In Debt or Indentured Part Two: Education

People Politicon In Debt or Indentured - EducationThis is the second part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured: Education

Another way the many middle class families have come to see the equity in their house is as a way to afford higher education for their children. As tuition prices for university and college educations have continued to explode, it became unreasonable for American families to be able to just save their way to a higher education for their children. Instead of demanding intervention from their government, the American middle class looked to their hidden savings in the form of home equity. For those that did not own their own home though the options dwindled to scholarships, grants and loans. With availability limited for students to receive scholarships and grants, many students are forced into borrowing in order to gain their degree. Writer and Editor Marcia Clemmitt dives into the ways which college pricing and affordability have changed over the past three decades in her report “Student Debt Is the College-loan System Fair?” Clemmitt observes, “Many analysts call current education-debt level truly alarming, arguing that college loans saddle students with long term burdens that can affect their choice of jobs and ability to shoulder other responsibilities such as mortgages.” The fear of analysts exemplifies that, as soon as, those students graduate from college, they have debt already strapped to their backs. Interestingly, these analysts are not only worried about the graduates’ ability to chose the job they want but the analysts are concerned that these students will not be able to get into the next big debt adventure for many adults…a mortgage.

The facts behind rising college costs are murky at best, but much has been attributed to state budget constraints and rising costs for services. Regardless of the reasons for the ballooning costs, student loans have far exceeded them by rising 375 percent from 1982 to 2005 (Clemmitt, 879). The debt being incurred by middle class Americans is phenomenal with total college debt surpassing America’s credit card debt in 2010 (Tompor). Part of the reason that college debt has become such an issue for the American middle class families is because there are safeguards in place for low-income families where they qualify for government grants and financial assistance. On the other hand, most middle class families do not qualify for these subsidies from the government and are instead made to rely on loans to pay for their further educations (Clemmit, 880). This has meant the cost to graduates has been growing substantially and as reported by Justin Pope for The Huffington Post titled “Average Student Loan Debt: $25,250” the debt for the average student is a large burden to leave school with. Graduating students were also met with nine-point-one percent unemployment (Finnegan). Priming students to become accepting of debt has been what the American middle class has come to embrace as their trade-off for participation in the American Dream.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

In Debt or Indentured Part One

People Politico In Debt or IndenturedThis is the first part of a multiple part series taking a deep dive into our current political and economic crisis in America. Partisan politics, unfettered corporate spending and recklessness along with a shift in our social acceptance of debt, is having far reaching and potentially devastating affects on our way of life, on the American Dream. With each installment we will take a closer look at some of the major pieces of this very complex puzzle and try to understand them and bring them into perspective. Use this opportunity to take a broader look on the political and social economic state of America and how each of us, as a small pieces of the puzzle, can make a difference.

In Debt or Indentured – Introduction

The American middle class is now swimming in debt that is pouring in from every direction. The middle class is faced with stagnant wages coupled with inflationary prices on energy and food, health insurance costs that continue to grow well beyond the rate of inflation, education debt, exorbitant cost of child care, and a dwindling number of well paid job prospects even for those that have higher education. These aspects coupled with The Great Recession have driven workers to stay in jobs that demand longer hours and with more tasks at the same rate of pay. Fear of unemployment and the debt that they owe has driven many American middle class workers to feel lucky to just have a job. They do not speak out because of their debt that they owe on credit cards, car loans, mortgages, and the steadily rising educational debt incurred by today’s students. With bankruptcy law changes that were heavily lobbied for by the banking industry and credit card industry, have made it virtually impossible for average Americans to qualify for bankruptcy bargaining to reduce the most of common middle class debts.

