Tag: Credit Debt

Being In Debt

A couple of points that are missing from the campaign trail.

We all know that the country works on debt….we constantly spend more than we take in….and yet no one wants to fix this problem because it might piss off a corporation or two.

Our national debt has a record high ….

It’s a record no one is happy about: The gross national debt in the US went above $35 trillion Monday, a first. The number (which, specifically, was $35,001,278,179,208.67) was noted in the Treasury Department’s daily report on America’s debt, the New York Times reports. Debt is accumulating at a quick clip, with the $34 trillion mark just having been passed for the first time in January, and the $33 trillion mark last September, Fox Business reports. Last month, the Congressional Budget Office said the national debt is on track to pass $56 trillion in the next decade.

he Times notes that given how little Donald Trump and Kamala Harris have said about the topic while campaigning for November’s presidential election, the problem will likely “only worsen in the coming years.” Social Security and Medicare largely drive the national debt, and there is resistance across the board to implementing cuts to those programs. Plus, interest rates are high, and some federal programs have proven more expensive than their original estimates. Meanwhile, federal budget deficits are also on the rise; the latest estimate for this year’s deficit is $1.9 trillion, which would be the third-largest in the country’s history and $200 billion more than last year’s.

Since neither candidate has said much about this problem it must not be important.

We could fix this problem, yes it would take time, by making the lay-about corporations pay their flippin’ taxes….

The country is not the only debt problem…..individual debt has also hit a record amount.

Americans owe more money than ever on their credit cards: $1.14 trillion. That’s after consumers added $27 billion to their tab in the second quarter, a 5.8% jump from the year before, a new report by the Federal Reserve Bank of New York says. Credit card delinquency rates increased, as well, CNBC reports. Borrowers ages 18 to 29 and 30 to 39 had the biggest delinquency increases; the New York Fed said those groups probably were heavily affected by COVID-19. They “may have overextended during the pandemic,” researchers said.

Americans used some of their pandemic-related federal stimulus money to pay down their credit card debt in 2020, said Ted Rossman of Bankrate in a statement. But balances shot up again starting in 2021, he said, per CBS News, “fueled by a post-pandemic boom in services spending as well as high inflation and high interest rates.” About 9.1% of credit card balances went into delinquency in the past year, the New York Fed found. The Urban Institute reported in May that more consumers are using credit cards to stay afloat, with 60% of them paying for their groceries that way. Overall, Rossman said, “More people are carrying more debt for longer periods of time.”

Credit cards are keeping some families afloat in this time of extreme prices…..

This will come back to bite us in the butt.

To paraphrase Marx….Credit is the opiate of the masses.

I Read, I Write, You Know

“lego ergo scribo”

Cancellation Of Medical debt

I know people that are trying to pay off their debt for the medical expenses…..it is not easy for them. Why doesn’t someone do something?

Enter Sen. Bernie Sanders…..

Studies have shown that millions of Americans owe a combined $220 billion in medical debt, with 1 in 5 adults saying they don’t expect to ever be able to pay off the bills. A group of congressional Democrats on Wednesday proposed knocking the amount down to zero. “People in our country should not be going bankrupt because they got cancer and could not afford to pay their medical bills,” Sen. Bernie Sanders said Wednesday in a statement. The legislation would remove the debt from credit reports and severely limit future debt from accruing, the Hill reports.

The legislation would cancel existing debt through a new federal grant program, per the Guardian. It would alter the Fair Debt Collection Practices Act to keep creditors from collecting old medical bills and change the Consumer Credit Reporting Act to prohibit credit agencies from reporting information about unpaid health care bills. Rep. Ro Khanna, one of the co-sponsors, talked about the stress the debt causes. “I’ve met people who say they’re just resigned to having this debt ruin their credit, and they don’t pay it, but they have this kind of harassment and anxiety while they’re dealing with a chronic condition like cancer or diabetes,” he said.

The burden of medical debt is not evenly distributed. An analysis by KFF Health News found that people with disabilities were more than twice as likely to be in medical debt than those without a disability. In addition, 13% of Black Americans have the debt, compared to 7% of white adults and 8% of Hispanic adults. Ensuring that people are not plunged into debt because they saw a doctor or went to an emergency room is “kind of human decency,” Khanna said.

I applaud Bernie’s bill and its supporters….at least these people are looking out for the American people and not who gets the biggest piece of taxpayer pie.

A great idea in my book….but it will go nowhere in Congress….for you see the insurance industry has buckets of money to throw that those in Congress to do their bidding.

