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Americans Hold Over $4.1T in Consumer Debt

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Re: Americans Hold Over $4.1T in Consumer Debt

#161

Post by Spooky23 »

refurb wrote: post #156
coliveira wrote: post #120

Earlier quoted context omitted.

The difference is that in the US there little social support for people who lost their jobs. Even employed people have a comparable lower standard of life, because there are so many social services available in Eastern EU countries not available in the US. Just for the biggest example, consider that Americans have no public option for health care, so if they lose a job their lives are at risk.

You're making it seem like there are no social services in the US yet 2/3 of the federal budget pays for just that. If make up to ~200% (varies state to state) of the federal poverty level you qualify for Medicaid which has almost no out of pocket expense for the patient.

That budget is mostly social security and Medicaid.

In New York, it's 138%, or $16k/year for a single person for $33k for a family of 4.

Re: Americans Hold Over $4.1T in Consumer Debt

#162

Post by njharman »

NumberSix wrote: post #30

The United States has a total resident population (as of January 23, 2017) of 324,420,000 people (about 324 million). Source: https://en.wikipedia.org/wiki/Demographics_of_the_United_Sta... Thus, $4.1 trillion in consumer debt works out to $12,638 per person. The Gross Domestic Product (GDP) in the United States was worth 18036.65 billion (about $18 trillion) US dollars in 2015. That is about $55,424 per person. Note…

Student Loans are increasingly a bad investment. But whatever.

$12k is a fuck ton of debt! A metric fuck ton, ~20% of avg yearly income. Not even counting mortgages.

Re: Americans Hold Over $4.1T in Consumer Debt

#163

Post by twoodfin »

pm90 wrote: post #132
vwcx wrote: post #36

Earlier quoted context omitted.

A pen being wielded by a man with no desire, or knowledge, or forethought, to do so.

You are forgetting that if large enough section of the population is wronged/backed into a corner, they are going to protest/rise/riot. It certainly seems to be heading that way...I would be seriously worried if I were one of these student loan companies that are giving loans to people with no prospect of getting paid back.

Student loans are now almost entirely held by the taxpayer.

Re: Americans Hold Over $4.1T in Consumer Debt

#164

Post by twoodfin »

sokoloff wrote: post #108
nugget wrote: post #64

Earlier quoted context omitted.

There are debt forgiveness programs like PSLF that I expect to become wildly more popular in the future. We're only ever a Presidential election away from dramatic changes to student loan treatment.

And with that the risk of the permanent destruction of the market for student lending in the future, meaning college will go back to being a upper-class game.

There is no "market" for (undergraduate) student loan lending any longer, AFAIK. The whole shebang is run by the Department of Education.

Re: Americans Hold Over $4.1T in Consumer Debt

#165

Post by TheCoelacanth »

bdcravens wrote: post #88
idiot_stick wrote: post #16

Earlier quoted context omitted.

> What could possibly go wrong? Americans are the wealthiest people in the history of mankind. Fortunes ebb and flow, but there isn't much to worry about.

Depends on your definition of wealth. Defined as "amount of time you could survive with no income", most Americans (including many in the HN crowd) aren't very wealthy at all.

Only if they insist on keeping their current (very high compared to most people in history) standard of living. A median American could survive at the standard of living of a medieval peasant indefinitely on their current assets.

Re: Americans Hold Over $4.1T in Consumer Debt

#166

Post by e12e »

graeme wrote: post #71
NumberSix wrote: post #30

The United States has a total resident population (as of January 23, 2017) of 324,420,000 people (about 324 million). Source: https://en.wikipedia.org/wiki/Demographics_of_the_United_Sta... Thus, $4.1 trillion in consumer debt works out to $12,638 per person. The Gross Domestic Product (GDP) in the United States was worth 18036.65 billion (about $18 trillion) US dollars in 2015. That is about $55,424 per person. Note…

>It is difficult to evaluate credit card debt because credit cards have increasingly become the substitute for cash in the United States. How much of the debt is extremely short term and essentially represents what used to be cash transactions? Indeed, I've often wondered this. If someone has an average $3000 credit card balance that they pay off in full when due, are they listed as having $3000 in consumer debt on a…

Should be possible to look at interest paid on credit card loans to better judge this?

Re: Americans Hold Over $4.1T in Consumer Debt

#167

Post by handojin »

TheCoelacanth wrote: post #165
bdcravens wrote: post #88

Earlier quoted context omitted.

Depends on your definition of wealth. Defined as "amount of time you could survive with no income", most Americans (including many in the HN crowd) aren't very wealthy at all.

Only if they insist on keeping their current (very high compared to most people in history) standard of living. A median American could survive at the standard of living of a medieval peasant indefinitely on their current assets.

Yes, but it would require one to possess a marked fondness for worms.

Re: Americans Hold Over $4.1T in Consumer Debt

#168

Post by madengr »

kasey_junk wrote: post #146
madengr wrote: post #128

Earlier quoted context omitted.

Well in 30 years you'll at least own it. Would suck to be renting in your late 60's and paying for that on retirement income.

But you can invest the difference in something more liquid and diversified and use that income to forever pay your rent.

That's true, but most of the time it's just as expensive to rent than buy. You are paying the mortgage of your landlord, along with their salary.

Re: Americans Hold Over $4.1T in Consumer Debt

#169

Post by Spivak »

rtx wrote: post #73
wtvanhest wrote: post #62

Earlier quoted context omitted.

I agree, but no one looks at the other forms of consumer debt as investments. If we are going to call student loans investments, we might as well call autoloans investments. The same logic could be applied. A car helps you get to a job and gives you a return.

It's an investment if it used to improve your economic condition, otherwise an expense.

Maybe better phrasing would be you expect investments to appreciate in value. Although student loans could be viewed this way as investments they certainly not investments in the typical sense.

You take out a car loan because you expect to extract more value from the car than its price plus interest. You take out a student loan for the same reason.

If student loans were buying a some percentage of your monetary worth or income then I could see investment angle but that's basically owning a person which I couldn't support.

Re: Americans Hold Over $4.1T in Consumer Debt

#170

Post by cnnsucks »

bamboozled wrote: post #124

Honest question here, does this actually matter anymore? Do economists see it as a positive, negative or neutral thing? When I hear about debt that big I wonder if $4.1T even a real thing. I mean is it a tangible number that actually represents something of real substance?

Yes, it's real. Lenders have computers that sum lots of accounts; they're expected to do that and disclose how much they've lent.

$4.1E12 isn't really that difficult to relate to. Just amortize it across the US population of 325 million. That's $12,612 per citizen. It's also about one year of Federal spending.

It's a negative thing. Both individual debt load the and the rate of delinquency has been increasing, with student debt being the worst of these; if you can fog a glass you can make the Federal government send money to some school against your future earnings. There is probably no form of debt easier to assume in the US and upon this river of money floats a horde of careers, bonuses, pensions, endowments and gold plated benefits for The Great and The Good of academe, which makes questioning the value of it all a political third rail.

What do economists think? They're watching the bubble grow and devising ever more contrived ways to pretend it's not a bubble.

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