How long can our debt levels keep growing much, much faster than the overall economy? We haven’t had a year of 3 percent growth for the U.S. economy since the middle of the Bush administration, but we keep borrowing money as if there is no tomorrow. Much of the focus has been on the exploding debt of the federal government, and that is definitely something I plan to address once I get to Washington. But on an individual level, U.S. consumers have been extremely irresponsible as well. In fact, one new survey has found that more than 80 percent of all American adults are currently in debt…
It’s no secret that America is a nation that runs on debt, but it may surprise you to learn that the overwhelming majority of U.S. adults owe money in some way, shape, or form. According to new data from Comet, here’s how many Americans have debt at present:
- 80.9% of Baby Boomers
- 79.9% of Gen Xers
- 81.5% of Millennials
For most of us, it starts very early. We were told that going into debt to get a college education would not be a problem because we would be able to pay those loans off with the good jobs we would get after graduation.
Unfortunately, those good jobs never really materialized for many of us, and now millions of former college students are absolutely drowning in debt…
A study released Friday by the Brookings Institution finds that most borrowers who left school owing at least $50,000 in student loans in 2010 had failed to pay down any of their debt four years later. Instead, their balances had on average risen by 5% as interest accrued on their debt.
As of 2014 there were about 5 million borrowers with such large loan balances, out of 40 million Americans total with student debt. Large-balance borrowers represented 17% of student borrowers leaving college or grad school in 2014, up from 2% of all borrowers in 1990 after adjusting for inflation. Large-balance borrowers now owe 58% of the nation’s $1.4 trillion in outstanding student debt.
In addition to owing more than a trillion dollars on student loans, Americans are also now carrying more than a trillion dollars of auto loan debt and more than a trillion dollars of credit card debt.
Corporations have been incredibly irresponsible as well. Corporate debt has doubled since the last financial crisis, and corporate bankruptcies have been rising steadily in recent years. All it would take for the dominoes to really start falling is some sort of a major economic downturn.
Local, state and federal government debt levels are all at record highs as well. It is now being projected that our national debt will hit 30 trillion dollars by 2028, and those projections are probably too optimistic.
My guess is that we will almost certainly hit the 30 trillion dollar mark far sooner than that.
We can’t keep doing this to ourselves. Our incessant greed is literally destroying the future, but anyone that tries to warn about the collective insanity that has descended upon our society is mocked and ridiculed.
Let me ask you a question.
Would you willingly choose to give yourself cancer?
Of course not, but that is essentially what we are doing to ourselves as a society.
Debt is economic cancer, and as Lance Roberts has pointed out, if we continue to allow debt levels to grow like this eventually it will kill our entire economy…
Debt is, by its very nature, a cancer on economic growth. As debt levels rise it consumes more capital by diverting it from productive investments into debt service. As debt levels spread through the system it consumes greater amounts of capital until it eventually kills the host.
Debt is addictive, because it does boost our standard of living in the short-term. It is so easy to keep going back for one more “hit”, but every time we do it just makes our long-term crisis even worse.
Most people out there seem to think that our economic problems have been “solved”, but that is not true at all.
The truth is that our long-term problems just continue to grow with each passing day, and that is one of the reasons why I am so determined to go to Washington. We are at such a critical juncture right now, and if something is not done the prognosis is extremely negative.
If we stay on this current path, the very best that we can hope for is a “soft landing” and a greatly reduced standard of living for future generations of Americans. Here is more from Lance Roberts…
The processes that fueled the economic growth over the last 30 years are now beginning to run in reverse, and when combined with the demographic shifts in the U.S., the impact could be far more immediate and prolonged than the media, economists, and analysts are currently expecting. Sacrifices will have to be made, the economy will drag on at subpar rates of growth, individuals will be working far longer into their retirement years and the next generation of Americans will lead a far different life than what the currently retiring generation enjoyed.
It is simply a function of the math.
I am sorry for not writing more lately. I have been working night and day to get ready for May 15th. With Donald Trump in the White House, this is our opportunity to take our government back. If we miss this window, we may never have this sort of opportunity ever again.
America is drowning in debt, but of course our problems go far beyond that. Our economic, political, cultural and spiritual problems go very deep, and we desperately need to change course as a nation.
Unfortunately, most of the population is in a deep state of sleep, and my hope is that we can wake them up while there is still time to turn things around.
Michael Snyder is a pro-Trump candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.