American household debt has been on the rise as credit became more available to middle class workers during the mid 80’s, 90’s and the first half of the 2000’s. With this new access to credit the Americans middle class families just as their government began to spend well beyond their means. Associate professor and Department Chair of Personal Finance and Planning at the University of Missouri Robert O. Weagley reported in an article for Forbes Magazine titled “Big Difference Between Chinese and American Households: Debt” that “The average US household debt is 136% of household income […] if we include federal borrowing, the United States number increases an additional $109,792 per household, to $224,303 per household or 266% of average household income.” This is a dramatic number that demonstrates how the American middle class has become reliant on cheap credit and borrowing. Professor of Economics at New York University Edward N. Wolf explains in his working paper “Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze—An Update to 2007” that “Indebtedness, […] skyrocketed in the early and mid-aughts [2000’s]; among the middle class, the debt-to-income ratio reached its highest level in 24 years.” Acquiring debt in America has not only established a way for Americans to live outside of their means through the use of credit cards, it has become blasé to go into debt in order to pay for a college education, afford transportation, buy one’s house, and even make daily necessity purchases. This has not always been the case in America.

Credit card debt in America exploded during the 1990’s through to the beginning of the Great Recession when credit became scarce and liquidity dried up as banks became unwilling to even loan to each other in fear of what bad debt the other bank might be holding. During this time period of easy qualification and exorbitant credit limits being doled out America’s binged. Writer Susan Tompor reported in her 2010 USA Today article “Student loan debt exceeds credit card debt in USA” that revolving credit in America stands at $828 billion, this included credit card debt. As Americans have become more accustomed to hearing numbers in the trillions, this number may have lost some of its sticker shock, but to put that into prospective, this is $2,760 owed by every man, woman, and child in America (based on a citizen population of 300 million). Although new lines of credit have been reduced following the financial collapse in 2008, existing borrowers have continued to use their credit cards. Karen E. Dynan and Donald L. Kohn said it well in their Federal Reserve report, “The Rise in U.S. Household Indebtedness: Causes and Consequences.” Dynan and Kohn claim “substantial evidence suggests that households are not always fully rational when making financial decisions” when discussing the American willingness to go into debt. Though Dynan and Kohn are primarily focused on housing debt they identify one of the reasons Americans have been willing to use credit cards so frivolously. The drastic rise in housing prices through the 1990’s into the mid 2000’s gave a false impression to many middle class American families that they were richer than they actually are (Dynan and Kohn, 6). By seeing the equity in their housing as actual banked money, many middle class Americans lived well outside their means knowing that they could refinance or sell their home and still end up with a net profit overall. This of course turned out to be a folly when housing prices plummeted during the economic down turn leaving many home owners upside-down in their mortgages.

That’s it for this part of In Debt or Indentured. We hope that this has given you some important things to think about. Use some of what you have learned here to look beyond the mere message our politicians are presenting to what the ramifications of these actions has on all of us Americans. Our country started down a slippery slope over a decade ago. We seemed to have stopped the free fall it had become, but do not fool yourself. We are still on the precipice of another long fall. Let’s just hope we all can learn, and grow, from the last spill we took.

Check back soon for the next installment of In Debt or Indentured.

President Obama’s State of the Union Address 2012

people-politico-president-barack-obama-debatingThe President of the United States of America, Barack Obama, gave his 2012 State of the Union Address. Whether you love or hate President Obama, there is no denying that he knows how to give a great speech. President Obama is a very charismatic speaker using a great amount of intelligence and elegance when he speaks. Whether you agree or disagree with what he said last night does not change the fact that he is great at addressing America.

Watch the web enhanced video of the 2012 State of the Union Address


It’s always interesting to see how the fact checkers rate these addresses. Not just the State of the Union Address but the many other speeches, policies, rallies and other promises that are made by politicians. They are so easily lost in the tumult that is politics that no regular person, like you and I, can keep track of it all. So I like to wait at least a day for all of the fact checking places to do their due diligence. Then I peruse through them to see what was real and was smoke. I urge everyone to take a few extra minutes and check several different sources yourself, especially about the political issues you care most about.

