Student Loan

30 Statistics About Americans Under The Age Of 30 That Will Blow Your Mind

Young People - Photo by Jefferson liffeyWhy are young people in America so frustrated these days?  You are about to find out.  Most young adults started out having faith in the system.  They worked hard, they got good grades, they stayed out of trouble and many of them went on to college.  But when their educations where over, they discovered that the good jobs that they had been promised were not waiting for them at the end of the rainbow.  Even in the midst of this so-called “economic recovery”, the full-time employment rate for Americans under the age of 30 continues to fall.  And incomes for that age group continue to fall as well.  At the same time, young adults are dealing with record levels of student loan debt.  As a result, more young Americans than ever are putting off getting married and having families, and more of them than ever are moving back in with their parents.

It can be absolutely soul crushing when you discover that the “bright future” that the system had been promising you for so many years turns out to be a lie.  A lot of young people ultimately give up on the system and many of them end up just kind of drifting aimlessly through life.  The following is an example from a recent Wall Street Journal article…

James Roy, 26, has spent the past six years paying off $14,000 in student loans for two years of college by skating from job to job. Now working as a supervisor for a coffee shop in the Chicago suburb of St. Charles, Ill., Mr. Roy describes his outlook as “kind of grim.”

“It seems to me that if you went to college and took on student debt, there used to be greater assurance that you could pay it off with a good job,” said the Colorado native, who majored in English before dropping out. “But now, for people living in this economy and in our age group, it’s a rough deal.”

Young adults as a group have been experiencing a tremendous amount of economic pain in recent years.  The following are 30 statistics about Americans under the age of 30 that will blow your mind…

#1 The labor force participation rate for men in the 18 to 24 year old age bracket is at an all-time low.

#2 The ratio of what men in the 18 to 29 year old age bracket are earning compared to the general population is at an all-time low.

#3 Only about a third of all adults in their early 20s are working a full-time job.

#4 For the entire 18 to 29 year old age bracket, the full-time employment rate continues to fall.  In June 2012, 47 percent of that entire age group had a full-time job.  One year later, in June 2013, only 43.6 percent of that entire age group had a full-time job.

#5 Back in the year 2000, 80 percent of men in their late 20s had a full-time job.  Today, only 65 percent do.

#6 In 2007, the unemployment rate for the 20 to 29 year old age bracket was about 6.5 percent.  Today, the unemployment rate for that same age group is about 13 percent.

#7 American families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.

#8 During 2012, young adults under the age of 30 accounted for 23 percent of the workforce, but they accounted for a whopping 36 percent of the unemployed.

#9 During 2011, 53 percent of all Americans with a bachelor’s degree under the age of 25 were either unemployed or underemployed.

#10 At this point about half of all recent college graduates are working jobs that do not even require a college degree.

#11 The number of Americans in the 16 to 29 year old age bracket with a job declined by 18 percent between 2000 and 2010.

#12 According to one survey, 82 percent of all Americans believe that it is harder for young adults to find jobs today than it was for their parents to find jobs.

#13 Incomes for U.S. households led by someone between the ages of 25 and 34 have fallen by about 12 percent after you adjust for inflation since the year 2000.

#14 In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger.  Today, the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.

#15 In 2011, SAT scores for young men were the worst that they had been in 40 years.

#16 Incredibly, approximately two-thirds of all college students graduate with student loans.

#17 According to the Federal Reserve, the total amount of student loan debt has risen by 275 percent since 2003.

#18 In America today, 40 percent of all households that are led by someone under the age of 35 are paying off student loan debt.  Back in 1989, that figure was below 20 percent.

#19 The total amount of student loan debt in the United States now exceeds the total amount of credit card debt in the United States.

#20 According to the U.S. Department of Education, 11 percent of all student loans are at least 90 days delinquent.

#21 The student loan default rate in the United States has nearly doubled since 2005.

#22 One survey found that 70% of all college graduates wish that they had spent more time preparing for the “real world” while they were still in college.

#23 In the United States today, there are more than 100,000 janitors that have college degrees.

#24 In the United States today, 317,000 waiters and waitresses have college degrees.

#25 Today, an all-time low 44.2 percent of all Americans between the ages of 25 and 34 are married.

#26 According to the Pew Research Center, 57 percent of all Americans in the 18 to 24 year old age bracket lived with their parents during 2012.

#27 One poll discovered that 29 percent of all Americans in the 25 to 34 year old age bracket are still living with their parents.

#28 Young men are nearly twice as likely to live with their parents as young women the same age are.

#29 Overall, approximately 25 million American adults are living with their parents according to Time Magazine.

#30 Young Americans are becoming increasingly frustrated that previous generations have saddled them with a nearly 17 trillion dollar national debt that they are expected to make payments on for the rest of their lives.

And this trend is not just limited to the United States.  As I have written about frequently, unemployment rates for young adults throughout Europe have been soaring to unprecedented heights.  For example, the unemployment rate for those under the age of 25 in Italy has now reached 40.1 percent.

Simon Black of the Sovereign Man blog discussed this global trend in a recent article on his website…

Youth unemployment rates in these countries are upwards of 40% to nearly 70%. The most recent figures published by the Italian government show yet another record high in youth unemployment.

An entire generation is now coming of age without being able to leave the nest or have any prospect of earning a decent wage in their home country.

This underscores an important point that I’ve been writing about for a long time: young people in particular get the sharp end of the stick.

They’re the last to be hired, the first to be fired, the first to be sent off to fight and die in foreign lands, and the first to have their benefits cut.

And if they’re ever lucky enough to find meaningful employment, they can count on working their entire lives to pay down the debts of previous generations through higher and higher taxes.

But when it comes time to collect… finally… those benefits won’t be there for them.

Meanwhile, the overall economy continues to get even weaker.

In the United States, Gallup’s daily economic confidence index is now the lowest that it has been in more than a year.

For young people that are in high school or college right now, the future does not look bright.  In fact, this is probably as good as the U.S. economy is going to get.  It is probably only going to be downhill from here.

The system is failing, and young people are going to become even angrier and even more frustrated.

