Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts

Friday, August 28, 2015

The Other National Debt No One Talks About

Image Source: Flickr
As we look at the state of the economy some people may be wondering,"Why, if jobs are increasing, are we not seeing other signs of improvement?" Though unemployment was down to 5.3% in July, wages only rose a few cents, and overall they have barely kept up with inflation since the beginning of the recovery.

Part of the problem may be people transitioning into new fields out of manufacturing into retail, healthcare or IT jobs; another is that people have less money after taking care of their bills to spend on the economy. One of the biggest obstacles to our economy is the massive debt burden that most Americans are carrying.

Current as of August 2015

U.S. household consumer debt profile:
  • Average credit card debt: $15,706
  • Average mortgage debt: $156,333
  • Average student loan debt: $32,953
In total, American consumers owe:
  • $11.85 trillion in debt
  • An increase of 1.7% from last year
  • $890.9 billion in credit card debt
  • $8.17 trillion in mortgages
  • $1.19 trillion in student loans
  • An increase of 7.1% from last year

With student loans alone, over 11.5 percent of the $1.19 trillion owed is in default. That number is up slightly compared to the 10.9 percent default rate we saw last year around the same time.

Why is debt such a major obstacle to our economy? When people are paying hundreds of dollars in credit card and student loan payments they don't have the money to buy a new car, put a down-payment on a house or start a business.

While we currently have a national debt of $18.3 trillion which our federal government owes, the $11.85 trillion which we as Americans owe is more concerning. 60% of college seniors have credit cards leaving college, with most of them carrying a balance. This may require them to take jobs that offer a guaranteed paycheck such as in retail versus interning or doing volunteer work out of college.

Student loan debt has been increasing drastically over the last decade as the cost of attendance increases. The worse news is that it can have even longer lasting effects. A recent by Gallup showed that:

"College graduates who carry a high amount of student debt appear to face long-term challenges that stretch beyond just their finances. A new analysis of Americans who graduated college between 1990 and 2014 shows that graduates who took on the highest amounts of student debt, $50,000 or more, are less likely than their fellow graduates who did not borrow for college to be thriving in four of five elements of well-being: purpose, financial, community, and physical."



It is no wonder that individuals offering debt advice like Dave Ramsey are becoming so popular. With so many Americans carrying such a large load in debt, the burden is becoming too great. While many point to the subprime mortgage crisis of 2008, if we were to have a major crisis right now with mass layoffs it could cripple our economy for years to come. With the current amount of consumer debt there would be a major unavailability of consumer spending to pull us out of a crisis. With 70 percent of our economy reliant on consumer purchases that could be devastating. 

Thursday, August 27, 2015

Fact Check: 'Illegal Alien Facts'



I've run across this picture posted on Facebook a half dozen times now, and I wanted to do a little research to fact check it's claims. Many Americans have the impression that most illegal immigrants are here just to live off our welfare system. So I wanted to check, are these "facts" true?

The first fact claims that more than 43% of all food stamps are given to illegals. According to estimates by Pew Research Center, there are currently 11.3 million illegal immigrants in the U.S., which has stabilized after decades of massive growth. According to the Department of Agriculture, 46.5 million Americans are on food stamps. Right there we can easily see that the first claim cannot possibly be true. Mathematically there aren't enough illegal immigrants in the U.S. to equal 43% of food stamp users.

On the claim that 95% of warrants for murder in Los Angelos are for illegal immigrants, several groups have fact checked this claim and found it to be only half true. Illegal immigrants are more likely to flee jurisdiction before being arrested, so warrants would remain open indefinitely but we don't have accurate statistics on what the most recent data is.

The next claim is that less than 2 percent of illegals are picking crops, but 41 percent are on welfare. Politifact found this claim to be mostly false. While only 2 percent of illegals are involved in picking crops according to a 2007 report, it is far from reasonable to even consider that as many as 41% are on welfare. Politifact continues:

"According to a 2007 report by the Center for Immigration Studies, a group that favors stricter immigration laws, 40 percent of illegal immigrant-headed households used any "major welfare" program in the previous calendar year.
   
But it’s important to keep two bits of context in mind:
   
• This statistic addresses households headed by an illegal immigrant. However, many of these households include American citizens within the family, often children who were born in the United States and who received citizenship at birth. Indeed, given the web of restrictions on the granting of government benefits to illegal immigrants, most of the "welfare" benefits being counted in the CIS table are going to citizen children, not to adult illegal immigrants.
   
• We suspect that when many people hear the term "welfare," they think of cash benefits. However, very little cash assistance is going to illegal immigrants. According to CIS, less than 1 percent of illegal-immigrant-headed households included anyone receiving direct government cash assistance, such as Temporary Aid for Needy Families (TANF), Supplemental Security Income (SSI) or state-run cash aid. This is not surprising: Illegal immigrants are generally barred from receiving such payments.
   
