Credit card debt the next bubble

[Gonad the Barbarian]

My post you quoted was edited to include this

Trade agreements are passed by 2/3 majority of the Senate. No party of congress has a 2/3 majority. It takes both parties of the senate to approve the free trade treaties proposed by the president.

Both parties favor big business equally.

If the democrats "really" favored the working class, they could have VERY easily held up the vote on free trade.

A lot of Democrats are every bit as pro big business as nearly all Republicans. That "a lot" vs "nearly all' is the distinction you are ignoring, as well as one party's fervent insistence on chipping away at unemployment benefits, social security, medicare, and the rest of the social safety nets that somewhat dampen the shock to us plain folks. Like I said, lube vs. anal stitches.

 

[ElFenix]

fwiw, a lot of treaties don't go through the treaty procedures, rather the applicable provisions get passed as regular US laws if at all possible. that's so that congress can change them more easily.

 

[Balt]

Just wait until the student loan bubble bursts. College tuition keeps going up and up, but the employment value of a college degree keeps going down. As more and more college graduates end up unemployed or underemployed-out-of-field, they won't be able to pay off their student loan debts.

Yuuuuuuup. It will be interesting (in a 'look at that car crash' kind of way) to see how many of the defaulted student loans are federally backed and how many aren't. I have zero doubt the student loan bubble is gonna burst, though.

 

[kranky]

Just wait until the student loan bubble bursts. College tuition keeps going up and up, but the employment value of a college degree keeps going down. As more and more college graduates end up unemployed or underemployed-out-of-field, they won't be able to pay off their student loan debts.

I agree that student loan debt can be crushing, but it's the student's fault. If they chose to go to more affordable schools instead of simply borrowing whatever it takes to go to the expensive school, the expensive schools would figure out they need to charge less.

I understand why it happens, because the schools make it so easy to get the loans, and at that age very few people can comprehend how hard it might be to repay $50,000, $80,000 or more in loans. They have no experience with budgeting, loans, etc.

I was lucky that at that age I was already debt-averse and was too afraid to take on a lot of debt to go to school after seeing how terrible it was for my parents to be perpetually in debt (through no fault of their own).

College is absolutely a buyer's market and if more students would shun the costly schools, those costs would come down in a hurry.

 

[Pulsar]

If you, or anybody, can cite a modern Republican position that doesn't cater to one of those four groups I listed at the expense of the rest of the country by all means post it. I'll go ahead and spot you gun ownership. That's one. Got any more? I won't hold my breath. I don't hate Republicans because they are Republicans, I deride Republicans because they actively hate everyone else. They overtly freaking campaign on it. They've devolved into little more than one big hate group based on attacking poor people, sick people, brown people, gay people, teachers- the list goes on and on. And the public's fiscal irresponsibility is largely a symptom of those attacks. This country is not in the shitter because a poor folks are buying big screen TV's.

Focus Gonad. Focus. Return to the post where you clearly state that it's ok to spend money you don't have if it means buying something that makes you happy.

The public spends money they don't have and practice irresponsibility because the republicans are evil? You're going to have to join the dots for me. I'm completely not following that line of thinking.

 

[Gonad the Barbarian]

Focus Gonad. Focus. Return to the post where you clearly state that it's ok to spend money you don't have if it means buying something that makes you happy.

I never said it was OK. I said it was likely, and I will say it's understandable, predictable and even inevitable given human nature.

The public spends money they don't have and practice irresponsibility because the republicans are evil? You're going to have to join the dots for me. I'm completely not following that line of thinking.

If you really want some dots joined I suggest watching this:
http://www.google.com/url?sa=t&sour...Zejj_PZCCfv5MpRpg&sig2=zbg1gD9XOnm780uqWMpEOA

I'm flattered by this little crush you have developed on me today.

 

[sportage]

Watch the banks! Closely! There is the clue to the next financial disaster. Especially watch what Bank of America does.

 

[Pulsar]

I never said it was OK. I said it was likely, and I will say it's understandable, predictable and even inevitable given human nature.

If you really want some dots joined I suggest watching this:
http://www.google.com/url?sa=t&sour...Zejj_PZCCfv5MpRpg&sig2=zbg1gD9XOnm780uqWMpEOA

I'm flattered by this little crush you have developed on me today.

That's a fascinating video. I certainly never realized that we pay less for most staples now, and more on only a couple big ticket things.

However, that does not answer the question of why you are blaming the Republicans for that. Is woman's rights (and the subsequent flood of women in the workplace) their fault? Is the rise in housing prices their fault? The requirement for a second car? The rise in healthcare costs? As far as I know, not one of those issues can be blamed on one-party.

So explain how the Republicans are at fault for people spending more money than they earn.

