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US Household Debt Surpasses 2008 High

nytimes.com

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Re: US Household Debt Surpasses 2008 High

#231

Post by prawn »

Teknoman117 wrote: post #140
manacit wrote: post #10

I don't know if it's a "bubble" (I am not qualified to say that), but I can't imagine that the current trend with student loans will continue. Looking at the numbers for someone entering college in 2017, it feels nearly predatory what a good portion of private and out of state colleges are charging. Even with financial aid, $30-40k a year for 4-5 years is insane. I was fortunate enough to have parents who made saving…

I went to one of the UC schools and left with $121k in debt ($100k borrowed plus the interest I couldn't pay off while working during school). Basically didn't qualify for any sort of scholarships or grants due to my parents making "enough money." Don't know where they get that figure from, as its not like my parents' could afford to write a check for $25k/yr just for my education (especially not with my sister enter…

Is that 7.5% interest rate standard? Is it high because of the risk inherent in young adults being unable to service the loan?

Re: US Household Debt Surpasses 2008 High

#232

Post by rdiddly »

nerfhammer wrote: post #200
austenallred wrote: post #70

Earlier quoted context omitted.

It sure feels like a bubble to me. I don't know how many friends I have with six figures of student loans and no career, but it's a lot. Considering that those loans don't even go away with bankruptcy, it's waaaay too many. I've noticed that younger students are starting to realize how much risk there is in something like that and shy away when my generation didn't. Maybe it's that I grew up in a "striving" middle cl…

Bubbles are caused by speculation, often by unsophisticated investors. Since an education is a non-transferrable asset it's difficult to conceive how it could be classified as a "bubble". Speculators buy assets that they aren't going to use themselves purely to sell it to someone else. If speculators are selling to mostly to other speculators and transactions between speculators starts taking up the bulk of the activ…

I've never believed in the "speculators" argument. Either there's a market or there isn't. I believe bubbles rise and pop owing to the properties of Ponzi schemes, which rise and pop. When a market takes on Ponzi-like characteristics (usually not intentionally), that's when it becomes bubble-like. Any wealth-concentrating mechanism, capitalism itself included, is essentially a pyramid system, which needs increasing input from the bottom to keep going. Soon the bottom layer of the pyramid is so big there aren't enough new suckers to support it, and the whole thing collapses leaving everyone running for the exits.

Re: US Household Debt Surpasses 2008 High

#233

Post by ryandrake »

diogenescynic wrote: post #193
ryandrake wrote: post #104

Earlier quoted context omitted.

I don't know, maybe it's different now, but my generation (went to school in the mid 90s) was not told to "just go to the best college no matter what": We were also advised to consider the cost and carefully choose a major so as to produce a positive expected ROI. Obviously nobody has a crystal ball and you can never tell when huge, industry-wrecking changes are coming, but it was well understood that majoring in Und…

>went to school in the mid 90s >but it was well understood that majoring in Underwater Basket Weaving The way you make such a condescending argument and blame the victim takes away any credibility in your comment. The issue is that tuition has ballooned since the 90s. Tuition is outpacing income/inflation and most else, so regardless of what school or major, the ROI is going down for most. Also, even if you went to a…

Sorry, bud. I also went back to school for another go after 2005, still focusing primarily on ROI. So I think I can say I'm well aware of and lived through both current and past student loan / tuition regimes. But please feel free to continue to attack the tone of my argument rather than the content.

Re: US Household Debt Surpasses 2008 High

#234

Post by AndrewUnmuted »

muninn_ wrote: post #160
lz400 wrote: post #139

Earlier quoted context omitted.

I truly don't understand the USA sometimes. Don't you guys know that in Europe higher education is free? Well where I'm from there was a very low nominal cost but my father was a public servant so cost was waived, I literally studied CS for 0 cost. And these countries are able to afford it all! Magic! I don't understand how people in USA are not aware of this and literally rioting in the streets. At the very least sw…

What is really mind-boggling is your comment. First, education is not, in any way, shape or form, free. You pay for it in taxes. Period. This isn't a pro/anti tax argument, but it's necessary to say. Second, you can also study CS for free in the United States or at a heavy scholarship. Large state schools subsidize a lot of engineers in their educational pursuit so long as you achieve good grades, or score well on en…

The podcast you're thinking of may be Dan Carlin's Common Sense, he recently did an episode on USA health care, where he touches on precisely the same points you mention.

Re: US Household Debt Surpasses 2008 High

#235

Post by prawn »

axaxs wrote: post #194
lz400 wrote: post #178

Earlier quoted context omitted.

Certainly not overnight but you can start somewhere . Look, it works in most of the first world. Many comments are trying so hard to convince us that "in America is different" from their armchairs. It's like people try to convince themselves it's impossible. I truly think both for education and healthcare (both a disaster in the world's first economy vs the rest of the first world) if because those systems in the US…

Your last couple sentences sum it up nicely. Anything is possible, but not in our political climate. The two sides think of each other as mentally ill, and are to the point of violence. I hope it calms down, but in my lifetime it's only gotten worse. That needs to be fixed before we can get anything good for the nation done.