So what will that mean for our future?

Please feel free to share what you think by posting a comment below…

20 Completely Ridiculous College Courses Being Offered At U.S. Universities

Lady Gaga In Toronto - Why Would U.S. College Students Study This In Class? - Photo by Robbie VWould you like to know what America’s young people are actually learning while they are away at college?  It isn’t pretty.  Yes, there are some very highly technical fields where students are being taught some very important skills, but for the most part U.S. college students are learning very little that they will actually use out in the real world when they graduate.  Some of the college courses listed below are funny, others are truly bizarre, others are just plain outrageous, but all of them are a waste of money.  If we are going to continue to have a system where we insist that our young people invest several years of their lives and tens of thousands of dollars getting a “college education”, they might as well be learning some useful skills in the process.  This is especially true considering how much student loan debt many of our young people are piling up.  Sadly, the truth is that right now college education in the United States is a total joke.  I know – I spent eight years in the system.  Most college courses are so easy that they could be passed by the family dog, and many of these courses “study” some of the most absurd things imaginable.

Listed below are 20 completely ridiculous college courses being offered at U.S. universities.  The description following each course title either comes directly from the official course description or from a news story about the course…

1. “What If Harry Potter Is Real?” (Appalachian State University) – This course will engage students with questions about the very nature of history. Who decides what history is? Who decides how it is used or mis-used? How does this use or misuse affect us? How can the historical imagination inform literature and fantasy? How can fantasy reshape how we look at history? The Harry Potter novels and films are fertile ground for exploring all of these deeper questions. By looking at the actual geography of the novels, real and imagined historical events portrayed in the novels, the reactions of scholars in all the social sciences to the novels, and the world-wide frenzy inspired by them, students will examine issues of race, class, gender, time, place, the uses of space and movement, the role of multiculturalism in history as well as how to read a novel and how to read scholarly essays to get the most out of them.

2. “God, Sex, Chocolate: Desire and the Spiritual Path” (UC San Diego) – Who shapes our desire? Who suffers for it? Do we control our desire or does desire control us? When we yield to desire, do we become more fully ourselves or must we deny it to find an authentic identity beneath? How have religious & philosophical approaches dealt with the problem of desire?

3. “GaGa for Gaga: Sex, Gender, and Identity” (The University Of Virginia) – In Graduate Arts & Sciences student Christa Romanosky’s ongoing ENWR 1510 class, “GaGa for Gaga: Sex, Gender, and Identity,” students analyze how the musician pushes social boundaries with her work. For this introductory course to argumentative essay writing, Romanosky chose the Lady Gaga theme to establish an engaging framework for critical analysis.

4. “Lady Gaga and the Sociology of Fame” (The University Of South Carolina) – Lady Gaga may not have much class but now there is a class on her. The University of South Carolina is offering a class called Lady Gaga and the Sociology of Fame.  Mathieu Deflem, the professor teaching the course describes it as aiming to “unravel some of the sociologically relevant dimensions of the fame of Lady Gaga with respect to her music, videos, fashion, and other artistic endeavours.”

5. “Philosophy And Star Trek” (Georgetown) – Star Trek is very philosophical. What better way, then, to learn philosophy, than to watch Star Trek, read philosophy, and hash it all out in class? That’s the plan. This course is basically an introduction to certain topics in metaphysics and epistemology philosophy, centered around major philosophical questions that come up again and again in Star Trek. In conjunction with watching Star Trek, we will read excerpts from the writings of great philosophers, extract key concepts and arguments and then analyze those arguments.

6. “Invented Languages: Klingon and Beyond” (The University Of Texas) – Why would anyone want to learn Klingon?

7. “The Science Of Superheroes” (UC Irvine) – Have you ever wondered if Superman could really bend steel bars? Would a “gamma ray” accident turn you into the Hulk? What is a “spidey-sense”? And just who did think of all these superheroes and their powers? In this seminar, we discuss the science (or lack of science) behind many of the most famous superheroes. Even more amazing, we will discuss what kind of superheroes might be imagined using our current scientific understanding.

8. “Learning From YouTube” (Pitzer College) – About 35 students meet in a classroom but work mostly online, where they view YouTube content and post their comments.  Class lessons also are posted and students are encouraged to post videos. One class member, for instance, posted a 1:36-minute video of himself juggling.

9. “Arguing with Judge Judy” (UC Berkeley) – TV “Judge” shows have become extremely popular in the last 3-5 years. A fascinating aspect of these shows from a rhetorical point of view is the number of arguments made by the litigants that are utterly illogical, or perversions of standard logic, and yet are used over and over again. For example, when asked “Did you hit the plaintiff?” respondents often say, “If I woulda hit him, he’d be dead!” This reply avoids answering “yes” or “no” by presenting a perverted form of the logical strategy called “a fortiori” argument [“from the stronger”] in Latin. The seminar will be concerned with identifying such apparently popular logical fallacies on “Judge Judy” and “The People’s Court” and discussing why such strategies are so widespread. It is NOT a course about law or “legal reasoning.” Students who are interested in logic, argument, TV, and American popular culture will probably be interested in this course. I emphasize that it is NOT about the application of law or the operations of the court system in general.

10. “Elvis As Anthology” (The University Of Iowa) – The class, “Elvis as Anthology,” focuses on Presley’s relationship to African American history, social change, and aesthetics. It focuses not just on Elvis, but on other artists who inspired him and whom he inspired.

11. “The Feminist Critique Of Christianity” (The University Of Pennsylvania) – An overview of the past decades of feminist scholarship about Christian and post-Christian historians and theologians who offer a feminist perspective on traditional Christian theology and practice. This course is a critical overview of this material, presented with a summary of Christian biblical studies, history and theology, and with a special interest in constructive attempts at creating a spiritual tradition with women’s experience at the center.

12. “Zombies In Popular Media” (Columbia College) – This course explores the history, significance, and representation of the zombie as a figure in horror and fantasy texts. Instruction follows an intense schedule, using critical theory and source media (literature, comics, and films) to spur discussion and exploration of the figure’s many incarnations. Daily assignments focus on reflection and commentary, while final projects foster thoughtful connections between student disciplines and the figure of the zombie.