So sad just how screwed up this system is when a debilitating illness can leave you in a refrigerator box under a bridge somewhere.

I Read, I Write, You Know

“lego ergo scribo”

Closing Thought–06Feb24

I am one of those un-American people for I do not have any credit debt…..no cards……and an article I read tells the tale of the credit ‘crunch’…..

While the US economy is broadly healthy, pockets of Americans have run through their savings and run up their credit card balances after battling inflation for more than two years. Experts worry that members of these groups—mostly lower- and middle-income Americans, who tend to be renters—are falling behind on their debts and could face further deterioration of their financial health in the year ahead, particularly those who have recently resumed paying off student loans. Some key stats, per the AP:

  • Americans held more than $1.05 trillion on their credit cards in the third quarter of 2023, a record, and a figure certain to grow once the fourth-quarter data is released by FDIC next month.
  • A report from the credit rating company Moody’s showed that credit card delinquency rates and charge-off rates, or the percent of loans that a bank believes will never be repaid, are now well above their 2019 levels and are expected to keep climbing.
  • These worrisome metrics coincide with the average interest rate on a bank credit card of roughly 21.5%, the highest it’s been since the Federal Reserve started tracking the data in 1994.
  • “Overall, the consumer is credit healthy, said Silvio Tavares, president and CEO of VantageScore, one of the country’s two major credit scoring systems. However, the reality is that there are starting to be some significant signs of stress. Most analyses of Americans’ financial health tend to tell a tale of two consumers. On one side are the roughly two-thirds of Americans who own their homes and those who’ve invested in the stock market and done substantially well. But for the rest of America, those who have not benefited from the housing and stock markets, things are looking rough. “They’ve been hit very hard by inflation,” said Warren Kornfeld of Moody’s.

Read the full story.

(NO one will read the full story but it is there for those with an inquisitive mind)

I Read, I Write, You Know

“lego ergo scribo”

Closing Thought–20Feb23

Inflation has been kicking the crap out of the American consumer….and it just keeps getting worse….

People are using the credit cards to help get by….

U.S. consumer credit card debt has jumped to nearly $1 trillion, the Federal Reserve Bank of New York said on Thursday.

Credit card balances increased more than $60 billion over the three months ending in December, lifting the total amount of U.S. credit card debt to an all-time high of $986 billion, the report found.

The skyrocketing credit card balance has coincided with an increase in the interest rates paid on such debt, crunching household budgets as high inflation eats away at the savings that many amassed during the pandemic.

The average credit card interest rate offered in the U.S. over the last three months of 2022 stood at 21.6%, according to WalletHub, a jump from about 18% a year prior. An aggressive series of interest rate hikes imposed by the Federal Reserve has caused the jump in credit card rates.

https://abcnews.go.com/Business/us-credit-card-debt-now-totals-1-trillion/story

A trillion dollars that is about the amount the War Department’s recent budget….

Eventually all this debt will be called in and thus an economic collapse will be in our future.

I am fortunate for I have no credit debt…but that is just me.

I Read, I Write, You Know

“lego ergo scribo”

 

 

How Did Student Debt Come To This?

I realize this is not a big story these days, especially with the death of the queen….but I post this because this will happen again….greed will make it so.

Since Biden has come up with the debt forgiveness thing for students struggling with their student debt there has been a swell of opinions in blogs and social media….some say it is about time someone did something about this problem and others that say it could end this country once and for all…..and yes I had a post on the Biden decision on student debt….

Did Students Win?

I also gave the reservations that some hold about this decision….

Reservations On Student Debt

Now that both sides have their day….how about the history of how this all began….

My thought is…..
College tuition is a full-on scam in the U.S. The thing I hate about the current educational system in the United States is that it is designed to put a college student in debt. As of 2022-2023, the average a student can expect to pay for one year’s in-state tuition, school-related expenses, and fees is $25,707 at a four-year state university, and for an out-of-state student it’s $43,421. As of 2022, the maximum amount of Federal Pell Grant money a student can get [per year is only $6895. That leaves the in-state student with $18,812 they have to cover somehow–and that almost always means borrowing the money. As a result, it’s common to see a student graduate college with a bachelor’s degree, and well over $50,000-$60,000 in debt that they’ll have to start paying off about six months after they get out of college. The government knows this, and the lending institutions know this. Students are actively getting screwed by this system.

As usual the Old Professor wants to give the history behind this situation…..

With the vociferous debate over President Joe Biden’s announcement that the federal government will cancel a portion of outstanding student debt, it’s important to understand how Americans came to owe the current cumulative total of more than $1.6 trillion for higher education.

