Posts tagged: debt
And we were lucky to land good jobs with a steady income. But we only finished paying off our student loans—check this out, all right, I’m the President of the United States—we only finished paying off our student loans about eight years ago.
—President Obama in North Carolina today on why Congress has to act to prevent interest rates on student loans from doubling (via barackobama)
Also, today is “T-1” day — when student loan debt in the U.S. is estimated to exceed One Trillion Dollars.
Keep in mind, fellow citizens, that one of the main points of getting an education is so that you can be a useful part of the labor force (ie. get a job). A labor force is required by corporations to operate. Corporations pay what is effectively a low tax rate in the U.S. (take GE, for example, which receives tax refunds but pays no tax), but it seems like maybe they should take an interest in paying for educated people, no?
For decades, America’s economic policies have been based on the notion that catering to corporations and the wealthy is the way to stimulate the economy. Republicans routinely insist that we need to bail them out, lower their taxes, allow them to repatriate hundreds of billions in overseas profits, and free them from annoying government meddling. If we don’t, the “job creators” will stay in a funk, and the economy will stay in a rut.
But here’s a pesky fact neither corporate America nor the GOP establishment is trumpeting: After-tax corporate profits are currently at an all-time high. The problem businesses face isn’t lack of cash but rather a lack of confidence that consumer demand will pick up in the future. So they’re not expanding or hiring at the rate they should be.
Rich people don’t create jobs when we hand them big windfalls. They create jobs when the economy is growing and they have customers for their businesses.
A debt-ridden economy is inherently more fragile and more volatile. This doesn’t mean that the tax system caused the financial crisis; after all, the tax breaks have been around for a long time, and the crisis is new. But, as a recent I.M.F. study found, tax distortions likely made the total amount of debt that people and companies took on much bigger. And that made the bursting of the housing bubble especially damaging. So encouraging people to take on debt qualifies as a genuinely bad idea.
The clearest hurdle to these changes may be political, but the bigger hurdle is, in a way, psychological: because tax breaks on debt have been around so long, we can hardly imagine what it would be like if we changed them, and we tend to underestimate their influence in shaping our behavior. Subsidizing debt seems harmless simply because we’ve always done it. But the fact that you’ve had a bad habit for a long time doesn’t make it less dangerous.
A succinct and convincing argument against the substantial tax subsidies in the U.S. for debt.
Via The Daily Dish
New York Times graphic shows how the U.S. Government has been adding up commitments.
Large version.
![[…] fallout from the credit crunch will lead to a sharp increase in credit card defaults in the coming year, making $1 out of every $10 owed on credit cards impossible to collect. That will force banks to write off nearly $100 billion in credit card debt, it said.
Read more from article at Consumerist.](http://24.media.tumblr.com/9ow2cnmAKf534no9gUsxryZio1_500.jpg)
[…] fallout from the credit crunch will lead to a sharp increase in credit card defaults in the coming year, making $1 out of every $10 owed on credit cards impossible to collect. That will force banks to write off nearly $100 billion in credit card debt, it said.Read more from article at Consumerist.