13. “Far Side Entomology” (Oregon State) – For the last 20 years, a scientist at Oregon State University has used Gary Larson’s cartoons as a teaching tool. The result has been a generation of students learning — and laughing — about insects.

14. “Interrogating Gender: Centuries of Dramatic Cross-Dressing” (Swarthmore) – Do clothes make the man? Or the woman? Do men make better women? Or women better men? Is gender a costume we put on and take off? Are we really all always in drag? Does gender-bending lead to transcendence or chaos? These questions and their ramifications for liminalities of race, nationality and sexuality will be our focus in a course that examines dramatic works from The Bacchae to M. Butterfly.

15. “Oh, Look, a Chicken!” Embracing Distraction as a Way of Knowing (Belmont University) – Students must write papers using their personal research on the five senses. Entsminger reads aloud illustrated books The Simple People and Toby’s Toe to teach lessons about what to value by being alive. Students listen to music while doodling in class. Another project requires students to put themselves in situations where they will be distracted and write a reflection tracking how they got back to their original intent.

16. “The Textual Appeal of Tupac Shakur” (University of Washington) – The UW is not the first college with a class dedicated to Shakur — classes on the rapper have been offered at the University of California Berkeley and Harvard — but it is the first to relate Shakur’s work to literature.

17. “Cyberporn And Society” (State University of New York at Buffalo) – With classwork like this, who needs to play? Undergraduates taking Cyberporn and Society at the State University of New York at Buffalo survey Internet porn sites.

18. “Sport For The Spectator” (The Ohio State University) – Develop an appreciation of sport as a spectacle, social event, recreational pursuit, business, and entertainment. Develop the ability to identify issues that affect the sport and spectator behavior.

19. “Getting Dressed” (Princeton) – Jenna Weissman Joselit looks over the roomful of freshmen in front of her and asks them to perform a warm-up exercise: Chart the major moments of your lives through clothes. “If you pop open your closet, can you recall your lives?” she posits on the first day of the freshman seminar “Getting Dressed.”

20. “How To Watch Television” (Montclair) – This course, open to both broadcasting majors and non-majors, is about analyzing television in the ways and to the extent to which it needs to be understood by its audience. The aim is for students to critically evaluate the role and impact of television in their lives as well as in the life of the culture. The means to achieve this aim is an approach that combines media theory and criticism with media education.

Are you starting to understand why our college graduates can’t function effectively when they graduate and go out into the real world?

All of this would be completely hilarious if not for the fact that we have millions of young people going into enormous amounts of debt to pay to go to these colleges.

In America today, college education has become a giant money making scam.  We have a system that absolutely throws money at our young people, but we never warn them about the consequences of all of these loans.  The following is an excerpt from an email that one reader sent me recently about the student loan industry…

For example, one woman told me that her and her husband sat down and thought of every possible expense they could when they were applying for parent/student loan for their daughter. When the approval came back, they were approved for 7k more than they asked for…how about ****! Of course at 7%, why not! Funny thing is they kept the 7k, because she’s in wealth management and said she could “easily” get more than 7% in the stock market……awesome! I have another example of a younger friend of mine who graduated law school from Vanderbilt with 210k in student loans. I asked if tuition was that much there. She said kind of, but they kept offering more than the actual tuition, so she took it and used it for a better lifestyle. Now 20% of her income goes to pay those loans, and it’s still not enough to touch one dollar of the principal…so all she is doing is paying interest, and building on principal…like a revers amortizing mortgage. To make it worse, she was able to save 25k, so she is going to buy a house somehow. Having explained to her that the best investment in the world is to pay off a high interest loan, she said I’m tired of waiting to have a life.

In a recent article entitled “The Student Loan Delinquency Rate In The United States Has Hit A Brand New Record High” I detailed how nightmarish our student loan debt bubble is becoming.  According to the Federal Reserve, the total amount of student loan debt has risen by 275 percent since 2003, and it just continues to soar.

A college education can be a wonderful thing, but right now we have got a system that is deeply, deeply broken.

So what do you think about our system of higher education?

Please feel free to express your opinion by posting a comment below…

The Student Loan Delinquency Rate In The United States Has Hit A Brand New Record High

College Graduation - Photo by Mando vzl37 million Americans currently have outstanding student loans, and the delinquency rate on those student loans has now reached a level never seen before.  According to a new report that was just released by the U.S. Department of Education, 11 percent of all student loans are at least 90 days delinquent.  That is a brand new record high, and it is almost double the rate of a decade ago.  Total student loan debt exceeds a trillion dollars, and it is now the second largest category of consumer debt after home mortgages.  The student loan debt bubble has been growing particularly rapidly in recent years.  According to the Federal Reserve, the total amount of student loan debt has risen by 275 percent since 2003.  That is a staggering figure.  Millions upon millions of young college graduates are entering the “real world” only to discover that they are already financially crippled for decades to come by oppressive student loan debt burdens.  Large numbers of young people are even putting off buying homes or getting married simply because of student loan debt.

So why is this happening?  Well, a big part of the problem is that the cost of college tuition has gotten wildly out of control.  Since 1978, the cost of college tuition has risen even more rapidly then the cost of medical care has.  Tuition costs at public universities have risen by 27 percent over the past five years, and there appears to be no end in sight.

We keep encouraging our young people to take out all of the loans that are necessary to pay for college, because a college education is supposedly the “key” to their futures.

But is that really the case?

Sadly, the reality of the matter is that millions of young Americans are graduating from college only to discover that the jobs that they were promised simply do not exist.

In fact, at this point about half of all college graduates are working jobs that do not even require a college degree.

This is leading to mass disillusionment with the system.  One survey found that 70% of all college graduates wish that they had spent more time preparing for the “real world” while they were still in college.

And because so many of them cannot get decent jobs, more college graduates then ever are finding that they cannot pay back the huge student loans that they were encouraged to sign up for.  The following is from a recent Bloomberg article.

