This article appeared online at TheNewAmerican.com on Tuesday, December 20, 2016:
The Government Accountability Office (GAO) issued its report on student loan repayments on Tuesday, revealing that 114,000 Americans age 50 and over had their Social Security checks garnished (the GAO calls them “offsets”), including 38,000 over age 65. In total the government recovered $171 million from this group last year, putting many of them into poverty.
Under the law,
This article was published by The McAlvany Intelligence Advisor on Wednesday, January 10, 2018:
Michael Snyder rivals only David Stockman in his pessimistic economic outlook, reflecting that outlook by naming his blog “The Economic Collapse.” On the first day of the New Year, Michael dug into his files for the most “crazy” numbers from 2017. He found 44, including these:
One out of every ten young adults in the United States has been homeless at some point over the past year;
The United States has lost more than 70,000 manufacturing facilities since China joined the WTO in 2001;
A total of 6,985 store locations were shut down last year, and we are expected to break the record again in 2018:
Only 25 percent of all Americans have more than $10,000 in savings right now; and
44 percent of all U.S. adults do not even have enough money “to cover an unexpected $400 expense,” according to the Federal Reserve.
What’s missing from Michael’s list? Credit card debt, student loan debt, and vehicle financing debt. Surely he was aware of these numbers, but for some reason didn’t include them in his list. For the first time in history, credit card debt last year hit $1 trillion, eclipsing the record set back in 2008 following the real estate collapse and the beginning of the Great Recession. Snyder didn’t mention the nearly $3 trillion in “non-revolving” debt (i.e., auto and student loans) either. Seeking Alpha called these numbers “scary” but Snyder ignored them.
A closer look behind the numbers reveals that these may not be such “scary” numbers after all. Perhaps that’s why Snyder ignored them, simply because, by his definition, they didn’t qualify as “crazy.” For one thing, fewer than 40 percent of all households carry any sort of credit card debt. Among millennials ages 18 to 29 only a third even have a credit card.
Next, the ratio of income to credit card debt at the end of 2017 (before the new tax cuts) was already declining with the ratio of credit card debt compared to the nation’s gross domestic economic output at about 5 percent, compared with 6.5 percent in 2008.
Also, credit card delinquencies remain way below the 9 percent historical average, at just 7.5 percent, and far below the rate of 15 percent touched following the 2008 financial crisis.
There’s another way to look at credit card debt: compare outstanding balances to incomes.ValuePenguin performed such a service, showing that households with annual incomes of between $25,000 and $100,000 have less than $7,000 in outstanding balances on their credit cards. Further, that analysis showed that the average has increased only slightly since 2013.
With almost two million more people working today than held jobs a year ago, and others enjoying wage and salary increases, that $1 trillion in credit card debt becomes far less “scary.” In a $20 trillion economy that is growing at three percent a year, $1 trillion in credit card debt may reflect that growth as banks are willing to issue more cards to more credit-worthy individuals and those individuals, having perhaps learned lessons from the Great Recession, are using them more prudently. That “trillion” dollar number may instead reflect a growing and increasingly healthy economy employing more people making more money who are using credit opportunities more wisely.
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Sources:
USAToday: Credit card debt hits new record, raising warning sign
SeekingAlpha.com: Credit card debt on watch
Michael Snyder: 44 Numbers From 2017 That Are Almost Too Crazy To Believe
ValuePenguin.com: Average Credit Card Debt in America: 2017 Facts & Figures
This article appeared online at TheNewAmerican.com on Tuesday, January 9, 2018:
For the first time in history credit card debt hit $1 trillion last year, reported the Federal Reserve on Monday. This eclipsed the previous record set almost 10 years ago, just before the housing and credit bubbles burst. In addition, “non-revolving” (i.e. auto and student loans) debt is approaching $3 trillion.
These numbers have put credit card debt on “watch” at Seeking Alpha, which said that that trillion dollar number is “scary.”
A closer look behind the numbers reveals that these may not be such “scary” numbers after all.
This article appeared online at TheNewAmerican.com on Monday, November 6, 2017:
The GOP tax reform bill presented last Thursday attempts to be “revenue neutral” within 10 years. By giving most of the cuts to corporate taxpayers, there’s precious little left for the middle class to enjoy. The problem is not only the mathematics — trying to match the “give” with the “take” — but the politics: Democrats will work to scuttle any attempt to relieve fiscal pressure on entrepreneurs (i.e., capitalists) who are largely carrying the burden of supporting the government. Absent any attempt to cut spending — the tax bill’s 429 pages offer little help with that — what’s left, as has been said, is simply moving the chairs around on the deck of the Titanic.
First,
This article appeared online at TheNewAmerican.com on Friday, April 1, 2016:
From a distance the jobs report issued on Friday by the Bureau of Labor Statistics (BLS) looked pretty good: 215,000 new jobs were created by the economy in March while earnings, year-over-year, increased by 2.3 percent. The average hours worked remained stable, and the labor force participation rate rose off its recent record lows.
The numbers came from two sources: payroll numbers provided by businesses directly to the Labor Department, and household numbers provided by phone-call surveys.
In looking at the numbers, Ward McCarthy, chief financial economist at Jefferies LLC, a massive global investment firm headquartered in New York City, said that “we continue to generate a lot of jobs” without asking what kind. A closer look reveals
This article was published by The McAlvany Intelligence Advisor on March 22, 2016:
Harry Dent, the author of The Great Crash Ahead, says that the current rebound in stocks is a head-fake of the first order, that the end of the seven-year bull market in stocks occurred last May. He said just look at a three-year chart of the SPX (Standard and Poor’s 500 Index) and see the rounded top formation.
Instead, talking heads all across the media are calling the recent rise following the precipitous decline that began the first day of trading of 2016 just a speed bump, a hiccup as the seven-year-long bull market in stocks is getting its second wind.
