| The term red pill and its opposite, blue pill, are pop culture terms that have become a common symbol for the choice between the blissful ignorance of illusion (blue) and embracing the sometimes painful truth of reality (red). |
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The 86 million invisible unemployed
NEW YORK (CNNMoney) — There are far more jobless people in the United States than you might think.
While it’s true that the unemployment rate is falling, that doesn’t include the millions of nonworking adults who aren’t even looking for a job anymore. And hiring isn’t strong enough to keep up with population growth.
As a result, the labor force is now at its smallest size since the 1980s when compared to the broader working age population.
“We’ve been getting some job growth and it’s been significant, but it hasn’t yet been strong enough that you start to get people re-engaging in the labor market,” said Keith Hall, a senior research fellow at the Mercatus Center and former commissioner of the Bureau of Labor Statistics.
A person is counted as part of the labor force if they have a job or have looked for one in the last four weeks. As of April, only 63.6% of Americans over the age of 16 currently fall into that category, according to the Labor Department. That’s the lowest labor force participation rate since 1981.
It’s a worrisome sign for the economy and partly explains why the unemployment rate has been falling recently. Only people looking for work are considered officially unemployed.
Jason Everett, for example, wouldn’t be counted.
Out of work for nearly three years now, Everett has given up his job search altogether.
Instead, the unemployed plumber and Air Force veteran takes a few community college courses and looks after his two children while his wife is the primary breadwinner.
“I’m not even totally convinced the college degree is really going to help at this point, but I figure at least I’ll be doing something,” he said.
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Student Loan Debt Slaves In Perpetuity – A True Story Of “Bankruptcy Hell”
The numeric implications as well as the magnitude of the student loan bubble have been discussed extensively before. Yet just like most people’s eyes gloss over when they hear billions, trillions or quadrillions, so seeing the exponential chart of Federal Student debt merely brings up memories of a math lesson from high school, or at best, makes one think of statistics. And as we all know statistics are faceless, nameless and can never apply to anyone else. It is the individual case studies that have the most impact. Which is why we would like to introduce you to Devin and Sarah Stang – student loan debt slaves in perpetuity.
First, for those who are still unfamiliar with the brush strokes, here is the big picture, courtesy of AP:
The Federal Reserve Bank of New York estimates 37 million Americans have student loan debt, totaling $870 billion. The average balance is around $23,000 (though that partly reflects a relatively small number of very large balances; the median is $12,800). Only 39 percent are paying down balances. An estimated 5.4 million borrowers have at least one student loan account past due.
Roughly 85 percent of outstanding student loan debt is owed to the federal government. The remaining 15 percent that’s counted as private student debt is owed to various non-federal lenders, ranging from banks to loan companies like Sallie Mae Corp. to non-profits and state-affiliated agencies (under the Durbin bill, loans from any government-funded entity still wouldn’t be dischargeable, only those from truly private lenders).
Generally, it’s these private loans that bring borrowers to the door of bankruptcy lawyers like Barrett. Private student loans often lack the protections of federal ones, and have rates that typically start higher and can shoot up. A recent survey of bankruptcy attorneys found 81 percent reporting more clients with student debt in recent years, and roughly half reporting a significant increase.
And, also by way of background to those unfamiliar, student debt has a very peculiar feature:
Virtually any other kind of debt — including medical bills, mortgage, credit cards and car loans, even gambling losses— can be discharged in bankruptcy, allowing the “honest but unlucky” a chance to restore their footing through an arduous restructuring overseen by a court.
But under a 2005 law passed by Congress to protect lenders, private student loans fall under the same nearly-impossible-to-clear category as child support payments and criminal fines.
“It’s a huge part of why the younger generations are here now,” said the Stangs’ bankruptcy lawyer, Matthew Barrett, whose busy office in Amherst, west of Cleveland, belies stories about the improving economy. He estimates half his clients have problems with student debt.
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Student Loan Debt Hits $1 Trillion, Deemed ‘Too Big To Fail’ By One Federal Agency
The student loan debt market is now “too big to fail”, says Rohit Chopra, the student loan ombudsman for the newly created Consumer Finance Protection Bureau.
