On August 24, President Biden announced the cancellation of $10,000 in federal student loan debt for most borrowers. But student loan accounts for less than 10% of household debt in America, which reached $16.15 trillion during the second quarter of 2022. And debt is likely to grow even further due to soaring inflation. 43% of Americans are expected to add even more debt within the next six months. So why are so many Americans in debt today and what impact does it have on the U.S. economy?
Policy plays a vital role in keeping household debt in check. Experts say outdated procedures such as wage garnishment, in which an individual’s earnings are withheld for the payment of a debt, are in dire need of a policy update. A survey found that about 7% of workers in America had their wages garnished, according to the most recent study in 2016.
The government can also play a potential role in reducing certain kinds of borrowings, such as medical debt that is currently held by roughly 23 million Americans.
Watch the video to find out more about why household debt is rising in America.
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Why Americans Are Drowning In Debt
So, if she took whatever she put down on that car and just used that to buy a beater on FB marketplace or Craigslist, and then used the money that she is putting into that loan and put it into first building an emergency fund and then paying extra on the student loans, she might find herself gaining some traction. Also, she looks like she is living pretty comfortably. I bet there are a few life style changes she could make– at least short-term– and maybe a second job or side hustle. Throw it all at the student loan and see how quickly she makes some headway. Eventually she can upgrade the car when the debt is no longer weighing her down. Just saying, if the debt is really a problem, it is possible to take matters into your own hands.
People like to complain about other people's debt, but you guys gotta realize that that's how we move our economy. If everybody was like me, buys a $8K car, saves money and don't go on vacations, the economy would either fall apart or be very poor. As much as I hate to see people buying luxury cars, it create jobs for countless people.
Since the so-called “dollar” is no longer tied to gold and silver, the U.S. Government can float whatever amount of debt it wants. Don’t have the exact quote, but Fed Chairman Alan Greenspan said that since “we”(ha!) have the World’s Reserve Currency and can print it(no longer tied to gold) we can always pay our bills/debts. And he followed that with, however, what cannot be guaranteed is the purchasing power of the dollar.
Which is not a dollar anymore. It is not “money” anymore. Ever since August 15, 1971 it has been nothing but a Federal Reserve “Note”, which is a currency, not money.
Any mention of the overpaid entitled university staff. That is why the cost of education is so high. Joe..work on lowering the cost of education.
I have zero debt, at
By age 50 I paid off a 700k 30 year mortgage in 16 years using accelerated payments. I live within my means. I was then fortunate to enough or should I say had the foresight to buy 5,000 shares of Tesla in June 2018. The rest is history.
Ya..I'm gonna go to college for 8 years and never work..take huge loans for some worthless degree or a degree that really not hiring many folk..we are a service nation
The lady who has 240,000 debt has car payment and nice place to live. What’s a life style.
Also you have the President literally incentivizing debt and a lack of responsibility for ones self
Student loan is good debt?
Who wrote this script…
She doesn't strike me as someone who's overspending.. sad to see that she can barely afford a small space and a basic car. She was a great example of today's struggle.
They were never taught how to handle debt in school. If you take someone making $40,000 a year. Now pay them $1 million a year they will have the same problem.
This is due to unwise choices. There is an infinite amount of stupidity and lack of wisdom.
Omg the entitled snowflakes are infuriating. You have no right to steal from me because you want 2 degrees and a newish unexpected car! I had to buy a new car unexpectedly as well because my dumb ass crashed – it cost me $1650 for a 2000 Camry and I wanted to replace the timing belt and some gaskets so also $250 in parts and tools. The hell is wrong with these kids?
Pause the lady's student loan payments and she can save up to buy a house. What a deal. ?
when people work hard and get tired , they always think they deserve something, but we all tired