In 1970, Ronald Reagan was running for reelection as governor of California. He had first won in 1966 with confrontational rhetoric toward the University of California public college system and executed confrontational policies when in office. In May 1970, Reagan had shut down all 28 UC and Cal State campuses in the midst of student protests against the Vietnam War and the U.S. bombing of Cambodia. On October 29, less than a week before the election, his education adviser Roger A. Freeman spoke at a press conference to defend him.

Freeman’s remarks were reported the next day in the San Francisco Chronicle under the headline “Professor Sees Peril in Education.” According to the Chronicle article, Freeman said, “We are in danger of producing an educated proletariat. … That’s dynamite! We have to be selective on who we allow [to go to college].”

“If not,” Freeman continued, “we will have a large number of highly trained and unemployed people.” Freeman also said — taking a highly idiosyncratic perspective on the cause of fascism —“that’s what happened in Germany. I saw it happen.”

https://theintercept.com/2022/08/25/student-loans-debt-reagan/

Could any of this problem have been the doing of the feds?

Until 1965, the cost of college at private and public institutions remained fairly in line with inflation — these were the good old days, when a minimum wage summer job could cover all of one’s annual tuition, and then some. So what happened in 1965? President Lyndon B. Johnson passed the Higher Education Act, which created guaranteed student loans by subsidizing capital for banks that would provide loans to low and middle income students. 

This simultaneously expanded college access, especially for less privileged students seeking to attend private institutions, while keeping loan burdens manageable because private banks still controlled who could receive student loans and for how much. From 1964-77, the tuition at slowly growing private universities grew 11.5% more than inflation, while that at public institutions, it grew 1.6% less than inflation as the government massively expanded public college systems to accommodate an exploding college-age population fueled by the Baby Boom. 

https://www.realclearhistory.com/2022/08/26/credit_feds_for_spiraling_college_costs_850148.html

This is an op-ed but all the hub-bub….

The greed, self interest and racism of US citizens never ceases to amaze and appall me.

President Biden was dragged, against his own wishes, into using his executive authority to cancel a paltry $10.000 in federally insured student college debt for all those former students with current income of less than $125,000, and an extra $10,000 in forgiveness for those former students who had qualified for Pell Grants — a need-based federal scholarship frant limited to students whose families had annual incomes of below the poverty time at the time they were attending college.

Now most Republicans in Congress or running for Congress — an institution known appropriately as a “millionaires’ club” because so many of its elected members either ran for office having millions of dollars in assets or became millionaires in office because of the corruption of the US political system — are opposing this Biden executive order, claiming it will be inflationary, will cost too much, isn’t fair to taxpayers. But perhaps even worse, are many ordinary Americans, most of them upper middle class or wealthier, who are grousing because they paid off their student loans on their own and don’t think their taxes should have to go to fund a cancellation of debt for poorer former students who have not repaid theirs.

How pathetic is that!

Enough With the Unseemly Whining About Student Debt Forgiveness!

A little something to think about (if you have the time)……

Trump had more than $280 million in loans forgiven and failed to pay taxes on most of the money he pocketed.

Why are neoliberals and cultural conservatives opposed to student debt relief? Look no further than the reasons Ronald Reagan ended free-tuition in California’s state university system, when he was governor. Roger Freeman, one of Reagans top advisors in the 60s, who was later to help craft Nixon’s ruinous education policy, spelled it out pretty starkly: “We are in danger of producing an educated proletariate. That’s dynamite! We have to be selective on who we allow to go through higher education. If not, we will have a large number of highly trained and unemployed people.”

Personally when it comes to college I think if a student goes to college in their home state then the first 2 years should be free….

But that is just me.

I Read, I Write, You Know

“lego ergo scribo”

Did Students Win?

For several years there has been a push to do something about all the massive student debt…..like forgive some or all of the debt that going to college has heaped upon the student.

Progressive been at the forefront of the proposals…..and Biden needs a win to boost his numbers and help Dems with the mid-terms.

And presto change-o the Dems come through…..