Instead, 27 percent of such households received coverage from Medicaid, the federal-state health care program for the poor, while 33 percent received food assistance, such as free or reduced-price school lunches, food stamps, or benefits from the Women-Infants-Children program (WIC). As noted earlier, many of the recipients of these programs were actually citizen children of illegal immigrants."

The next claim is that 2/3 of all births in California are to illegals on Medi-Cal. This was found to be a false skewing of data which focused just on Los Angelos and included all births to hispanics.

Number five says that nearly 60% of all occupants of HUD properties in U.S. are illegals. Politifact found that "The closest but unverified estimate we could find for illegal occupants in HUD housing is less than 1 percent nationwide. The claim of 60 percent is ridiculously false."

Next we look at whether more than 39% of California students grades 1-12 are illegals. A Center for Immigration Studies report (2011) gives the percentage of school age “illegal and U.S. born children of illegals” in California as 14%. The math on this one just does not add up, and is rated false.

The post claims 75% of LA’s Most Wanted are illegals. According to the LA Times (to which many of these facts were first falsely attributed), the LAPD, states this is simply not true.

More than half of all gang members are illegals. This one seems to come from a 2008 study funded by the Justice Department. The Center for Immigration Studies found that 25 to 50 percent of gang members arrested in northern and western Virginia were removable, and usually illegal aliens. We simply do not have the data available to determine the validity of this claim. However since there are around 1.4 million gang members in the U.S, it seems unlikely that the claim would hold up nationwide.

US companies using illegals in 2005 profited over 2.36 trillion dollars. The total U.S. economic output in 2014 was just over 17 trillion dollars. While illegals do make up 5.1% of the U.S. labor force, it seems unlikely that they would drive that much economic growth. Legally however, companies are required to check to see if their workers are here legally.

US Taxpayers are footing the bill for ALL illegals. Currently 43% of all Americans aren't paying federal taxes, but all of us (illegals included) are paying taxes. We all pay sales tax, and if we own property we pay property tax, (even if we're renting, our landlords pay property tax). I'm sure many illegal immigrants would love to be here legally and wouldn't mind paying back taxes just to have that right.

Overall this internet meme is rated false. Some of the claims have half truths. Others were flat-out lies. If you see your friends post this meme, please refer them to this article.

Friday, July 10, 2015

Confederate Flag Discussion Distracts From Major Issues Facing Our Nation

Image Source: Flickr
In case you have been hiding under a rock the last few weeks a mentally unstable young man entered a black church in South Carolina and killed 9 African-Americans. It was later discovered that Dylann Roof was a white supremacist with pictures found of him in front of the Confederate flag. Since then there has been a national debate about whether or not the confederate flag should come down from the South Carolina statehouse, which finally happened today.

Whether you see the Confederate flag as a symbol of hatred and racism, or of heritage and history, what we must realize is that this issue doesn't really affect most of us. Every day this story  has been the top of every news hour, and each day more important issues continue to be ignored. Why? Because they don't bring as much emotion to our hearts and excitement to our minds. Those in the news industry care more about the money they can make by talking about sensationalist stories rather than more pressing issues.

While the U.S. has been surrounded by news about the Confederate flag, major issues loom over the horizon. Our national debt has recently passed the $18.3 trillion mark. It is inexcusable for us to continue in a path that puts our spending on the backs of our children and grandchildren. If we were really paying attention to the news we would see the real effects of this debt on a nation as we observe Greece fall to pieces. Not to mention the increasing threat of a new financial crisis and our inability to handle it.

Not only should we be concerned about our national debt, but we should have concern for the labor market, which still faces record low labor participation rates, meaning that the fewest percentage of working age adults are currently working or seeking for work in decades. The 5.3% U3 number we hear on the news only includes part of the total number of unemployed persons, more than likely our real unemployment is at least 10%. We also fail to  realize that over 300,000 jobs that were created in the last year were in the food service industry and that wages have stagnated for years.

We are also in the midst of preparing for the campaign to elect the next president of our country. Many are getting distracted by flashy populist statements without considering fully where each individual stands on the issues. I recommend you visit the site ISideWith.com , and take their quiz to see who you side with on the issues.

During the flag debate we also saw Congress give President Obama massive amounts of leeway on trade issues by granting him Trade Promotion Authority, or Fast Track as it is also known. This version of Fast Track doesn't do nearly enough to put in place Congressional oversight over trade pacts that are in the works like the TPP and TTIP. Many have concerns over how these deals will take place, but the media has paid hardly any attention to these deals.

Even with this debate, the real issue we should be discussing is the need to reform the treatment of mental health in our nation, to help prevent tragedies like this from happening again because I can guarantee the real cause wasn't the Confederate flag.

We need to wake up as a nation and not be sucked as deeply into debates that have little real impact on the daily lives of most Americans. We cannot continue to be sucked into sensationalist stories and debates when there are more impactful issues that surround us on every side.