U.S. household debt tops $14 TRILLION and reaches new record

If we divide $14 trillion by the number of US households, 128 million, we get $109375 of debt per household on average. So, I'm guessing this debt includes all unpaid mortgage debt? Mortgage debt is around $9 trillion, so doing the same math as above we get $39,062 per household on average of all debt excluding mortgage debt. Throw in a couple of car loans and some credit card debt, and the numbers make sense. Most people function in debt so it's not a huge surprise to me. The problems lie with those who carry 2 or 3 times or more this much average debt...

 

1) I'm talking about flippers who do awful lowbrow 'remodels' to onsell at profit. They're easily identified by their terrible design aesthetics - their complete disregard of colour/character/proportion/natural light, etc. The sort of people who paint everything either beige or gray, and put down carpet. I'm not talking about Joanna Gaines, who mostly knows what she's doing - though still gets it very wrong sometimes (like whenever she does a mid-century home. she always wrecks those!).

2) I don't think of those 'move every two years' peeps as flippers. I have a few friends/family who do that. They do it more as a hobby/second income. They enjoy the challenge, and turn a nice little profit. And they're always very well considered renovations, often involving an architect. No borrowed money involved, though .. these are people well past the mortgage stage. They fund each new project with the proceeds of the last.

 

Psychiatry is a SCIENCE, and a speciality of medicine. Absolutely nothing like and nothing to do with - sociology. Also, a decent Psych earns far more than $200k.

And I defy you to prove there is a healthy and growing job market in sociology. At ANY income, much less $140k.

 

Good for you. The growing number of people choosing to 'rent for life' means a nice solid future for property owners!

 

Exactly. People who are nowhere near qualified to make it in a game which is ultimately contingent upon aesthetics. Given that, I'd say it's far less than 22%. Probably 10%, if that.

And no, I'd never tell anyone.

 

Any use of an average related to household finances is skewed beyond all usefulness.

The eoonomic divide in America is radical enough to make even the median skewed.

Also, one must consider our savings rate.

Finally, notice that student debt increased by $10BILLION in the fourth quarter. That's what our children are being required to pay in order to find a good career in our emerging economy - so they can pay back their debt. There is NO chance that this isn't reducing the number of those educated. One result is that we're looking at other countries for educated employees. Another is that business startups, most of which come from those with 4 year degrees, are made more difficult by harnessing graduates with debt.

 

Kids have been required to pay back education debt for decades, there's nothing new in that. What is new is that kids who should never have considered college, are going to college. And because they're the 'wrong' kids, they're doing all the wrong things when they get there. Unless they're doing a solid 'trade' degree, or their folks are megarich (therefore can risk an arts degree), they have no business being there. Yet they keep being there.

The reason we're looking overseas for skilled people is the above. Too many of our own kids are doing Gender Studies, and not enough are doing medicine and engineering.

 

Median income is ~$35K, which is about 75 million US workers, and perhaps they represent ~50 million households?? I think average household income is around $55K. With a car loan, student loans, credit card debt, etc. I can imagine even those earning median wage can on average have $39K in debt. The entire discussion about personal debt is somewhat nebulous and certainly quite generalized. What would be more interesting is if they provided some ratios of debt to income or debt to savings to watch those trends.

Assuming this data is reasonably accurate; Among those who borrow, the average debt at graduation is $27,610 — or $6,900 for each year of a four-year degree at a public university. Among all public university graduates, including those who didn't borrow, the average debt at graduation is $16,300. IMO these amounts are not horrific or insurmountable ASSUMING the degrees achieved were designed to greatly improve their employment and wage earning prospects. I was a child once and paid my way through college by working full and part-time and it took longer than others but so what.

I don't agree with your assessment that the cost of education is reducing those educated today anymore than it was back in the 50's and 60's. Regarding business owners and education; In fact, even though less than half of business owners have received a college degree, the 44 percent that have puts them ahead of the general population, where 1 out of every 3 adults has a college degree or more education, according to Census data.

Basically, US education is not churning out enough quality and productive and creative future workers...no matter the financing of the education. For example, a new governor discovers their education system is not teaching cursive reading and writing and demands an immediate change. A week later the education union responds saying no problem but it will take a few years before it can change. The governor responds they need to start now. The union pushes back saying a high percentage of their educators don't know cursive reading and writing and they must learn before they can teach others. Surely 99% of the educators have college degrees and teaching credentials. Many Americans are demanding higher quality education in public schools, and this is a great goal, but where will the system find higher quality educators? In the US? Immigrants? If you've managed a business you know the biggest challenge is finding quality workers. If you're managing a more technical business in which you require the best technicians, you probably have no choice but to look at green card holders...

 

The rise in the debt level seems pretty constant from 2015 to now. Total household debt is approaching GDP. Is that sustainable? For how long? When's the last time that happened?

 

So stop living above your means.

 

Right up until the market crashes and your stuck with five empty houses, or worse, five full houses that can't pay the rent.

I'm not pissing in your Cheerios. Good on you for making those investments. I just saw a lot of landlords go bust in 08'-10' for the same reasons you're celebrating now.

 

Tell that to your government.

 

The world need nurses and artists and historians as much as it needs plumbers.

Who are you to say what degrees are worthy of loan debt and which ones are not?

I didn't elect you the arbitrator of higher education value.

Seems like you appointed that position to yourself.

 

"The world need nurses and artists and historians as much as it needs plumbers."

Lots and lots of millions of nurses, a very small handful of artists (outside of commercial artists), and a very few historians. ​

 

I think at least a third of it can be attributed to my son!

 

All three contribute to society whether you like it or not.

Should a nursing degree be free because it is an in demand profession?

Asking for a friend.

 

Nothing should ever be free except NASA training for astronauts.

 

What about the PhD requirements for nearly all NASA astronauts?

Should those have been free?

 

That's what got 'em in the door and that's on them afaik -- unless they got some of their education while on active duty in the armed forces. The US taxpayer always pays that. But if NASA wants to pay for additional education for astronauts that's a worthy cause.

The US taxpayer paid for all of General Chuck Yeager's education except for his high school -- which enabled him to enlist as a recip mechanic out of Appalachia, and then bootstrap up to a flying commission, become a WWII Ace, and then test pilot breaking the sound barrier and flying into space in the 1960's, and then to command. He done good for a po' boy.

 

Chuck Yeager, a man whose hand I have shook, is a piss poor example of why we should, or shouldn't, pay the tuition of every American college student.

 

You a better pilot?

 

No, but I was a damn good APT, which is why I was invited to meet him along with Neil Armstrong, and later spent 24 hours in a hypobaric chamber with Story Musgrave before he fixed the Hubble.

 

The thing about education loans is that if you graduate, you may well not be in trouble. But, a high school kid is not in a position to bet on whether they will successfully complete a four year degree. They have to consider the case that they may borrow/spend a lot of money on tuition, books/supplies, food/rent, etc. and end up with NO degree.

Also, "average debt after graduation" is heavily weighted in favor of those whose parents have money to spend on their kid's education.

Both these factors push for a divide in education on the basis of parental wealth - and to a degree that does NOT correspond to the math you're doing.

 

Aerospace Physiology Technician? Super.

 

It was.