On Wednesday President Biden made good on his campaign promise to ease the burden of federal student loan debt. Under Biden’s plan, many Americans will be granted $10,000 in debt cancellation; those with the greatest financial need could see an additional $10,000 wiped away. The specifics, per a tweet from the president and the AP:

  • Borrowers who earn less than $125,000 a year, or families earning less than $250,000, will be eligible for the $10,000 loan forgiveness. For recipients of Pell Grants, which are reserved for undergraduates with the most significant financial need, the federal government will cancel up to an additional $10,000 in federal loan debt.
  • Biden also extended a pause on federal student loan payments for what the White House calls the “final time” through the end of 2022.
  • If his plan survives legal challenges that are almost certain to come, it could offer a windfall to a swath of the nation in the run-up to this fall’s midterm elections. More than 43 million people have federal student debt, with an average balance of $37,667, according to federal data.
  • Nearly a third of borrowers owe less than $10,000, and about half owe less than $20,000. The White House estimates that Biden’s announcement would erase the federal student debt of about 20 million people.
  • Proponents say cancellation will narrow the racial wealth gap—Black students are more likely to borrow federal student loans and at higher amounts than others. Four years after earning bachelor’s degrees, Black borrowers owe an average of nearly $25,000 more than their white peers, according to a Brookings Institution study.
  • The Washington Post cites previous estimates that put the cost of canceling $10,000 per borrower at about $230 billion; that doesn’t include the Pell Grant relief.
  • CNN points out the problem of college affordability is a big one that’s unchanged by today’s announcement. To wit, the Committee for a Responsible Federal Budget found total federal student loan debt, currently at $1.6 trillion, will be back at that level within four years of wiping out $10,000 per borrowers

This will be good news for most of those that accrued the massive debt to get their education.

It is a good start but I do think it is not enough.

If they want to protect students then try doing something about the predatory lending practices ….but that is not happening because of the cash that pays for a do-nothing Congress.

At least $10,000 of debt will be canceled…..

Whatcha think?

I Read, I Write, You Know

“lego ergo scribo”

Closing Thought–27May21

Do you have student debt?

This is a hindrance to people as they try to pay off thousands of dollars in debt for their excellent education…..this crippling debt keeps college grads from living the ‘good life’…..

There has been ideas to help people get on with their lives by lessening or cancelling student debt.

Some progressives are calling for the canceling of all student debt….the new president is calling for the cancellation of $10,000 of debt…..that figure is not nearly enough.

Forty-five million Americans now owe a total of $1.7 trillion in federal and private student loans.

For many people, that debt is the biggest drag on their adult lives. It prevents them from buying a home or starting a family or investing in their future. They are stuck in a perpetual loop.

This crisis has led to calls to cancel all that debt and liberate an entire generation of Americans — something I instinctively support. But when you start to think about all the obstacles and trade-offs, you quickly realize how politically fraught such a proposal would be. Is there any way to do it fairly? What about the millions of people who spent decades paying down their loans? And what about the people who didn’t go to college because they didn’t want the debt — how would this land for them?

So I reached out to Astra Taylor, documentary filmmaker and author of the 2019 book Democracy May Not Exist, But We’ll Miss It When It’s Gone. Taylor has become a leading advocate for debt forgiveness, and she treats it as not just an economic problem but as a small-d democratic problem. We talk about why that is and how it shapes her argument.

https://www.vox.com/policy-and-politics/22383450/student-debt-forgiveness-biden-astra-taylor

A total cancellation of student debt could be fuel for the economy….it would put $1.7 trillion dollars into the economy…..and that would be a huge boost across the board.

Turn The Page!

I Read, I Write, You Know

“lego ergo scribo”

You Are Your Credit Score

Your credit score is you!

It is used for shelter acquisition, transportation buying, employment, etc.

Very little accomplishments in life mean nothing but your credit score is there for you to live or die.

For those that do not pay attention to such menial things….

Companies use a mathematical formula – called a scoring model – to create your credit score from the information in your credit report.

Some factors that make up a typical credit score include:

  • Your bill-paying history
  • Your current unpaid debt
  • The number and type of loan accounts you have
  • How long you have had your loan accounts open
  • How much of your available credit you are using
  • New applications for credit
  • Whether you have had a debt sent to collection, a foreclosure, or a bankruptcy, and how long ago

Companies use credit scores to make decisions such as whether to offer you a mortgage, credit card, auto loan, or other credit product. They are also used to determine the interest rate you receive on a loan or credit card, and the credit limit.

Keep in mind there is no “one” credit score. It is important to know that you do not have just “one” credit score and there are many credit scores available to you as well as to lenders. Any credit score depends on the data used to calculate it, and may differ depending on the scoring model, the source of your credit history, the type of loan product, and even the day when it was calculated.

Usually a higher score makes it easier to qualify for a loan and may result in a better interest rate. Most credit scores range from 300-850.

In other words accomplishments in life mean nothing….it is all about the math.

