Debt serfdom via student loans: A new class of indentured servants now carry the $1.1 trillion student loan bubble and cracks are already plaguing the system.
$1.1 trillion. That is the amount of student debt being carried on the backs of millions of Americans. Student debt has become a rite of passage for many young Americans. In fact, many Americans establish their first credit line with student debt as they enter college. The crisis is large and has a direct connection to the abysmal savings that younger Americans have. The press has tried to downplay this debt sector because students continue to carry the burden making minimum payments on the debt. Yet even with this, student debt is the most delinquent household debt sector in the United States. There are deeper trends at hand yet the amount of debt floating around in the student debt markets continues to expand. Disposable income of younger Americans already ravaged by the recession continues to be sucked away into this gigantic burden. Are we creating student debt serfs via higher education?
How the stock market is a sham for the working and middle class. 53 percent of Americans have no money in the stock market, including retirement accounts. 62 percent of all US wealth owned by top 5 percent.
The growing wealth divide in this country is devouring every piece of the middle class that is currently left. The stock market is largely a sham for most Americans. Why? Many hedge funds and other large Wall Street firms are in the business of making quick profits even if it means destabilizing the underlying economy. Many large companies have made larger profits since the recession ended by slashing wages and benefits. More importantly however, is that this dramatic bull market in stocks since 2009 has been one big sideshow for most Americans. A Pew Research survey found that 53 percent of Americans own no stocks, including in their retirement accounts. And the fact that only 10 percent of Americans have pensions, many (most) are going to rely on Social Security as they enter old age. Why is the stock market a sham for working and middle class Americans?
Going for broke: The multiple lost decades of US household income. Is it possible to have a recovery while the standard of living collapses?
The recent Census data highlights a stark difference between the stock market and what families are facing across the United States. Households are struggling to keep ahead while the standard of living slowly erodes with the juggernaut that is the banking tide. There will be repercussions for what the Fed has done in terms of bailing out the banks. One longer term problem is the decline in household incomes. Adjusting for inflation, American families are making what they did in 1989. How long ago was this? The most popular shows on TV were The Cosby Show and Roseanne. In other words, this was a generation ago. The standard of living continues to decline for many but for others the bailouts are working out magnificently like rubbing on a central bank genie lamp. The Fed is going for broke here but only a small portion of our population is really coming out ahead.
A road to unsustainable debt: CBO reports that US is on unsustainable budget course as spending exceeds revenues.
A recent CBO report came out with a rather sobering outlook of our governmental spending habits. The word “unsustainable†is probably not something you want uttered in a report about meeting a budget. Yet that has been our recent trajectory when it comes to spending. The massive financial crisis and subsequent bailouts have resulted in a titled economy favoring a small group of people. The same engine that led us into this problem is still humming along and the too big to fail have now become the way too big to fail banks. So unsustainability is the spine fueling the current recovery. Debt upon debt only works until you reach tipping points. US households hit that point a few years ago as the housing bubble imploded. To think that this path of acquiring debt upon debt to pay for expenditures is sustainable is going to cause deeper instability into an already shaky system.