Whenever you let federal bureaucrats get their hands on anything they are probably going to ruin it. During the Obama administration, the Department of Education spearheaded a transformation of American education that was absolutely breathtaking. Over a period of about five years, Common Core standards were implemented in almost every state in the entire nation. Unfortunately, this has resulted in a huge step backward for public education in this country. Common Core has been called “state-sponsored child abuse”, and it is a big reason why U.S. students are scoring so poorly on standardized tests compared to much of the rest of the world.
According to Wikipedia, at one point 46 states had adopted Common Core, but now some states are having second thoughts…
46 states initially adopted the Common Core State Standards, although implementation has not been uniform. At least 12 states have introduced legislation to repeal the standards outright, and Indiana has since withdrawn from the standards.
Sadly, many parents don’t even understand how dramatically our system of education has been tampered with. In her book entitled The Education Invasion: How Common Core Fights Parents for Control of American Kids, Joy Pullmann exposes how the Gates Foundation has been one of the key players in the effort to get Common Core introduced into classrooms all over America…
Organized in seven chapters, her book describes how the Gates Foundation promoted and continues to promote one extremely wealthy couple’s uninformed, unsupported, and unsupportable ideas on education for other people’s children while their own children are enrolled in a non-Common Cored private school. It explains how (but not exactly why) the Gates Foundation helped to centralize control of public education in the U.S. Department of Education. It also explains why parents, teachers, local school boards, and state legislators were the last to learn how the public schools their local and state taxes supported had been nationalized without Congressional knowledge or permission; and why they were expected to believe that their local public schools were now accountable for what and how they teach … not to the local and state taxpayers who fund them or to locally-elected school boards that by law are still supposed to set education policies not already determined by their state legislature … but to a distant bureaucracy in exchange for money to their state department of education to close “achievement gaps” between unspecified groups.
But this isn’t just an issue about control. The truth is that the approach to teaching basic fundamentals such as how to add and how to subtract is fundamentally different under Common Core.
Let me share just three examples that show how much Common Core is changing the way that U.S. students learn math. All of these examples have been floating around Facebook, and if you have never seen these before they are likely to make you quite angry.
If I asked you to subtract 12 from 32, how would you do it? Well, the “new way” is much, much more complicated than how we were all taught to do it…
If that first one seemed bizarre to you, than you really aren’t going to like this one…
And this last one was so confusing that a parent with a degree in engineering decided to include his own commentary on his child’s homework…
How are kids supposed to function in the real world if this is how they are learning to do basic math?
Personally, I am going to teach my daughter that 9 + 6 equals 15. But that isn’t how it is supposed to be done under Common Core. You can watch a video of a teacher explaining the very convoluted Common Core way to solve that math equation right here.
And of course it isn’t just math that is the problem. Common Core is systematically “dumbing down” our young people, and that may help to explain why the average U.S. college freshman now reads at a seventh grade level.
So what is the answer?
The first step in fixing our education system is to repeal Common Core. But even in red states such as Idaho there is a lot of resistance…
Since their inception, the Idaho Core Standards have been enmeshed in controversy.
Some legislators and citizens have pushed for a repeal of the Idaho Core Standards, the state’s version of Common Core standards in math and English language arts. Those repeal efforts have gone nowhere in the Legislature.
I don’t know what is wrong with our legislators. The Republicans have full control in this state, and so there is absolutely no excuse for not getting something done.
As I end this article, I want to give you an idea of just how far the quality of education in America has fallen over the past 100 years. In Kentucky, an eighth grade exam from 1912 made a lot of headlines when it was donated to the Bullitt County History Museum. As you can see, it is doubtful whether many of our college students would be able to pass such an exam today…
One thing that almost everyone can agree upon is that our system of public education is broken. We spend far more money on public education than anyone else in the world, and yet the results are depressing to say the least. Considering how much we are putting into education, we should be producing the best students on the entire planet, but it just isn’t happening. Personally, I attended public schools from kindergarten all the way up through law school, and the quality of education that I received was extremely poor. Even on the collegiate level, most of the courses were so “dumbed down” that even the family dog could have passed them. And of course millions of other people all over the country would say the same sorts of things about their own educations. Many refer to what is happening to our society as “the dumbing down of America”, and if we don’t get things fixed the United States is on course to become a second class nation.
If you believe that I am exaggerating, I would like you to consider the following numbers. The following are 14 facts that prove that America’s absolutely pathetic system of education deserves an “F” grade…
#1 Somewhere around 50 million students attend public schools in America today.
#2 Education is the most expensive item in 41 different state budgets.
