $86 trillion. It's not an issue compared to the vast household assets. The median student loan debt, for adults with student loans, is around $13,000 - not a menacing sum, even if it has climbed a lot in the last ten years. Gross federal debt only gets included if we're going to count gross national assets: $225 or so trillion. Not to mention, that public debt is backed by the global reserve currency, which grants immense privileges to the US economy. A 100% GDP to debt ratio, while high, is manageable (and yes, we'll see what happens in the future given entitlement costs). The US also has spare taxing capacity when it comes to the upper 25%, versus most other developed nations (the US has among the highest disposable income levels). Most of the developed world has expensive real estate, a consequence of relatively low interest rates. In no way is it unreasonable to compare apples to apples. Full-time employment has increased by seven million in 3.5 years. While the drop in the labor force participation rate is a drag on the economy (some of that is legitimate boomer retirement and an aging population), the US participation rate is still very healthy compared to peers (it's 10 points higher than Belgium by comparison).

jazzyk 11y ago
Not sure which assets you are talking about: 1. Half of US households have no retirement savings: http://www.bloomberg.com/news/articles/2015-03-12/the-retirement-savings-gap-between-haves-and-have-nots-is-getting-bigger http://www.bloomberg.com/news/articles/2015-03-12/the-retire... 2. One third of households making > $75K live paycheck-to-paycheck and are essentially one or two months of unemployment from bankruptcy: http://www.washingtonpost.com/news/get-there/wp/2015/04/16/one-third-of-households-making-more-than-75000-live-paycheck-to-paycheck/ http://www.washingtonpost.com/news/get-there/wp/2015/04/16/o... 3. Disastrous healthcare costs (roughly $20K per family per year). You may or may not be paying it directly out of pocket (your employer may be paying for you, or you my be subsidized), but that's what it costs. Also remember that asset (mostly housing and stocks) values are on paper and may (and will) go down if the economy keeps slowing down as it has been since the dead-cat bounce of 2010-2011.
- jazzyk 11y ago
  One more thing: asset ownership is heavily concentrated in the hands of the 1%.So out of 100 students, 1 can pay many times over, the next 9 too, with more pain. At least 50 students are penniless and with the job market paying what it is paying, they may never pay back their student loans - what could possibly go wrong?