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US Household Debt Surpasses 2008 High

nytimes.com

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Re: US Household Debt Surpasses 2008 High

#131

Post by ced »

ryandamm wrote: post #20

An alternative view, and one I happen to subscribe to: a balance sheet analysis shows that US debt must go up over time to support exogenous capital flows. Whether US debt grows in the housing sector, student loans, revolving debt, etc is a function of internal, domestic dynamics (including laws, local economic structure, etc). But the total capital flow into the US exceeds the outflow; that money ends up on a balanc…

I'd like to understand this better. There's two villages. A businessman from village B comes to village A and buys a store from Bob for 100$. Bob keeps the money for a rainy day. Where is debt increasing?

Re: US Household Debt Surpasses 2008 High

#132

Post by int_19h »

jcrites wrote: post #113
theparanoid wrote: post #52

Earlier quoted context omitted.

University is about signalling not education (for the most part). University administrators are a large part of the cost increase.

I don't think that's true, at least in STEM degrees. I learned a tremendous amount in university. I took classes to a 100 or 200 level in a bunch of subjects, which vastly increased my ability to reason about what I know and what I don't . My computer science degree required me to study topics like statistics, computational and applied mathematics (CAAM), and electrical/computer engineering (ELEC), and many more, alo…

The question is, how much of what you've learned in college actually contributes to your ability to work in the industry? They may all be useful skills in theory, but do you actually use them much? And those that you do use, did they have to be acquired in college, or could you have acquired them in the industry?

Anecdotally, I am a software developer without a degree (I did some college, never finished it - but I can't say that I took anything useful away from it, certainly not anything related to my day-to-day job). I've learned some of the things that you list on my own, and I haven't learned others (like electric engineering) - but that didn't prevent me from finding a good starting job, and working my way up through the ranks.

So, while not disputing that STEM degrees are useful and offer something that industry experience does not - do we actually need STEM degrees for everyone in the industry? or even for the majority?

Re: US Household Debt Surpasses 2008 High

#133

Post by flukus »

Goronmon wrote: post #105
libria wrote: post #19

Earlier quoted context omitted.

Why is student loan debt not dischargable in bankruptcy? If it were, banks would be far less likely to issue them, students would find cheaper education alternatives, and universities would be forced to provide greater assistance.

Why is student loan debt not dischargable in bankruptcy? Because there isn't a way to take back the knowledge/skills/information learned while in college. If you default on a home loan, then can take your house. If you default on a car loan, they can take your car. What can they do when you default on your student loans?

> Because there isn't a way to take back the knowledge/skills/information learned while in college.

Time does that anyway, you'd be surprised how much you forget when you don't use it everyday. Plus the knowledge get's stale. A university degree depreciates just like everything else.

Re: US Household Debt Surpasses 2008 High

#134

Post by redblacktree »

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…

What about the distribution of net worth vs debt? If the two are balanced, I agree with your point.

Re: US Household Debt Surpasses 2008 High

#135

Post by hiddencost »

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…

The change in HNW is not distributed evenly; the increase in individual debt is anti-correlated with increasing individual HNW.

Re: US Household Debt Surpasses 2008 High

#136

Post by muninn_ »

austenallred wrote: post #127
muninn_ wrote: post #115

Earlier quoted context omitted.

Sure but we're talking about rights, not operations.

I'm not trying to comment on whether or not education should be a right, I'm just saying that believing it should be given our current system has had some negative repercussions.

Which is fine, but my comment was addressing the right to education.

Re: US Household Debt Surpasses 2008 High

#137

Post by austenallred »

Meekro wrote: post #118
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…

My experience was similar to yours. I immigrated from Russia at a young age so we had very little money. I attended a great college mostly on scholarship. My mom had always taught me to work hard and pick a major carefully, taking into account ROI. Thanks to merit-based scholarships and need-based aid, I graduated with minimal debt, despite attending a private college with a $45k per year sticker price. Thanks to a p…

I'd venture a guess that helpful and savvy parents matter as much as (if not more than) coming from money

Re: US Household Debt Surpasses 2008 High

#138

Post by AnimalMuppet »

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…

> $13.6 trillion is a ton of debt (literally?)

IIRC, in $100 bills, $100 million is a ton. $13.6 trillion is 136,000 tons of $100 bills.

Re: US Household Debt Surpasses 2008 High

#139

Post by lz400 »

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 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 swing public opinion and voting. Don't even start talking about the we are americans we don't like taxes BS, you really think being a young adult with a 200K student loan and a $6K deductible for healthcare insurance is better than an extra ~5-10% of tax? It's truly mind boggling.

Re: US Household Debt Surpasses 2008 High

#140

Post by Teknoman117 »

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 entering college in my senior year). I had to take out loans for the whole bill. Not that I'd ever expect my parents to pay for my education.

The one that kills me is that my sister, who graduated high school with a 4.5 gpa (second only to her class's valedictorian) wasn't able to get any scholarships or grants. If your parents' credit is good enough to take out the loans very few seem to be willing to give you even a merit scholarship.

So I worked my ass off while attending school (academics and side projects) and got myself a nice tech-industry job (not like I'm pulling a Google level of pay though). Still, with the interest rates the government loans are (~7.5%), I'm paying a $2,350 a month bill to shed my student loans in 5 years. Kind of unnerving to think I'll be paying on them for the rest of my 20's. I won't lie, I find myself envious of people I met in school who got free rides in many cases for nothing more than being a member of some special interest group. A bunch of them are talking about starting companies or going to work for very risky (early stage) startups as they don't owe anything to anyone. With the student loan payment though, doing anything that doesn't have good stability seems like a bad choice.

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