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US Household Debt Surpasses 2008 High

nytimes.com

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Re: US Household Debt Surpasses 2008 High

#271

Post by smileysteve »

lz400 wrote: post #139
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 sw…

> Don't you guys know that in Europe higher education is free

In SOME countries in europe, higher education is free. I've met plenty of Brits with student loans. They're still in Europe (and the eu for now)

Re: US Household Debt Surpasses 2008 High

#272

Post by FT_intern »

cstejerean wrote: post #257
crdb wrote: post #217

Earlier quoted context omitted.

Ah, but I'm not saying that Ivy/Oxbridge grads make better employees all else being equal (in particular salary). I'm specifically saying that on a financial/job hunting basis, it makes more sense to pick a prestigious university and "useless" degree than a "useful" degree at a non-prestigious university, in aggregate. When you are on the other side, other variables come into play. For example, elite grads might be g…

I think there may be some hidden variables there. For example the kids of a VP at a large company may very well go to Oxford and study philosophy and then get a job at McKinsey, but how much of that was based on the family connections rather than anything to do with the philosophy curriculum at Oxford. And some of those kids get into the ivy schools because their parents went there or made large donations, so again i…

> And some of those kids get into the ivy schools because their parents went there or made large donations,

Or they were born with the right skin color

Re: US Household Debt Surpasses 2008 High

#273

Post by bpchaps »

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…

I think so. It's funny, despite having a relatively damn good career without a degree, I still get constant grief from friends and family. There probably hasn't been a single family visit since leaving home where someone hasn't asked me when I'm going back to college. Even after explaining that it makes no financial sense to put myself into >$100k debt, the degree comes out as more important than anything else.

It's not something I really know how to explain, except that the modern expectation of "established person" is someone with a degree. So until that expectation goes away,it seems we're going to be culturally stuck here for a while.

/anecdote

Re: US Household Debt Surpasses 2008 High

#274

Post by labster »

vizeroth wrote: post #264
labster wrote: post #145

Earlier quoted context omitted.

You need luck or connections or wealth to succeed. Connections can include parents, friends, etc. But something has to break your way -- simply attending college is not enough to tilt the odds in your favor.

Many colleges are being pressured (by accreditation committees, donors, government, etc.) to provide methods for students to acquire connections that make it easier to succeed. Networking opportunities, guest lecturers from industry, internships, and special programs are fairly common ways that colleges can make a difference for students beyond an education. While some (perhaps many or most in some schools) professor…

So that's how they justify the administrative bloat in universities these days. And it's a great excuse to keep hiring lecturers instead of faculty!

I'm not trying to be hard on you, it's just that I'm skeptical about whether new non-academic programs in universities improve outcomes enough to offset their costs to individual students. The check on administrative bloat is very weak in the US, and arbitrary ratings like the US News & World Report have more influence than customers do.

Re: US Household Debt Surpasses 2008 High

#275

Post by subterfudge4 »

ceejayoz wrote: post #158
subterfudge4 wrote: post #119

Earlier quoted context omitted.

> Because it doesn't necessarily have to cost that much. Makes no sense to me. Any person who thinks something is more expensive than it can be; can start his own college and win over the market while making a lot of money. How can a person claim to know the value of other people's labor ?

> Makes no sense to me. Any person who thinks something is more expensive than it can be; can start his own college and win over the market while making a lot of money. No, because there are enormous barriers to entry. We can, however, see that many other countries have similarly good universities that don't cost as much per pupil. > How can a person claim to know the value of other people's labor ? Every person who…

> see that many other countries And which are those countries ? Very few countries in the world have enrolment close to that of USA. Of course American students should go to those countries then.

> Every person who has ever hired someone does that.

Never. People hire people based on value to them not to the employees.

Re: US Household Debt Surpasses 2008 High

#276

Post by grigjd3 »

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…

I got that lesson and that school is what you make of it.

Re: US Household Debt Surpasses 2008 High

#277

Post by dennisgorelik »

plaguuuuuu wrote: post #270
Meekro wrote: post #118

Earlier quoted context omitted.

