By Michael Snyder
How long can our debt levels keep growing much, much faster than the overall economy? We haven’t had a year of 3 percent growth for the U.S. economy since the middle of the Bush administration, but we keep borrowing money as if there is no tomorrow. Much of the focus has been on the exploding debt of the federal government, and that is definitely something I plan to address once I get to Washington. But on an individual level, U.S. consumers have been extremely irresponsible as well. In fact, one new survey has found that more than 80 percent of all American adults are currently in debt…
It’s no secret that America is a nation that runs on debt, but it may surprise you to learn that the overwhelming majority of U.S. adults owe money in some way, shape, or form. According to new data from Comet, here’s how many Americans have debt at present:
- 80.9% of Baby Boomers
- 79.9% of Gen Xers
- 81.5% of Millennials
For most of us, it starts very early. We were told that going into debt to get a college education would not be a problem because we would be able to pay those loans off with the good jobs we would get after graduation.
Unfortunately, those good jobs never really materialized for many of us, and now millions of former college students are absolutely drowning in debt…
A study released Friday by the Brookings Institution finds that most borrowers who left school owing at least $50,000 in student loans in 2010 had failed to pay down any of their debt four years later. Instead, their balances had on average risen by 5% as interest accrued on their debt.
As of 2014 there were about 5 million borrowers with such large loan balances, out of 40 million Americans total with student debt. Large-balance borrowers represented 17% of student borrowers leaving college or grad school in 2014, up from 2% of all borrowers in 1990 after adjusting for inflation. Large-balance borrowers now owe 58% of the nation’s $1.4 trillion in outstanding student debt.
In addition to owing more than a trillion dollars on student loans, Americans are also now carrying more than a trillion dollars of auto loan debt and more than a trillion dollars of credit card debt.
Corporations have been incredibly irresponsible as well. Corporate debt has doubled since the last financial crisis, and corporate bankruptcies have been rising steadily in recent years. All it would take for the dominoes to really start falling is some sort of a major economic downturn.
Local, state and federal government debt levels are all at record highs as well. It is now being projected that our national debt will hit 30 trillion dollars by 2028, and those projections are probably too optimistic.
My guess is that we will almost certainly hit the 30 trillion dollar mark far sooner than that.
We can’t keep doing this to ourselves. Our incessant greed is literally destroying the future, but anyone that tries to warn about the collective insanity that has descended upon our society is mocked and ridiculed.
Let me ask you a question.
Would you willingly choose to give yourself cancer?
Of course not, but that is essentially what we are doing to ourselves as a society.
Debt is economic cancer, and as Lance Roberts has pointed out, if we continue to allow debt levels to grow like this eventually it will kill our entire economy…
Debt is, by its very nature, a cancer on economic growth. As debt levels rise it consumes more capital by diverting it from productive investments into debt service. As debt levels spread through the system it consumes greater amounts of capital until it eventually kills the host.
Debt is addictive, because it does boost our standard of living in the short-term. It is so easy to keep going back for one more “hit”, but every time we do it just makes our long-term crisis even worse.
Most people out there seem to think that our economic problems have been “solved”, but that is not true at all.
The truth is that our long-term problems just continue to grow with each passing day, and that is one of the reasons why I am so determined to go to Washington. We are at such a critical juncture right now, and if something is not done the prognosis is extremely negative.
If we stay on this current path, the very best that we can hope for is a “soft landing” and a greatly reduced standard of living for future generations of Americans. Here is more from Lance Roberts…
The processes that fueled the economic growth over the last 30 years are now beginning to run in reverse, and when combined with the demographic shifts in the U.S., the impact could be far more immediate and prolonged than the media, economists, and analysts are currently expecting. Sacrifices will have to be made, the economy will drag on at subpar rates of growth, individuals will be working far longer into their retirement years and the next generation of Americans will lead a far different life than what the currently retiring generation enjoyed.
It is simply a function of the math.
I am sorry for not writing more lately. I have been working night and day to get ready for May 15th. With Donald Trump in the White House, this is our opportunity to take our government back. If we miss this window, we may never have this sort of opportunity ever again.
America is drowning in debt, but of course our problems go far beyond that. Our economic, political, cultural and spiritual problems go very deep, and we desperately need to change course as a nation.
Unfortunately, most of the population is in a deep state of sleep, and my hope is that we can wake them up while there is still time to turn things around.