Markit Ltd., the monster financial services and advisory company located in London, issued its first warning in late February with its flash that its services purchasing managers’ index
This article appeared online at TheNewAmerican.com on Tuesday, March 22, 2016:
Markit Ltd., the London-based global financial information behemoth, issued an early warning about signs of the coming recession in late February when it published its services purchasing managers’ index. It went negative for the first time in more than two years. At the time, Chris Williamson, Markit’s chief economist, said:
This article appeared online at TheNewAmerican.com on Monday, March 14, 2016:
President Ronald Reagan’s former budget director David Stockman (middle, left) has been negative on the economy for months, noting in early February that
This article was published by The McAlvany Intelligence Advisor on Monday, March 14, 2016:
The best evidence comes from the US Treasury with its daily report of tax receipts from wages and salaries. It’s pure, it’s timely, and it’s free of massaging and/or manipulation. And it’s ugly.
John Williams, the skilled and capable economic statistician whom the establishment economists love to hate, author of ShadowStats.com, has built a graph (see source below) showing
This article was published by The McAlvany Intelligence Advisor on Wednesday, November 18, 2015:
As a general rule a recession is two quarters of negative growth (aka decline) in the country’s gross domestic product (GDP). GDP, in simplest terms, is a measure of industrial production, employment, real (inflation-adjusted) income, and wholesale and retail trade.
The trick is knowing when a recession is coming. Even trickier is knowing what to do about it beforehand.
The Bureau of Economic Analysis (BEA) said GDP
This article appeared online at TheNewAmerican.com on Tuesday, November 17, 2015:
The latest Empire State Manufacturing Survey issued by the New York Federal Reserve Bank on Monday confirms an increasingly ominous economic trend: The fourth consecutive monthly decline in its index is the longest since early 2009.
Its authors didn’t even try to sugarcoat it:
This article appeared online at TheNewAmerican.com on Wednesday, October 14, 2015:
Last night’s “debate” had one winner and six losers in showcasing the Democratic Party’s potential nominees for president in 2016: Hillary Clinton, according to all liberal commentators, was the winner going away.
The losers were everyone else on stage — Jim Webb, Bernie Sanders, Martin O’Malley, and Lincoln Chafee — plus Joe Biden, and the American taxpayer.
It was all Kabuki dance:
This article was published by The McAlvany Intelligence Advisor on Monday, June 8, 2015:
Students at a table in Muscatine Community College courtyard
In 2008 the city council of Knoxville, Tennessee created “Knoxville Achieves”, a philanthropically-funded free tuition program for lower income families who couldn’t afford college. It blended private funds with requirements that students receiving “last dollar” benefits (tuition expenses remaining after grants, scholarships and personal resources were used up) would be guided by volunteer mentors through regular consultations and planning sessions. If the students didn’t meet certain minimum performance standards, the mentoring stopped and so did the money.
This was a local response to the pitiful results, in general, that community college students were obtaining. Barely 20 percent of them obtain their associate’s degree after three years. It’s supposed to take two.
The first year 496 students received tuition assistance, with good results appearing almost immediately. It wasn’t the money – it was the mentoring and the tracking, following, and monitoring that made the difference. Students were, some for the first time, being held personally accountable to a friendly volunteer, along with receiving a financial incentive.
It worked so well that
This article first appeared online at TheNewAmerican.com on Monday, June 8, 2015:
Buried in the fine print of President Obama’s State of the Union speech last January was an idea that the federal government should make community college tuition-free. It’s loosely based on a Tennessee program that seems to be working without federal funding or intervention.
The federal program would add $6 billion to the government’s already bloated educational assistance programs, which already run $70 billion (not counting the $100+ billion in student loans) every year. Anything for the kids, it seems, and according to promoters, the taxpayers won’t feel a thing.
According to the federal program, an estimated nine million students attending community colleges could avoid up to $3,800 a year in tuition, with three-quarters of the largesse coming from Uncle Sam and the balance put up, under federal mandates, by the states. In his speech, Obama called community colleges “essential pathways to the middle class,” adding,
College Students Spending Time Outside (Photo credit: York College of PA)
This article first appeared at The McAlvany Intelligence Advisor on Wednesday, June 18, 2014:
Mr. Obama has never been very good at math or in getting his facts straight. His misunderstanding of basic laws of economics, however, is breathtaking. Last week, on Tumblr, he announced his latest plans to make it easier for high school graduates to borrow their way into college. First he’ll cap their debt repayments at 10 percent of disposable income. Second, if they default after 20 years, their debts will be forgiven.
Often in error but never in doubt, the president said:
cardboard sign … College Graduates. Lots of them and lots of debt. (FEBRUARY 16, 2012) …item 2.. Searching for jobs in Tallahassee is a burden (Jan. 23, 2013) … (Photo credit: marsmet531)
On Monday, June 9, President Obama announced new executive orders to make borrowing for college easier and less costly as part of his “year of action.” Speaking to students via Tumblr, the president said:
A higher education is the single best investment that you can make in yourselves and your future, and we’ve got to make sure that investment pays off…
In America, higher education opens the doors of opportunity for all…
He dusted off the old shibboleths that a college degree will improve chances to get hired and will result in higher earnings as well:
It’s done all the time. In fact, thanks to “degree inflation” one has to have a BA just to get a job interview. It’s another result of excessive supply and reduced demand. And the supply is being provided by schools charging $100,000 to get a BA degree.
There are so many things wrong with this equation one scarcely knows where to begin.
The Bureau of Labor Statistics (BLS) has done us another favor: it has blown the cover off the perception that a college degree is worth the money. Their listing of the top 30 occupations in job growth for the next 8 years shows that only five of them need a college degree! They are
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