#3 The latest PISA tests show that U.S. students are below average compared to the rest of the industrialized world…
One of the biggest cross-national tests is the Programme for International Student Assessment (PISA), which every three years measures reading ability, math and science literacy and other key skills among 15-year-olds in dozens of developed and developing countries. The most recent PISA results, from 2015, placed the U.S. an unimpressive 38th out of 71 countries in math and 24th in science. Among the 35 members of the Organization for Economic Cooperation and Development, which sponsors the PISA initiative, the U.S. ranked 30th in math and 19th in science.
#4 A report from the Educational Testing Service found that American Millennials are way behind Millennials in most other industrialized nations…
Half of American Millennials score below the minimum standard of literacy proficiency. Only two countries scored worse by that measure: Italy (60 percent) and Spain (59 percent). The results were even worse for numeracy, with almost two-thirds of American Millennials failing to meet the minimum standard for understanding and working with numbers. That placed U.S. Millennials dead last for numeracy among the study’s 22 developed countries.
#5 According to one very disturbing study, fewer than half of all high school graduates “are able to proficiently read or complete math problems”.
#6 According to U.S. News & World Report, “inflation-adjusted spending per student in American public schools has increased by 663 percent.”
#7 In 2015, the percentage of students in our public schools coming from low income homes crossed the 50 percent mark. That was the first time that had happened in at least 50 years.
#8 One study found that a whopping 76 percent of all high school graduates “were not adequately prepared academically for first-year college courses.”
#9 The following are five numbers which show how far the quality of college education has fallen in the United States…
-“After two years in college, 45% of students showed no significant gains in learning; after four years, 36% showed little change.”
-“Students also spent 50% less time studying compared with students a few decades ago.”
-“35% of students report spending five or fewer hours per week studying alone.”
-“50% said they never took a class in a typical semester where they wrote more than 20 pages.”
-“32% never took a course in a typical semester where they read more than 40 pages per week.”
#10 Just 36 percent of all full-time college students receive a bachelor’s degree within four years, and just 77 percent of all full-time college students have earned a bachelor’s degree by the end of six years.
#11 One survey found that nearly 10 percent of our college graduates believe that Judge Judy is on the Supreme Court…
#12 Another survey found that 29 percent of all U.S. adults cannot name the Vice-President.
#13 And yet another survey found that only 43 percent of all U.S. high school students knew that the Civil War was fought some time between the years of 1850 and 1900.
#14 Perhaps worst of all, 75 percent of our young adults cannot find Israel on a map of the Middle East.
This is what happens when we put federal bureaucrats in charge of education.
All over the country there are calls to abolish the Department of Education. For example, the following was published on CNBC…
The DOE currently employs 5,000 government workers and has an annual budget of $73 billion, yet according to the CATO Institute, it has not affected student outcomes in any demonstrable way over its 40-year history . It has successfully created a system that requires educators to teach reams of “politically-correct” content and focus on scoring well on standardized tests. It has created an atmosphere of testing in our schools, putting intense pressure on teachers and students to “ace the test” rather than mastering the material. This promotes a culture of teaching to the test and score tampering.
Unfortunately, abolishing the Department of Education is not going to be easy, because there is a tremendous amount of money at stake. And whenever there is a tremendous amount of money at stake, there are going to be very powerful interests that are determined to keep things just the way that they are…
The major stakeholders in K-12 public education are at an impasse. Teachers’ Unions are primarily concerned with self-preservation, maintaining extravagant perks for union administrators and exerting disproportionate political influence. A handful of publishing houses sell us $8 billion worth of warmed- over text books every year. Testing companies collectively spent tens of millions lobbying in states and on Capitol Hill from 2009 to 2014. These politically powerful, entrenched special interests are heavily invested in maintaining the failing status quo.
But even though there is going to be a lot of resistance, I am going to try to abolish the Department of Education anyway. I believe that full control over education should be returned to the state and local levels, but that is just the beginning.
Ultimately, we need to rebuild our system of education from the ground up. Instead of politically-correct indoctrination centers that endlessly pump progressive propaganda into impressionable young minds, we need to transform our public schools into institutions that focus on the essentials. We need a renewed emphasis on reading, writing, math and the skills that will enable our young people to function successfully once they get out into the real world.
At one time America’s system of education was the best in the world, and we can get there again. But of course the left is going to fight against the changes that need to be made every step of the way.
