Monday, 22 April 2019

Warren's Save America Fund

This Senator Warren plan on student loan debt?

Well, here's the simplicity of the deal.  As long as you make under $100,000 (even if unemployed today)....her deal would cancel out $50,000 of the debt.  If you had $120,000 at age 22?'d only resolve part of your'd still owe $70k. 

Amount that it'd add up to?  Well....she says $640 billion.  I have my doubts and an audit might suggest it closer to $1-trillion.

Where would the $640 billion come from?  Taxes. So you folks who never went to college, or made it debt-free through college?'d pay for the debt folks.

The more that this gets brought up.....the more frustrated non-debt folks would get over this free deal.  If this were me, and I were debt free....even at age 60...I'd do the paperwork for college loan, borrow the money, and blow it on Vegas gambling, a around-the-world cruise, or an RV camper. 

Debt Chatter

I sat and watched a YouTube video documentary over the weekend entitled 'What Killed The American Middle Class'.

It's a 30-minute piece which is kinda curious and interesting.

Basically, they lay out this downfall of the American middle-class, and the economic woes that they've suffered through.

Some folks have had to declare bankruptcy.  Some have gone to two jobs.  Some have gone to depression stages.

At the end of this....I sat there and did a fair amount of pondering.

What happened, if you didn't really notice the past three decades....people were building mountains of debt...either because of bad decisions on home-purchases, or via credit cards, or buying cars beyond their lifestyle, or via college loans. That meant that they were gradually going paycheck to paycheck, and that only increased in the past decade. The people who avoided the debt-bomb....have survived, and are doing quite well. It's not capitalism that bankrupted these's the failure to recognize the problem of debt and how much you can legitimately carry on your back.

I worked with a guy in DC, whose combined household income (him and his wife) was near $200,000.  Both nearing 45 years old....had mountains of debt.  They'd bought a half-million-dollar house.  They'd bought high-cost cars (one a BMW and the other a Infiniti).  One still owed $20k on college debt.  I never asked about credit cards, but I'd assume that they had that issue existing as well.  Luckily, no kids.  But the guy admitted....they were reaching a stage where debt was consuming one-third of their total income (on top of taxes, social security, etc).

I give some credit to the documentary folks for the style and quality of the video, but the truth of the matter is that the middle-class folks who missed the 'debt-bomb', are doing very well, and still enjoying life.  The other folks?  They screwed up, and just never got that lesson on spending and saving.