Eleven percent of student loans were seriously delinquent — at least 90 days past due — in the third quarter of 2012, compared with 6 percent in the first quarter of 2003, according to the report by the U.S. Education Department.  Almost 30 percent of 20- to 24-year-olds aren’t employed or in school, the study found.

Everyone agrees that we are now dealing with an unprecedented student loan debt bubble, but none of our leaders seem to have any solutions.

The two charts posted below come from a recent Zero Hedge article, and they are very illuminating.  The first chart shows how the amount of student loan debt owned by the federal government has absolutely exploded in recent years, and the second chart shows how the percentage of student loan debt that is at least 90 days delinquent has risen to a brand new record high…

Delinquent Student Loans - Zero Hedge Chart

How is the economy ever going to recover if an increasingly large percentage of our young college graduates are financially crippled by student loan debt?

And things are about to get even worse.

If Congress takes no action, the interest rate on federal student loans is going to double to 6.8 percent on July 1st.  That rate increase would affect more than 7 million students.

And debt burdens just continue to increase in size.  In fact, according to one recent study, “70 per cent of the class of 2013 is graduating with college-related debt – averaging $35,200 – including federal, state and private loans, as well as debt owed to family and accumulated through credit cards.”

This is one reason why there is so much poverty among young adults in America today.  As I mentioned in a previous article, families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.  For much more on the student loan debt bubble and how it is crippling an entire generation of Americans, please see my recent article entitled “29 Shocking Facts That Prove That College Education In America Is A Giant Money Making Scam“.

And of course delinquency rates remain very high on other forms of debt as well.  For example, delinquency rates on home mortgages have typically been around 2 to 3 percent historically.  But as you can see from the chart below, the delinquency rate on single-family residential mortgages is currently close to 10 percent…

Delinquency Rate On Single-Family Residential Mortgages

So are we really having an “economic recovery”?

Of course not.

Things are good for those that have lots of money in the stock market (for now), but for the vast majority of Americans things continue to get worse.

And we continue to forget the lessons that we should have learned from the financial crisis of 2008.  Right now, we are seeing a resurgence of cash out financing.  But this time, people are leveraging their inflated stock portfolios instead of their home equity.  The following is from a  CNN report…

The recent run-up in the market, financial advisers say, has led to a resurgence of the type of loan not seen since the end of the housing boom — cash out financing. But this time, though, people aren’t tapping their inflated house for money. These days stock portfolios appear to be the well of choice.

Financial planners say in recent months clients have taken out so-called margin loans to buy real estate, fund small business acquisitions, or to provide gap financing before a traditional loan could be secured from a bank.

“No one wants to be out of the market for 90 days,” says Mark Brown, a financial planner for Brown Tedstron in Denver. “People just don’t want to sell right now.”

We are a nation that is absolutely addicted to debt.  We know that it is wrong, but we just can’t help ourselves.

We are like the 900 pound man that recently died.  He knew that he was eating himself to death, but he just couldn’t stop.

In the end, we are going to pay a great price for our gluttony.  Everyone in the world can see that we are killing the greatest economy that ever existed, but we simply do not have the self-discipline to do anything about it.

Will The New Housing Bubble That Bernanke Is Creating End As Badly As The Last One Did?

Will The New Housing Bubble Lead To Another Housing Crash?Federal Reserve Chairman Ben Bernanke has done it.  He has succeeded in creating a new housing bubble.  By driving mortgage rates down to the lowest level in 100 years and recklessly printing money with wild abandon, Bernanke has been able to get housing prices to rebound a bit.  In fact, in some of the more prosperous areas of the country you would be tempted to think that it is 2005 all over again.  If you can believe it, in some areas of the country builders are actually holding lotteries to see who will get the chance to buy their homes.  Wow – that sounds great, right?  Unfortunately, this “housing recovery” is not based on solid economic fundamentals.  As you will see below, this is a recovery that is being led by investors.  They are paying cash for cheap properties that they believe will appreciate rapidly in the coming years.  Meanwhile, the homeownership rate in the United States continues to decline.  It is now the lowest that it has been since 1995.  There are a couple of reasons for this.  Number one, there has not been a jobs recovery in the United States.  The percentage of working age Americans with a job has not rebounded at all and is still about the exact same place where it was at the end of the last recession.  Secondly, crippling levels of student loan debt continue to drive down the percentage of young people that are buying homes.  So no, this is not a real housing recovery.  It is an investor-led recovery that is mostly limited to the more prosperous areas of the country.  For example, the median sale price of a home in Washington D.C. just hit a new all-time record high.  But this bubble will not last, and when this new housing bubble does burst, will it end as badly as the last one did?

Federal Reserve Chairman Ben Bernanke has stated over and over that one of his main goals is to “support the housing market” (i.e. get housing prices to go up).  It took a while, but it looks like he is finally getting his wish.  According to USA Today, U.S. home prices have been rising at the fastest rate in nearly seven years…

U.S. home prices in the USA’s 20 biggest cities rose 9.3% in the 12 months ending in February. It was the biggest annual growth rates in almost seven years, a closely watched housing index out Tuesday said.

In particular, home prices have been rising most rapidly in cities that experienced a boom during the last housing bubble…

Year over year, Phoenix continued to stand out with a gain of 23%, followed by San Francisco at almost 19% and Las Vegas at nearly 18%, the S&P/Case-Shiller index showed. Most of the cities seeing the biggest gains also fell hardest during the crash.

But is this really a reason for celebration?  Instead of addressing the fundamental problems in our economy that caused the last housing crash, Bernanke has been seemingly obsessed with reinflating the housing bubble.  As a recent article by Edward Pinto explained, the housing market is being greatly manipulated by the government and by the Fed…

While a housing recovery of sorts has developed, it is by no means a normal one. The government continues to go to extraordinary lengths to prop up sales by guaranteeing nearly 90% of new mortgage debt, financing half of all home purchase mortgages to buyers with zero equity at closing, driving mortgage interest rates to the lowest level in 100 years, and turning the Fed into the world’s largest buyer of new mortgage debt.

