Debt

Risky Debt Spending Of Bottom Half Is Bolstering The Economy

July 29, 2018 Jonathan Spicer, Reuters Educate! Debt, Inequality, Jobs and Wages, New Economy

By almost every measure, the U.S. economy is booming. But a look behind the headlines of roaring job growth and consumer spending reveals how the boom continues in large part by the poorer half of Americans fleecing their savings and piling up debt.

Back When College Was Debt-Free

June 12, 2018 By Josh Hoxie, Inequality.org Create! Debt, Higher Education, Student Debt, Tuition

As May gives way to June, the last college grad ceremonies are wrapping up and the last parties are coming to a close. Now the job hunt for recent grads begins in earnest — with the looming specter of student loan payments drawing ever closer. Today’s average student debt is around $37,000. But in America’s largest state, it wasn’t that long ago that any student could get a world-class, debt-free education — regardless of their economic background. That state was California, and Gail Leondar-Wright was one of those students. Gail came from a middle-class family — her dad was an engineer and her mom a stay-at-home parent. She attended UC Berkeley from 1976 to 1980, graduating with a bachelor’s degree in theater. At the time, the elite public school was tuition-free and required a mere $600 per year in fees, or just under $1,400 in today’s dollars.

Global Economy A Giant Debt Scam,What the Financial Elite Don’t Want You to Know

June 10, 2018 By Andrew O'Hehir, Salon Educate! Banking and Finance, Capitalism, Debt, New Economy

Capitalism collapsed in 2008, just as communism had collapsed in 1991 — the system we have now is something else This is an argument Varoufakis has made many times, including in his 2011 book “The Global Minotaur.” As he expressed it to me, the financial crisis of 2008 led to “a wholesale collapse of what used to be called capitalism,” which has not recovered nearly as much as most people believe. What we have instead is an almost galactic-scale system of moving debt around to conceal the various flaws and shortfalls in the system. Varoufakis calls it “bankrupt-ocracy,” in which enormous but endangered or bankrupt financial institutions wield enormous power over the rest of society. “That’s not capitalism.” And on the subject of shell games …

Could Student Loans Lead To Debt Prison? The Handwriting On The Wall

April 20, 2018 Alan Nasser, Counterpunch.org Educate! Debt, Prison, Student Loans

The burden weighing like a nightmare, to coin a phrase, on 44 million indebted current and former students will haunt these people for a good portion of their lives. The average student debtor graduates owing close to $34,000 and is projected to spend 21 years paying it off. At present, the average monthly payment for those between 30 and 40 years old is $351.00. It is not uncommon for repayment obligations to be borne by underwriters of these loans, typically the primary borrower’s parents, grandparents, aunts and uncles. Taking these co-signers into consideration, we have about 100 million people adversely affected, directly or indirectly, by the difficulty very many have repaying these loans. Because it is hard to have loans dismissed or renegotiated on the grounds of undue hardship, cases like the following are numerous

Not A Matter Of If, But When

February 18, 2018 Shawn Hattingh, MR Online. Educate! Banking, Capitalism, Debt, Stock Market

In early January 2018, capitalists across the globe were celebrating the fact that the Dow Jones had rallied by 45% since the election of Donald Trump. Likewise, brokers were beaming in Sandton when the Johannesburg Stock Exchange hit a high of 61,475 points (up a staggering 300% compared to early 2009 when at one point it sat at 18,465 points). Yet beneath all the exuberance, danger signs abound—including signs that stock, bond and debt markets are experiencing bubbles, which will burst at some point.

To Grow the US Economy, Cancel Student Debt

February 11, 2018 By A.P. Joyce, MIC Create! Debt, New Economy, Student Debt

A report from a group of economists at the Levy Economics Institute of Bard College finds that there would be huge benefits if the federal government were to forgive all existing student debt. This would ripple out from young people struggling to pay off massive college loans to the economy as a whole, according to the report. “The idea of canceling student debt is not just some crazy idea out of left field, but is actually something that could be done, and done in a way that has a moderately positive economic impact,” Marshall Steinbaum, a fellow and research director at the Roosevelt Institute and a coauthor of the report said in an interview. “The way this and similar polices are often discussed is in a mode of ‘well can we really afford this?’ and the answer is definitely yes,” he added.