What incentive is there for a politician to do the right thing on the whole? They need a broad professional support base (party) to succeed in the American voting system, which means they toe the line or go nowhere. And there are lobbyists (at best) pressuring or forcing their hand on decisions where so much money is at stake (private prisons, healthcare, education, etc).

You could say that a real character or charismatic leader may emerge from outside the political system and slowly convince people to change things, but the US just got the former and I don't know that it's working very well.

Brings to mind this recent story about Dwayne Johnson as a potential candidate: http://www.gq.com/story/dwayne-johnson-for-president-cover

Re: US Household Debt Surpasses 2008 High

#236

Post by majormajor »

ryandrake wrote: post #104
austenallred wrote: post #70

Earlier quoted context omitted.

It sure feels like a bubble to me. I don't know how many friends I have with six figures of student loans and no career, but it's a lot. Considering that those loans don't even go away with bankruptcy, it's waaaay too many. I've noticed that younger students are starting to realize how much risk there is in something like that and shy away when my generation didn't. Maybe it's that I grew up in a "striving" middle cl…

I don't know, maybe it's different now, but my generation (went to school in the mid 90s) was not told to "just go to the best college no matter what": We were also advised to consider the cost and carefully choose a major so as to produce a positive expected ROI. Obviously nobody has a crystal ball and you can never tell when huge, industry-wrecking changes are coming, but it was well understood that majoring in Und…

Don't worry, there are a lot of people who still don't go to their first choice school because it's too expensive.

But if even the second, third, fourth, fifth, etc, choices also leave you 50K+ in the hole... and nobody will give you a glance without some kind of degree... what the fuck are you supposed to do?

IME you're wildly overestimating the number of people who think they're going to make tons of money with a BA in Photography or similar. They just need to tick that degree checkbox to be employable at most places, and everyone has been telling them to go to a 4 year university their entire life, and they're all stupidly expensive.

Re: US Household Debt Surpasses 2008 High

#237

Post by djrogers »

Teknoman117 wrote: post #140
manacit wrote: post #10

I don't know if it's a "bubble" (I am not qualified to say that), but I can't imagine that the current trend with student loans will continue. Looking at the numbers for someone entering college in 2017, it feels nearly predatory what a good portion of private and out of state colleges are charging. Even with financial aid, $30-40k a year for 4-5 years is insane. I was fortunate enough to have parents who made saving…

I went to one of the UC schools and left with $121k in debt ($100k borrowed plus the interest I couldn't pay off while working during school). Basically didn't qualify for any sort of scholarships or grants due to my parents making "enough money." Don't know where they get that figure from, as its not like my parents' could afford to write a check for $25k/yr just for my education (especially not with my sister enter…

Cautionary tale here for anyone entering college - take out student loans for 2x the cost of tuition (UC tuition is about 12,300) and you'll be paying for a looooong time.

If you can, you're much better off limiting your student loans and working to pay for food/beer/rent etc. students who work through college generally manage to pull the same or higher GPAs anyway, so you're not going to hurt your career.

Re: US Household Debt Surpasses 2008 High

#238

Post by djrogers »

prawn wrote: post #231
Teknoman117 wrote: post #140

Earlier quoted context omitted.

I went to one of the UC schools and left with $121k in debt ($100k borrowed plus the interest I couldn't pay off while working during school). Basically didn't qualify for any sort of scholarships or grants due to my parents making "enough money." Don't know where they get that figure from, as its not like my parents' could afford to write a check for $25k/yr just for my education (especially not with my sister enter…

Is that 7.5% interest rate standard? Is it high because of the risk inherent in young adults being unable to service the loan?

There is basically no risk, they are government guaranteed and can't be defaulted on.

Re: US Household Debt Surpasses 2008 High

#239

Post by djrogers »

Teknoman117 wrote: post #173
lz400 wrote: post #139

Earlier quoted context omitted.

I truly don't understand the USA sometimes. Don't you guys know that in Europe higher education is free? Well where I'm from there was a very low nominal cost but my father was a public servant so cost was waived, I literally studied CS for 0 cost. And these countries are able to afford it all! Magic! I don't understand how people in USA are not aware of this and literally rioting in the streets. At the very least sw…

I don't understand why the cost of higher education has gone up so much. My grandparents paid for college via a job they only held in the summer and my parents paid for college working part time during the school year and full time in the summer - both of those jobs paying a little better than minimum wage. Yet I'm looking at 5 years of debt with a tech industry salary. Having to paying for higher education wouldn't…

It's gone up because of one reason- unlimited student loans being available. As long as the money is available, schools will pay administrators more, Filled newer buildings, and charge their students more.

Re: US Household Debt Surpasses 2008 High

#240

Post by david927 »

omgwtfbyobbq wrote: post #128

$13.6 trillion is a ton of debt (literally?). At the same time, I think debt versus net worth is a more descriptive metric. Back in 2008, household net worth (HNW) was about $56 trillion, so household debt was about a quarter of HNW. With HNW at about $93 trillion, reaching $14+ trillion in household debt doesn't sting as much. https://www.federalreserve.gov/releases/z1/current/z1.pdf At the same time, interest rates…

debt versus net worth is a more descriptive metric.

But over time debt will inflate the economy and make net worth look like it has been raised, when in fact, it's the effect of the debt itself.

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