Thus, with real incomes essentially stagnant, this is a market recovery largely driven by low interest rates and plentiful government financing. This is eerily familiar to the previous government policy-induced boom that went bust in 2006, and from which the country is still struggling to recover. Creating over a trillion dollars in additional home value out of thin air does sound like a variant of dropping money out of helicopters.

And the Obama administration has been pushing very hard to get lenders to give mortgages to those with “weaker credit”.  In other words, the government is once again trying to get the banks to give home loans to people that cannot afford them.  The following is from the Washington Post…

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

We are repeating so many of the same mistakes that we made the last time.

But surely things will turn out differently this time, right?

I wouldn’t count on it.

Right now, an increasingly large percentage of homes are being purchased as investments.  The following is from a recent Washington Times article…

Much of the pickup in sales and prices has been powered by investors who, convinced that the market is bottoming, are scooping up bountiful supplies of distressed and foreclosed properties at bargain prices and often paying with cash.

With investors targeting lower-priced homes that they intend to purchase and rent out, they have been crowding out many first-time buyers who are having difficulty getting mortgage loans and are at a disadvantage when competing with well-heeled buyers. Cash sales to investors now account for about one-third of all home sales, according to the National Association of Realtors.

And as we have seen in the past, an investor-led boom can turn into an investor-led bust very rapidly.

If this truly was a real housing recovery, the percentage of Americans that own a home would be going up.

Instead, it is going down.

As I mentioned above, the U.S. Census Bureau is reporting that the homeownership rate in the United States is now the lowest that it has been since 1995.

In particular, homeownership among college-educated young people is way down.  They can’t afford to buy homes due to crippling levels of student loan debt…

For the average homeowner, the worst news is that these overleveraged and defaulting young borrowers no longer qualify for other kinds of loans — particularly home loans. In 2005, nearly nine percent of 25- to 30-year-olds with student debt were granted a mortgage. By late last year, that percentage, as an annual rate, was down to just above four percent.

The most precipitous drop was among those who owe $100,000 or more. New mortgages among these more deeply indebted borrowers have declined 10 percentage points, from above 16 percent in 2005 to a little more than 6 percent today.

“These are the people you’d expect to buy big houses,” said student loan expert Heather Jarvis. “They owe a lot because they have a lot of education. They have been through professional and graduate schools, but their payments are so significant, they have trouble getting a mortgage. They have mortgage-sized loans already.”

And the truth is that there simply are not enough good jobs in this country to support a housing recovery.  In a previous article, I used the government’s own statistics to prove that there has not been a jobs recovery.  If we were having a jobs recovery, the percentage of working age Americans with a job would be going up.  Sadly, that is not happening…

Employment-Population Ratio 2013

And as I mentioned above, the “housing recovery” is mostly happening in the prosperous areas of the country.

In other areas of the United States, the devastating results of the last housing crash are still clearly apparent.

For example, the city of Dayton, Ohio is dealing with an estimated 7,000 abandoned properties.

As I wrote about the other day, there are approximately 70,000 abandoned buildings in Detroit, Michigan.

And all over the nation there are still “ghost towns” that were created when builders abruptly abandoned housing developments during the last recession.  You can see some pictures of some of these ghost towns right here.

So the truth is that this is an isolated housing recovery that is being led by investors and that is being fueled by very reckless behavior by the Federal Reserve.  It is not based on economic reality whatsoever.

In the end, will the collapse of this new housing bubble be as bad as the collapse of the last one was?

Please feel free to post a comment with your thoughts below…

Federal Reserve Chairman Ben Bernanke

Money Is A Form Of Social Control And Most Americans Are Debt Slaves

Money Is A Form Of Social Control And Most Americans Are Debt Slaves - Photo by Serge Melki from Indianapolis, USAIs America really “the land of the free”?  Most people think of money as simply a medium of exchange that makes economic transactions more convenient, but the truth is that it is much more than that.  Money is also a form of social control.  Just think about it.  What did you do this morning?  Well, if you are like most Americans, you either got up and went to work (to make money) or to school (to learn the skills that you will need to make money).  We spend a great deal of our lives pursuing the almighty dollar, and there are literally millions of laws, rules and regulations about how we earn our money, about how we spend our money and about how much of our money the government gets to take from us.  Not that money is a bad thing in itself.  Without money, it would be really hard to have a modern society.  Unfortunately, our money is based on debt, and debt levels in the United States have exploded to absolutely unprecedented levels in recent years.  The borrower is the servant of the lender, and if you are like most Americans, nearly every major purchase that you make in your life is going to involve debt.  Do you want to get a college education so that you can get a “good job”?  You are told to get a student loan.  Do you want a car?  You are encouraged to get an auto loan and to stretch out the payments for as long as possible.  Do you want a home?  You are probably going to end up with a big fat mortgage.  And of course I could go on and on and on.  The cold, hard truth of the matter is that most Americans are debt slaves.  Most of us spend our entire lives trapped in an endless cycle of debt that we never escape until we die, and meanwhile our years of hard labor are greatly enriching those that own our debts.

Have you ever found yourself wondering why you can never seem to get ahead financially no matter how hard you work?

Well, it is probably because you have gotten yourself enslaved to debt.

Just consider the following example about credit card debt from a former Goldman Sachs banker…

On the debt side of things, how much does your credit card company earn if you carry just an average of a $5,000 credit card balance, paying, say, 22% annual interest rate (compounding monthly) for the next 10 years?

In your mind you owe a balance of only $5,000, which is not a huge amount, especially for someone gainfully employed.  After all, $5,000 is just a quick Disney trip, or a moderately priced ski-trip, or that week in Hawaii.  You think to yourself, “how bad could it be?”

The answer, including the cost of monthly compounding, is $44,235, or about 9 times what it appears to cost you at face value.

But a large percentage of Americans never pay off their credit cards at all.  They make small payments each month, but then they just keep on adding to their balances.

In the end, that is financial suicide.

If you carry an “average balance” on your credit cards each month, and those credit cards have an “average” interest rate, you could end up paying millions of dollars to the credit card companies by the end of your life…

Let’s say you are an average American household, and you carry an average balance of $15,956 in credit card debt.