Did you know that if you join one of the many credit score people you can add points to your score?

It has nothing to do with your ability to pay or not….just that you have spent money to access your “score” at any time.

Now that I have set the stage I would like to tell my better half’s story.

She owed a house for about twelve years and recently sold it….she got enough to pay off her mortgage and a SBA loan that she took out to do repairs that her house had been given by Hurricane Katrina in 2005.

She had a great credit score…..she had credit cards and such…but after she sold her home and got her new score she learned that it had decreased by about 100 points.

The moral of this story is that you are supposed to be in debt to retain your “good” credit score.

Learn Stuff!

I Read, I Write, You Know

“lego ergo scribo”

The Power Of Addiction

We all are addicted to something…..drugs, cigs, sex, whiskey and so on……but we Americans have an addiction to……consumerism.  A couple of years ago I wrote a piece entitle “The Real Opiate Of The Masses”…..when I pointed out that Americans were drowning in debt and even with the crash of ’08 nothing would change……we will buy way beyond our means……and guess what?

(Newser) – More than a third of Americans with credit scores have debt “in collections”—meaning one in three of us has been reported to collection agencies, a study finds. That’s a total of 77 million people whose non-mortgage debt is significantly overdue, the Urban Institute notes. The study includes debts ranging from credit card and medical bills to parking tickets, CNNMoney notes. And the widespread issue “can tip employers’ hiring decisions, or whether or not you get that apartment,” an analyst tells the AP.

The average debt is $5,178, the AP notes. The problem exists all over the country, but Southern and Western states are facing the most trouble. Among the report’s findings:

  • Nevada has the highest percentage of people with debt in collections: 47%. In Las Vegas, the figure is 49%. North Dakota has the lowest at 19%, CNNMoney reports.
  • The average amount owed is also highest in Nevada at $7,198. Washington, DC, has the lowest figure at $3,547.
  • At 51%, McAllen, Texas, has the highest percentage of affected people among the nation’s 100 largest metropolitan areas. At least 43% of people in Houston, Dallas, El Paso, and San Antonio have debt in collections. Minneapolis-St. Paul has the lowest percentage among the 100 biggest metropolitan areas, with 20%.

The complete study is here.

The scary part is that NOTHING will change……this addiction is like any other addiction….eventually it will kill the individual….in every sense of the word….KILL!

Will That Be Cash Or Charge?

My regular readers know that I have a tendency to find stuff that just pisses me off….and to the point that I must rant…..and I found an absurd report…..

Until recently, I had always paid cash for just about everything I bought…you know computers, groceries, everything…..but all that changed after I was badly hurt after Hurricane Katrina….I was forced to retire with a disability and had to have my check direct deposited…..I have NEVER been one to use a lot of credit cards….I guess I am from the old school of economic thought…..if I wanted something I bought it when I had the money to cover the cost….I still pay cash but it is in the form of a debit card and not a pocket full of greenbacks…..

I had a rude awakening when I went for pain management…..they did not take cash!  I had to be insured or NO help……my leg had been crushed and I now have about 70% use of it….I was not insured because NO company will insure a broke person, both physically and monetarily, and I am not old enough for medicare….all of it has been resolved but a recent story I read made me think about the ordeal from the past….

I know we are told by the government that we should be on the lookout for any suspicious behavior….but really?

It seems that cash is still a dirty word and could make you a person of interest to the authorities if you pay in cash…..I know…what the Hell am I talking about?

the White House announced a community-based approachto combating terrorism in the United States, the FBI and other agencies are asking managers of surplus stores to spy on their customers, watching whether they pay in cash, make “extreme” religious statements or purchase products such as waterproof matches.And the request from the government also is going to gun shops, fertilizer suppliers, motels and hotels, authorities say.

Earlier this month, the Obama administration announced a new plan titled “Empowering local partners to prevent violent extremism in the United States.” In it, Obama wrote, “Communities – especially Muslim American communities whose children, families and neighbors are being targeted for recruitment by al-Qaida – are often best positioned to take the lead because they know their communities best.”

“The best defenses against violent extremist ideologies are well-informed and equipped families, local communities, and local institutions. Their awareness of the threat and willingness to work with one another and government is part of our long history of community-based initiatives and partnerships dealing with a range of public safety challenges,” the report says.

So once again….if you pay cash for stuff you could be deemed a “suspicious” person and subject to an FBI check and harassment…..
Why is cash a dirty word?  Could it be because few make any profit off the transaction?  There is NO service charge for using cash….at least for now!