 

[WhipperSnapper]

You constantly use anecdotal evidence or personal Walmart stories to formulate opinions on the nations issues.

Did somebody say Walmart? I bet these people have anecdotal stories:

http://www.peopleofwalmart.com/photos

 

[nonlnear]

Since the beginning of 2010 I went from $0 CC debt to $7000. That's what happens when your salary doesn't meet the cost of living.

When my income didn't meet my cost of living I cut my cost of living. I made cuts that a lot of people would think unconscionable.

 

[sarsipias1234]

Say a $2,000, depreciated over the 5 year or so life of the TV, works out to about $33 dollars a month. Add the 20% or so interest and round it to $40. WTF else is $40 a month going to get you? The audacity of people who probably work just as hard as folks who make many times more than they do and get health coverage thinking they are entitled to a nice TV. Or the ability to store and prepare food. Or anything else you entitlement whiners whine about. Like I said, when they buy a boat or something you'll have a point.

Most LCD TV's are far less than $2000. Up until recently Walmart sold a 72" Mitsubishi DLP TV for $1300.00.

TV is one of the cheapest forms of entertainment so this actually saves people money.

 

[rchiu]

The credit card system is broken. We can not have the banks on one hand evaluate people's credit worthiness, and on the other hand approve credit cards that make them billion if not trillions of dollar and the bank stand to make much more with 20%+ interest for those who lack a bit on their credit rating.

That's as big a conflict of interest as there is. And that's the reason why there is a huge bubble created with credit card given to many who are not suppose to have a credit card.

There has to be 1) government agency that does credit review and approves credit card 2) Independent agency that does credit review and approves credit card.

I don't know why people blame republican or democrats. This is a pure f'ed up in the financial system. We can either let banks suffer their own consequences, but since everyone else will be impacted by banks failure, it's time for government to step in and regulates this.

 

[Fern]

The credit card system is broken. We can not have the banks on one hand evaluate people's credit worthiness, and on the other hand approve credit cards that make them billion if not trillions of dollar and the bank stand to make much more with 20%+ interest for those who lack a bit on their credit rating.

That's as big a conflict of interest as there is. And that's the reason why there is a huge bubble created with credit card given to many who are not suppose to have a credit card.

There has to be 1) government agency that does credit review and approves credit card 2) Independent agency that does credit review and approves credit card.

I don't know why people blame republican or democrats. This is a pure f'ed up in the financial system. We can either let banks suffer their own consequences, but since everyone else will be impacted by banks failure, it's time for government to step in and regulates this.

Strongly disagree.

What we can NOT have happen is bailing out banks for making poor decisions on who to extend credit to.

That risk analysis belongs squarely in the banks court, and they need to be accountable. That's why it's not a conflict of interest, it's in their own interest to get it right.

Having the govt make the credit decisions should mean the govt takes the responsibility for failures.

Fern

 

[Zebo]

First of all housing bubble is not yet over, but yeah w/o credit we don't have much of an economy left CC are just one way to prime pump of credit expansion.

I read the US economy HAS to issue 5 trillion in new credit a year just to sustain current obligations. It's not like they want to but they have no choice to keep making profits and balance books. Housing failed. CC are failing. And Student Loans will fail. Eventually when they run out of people to loan to whole banking system will implode.

 

[rchiu]

Strongly disagree.

What we can NOT have happen is bailing out banks for making poor decisions on who to extend credit to.

That risk analysis belongs squarely in the banks court, and they need to be accountable. That's why it's not a conflict of interest, it's in their own interest to get it right.

Having the govt make the credit decisions should mean the govt takes the responsibility for failures.

Fern

well, the mortgage and the banking crisis have proven that banks have a habit of looking at short term profit in the expense of long term risk and viability. I don't know if expecting them to be accountable will solve anything.

It doesn't have to be government to make the credit decision, it can be private company, as long as it's independent. They don't even have to take the responsibility for failures, banks and provide the parameters for the credit review. The point is to have an independent reviewer and process that make sure credit are given to people who can actually afford those credits.

 

[Svnla]

Debts (all kinds) hobbles older Americans = http://finance.yahoo.com/focus-reti...amp;cat=fidelity_2010_getting_ready_to_retire

 

[Rebel44]

Say a $2,000, depreciated over the 5 year or so life of the TV, works out to about $33 dollars a month. Add the 20% or so interest and round it to $40. WTF else is $40 a month going to get you? The audacity of people who probably work just as hard as folks who make many times more than they do and get health coverage thinking they are entitled to a nice TV. Or the ability to store and prepare food. Or anything else you entitlement whiners whine about. Like I said, when they buy a boat or something you'll have a point.

Thats stupid.

People living on CCs shouldnt be buying new TV for 2000$ - they should buy something "reasonable" for under 500$.