Also, as an average American household, let’s assume you pay an average current rate of 12.83%.

Finally, let’s assume you carry this average balance for 40 years, between ages 25 and 65.  How much did your credit card company make off of you and your extreme averageness?

Answer: $2,629,618.64

Sadly, approximately 46% of all Americans carry a credit card balance from month to month.

How stupid can we be as a nation?

When you become enslaved to the credit card companies, your toil and sweat makes them much wealthier.  It is a form of slavery that does not require anyone pointing a gun at you.

But we never seem to learn.  Incredibly, 43 percent of all American families spend more than they earn each year.

As the chart below demonstrates, consumer credit actually declined for a short while during the last recession, but now it has turned around and the growth of consumer credit is on the same trajectory as it was before the last economic crisis…

Consumer Debt

Today, the total amount of consumer credit in the United States is 15 times larger than it was 40 years ago.

And every major “milestone” in our lives typically involves even more debt.

-The total amount of student loan debt in the United States recently passed a trillion dollars, and approximately two-thirds of all college students graduate with student loan debt at this point.

-Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago, and mortgage debt as a percentage of GDP has more than tripled since 1955.

-Car loans just keep getting longer and longer, and approximately 70 percent of all car purchases in the United States now involve an auto loan.

-Want to get married?  That average cost of a wedding is now $26,989 which is probably going to mean even more debt unless you have wealthy parents.

-Do you have a serious medical problem?  According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.

Are you starting to understand why approximately half of all Americans die broke?

And I have not even begun to talk about our collective debts yet.

Government debt is a collective form of debt.  You may not have voted for any of the politicians that have been racking up debt in your name, but part of it still belongs to you.

Since the year 2000, state and local government debt has more than doubled.  These are collective debts for which we are all responsible…

State And Local Government Debt

And of course the biggest collective debt of all is the U.S. national debt.

In a previous article, I discussed how the national debt has exploded out of control in recent years.  If you can believe it, the U.S. debt to GDP ratio has increased from 66.6 percent to 103 percent since 2007, and the U.S. government accumulated more new debt during Barack Obama’s first term than it did under the first 42 U.S. presidents combined.

When you break things down by household, the numbers look even more frightening.

During Barack Obama’s first four years in the White House, the amount of new debt accumulated by the federal government breaks down to approximately $50,521 for every single household in the United States.

And as I have mentioned previously, if you started paying off just the new debt that the federal government has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.

Well, you might argue, none of that debt will ever be paid off in our lifetimes.

And you would be right.

But what we are doing is consigning our children, our grandchildren and all future generations of Americans to a lifetime of debt slavery.

How nice of us, eh?

Over the past 10 years, the U.S. national debt has grown by an average of 9.3 percent per year, but the overall U.S. economy has only grown by an average of just 1.8 percent per year.

How do we expect to continue doing this?

Fortunately, more Americans are starting to wake up to how foolish all of this is.

For example, the following is what Home Depot Founder Kenneth Langone told CNBC on Tuesday…

“The fundamentals haven’t changed … And we don’t know when the storm is going to hit,” he predicted. “It has to happen.If you look at our debt to GDP, eventually you reach a point where there’s no turning back.”

He used an analogy to make his point. “If you had one meal left, and you had your grandchild with you, would you eat if or give it to your grandchild?”

He said all people would say “give it to my grandchild.”

But pursuing the president’s vision, he argued, “[Is] eating the grandchildren’s breakfast, lunch and dinner right now. And the [grandchildren] haven’t been born yet.”

What we are doing to our children and our grandchildren is beyond criminal.  We are selling away their futures in order to make our lives more pleasant.

Right now, we are stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day.

So where is the outrage over this theft?

Sadly, most Americans don’t even realize that all of this is by design.  When the Federal Reserve system was created back in 1913, it was designed to get the U.S. government trapped in an endless spiral of debt.

And it worked.  Today, the U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.

Our society has become addicted to debt, and that means that we have become addicted to slavery.

We are not the “land of the free”.  The truth is that we are now the “land of the servants”.

Over the past 40 years, the total amount of debt owed in the United States (government, business, consumer, etc.) has grown from less than 2 trillion dollars to more than 55 trillion dollars…

Total Credit Market Debt Owed

So who benefits from all of this?

I talked about this in a previous article.  The ultra-wealthy and the international bankers make enormous profits by lending money to all the rest of us.

According to a stunning report that was released last summer, the global elite have up to 32 trillion dollars stashed away in offshore tax havens around the globe.

How did they get so much money?

The borrower is the servant of the lender.  They have gotten rich at our expense.

But most people live their entire lives without ever understanding how the game is being played.

Today, most Americans see that the Dow is back above 14,000 and they hear the mainstream media telling them that happy days are here again and so they just believe that things are going to turn out okay somehow.

And it certainly does not help that most people seem to let others do their thinking for them.  In fact, about 23% of all Americans can’t even read at this point.

So is there any hope for us?

Please feel free to post a comment with your opinion below…

Money - Photo by selbstfotografiert

The Student Loan Debt Bubble Is Creating Millions Of Modern Day Serfs

Every single year, millions of young adults head off to colleges and universities all over America full of hopes and dreams.  But what most of those fresh-faced youngsters do not realize is that by taking on student loan debt they are signing up for a life of debt slavery.  Student loan debt has become a trillion dollar bubble which has shattered the financial lives of tens of millions of young college graduates.  When you are just starting out and you are not making a lot of money, having to make payments on tens of thousands of dollars of student loan debt can be absolutely crippling.  The total amount of student loan debt in the United States has now surpassed the total amount of credit card debt, and student loan debt is much harder to get rid of.  Many young people view college as a “five year party“, but when the party is over millions of those young people basically end up as modern day serfs as they struggle to pay off all of the debt that they have accumulated during their party years.  Bankruptcy laws have been changed to make it incredibly difficult to get rid of student loan debt, so once you have it you are basically faced with two choices: either you are going to pay it or you are going to die with it.

But we don’t warn kids about this before they go to school.  We just endlessly preach to them that they need a college degree in order to get a “good job”, and that after they graduate they will easily be able to pay off their student loans with the “good job” that they will certainly be able to find.