Speaking on Wednesday to a conference hosted by the Consumer Bankers Association in Austin, Texas, Chopra highlighted the sobering news that total student loan debt in the United States now exceeds an eye-popping $1 trillion, a record high. In prepared remarks published on the CFPB’s blog, Chopra writes:
Students borrowed $117 billion in just federal student loans last year. And students continue to borrow private student loans, which lack the income-based repayment and deferment options of federal student loans. If current trends continue, there will be consequences not just for young people, but for all of us.
If that wasn’t disturbing enough, now comes news that the interest rate on new subsidized student loans from the federal government, called Stafford loans, are set to double to 6.8 percent on July 1 if Congress does not prevent the federal program keeping those interest rates low from expiring.
If interest rates on new subsidized student loans double, the average student loan borrower on the standard 10-year plan will need to pay $2,800 more… Continue reading
The Dark Side of Student Debt
Defaulting on your loans can ruin your financial life. We show you how to repair the damage.
Imagine going to college to improve your life and walking away with $500,000 in student debt. That number is no typo. A young Seattle couple ended up so mired in debt on the way to their degrees that they “couldn’t even make the initial payments,” says Christina Henry, of Seattle Debt Law. After the collection agencies started calling, the couple, who have two children and earn a total of $80,000, visited Henry for help. “They took out as much as they were able to and didn’t even know how much they had. It’s the most egregious case I’ve ever seen.”Consider it a cautionary tale. Over the past decade, college students have had every reason to borrow for college and little reason not to. College costs exceeded inflation by as much as six percentage points a year, bringing the average annual price of a private-school education to $37,000. Congress raised the maximum on federal student loans and introduced the Grad PLUS loan, allowing graduate students to borrow up to the cost of attendance. And until 2008, when credit began tightening up, lenders handed out private student loans as if they were party favors. Continue reading
Debt Slavery
30 Facts About Debt In America That Will Blow Your Mind
When most people think about America’s debt problem, they think of the debt of the federal government. But that is only part of the story. The sad truth is that debt slavery has become a way of life for tens of millions of American families. Over the past several decades, most Americans have willingly allowed themselves to become enslaved to debt. These days, most of us are busy either going into even more debt or paying off the debt that we have accumulated in the past. When your finances are dominated by debt, it makes it really hard to ever get ahead. Incredibly, 43 percent of all American families spend more than they earn each year. Even while median household income continues to decline (now less than $50,000 a year), median household debt continues to go up. According to the Federal Reserve, median household debt in America has risen to $75,600. Many Americans spend decades caught in the trap of debt slavery. Large numbers of them never even escape at all and die in debt. It can be a lot of fun to spend lots of money and go into lots of debt, but it can be absolutely soul crushing to toil and labor for years paying off those debts while making others wealthy in the process. Hopefully this article will inspire many people to try to escape the chains of debt slavery once and for all.
Because the truth is that the American people need a wake up call. Consumer borrowing rose by another $19.3 billion in December. Right now it is sitting at a grand total of $2.5 trillion according to the Federal Reserve.
Overall, consumer debt in America has increased by a whopping 1700% since 1971.
We always criticize the federal government for going into so much debt, but we rarely criticize ourselves for our own addiction to debt.
Debt slavery is destroying millions of lives all across this country, and it is imperative that we educate the American people about the dangers of all this debt.
The following are 30 facts about debt in America that will absolutely blow your mind….
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Who Is Saul Alinsky?
Saul David Alinsky was a community organizer and organized the Industrial Areas Foundation in Chicago in 1940. Born in 1909, Alinsky’s strategy was social reform by the organizing in mass power and taught us the means for action until his death in 1972. He was a compassionate social reformer of great magnitude and wisdom and brought together community groups to work with socially aware churches. No one had more experience or was more successful in bringing together activists for united community action than Saul Alinsky. We may truly have Alinsky to thank for all the good that came out of all that was bad of the Democratic Convention of Chicago in 1968.
Saul was born and raised in Chicago, studied archaeology and criminology and worked as a criminologist. Alinsky saw the hypocrisy of Madison Ave, the middle-class and the Protestant moral superiority and recognized the ignorance inherent in the attitude that to be controversial is practically a cardinal sin. Rather, Alinsky believed that conflict and controversy are the very elements of a democratic, free way of life and even told stories about spending time with Al Capone and his mob. In Chicago, he helped organize the Back of the Yards Council, made famous in Upton Sinclair’s “The Jungle.” The Industrial Areas Foundation and the Woodlawn Organization organized inner-city blacks to solve problems.