The Real Causes Of Deficits And The US Debt

December 7, 2017 Jack Rasmus, telesurtv.net Educate! Budgets, Debt, Finance and Economy, New Economy

By Jack Rasmus for Tele Sur - Nonsense like social security and Medicare will be insolvent by 2030. When in fact social security has created a multi-trillion dollar surplus since 1986, which the U.S. government has annually ‘borrowed’, exchanging the real money in the fund created by the payroll tax and its indexed threshold, for Treasury bonds deposited in the fund. As for Medicare, the real culprit undermining the Medicare part A and B funds has been the decades-long escalating of prices charged by insurance companies, for-profit hospital chains (financed by Wall St.), medical devices companies, and doctor partnerships investing in real estate and other speculative markets and raising their prices to pay for it. As for Part D, prescription drugs for Medicare, the big Pharma price gouging is even more rampant, driving up the cost of the Part D fund. By the way, the prescription drug provision, Part D, passed in 2005, was intentionally never funded by Congress and George Bush. It became law without any dedicated tax, payroll or other, to fund it. Its US$50 billion plus a year costs were thus designed from the outset to be paid by means of the deficit and not funded with any tax.

11 Percent Of Student Borrowers Are In Default

December 6, 2017 Drew Cloud, studentloans.net Educate! Debt, Student Loans

By Drew Cloud for Student Loan Report - The national student loan default rate is now over 11 percent, and the total outstanding student debt shows no signs of shrinking any time soon. When you think about the 44 million+ borrowers with student loan debt, that default rate is a little more frightening. Millions of borrowers throughout the United States are not making payments and are digging themselves into a hole that is not easy to get out of. Without even considering the issues caused by defaulting, student loan debt causes plenty of other problems. Many graduates move back home because they can’t afford to buy a new home as they can't afford rent or mortgage payments. Student debtors are also pushing off their family plans as well. It’s hard to pay for a wedding and a child when a significant part of your income goes towards your student debt each month. These are common problems experienced by student loan borrowers who are successfully paying their loans. Borrowers in default have even more issues to consider, such as the impact on their credit. Defaulting on a student loan right out of college can wreck someone’s credit report, and this will only cause difficulty down the road whenever applying for a mortgage, credit card, auto loan, or anything else that requires credit. It’s no secret that student loans cause problems for graduates. But, why exactly is this happening? Who’s to blame?

Creston Davis On Forming Global Center For Advanced Studies

November 27, 2017 James Crossley, truth-out.org Create! Debt, Education, Higher Education

By James Crossley for Truthout - Creston Davis: Starting an independent school run strictly by intellectuals was always my dream. Back in 2002, I remember talking with Slavoj Zizek about the need for a Frankfurt School for the 21st century. Years later, after I was teaching at Rollins College, this idea came to the fore again when, year after year, I had students report to me not only how deeply in student loan debt they were, but also how job prospects were difficult (if not impossible) to come by, especially [if] they were from the working or poor class. Over the years, and before I was promoted to associate professor, I began looking into the structural logic and root causes my students, sometimes called "the lost generation," faced. In the end, it became clear to me that I could no longer continue teaching about emancipation and liberation when my very students (and soon, my sons) had to indenture themselves to banks (via student loans) in order to learn about liberation. It was a contradiction that my conscience could not reconcile. So, in late 2012, and after lecturing for a semester in Poland on my sabbatical, I resigned, took out my retirement and used those funds to help start an education initiative designed to create a debt-free high-quality education alternative. Over 100 leading academics, writers, filmmakers, artists and intellectuals quickly joined.

How To Erase Puerto Rico’s Debt Without Hurting Mom And Pop

October 15, 2017 Ellen Brown, www.ellenbrown.com Create! Banking and Finance, Debt, Federal Reserve, New Economy, Puerto Rico

By Ellen Brown for Web of Debt. During his visit to hurricane-stricken Puerto Rico, President Donald Trump shocked the bond market when he told Geraldo Rivera of Fox News that he was going to wipe out the island’s bond debt. How did the president plan to pull this off? Pam Martens and Russ Martens, writing in Wall Street on Parade, note that the U.S. municipal bond market holds $3.8 trillion in debt, and it is not just owned by Wall Street banks. Mom and pop retail investors are exposed to billions of dollars of potential losses through their holdings of Puerto Rican municipal bonds, either directly or in mutual funds.

Puerto Rico Needs More Hurricane Relief Now

October 3, 2017 Mark Weisbrot, www.buzzfeed.com Create! Debt, Hurricane, Natural Disasters, Puerto Rico

By Mark Weisbrot for Buzz Feed News - More than 40 percent of Puerto Rico is without clean water, and the vast majority has no electricity. Many hospitals and operating rooms are not functioning, and the threat of a public health crisis looms. On Wednesday, 145 members of Congress took the unusual step of writing to President Trump and asking for more Department of Defense resources to be immediately deployed. Puerto Ricans are US citizens, and Puerto Rico is legally entitled to the same federal relief and reconstruction aid as Texas or Florida. But Puerto Rico is also an “unincorporated territory” of the United States ― or, as many would say, a colony. Although Puerto Ricans can be drafted to serve in the US military, and are subject to other obligations of US citizenship, they do not have voting representation in the US Congress. Therein lies the problem: Puerto Rico’s political status not only prevents these US citizens from securing their legal rights, but even worse, it allows them to be treated very badly, over and over again, and not have the sovereignty to chart a different course. That different course is desperately needed, because if Puerto Rico is to have a future, it will need a whole new economic plan that allows it to recover. This would include, at a minimum, the cancellation of most of its debt, which is not going to be paid in any case.