It turns out that on the scale of what was true and what is reality President Obama’s State of the Union Address turns out to be mostly true! This is great news and a refreshing change of pace from the last administration. I always hate when we hear great promises or “facts” about what they have done or not done only to find out it was a thinly veiled attempt to earn favor, and far from the truth. Unfortunately, our first impressions are often the strongest. This means it is much harder for us to “unlearn” the lies we hear first instead of being able to believe the truth we learn later. Unfortunately this is widely known and is an often used tactic in politics. Know they use it, so you can guard yourself from it.

President Obama definitely covered the full gamut of issues that America is facing. There is a lot to talk about for sure and it will be interesting to see what, if any, action is actually taken. President Obama took a tougher stand last night during the State of the Union Address than we have seen before. We can only expect this “toughness” to increase over the course of the election year. I do appreciate that even though President Obama was talking tougher, he was still addressing everyone with respect and dignity. This is something that is unfortunately becoming more and more rare.

Formation of Committee to Investigate Misconduct of Big Oil and Wall Street

I think this was one of the biggest, most important announcements from the State of the Union Address, the formation of a Committee to formally investigate big corporations. If this actually happens, and actually gets to a place that they can actually do their job, it has the possibility to illuminate the insanity that our financial system and its corporations that puts on the people of American and the rest of the world. This decision alone could reach deep into the workings of our government and economy to expose the massive issues and broken systems that have brought the world economy to its knees. It amazes me how fast people have already forgotten how close we were to a calamity of massive proportions. Hopefully this will help to expose these issues and help us move forward to a solution in the future.

I know these are high hopes, look at how crippled some of the others have been. Tied up in the bureaucracy but more importantly the lobbyists pushing their congressman to fight against these common sense steps to a better America.

Combine the Citizen’s United, political partisanship, election year politics and it will honestly be a miracle if anything gets done at all this year. However, I am still hopeful that something will be, or at least could be, accomplished. We have to keep on trying and keep on pushing forward. Contact your representative and urge them to action!

The Failing of Our Politics Continues

people-politico-super-committeeThe “Super Committee”, a group of twelve Congress members, were tasked with finding a solution to America’s debt crisis and the deadline is 24 hours away. The outlook is grim.

The official vote for whatever solution the “Super Committee” was supposed to engineer must be delivered to the public at least 48 hours before the voting deadline on Wednesday. That means the plan is due tomorrow. If no plan is presented tomorrow, the “Super Committee” will have failed.

The possible failure of the “Super Committee” follows a long line of failures of Congress to act in the best interest of the American people. Their failure is just a reflection of the larger failure of American politics.

Who imagined a half dozen bull-headed politicians could agree on anything when they couldn’t do it before?

Why has it become OK to forget what comprise means?

Why has it become OK to continue to hurt America and its people over politics?

Why isn’t it OK to make those that forced us into multiple wars pay for the costs of those wars?

Why isn’t it OK to make those corporations that tanked the worldwide economy pay for their  disregard?

Why must those that that are the victims of these injustices now be asked to pay for them?

Why are we all suffering the failures of our politicians, our government, and our people?

I wish I had a good answer for these questions but I don’t.

Our politicians have failed to do what is right for our country. Our people have failed by letting these political failures into office.

What is our recourse for the continued pulling of  America down the drain.

Everyday Americans need to speak out, shout out. Join the Occupy Wall Street movement and help make these voices heard. When the topic comes up in conversations, use it as an opportunity to inform people that Occupy Wall Street is about the vast majority of Americans taking back the power, and holding those who are endangering America’s future accountable for their actions.

Contact your representatives. Let them know that you are in favor of compromise, that you are either in favor of their actions or you disagree. Our representatives have gotten away with doing what’s best for their re-election campaigns or the lobbyists for a long time. Let them know that Americans are no longer the apathetic sheep we used to be. We are watching what they do, we will remember, and they will be held accountable.

Come election time, make sure you go out and vote these obstructionists out of office. Vote these uncompromising political failures out of office.