Sadly, tens of millions of young Americans have left college in recent years only to find out that they were lied to all along.

As I have written about previously, college has become a giant money making scam and the victims of the scam are our young people.

Back in 1952, a full year of tuition at Harvard was only $600.

Today, it is over $35,000.

Why does college have to cost so much?

At every turn our young people are being ripped off.

For example, the cost of college textbooks has tripled over the past decade.

Has it suddenly become a lot more expensive to print books?

Of course not.

The truth is that an entire industry saw an opportunity to gouge students and they went for it.

The amount of money being spent on higher education in this country is absolutely outrageous.  One father down in Texas says that he will end up spending about 1.5 million dollars on college expenses for his five daughters before it is all said and done.

Unfortunately, most young adults in America don’t have wealthy fathers so they have to take out large student loans to pay for their educations.

Average student loan debt at graduation is estimated to be about $28,720 right now.

That is a crazy figure and it has absolutely soared in recent years.  In fact, student loan debt in America has grown by 511 percent since 1999.

And student loan debt will follow you wherever you go.

If you do not pay your loans when you graduate, you could end up having your wages, your tax refunds and even your Social Security benefits garnished.

In addition, your account could be turned over to the debt collectors and they can be absolutely brutal.

The student loan debt bubble is the best thing to happen to debt collectors in ages.  The following is what one professional who works in the industry said in a recent article that he wrote for a debt collection industry publication….

As I wandered around the crowd of NYU students at their rally protesting student debt at the end of February, I couldn’t believe the accumulated wealth they represented – for our industry.

It was lip-smacking.

At my right, to graphically display how she was debt-burdened, was a girl wearing a t-shirt emblazoned with the fine sum of $90,000, another with $65,000, a third with $20,000 and over there a really attractive $120,000 was printed on another shirt.  Guys were shouldering their share, with t-shirts of $20,000, $15,000, $27,000, $33,000 and $75,000.

There is no way that our young people can afford to take on those kinds of debt loads, and that is one reason why student loan delinquency rates continue to surge.

In fact, the student loan default rate in the United States has nearly doubled since 2005.

Today, one out of every six Americans that owes money on a student loan is in default.

One out of every six.

And it is going to get a whole lot worse.

At this point there are about 5.9 million Americans that are at least 12 months behind on their student loan payments.

So could the bursting of the student loan bubble do tremendous damage to our financial system?

Don’t worry – Federal Reserve Chairman Ben Bernanke is promising that the student loan debt bubble won’t cause a crisis.

And you can trust him, right?

For those living with the burden of unpaid student loan debt, life can be really tough.  Some try to avoid the debt collectors, but it is easier said than done.  The following is from a recent article in the New York Times….

Hiding from the government is not easy.

“I keep changing my phone number,” said Amanda Cordeiro, 29, from Clermont, Fla., who dropped out of college in 2010 and has fielded as many as seven calls a day from debt collectors trying to recover her $55,000 in overdue loans. “In a year, this is probably my fourth phone number.”

Unlike private lenders, the federal government has extraordinary tools for collection that it has extended to the collection firms. Ms. Cordeiro has already had two tax refunds seized, and other debtors have had their paychecks or Social Security payments garnisheed.

The biggest problem, of course, is that there are not nearly enough jobs for the hordes of college graduates that our system produces each year.

During 2011, 53 percent of all Americans with a bachelor’s degree under the age of 25 were either unemployed or underemployed.

So without a good job, how are those young people supposed to service their student loans?

Once upon a time, a college degree was a guaranteed ticket to the middle class.

Sadly, those days are long gone.  Today, millions upon millions of college graduates have taken jobs that do not even require a college education.  The following is from a recent CNBC article….

In the last year, they were more likely to be employed as waiters, waitresses, bartenders and food-service helpers than as engineers, physicists, chemists and mathematicians combined (100,000 versus 90,000). There were more working in office-related jobs such as receptionist or payroll clerk than in all computer professional jobs (163,000 versus 100,000). More also were employed as cashiers, retail clerks and customer representatives than engineers (125,000 versus 80,000).

You probably know young people who have experienced the “wake up call” that comes as a result of entering the “real world” in this horrible economic environment.

It is not easy out there.

And this can be extremely disappointing for parents as well.  How would you feel if your daughter got very high grades all of the way through college and ended up working as a waitress because she couldn’t find anything else?

Even those that pursue advanced degrees are having an extremely challenging time finding work in this economy.

For example, a Business Insider article from a while back profiled a law school graduate named Erin that is actually on food stamps….

She remains on food stamps so her social life suffers. She can’t afford a car, so she has to rely on the bus to get around Austin, Texas, where she lives. And currently unable to pay back her growing pile of law school debt, Gilmer says she wonders if she will ever be able to pay it back.

“That has been really hard for me,” she says. “I have absolutely no credit anymore. I haven’t been able to pay loans. It’s scary, and it’s a hard thing to think you’re a lawyer but you’re impoverished. People don’t understand that most lawyers actually aren’t making the big money.”

And the really sad thing is that the quality of the education that our young people are receiving is very poor.  I spent eight years attending U.S. universities, and most parents would be absolutely shocked at how little our college students are actually learning.

Going to college really has become a ticket to party for four or five or six years with a little bit of “education” thrown in.

But our society has put a very high value on those little pieces of paper called “diplomas” so we all continue to play along with the charade.

Some college students are finding other “creative” ways to pay for their educations other than going into tremendous amounts of debt.  For example, an increasing number of young women are seeking out “sugar daddies” who will “sponsor” their educations.  The following is from a Huffington Post article about this disturbing trend….

On a Sunday morning in late May, Taylor left her Harlem apartment and boarded a train for Greenwich, Conn. She planned on spending the day with a man she had met online, but not in person.

Taylor, a 22-year-old student at Hunter College, had confided in her roommate about the trip and they agreed to swap text messages during the day to make sure she was safe.