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…

Coming from money isn't a necessity for an individual, but on a statistical basis, the correlation is undeniable - you're so much more likely to succeed if you come from money that the idea is substantially correct. If I had a "small $1 million loan" right now, I'd be able to take much greater risks in terms of quitting my job to create a startup or whatever. Thus I'd be far more likely to be more successful (financi…

> If I had a "small $1 million loan" right now

... then your fate would be similar to the fate of a typical big lottery winner: having all your money spent in a few years and your life derailed.

Children of wealthy people succeed not because of inherited money, but because of wealth management habits they learned from their parents.

Re: US Household Debt Surpasses 2008 High

#278

Post by ryandamm »

int_19h wrote: post #152
ryandamm wrote: post #56

Earlier quoted context omitted.

I agree! His simple-but-not-too-simple model to explain international macro economics is really great, and happens to explain a lot of the dynamics of what we see these days. It's appealing intellectually; I like small and simple models. I suppose if we see a major dislocation in the Chinese economy in the next 2-3 years, his model will be extra-confirmed. (That's a major point he makes on his blog.)

Can you recommend a good starting point to read up on this?

Well, I was introduced to Pettis via Paul Krugman's blog at the NYTimes... but in practice, you just gotta wade in. Be comfortable with being lost the first few tens of thousands of words on his blog, and it will add up.

Pettis doesn't really give a primer; he discusses lots of different issues through the same lens, and his target audience appears to be readers with at least an undergraduate understanding of economics and a passing familiarity with balance sheets (I had neither). Frankly, I picked it up via muscle memory (and lots of context-Googling; Wikipedia helps, and StackOverflow has a surprising amount of basic economics info).

I think the bottom line is this: if you're willing to devote a few hours (maybe low tens of hours) to slogging through his posts, occasionally re-reading them a few times and searching elsewhere for explanation of terms, you'll start to understand his balance-sheet theory of macro. And it doesn't require much context, to be honest: one of the beauties of his framework is it glosses over so much of the complexity of an economy by dealing with clear and clean abstractions at the national level. (It's only an okay source for understanding the internal dynamics of an economy; the blog really mostly focuses on international macro.)

I hope that helps... though acknowledge it might not! (My interest was driven by a burning desire to understand WTF just happened!?! circa 2008; that motivation is probably hard to conjure without context, to be honest.)

Re: US Household Debt Surpasses 2008 High

#279

Post by [deleted] »

cstejerean wrote: post #257
crdb wrote: post #217

Earlier quoted context omitted.

Ah, but I'm not saying that Ivy/Oxbridge grads make better employees all else being equal (in particular salary). I'm specifically saying that on a financial/job hunting basis, it makes more sense to pick a prestigious university and "useless" degree than a "useful" degree at a non-prestigious university, in aggregate. When you are on the other side, other variables come into play. For example, elite grads might be g…

I think there may be some hidden variables there. For example the kids of a VP at a large company may very well go to Oxford and study philosophy and then get a job at McKinsey, but how much of that was based on the family connections rather than anything to do with the philosophy curriculum at Oxford. And some of those kids get into the ivy schools because their parents went there or made large donations, so again i…

[deleted]

Re: US Household Debt Surpasses 2008 High

#280

Post by 0xC0DECAFE2020 »

dennisgorelik wrote: post #277
plaguuuuuu wrote: post #270

Earlier quoted context omitted.

Coming from money isn't a necessity for an individual, but on a statistical basis, the correlation is undeniable - you're so much more likely to succeed if you come from money that the idea is substantially correct. If I had a "small $1 million loan" right now, I'd be able to take much greater risks in terms of quitting my job to create a startup or whatever. Thus I'd be far more likely to be more successful (financi…

> If I had a "small $1 million loan" right now ... then your fate would be similar to the fate of a typical big lottery winner: having all your money spent in a few years and your life derailed. Children of wealthy people succeed not because of inherited money, but because of wealth management habits they learned from their parents.

They succeed because of connections, plain and simple.
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