 

[Doppel]

The kind of person in bad growing CC debt who spends $2k on a tv is inevitably poor with money elsewhere.

 

[Gonad the Barbarian]

That's a fascinating video. I certainly never realized that we pay less for most staples now, and more on only a couple big ticket things.

However, that does not answer the question of why you are blaming the Republicans for that. Is woman's rights (and the subsequent flood of women in the workplace) their fault? Is the rise in housing prices their fault? The requirement for a second car? The rise in healthcare costs? As far as I know, not one of those issues can be blamed on one-party.

So explain how the Republicans are at fault for people spending more money than they earn.

Rightwing economic policies specifically over the past 30 years have suppressed wages, concentrated wealth at the top, and chipped away at opportunity and the social safety net for everyone else. Your denial would be a lot more plausible if Republicans were not still actively doing this, let alone explicitly campaigning on it as they are.

 

[Texashiker]

I read the US economy HAS to issue 5 trillion in new credit a year just to sustain current obligations.

The US only has around 312 million people - http://www.census.gov/main/www/popclock.html

Where is all of that credit going?

 

[IceBergSLiM]

Debts (all kinds) hobbles older Americans = http://finance.yahoo.com/focus-reti...amp;cat=fidelity_2010_getting_ready_to_retire

The key:
Most people used to pay off their debts before retiring. But as wages have barely kept up with rising prices over the past 35 years Americans have pushed debt higher, living beyond their means. Now, people are postponing retirement, cutting living standards or both.


I'm actually surprised more people aren't retiring in foreign countries to extend their dollars.

 

[IceBergSLiM]

The credit card system is broken. We can not have the banks on one hand evaluate people's credit worthiness, and on the other hand approve credit cards that make them billion if not trillions of dollar and the bank stand to make much more with 20%+ interest for those who lack a bit on their credit rating.

That's as big a conflict of interest as there is. And that's the reason why there is a huge bubble created with credit card given to many who are not suppose to have a credit card.

There has to be 1) government agency that does credit review and approves credit card 2) Independent agency that does credit review and approves credit card.

I don't know why people blame republican or democrats. This is a pure f'ed up in the financial system. We can either let banks suffer their own consequences, but since everyone else will be impacted by banks failure, it's time for government to step in and regulates this.

Lemme guess, "more government" is your solution to everything right?

 

[IceBergSLiM]

Most LCD TV's are far less than $2000. Up until recently Walmart sold a 72" Mitsubishi DLP TV for $1300.00.

TV is one of the cheapest forms of entertainment so this actually saves people money.

slaves aren't supposed to have entertainment. They should get in a circle and shuck n jive like the good ole days.

 

[simpletron]

2009 - credit card debt went down, I do not have exact numbers
2010 - CC debt increased by $9 billion
2011 - estimates put the increased CC debt at around $54 billion by the end of 2011

As a whole, Americans now have roughly $772 billion in outstanding credit card balances

http://moneyland.time.com/2011/09/14/54-billion-closer-to-our-next-financial-crisis/

I wonder if the increased CC debt is from people not being able to pay their basic bills, and using the CC as a crutch.

Or, is the increased debt from people trying to live well beyond their means?

There is a difference in someone using a CC to buy food for their family, and someone buying a new flat screen TV just because they want one.

First came the housing crash and the banks had to be bailed out.

Will the banks claim there is a credit card crash and need to be bailed out again?

Outsanding credit card debit has been declining according to the study link in the article from 969.3 billion in 2008, down to 876.1 billion in 2009, down again to 810.2 billion in 2010 and down again to 771.7 billion for Q2 2011. The amount begin charged off is dropping too, 83.2 billion in 2009 to 75.1 billion in 2010 and 24.1 billion for the first half on 2011.

The article also misinterpreted the 1.7 trillion non-rerevolving consumer credit. It doesn't include mortgages and is credit like auto and student loans. The mortgage debt stands at 9.97 trillion as of Q1 2011 according to the flow of funds report.

So outsanding credit card debit is going down, people are paying on a larger percentage on it, credit card debit is about 5% of total household debit and I'm suppose to be worry about credit card debit being a bubble that will crash the banking system?

 

[Texashiker]

Outsanding credit card debit has been declining according to the study link in the article from 969.3 billion in 2008, down to 876.1 billion in 2009, down again to 810.2 billion in 2010 and down again to 771.7 billion for Q2 2011. The amount begin charged off is dropping too, 83.2 billion in 2009 to 75.1 billion in 2010 and 24.1 billion for the first half on 2011.

Where did you see that in the article?

I quote from the linked article

we’re on track to increase our collective credit card debt by $54 billion in 2011

Where do you get the word "decrease" from the word "increase"?

If you take $772 billion and divide it by 312 million (estimated US population), that equals $2,474 owed by every man,woman and child in the US.