Once in Greenwich, a man who appeared significantly older than his advertised age of 42 greeted Taylor at the train station and then drove her to the largest house she had ever seen. He changed into his swimming trunks, she put on a skimpy bathing suit, and then, by the side of his pool, she rubbed sunscreen into the folds of his sagging back — bracing herself to endure an afternoon of sex with someone she suspected was actually about 30 years her senior.

Of course that young woman will probably deeply regret doing that later on in her life.

Once graduation comes, millions upon millions of our young people are discovering that it is really hard to be financially independent if you are drowning in student loan debt and you can’t find a good job.

So what are they doing?

They are moving back in with Mom and Dad.

One poll discovered that 29 percent of all Americans in the 25 to 34 year old age bracket are still living with their parents.

Ouch.

So what do you think about all of this?  Please feel free to post a comment with your thoughts below….

Underemployed And Hating Life

Today, millions of smart, hard working Americans are flipping burgers, waiting tables or working dead end retail jobs not because they want to, but because they have no other options.  According to the U.S. Bureau of Labor Statistics, about 14 million Americans are currently unemployed and another 9.3 million Americans are currently “underemployed”.  During this economic downturn, a lot of Americans have been forced to take part-time jobs because they have been unable to find full-time jobs.  For many, this can be a soul-crushing experience.  It can be easy to become very bitter when you have worked very hard all your life and yet you find yourself having to take a job that only pays you a fraction of what you used to make.  A lot of young college graduates end up hating life because the only jobs that they can seem to find do not even require a college degree and don’t even come close to enabling them to keep up with their crippling student loan debt payments.  Sadly, the underemployment problem continues to grow even worse.  In September alone, the number of underemployed Americans rose by close to half a million.

There are other measurements that indicate that unemployment in America is even worse that the Bureau of Labor Statistics is indicating.

For example, a recent Gallup poll found that approximately one out of every five Americans that currently have a job consider themselves to be underemployed.

In addition, according to author Paul Osterman about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.

When you try as hard as you can and you still can’t pay the bills, it is easy to end up hating life.

What some Americans are going through is absolutely heart breaking.  Just consider the following story from a recent article on Fox News….

Damian Birkel, of Winston-Salem N.C., found himself in similar circumstances. He was a marketing manager at Sarah Lee in the early 1990s when he was downsized. Since then, he has been laid off from three other jobs, including one at a recruiting firm.

“I felt like I had ‘loser’ tattooed to my forehead, and ‘will work for food’ tattooed to my chest,” he says. 

The hardest part was telling his young daughter that there might not be enough money to pay the bills — among them, sending her to summer camp. “She brings her piggy bank and says, ‘Daddy, why don’t you break into the piggy bank so that you can pay some of the bills.’”

How would you feel if your little daughter said that to you?

Unfortunately, the number of good jobs just continues to decrease.

There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.

And the mix of jobs that our economy is producing continues to change.

Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.

What that means is that the middle class is shrinking.

A lot of young people are coming out of college right now and are having their dreams absolutely crushed.  Large numbers of them are entering the “real world” with nightmarish student loan debt burdens and only a limited number of them can find decent jobs.

A recent USA Today article told the story of one of these very frustrated young Americans….

Kate Wolfe chased a dream when she moved to New York after college, looking to break into acting while working as a maître d’.

Her $50,000 worth of student loans were a distraction she could handle. Then the uninsured 25-year-old was mugged last year, and the final indignity was the $30,000 emergency room bill.

We are pumping out tons of college graduates, but we are not pumping out nearly enough jobs for all of them.

If you can believe it, in the United States today there are 317,000 waiters and waitresses that actually have college degrees.

That is an absolutely horrifying statistic.

But the truth is that the lack of good jobs is hitting every age level really hard.

For example, the average American family is under a tremendous amount of financial stress in this economy.  Once you adjust it for inflation, median household income in the United States has declined approximately 10 percent since December 2007.

Meanwhile, the cost of food, gas, health insurance and just about everything else a family needs has gone up significantly.

Our politicians keep talking about “jobs, jobs, jobs” but the number of decent jobs continues on a very clear downward trend.

Back in 1980, 52 percent of all jobs in the United States were middle income jobs.  Today, only 42 percent of all jobs in the United States are middle income jobs.

Sadly, it now looks like even the low income jobs are starting to dry up.

Mall vacancies recently hit a brand new all-time record.  Major retail chains all over the country are announcing layoffs.  Things do not look very promising for the upcoming holiday season.

So what are our leaders doing about all of this?

Well, unfortunately they continue to fumble the football very badly.

According to a recent ABC News report, the U.S. government actually gave a $529 million loan guarantee to an electric car company that decided to make its cars in Finland….

Vice President Joseph Biden heralded the Energy Department’s $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the job of assembling the flashy electric Fisker Karma sports car has been outsourced to Finland.

If we don’t figure out how to stop millions of jobs from leaving this country we are going to be in a world of hurt.

The trade policies of the federal government are neither “free” nor “fair” and they are causing the standard of living of American workers to rapidly sink toward the level of the rest of the world.

We are told that it is “inevitable” that we are going to be deindustrialized and that we are going to become a service economy.

But guess what?

Service jobs generally pay a lot less than manufacturing jobs do.

A “one world economy” where our labor force is merged with the labor forces of the rest of the globe is not a good thing for the average American worker and it is not a good thing for America.

But of course trade is not the only reason why we are losing good jobs.  There are a whole bunch of reasons why this is happening.  For many more reasons, just check out this article.

A lot of you that are reading this article are unemployed or underemployed right now.

Unfortunately, there is not much hope that the U.S. economy is going to experience a significant turnaround any time soon.

In fact, it is likely that things are going to be getting even worse.

Our economic system is dying.  Now is the time to try to get as independent of it as you can.

Don’t count on a job (“just over broke”) as your only source of income.  In this economy, no job is safe.

There are millions upon millions of unemployed and underemployed Americans that never dreamed that their lives would go so horribly wrong.

But they did.

Our nation is experiencing the consequences of decades of very bad decisions.

There is no help on the horizon and the cavalry is not on the way to rescue us.

You better prepare accordingly.

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