A nice mile-high view of everything everyone is freaking out about while telling you things have never been better.
A few things about student debt aren't addressed here and ignoring them probably underestimates how problematic the situation is: 1. Student debt is saddled on what should be major spenders in the economy 5-10 years down the line in a way mortgage or other debt is not. 2. Student debt has been stripped of most protections found in other forms of debt. Dollar for dollar you student loan is more dire than your mortgage because there's no escape route. 3. Student debt is meant to have a return for the indebted, but the amount of that return has been steadily decreasing for ages now.
As currently written, you can get yourself on an income-adjusted plan, make minimum payments, and then forgive the whole stupid thing after 360 of them. Granted, that's a 30-year millstone and requires an appalling amount of interaction with a bunch of shifting lenders and agencies (and they've gotten real good at losing your paperwork, if you know what I mean). But it's worth it. My wife took out $150k in loans to get a medical degree. At the end of 30 years, at our current rate, she'll owe the government $3m. 45% of our clients are on medicaid. Fuck that shit.
It actually depends on the loan. However, in most cases the answer is yes. There are some government loans where you do have to pay the interest but none accumulates (or what accumulates is forgiven) while you are in school. I believe there is another type (again, through the gov’t) where the total lifetime interest can be forgiven if certain conditions are met. This is based off recollection so I might be a little wrong on some details but I know for sure there’s a type in line with the first because I had some like that.
Ouch yeah that'd be a millstone. Mine, thankfully, has the interest written off so I've been happily whittling it away for a few years and am now halfway through. As of 2006 our student loans have their interest written off provided you stay in NZ, after a certain amount of time overseas the interest will kick in. I think it's over a year as I spent a year in Australia and never incurred anything extra.
I agree with all of this, and can point to links for all of it. However, the "financial calamity" of elevated student debt has an outsized effect on those carrying it; for the financial class it's excellent debt because it can't be disbursed. This is one of the reasons the for-profit college has become such a thing: if you default on your loans, the government pays the people you owe and comes after you. It's entirely risk-free. Sure- you don't have enough money to buy more than a slice of avocado toast every other two weeks but that's an externality. "Millennials don't have any money to spend" is certainly a contributor to any impending financial crisis. But if you're in the finance industry, you lurrrvvvvvvv student loan debt.
Go figure: A key element to financial crises in our modern era is debt. It always comes back to debt. Of course, in the US we're a consumer driven nation. Even at the risk of mortgaging the future, everyone wants what they want now. So they assume debt with no real plan for how and when they plan to make that debt disappear. It's on both sides. and yes, it goes for student loans too. No one thinks past signing the promissory note and getting into school.
I dunno, man. Debt is the same thing as "financing" and really, within any business cycle there will be periods of expanding and contracting debt. "It always comes back to debt" is kind of like saying "the tide always comes in." Profound, sure. And yeah there are people building sand castles that aren't thinking about the tide. But it's a 100% predictable force of nature. Sunrise, sunset. The developed world has actually been a lot better about debt lately: Generally when people whinge about consumer debt they aren't talking about the Chinese but they've been on a bender lately. And whenever we're talking about "everyone" I try not to get too deep into motive and personal failings and more into external pressures. People go into debt because there's no substantial negative impact on them for doing so. There's no substantial negative impact on them because lenders want their business. Lenders want their business because the government wants liquidity in the economy. And in the end, it's just the fuckin' tide. Sure - I do my level best to be conscious of the tide and I would be in a very different position if I didn't study the shit out of everything I do. The people who plan better and understand the risks better come out ahead every time - my wife is the only person I know who didn't pile into an ARM in like 2006. But there was a whole lot of ballyhoo convincing everyone that ARMs were a great idea and when we've got a system that requires you to spend days researching that thing that everyone wants you to do before you realize what a bad idea it is, we're better off blaming the system than the individual.
The system is designed to exploit you for profit. People need be more proactively mindful than assigning blame and expecting an exploitative system to protect them.
What mega-corps are getting the bailouts this time? Weyland-Yutani? Toha Heavy Industries? Lexcorp? HSBC? Veidt Industries? I'll change my investments this afternoon. Edit* This is my bad-mood day way of asking, 'Where is this crash going to happen?' Is it really going to be some seventeen year old Romanian hacker that causes the next crisis? Something else? I know enough to know that I am hopelessly out of my depth here.
I like this one too: We’re Measuring the Economy All Wrong As a technical matter, the current batch of official numbers are perfectly accurate. They also describe some real and important aspects of the American economy. The trouble is that a handful of statistics dominate the public conversation about the economy despite the fact that they provide a misleading portrait of people’s lives. Even worse, the statistics have become more misleading over time.Almost a century later, it is time for a new set of statistics. It’s time for measures that do a better job of capturing the realities of modern American life.
Yeah the wonks get even more flagrant about it: IF the Federal Reserve adjusts interest rates by monitoring the Phillips curve AND the Phillips curve suggests a correlation between employment and interest rates AND the official unemployment rate no longer matches current employment trends THEN the Fed is at sea.
I found the following concerning as well. Banks are rushing to fortify their defenses. The crippling of a major financial institution at the hands of hackers could sow fear and instability across the entire banking system — the same sort of chain reaction that brought financial activity to a halt 10 years ago. Lends me to see Crypto currency as a nice hedge to a huge hacking of traditional institutions.There’s no question that hackers are trying to penetrate the American financial system. The number of successful data breaches has been rising.
That was the basis for the creation of Bitcoin in the first place: Satoshi Nakamoto, whoever he, she or they may be, saw the bailouts of the markets by central banks to be a "hacking" of the financial system to the benefit of large institutional investors. I read Bernanke's Courage to Act. The basis of the book is "stupid Americans, not knowing what's good for them, even now that Goldman Sachs is making profits hand over fist!"