Corporations, individuals and the federal government continue to rack up debt at a rate that is far faster than the overall rate of economic growth. We are literally drowning in red ink from sea to shining sea, and yet we just can’t help ourselves. Consumer credit has doubled since the year 2000. Student loan debt has doubled over the course of the past decade. Business debt has doubled since 2006. And of course the debt of the federal government has doubled since 2007. Anyone that believes that this is “sustainable” in any way, shape or form is crazy. We have accumulated the greatest mountain of debt that the world has ever seen, and yet despite all of the warnings we just continue to race forward into financial oblivion. There is no possible way that this is going to end well.
Just the other day, a financial story that USA Today posted really got my attention. It contained charts and graphs that showed that business debt in the U.S. had doubled since 2006. I knew that things were bad, but I didn’t know that they were this bad. Back in 2006, just prior to the last major economic downturn, U.S. nonfinancial companies had a total of about 2.6 trillion dollars of debt. Now, that total has skyrocketed to 5.8 trillion…
Companies are sitting on a record $1.82 trillion in cash. That might sound impressive until you hear companies owe three times more – $5.8 trillion, according to a new report from Standard & Poor’s Ratings Services.
Debt levels are soaring at U.S. non-financial companies so quickly – total debt outstanding rose $650 billion in 2014, which is six times faster than the $100 billion in added cash.
So are we in better condition to handle an economic crisis than we were the last time, or are we in worse shape?
Let’s look at another category of debt. According to new data that just came out, the total amount of student loan debt in the U.S. is up to a staggering 1.2 trillion dollars. That total has more than doubled over the past decade…
New data released by The Associated Press shows student loan debt is over $1.2 trillion, which is more than double the amount of a decade ago.
Students are facing an average of $35,000 in debt, that’s the highest of any graduating class in U.S. history. A senior at University of Colorado, Colorado Springs, Jon Cheek, knows the struggle first hand.
“It’s been a pretty big concern, I work while I go to school. I applied for a bunch of scholarships and done everything I can to try and keep it low,” said Cheek.
And of course it isn’t just student loan debt. American consumers have had a love affair with debt that stretches back for decades. As the chart below demonstrates, overall consumer credit has more than doubled since the year 2000…
If our paychecks were increasing at this same pace, that would be one thing. But they aren’t. In fact, real median household income is actually lower today than it was just prior to the last economic crisis.
So American households should actually be cutting back on debt. But instead, they are just piling on more debt, and the financial predators are becoming even more creative. In a previous article, I discussed how many auto loans are now being stretched out for seven years. At this point, the number of auto loans that exceed 72 months is at an all-time high…
The average new car loan has reached a record 67 months, reports Experian, the Ireland-based information-services company. The percentage of loans with terms of 73 to 84 months also reached a new high of 29.5% in the first quarter of 2015, up from 24.9% a year earlier.
Long-term used-vehicle loans also broke records with loan terms of 73 to 84 months reaching 16% in the first quarter 2015, up from 12.94% — also the highest on record.
When will we learn?
The crash of 2008 should have been a wake up call.
We should have acknowledged our mistakes and we should have started doing things very differently.
But instead, we just kept on making the exact same mistakes. In fact, our long-term financial problems have continued to accelerate since the last recession. Just look at what has happened to our national debt. Just prior to the last recession, the U.S. national debt was sitting at approximately 9 trillion dollars. Today, it is over 18 trillion dollars…
Our debt has grown so large that we will never be able to get out from under it. This is something that I covered in my recent article entitled “It Is Mathematically Impossible To Pay Off All Of Our Debt“. Because of our recklessness, our children, our grandchildren and all future generations of Americans are consigned to a lifetime of debt slavery. What we have done to them is beyond criminal. If we lived in a just society, a whole bunch of people would be going to prison for the rest of their lives over this.
During fiscal year 2014, the debt of the federal government increased by more than a trillion dollars. But in addition to that, the federal government has more than seven trillion dollars of debt that must be “rolled over” every year. In other words, the government must issue more than seven trillion dollars of new debt just to pay off old debts that are coming due.
As long as the rest of the world continues to lend us enormous mountains of money at ridiculously low interest rates, we can continue to keep our heads above the water. But this can change at any time. And once it does, interest rates will rise. If the average rate of interest on U.S. government debt was to return to the long-term average, we would very quickly find ourselves spending more than a trillion dollars a year just on interest on the national debt.
The debt-fueled prosperity that we are enjoying now is not real. It is a false prosperity that has been purchased by selling future generations into debt slavery. We have mortgaged the future to make our own lives better.
We are addicts. We are addicted to debt, and no matter how many warnings we receive, we just can’t help ourselves.
Shame on you America.