Government Debt Is Not The Problem

September 7, 2017 Dean Baker, www.library.cqpress.com Educate! Debt, Government, New Economy

By Dean Baker for Counter Punch - Deficit fears are impoverishing our kids. The people complaining about budget deficits fundamentally misrepresent how the economy works and the problems it faces. A deficit is a problem when it creates too much demand, exceeding the economy’s ability to supply goods and services. In this situation, a deficit is likely to lead to higher interest rates and inflation, which reduce investment. Less investment means less productivity growth, which means we will be less wealthy in the future. Ever since the 2007–09 recession, the problem has been the opposite: too little demand. Millions of workers have gone unemployed because there was not enough demand for their labor. In a weak economy, companies invest less. In a period of weak demand, it is virtually costless for the government to spend in areas that will not only employ people but also increase long-term productivity and spending on infrastructure, research and development and such areas as quality preschool, which pays enormous long-term dividends. Deficit fears prevented the government from spending the money needed to bring the economy back to full employment. That was costly in the short term because it meant millions of workers went unemployed, but it was also very costly in the long term.

If China Can Fund Infrastructure With Credit, So Can We

May 21, 2017 Ellen Brown, www.ellenbrown.com Create! Banking and Finance, Debt, Infrastructure, Transportation

By Ellen Brown for the Web of Debt Blog. United States - May 15-19 has been designated “National Infrastructure Week” by the US Chambers of Commerce, the American Society of Civil Engineers (ASCE), and over 150 affiliates. Their message: “It’s time to rebuild.” Ever since ASCE began issuing its “National Infrastructure Report Card” in 1998, the nation has gotten a dismal grade of D or D+. In the meantime, the estimated cost of fixing its infrastructure has gone up from $1.3 trillion to $4.6 trillion. While American politicians debate endlessly over how to finance the needed fixes and which ones to implement, the Chinese have managed to fund massive infrastructure projects all across their country, including 12,000 miles of high-speed rail built just in the last decade. How have they done it, and why can’t we?

Number Of Americans Defaulting On Student Loans Reaches 4.2 Million

April 21, 2017 Philip Andrea and Genevieve Leigh, www.wsws.org Educate! Debt, Student Loans

By Philip Andrea and Genevieve Leigh for WSWS - A new analysis released this week by the Consumer Federation of America found that the number of Americans in default on their student loans jumped by nearly a fifth in 2016. Rising 17 percent from 3.6 million in 2015, there are now at least 4.2 million Federal Direct Loan borrowers in default. A borrower is put in default when no payment is made in more than 270 days. In addition to more borrowers defaulting on their loans, both the number of borrowers and the average amount borrowed continues to increase rapidly. The new analysis shows that the total amount of student debt owed adds up to a staggering $1.3 trillion, triple what it was a decade ago. The report also emphasized the relationship between student debt and homeownership. Not surprisingly, it was found that people with student debt have a significantly lower chance of owning a home when compared to graduates without debt, namely those aged 30 to 36. Attaining a college degree has been shown to increase the probability of owning a home, but this statistic still keels to the prospect of debt damaging the borrower’s credit score.

The Student Debt Crisis Is Exploding

April 18, 2017 Kevin Zeese and Margaret Flowers, www.PopularResistance.org Resist! Debt, Education, Student Activism, Student Debt, Student Loans

By Kevin Zeese and Margaret Flowers for Popular Resistance. The level of student loan debt has risen to $1.5 trillion and defaults are more than 40% and rising. U.S. student loan debt has grown to overwhelm all other categories of non-housing consumer debt in this nation. Underneath the crisis are rising tuition costs, a predatory student loan industry and an absence of consumer protections for students. What is the student debt movement to do? Of course the Biden bankruptcy protections should be repealed but that is not enough. We need a complete student loan debt forgiveness program. These debts are ill gotten gains and should be forgiven. If the government refuses to forgive these debts, people must rise up together and refuse to pay any student loan debt. The people have the power to end this injustice and must mobilize to do so. A student loan debt jubilee, whether mandated by law or put in place by the people, will bring economic freedom to tens of millions, end their debt servitude and allow them to participate in the economy. It will be a significant economic stimulus, but more importantly it will end an injustice.

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