We need to, no we MUST, send a message to Washington and the politicians that represent us that we will not stand for failure. We will not stand for their inability to legislate. We will not stand for them to demean, degrade and deconstruct this country that we all love.

Super Committee Members

Democrats

  • Patty Murry
  • Max Baucus
  • John Kerry
  • James Clyburn
  • Xavier Becerra
  • Chris Van Hollen

Republicans

  • Jen Hensarling
  • Dave Camp
  • Fred Upton
  • John Kyl
  • Pat Toomey
  • Rob Portman

Tweet the Super Committee the Peoples Will

older-womanSo this has seemed to fade into the news cycle somewhere but a huge and potentially country changing decision is looming in near future. What will be the Super Committee’s decision and/or suggestions going to be to our current financial crisis? Will the Super Committee be able to craft a solution that satisfies both the Democrats, Republicans and the American People?

The hope is that they will have some ingenious solution to make our pains go away. The hope is that they will bridge their differences and come up with an all-encompassing compromise that will make us all do our fair share.

The reality is that they are very unlikely to come up with anything of substance at all unless we speak up.

With the very idea of compromise seeming to be a bad word in Washington recently. Compromise and working together is openly shunned. It is unlikely that anything real will happen. The current political strategies of obstructionism are wreaking havoc on our country, our government and most notably the people of the United States of America. We are all suffering because of the quagmire of politics right now.

We have seen in recent days that the voice of the people can make a difference should we shout out loud enough.

Stand Up For Healthcare has created a handy little tool to help you get a list of your representatives and their twitter accounts. There is currently a campaign now to inundate our representatives with what the people really want through Twitter in hopes that they will actually represent us and provide what we ask for.

I hope all of you use the tool provided below to make your voice heard. We the people are being systematically silenced but we can use the tools of today to keep out voice. Use yours.

 http://www.standupforhealthcare.org/tweet

Republicans Win America Loses

people-politico-credit-cardsI wonder how the Republicans in Congress can look at themselves in the mirror today, after the mockery they’ve made of themselves, our country, and our allies in the world. In the last few years we know the majority of Republicans in the House and Senate have become uncompromising zealots, crippling the government and our democracy as a whole, blocking any sort of American progress for the sake of their own agenda, instead of representing the will of the people.

Preaching change and fresh ideas, newer Republicans achieved great gains and even took over control of the House of Representatives during the midterm election. They did not make enough gains to actually push their own agenda, but to bring our legislative process to a halt.

Why would elected representatives of the American people want to throw a wrench in the works? John Boehner, Speaker of the House of Representatives, openly states he will do whatever he can to undermine, undercut and ruin Barack Obama’s presidency. Besides being a traitorous and horribly un-American thing to say, it shows his unwillingness to do his actual job: working with colleagues from both sides of the aisle in order to keep the government running, adapt it to changing issues, and work to improve America.

The Republicans have spent the first two years of Barack Obama’s presidency working their hardest to block, stop and oppose any legislation that was proposed. In fact, they’ve spoken out against legislation that was originally introduced by Senator John McCain, Barack Obama’s political opponent in the 2008 election, because President Obama endorsed it! A large piece of the healthcare overhaul was legislation that McCain actually originally introduced during President Clinton’s administration. President Obama has spent so much time trying to work with the Republicans and has compromised so much on key issues that the majority of Americans wanted that his own party is frustrated with him. And instead of being grateful for a President that bends over backward to work with Congress, the Republicans act like a spoiled child who has just learned to say “no”. They say NO at any and every opportunity they have because they can, not because they should.

It is amazing the Republican hate for President Obama runs so deep that it surpasses their love of America and its people’s well being.

Now we are embroiled in a political quagmire. Republicans have irrationally held onto the idea that it is unfathomable to put an end to unreasonable tax breaks and loop holes, even when the current economic climate calls for such action. They have been asked not to raise taxes, but simply to put an end to the breaks the wealthy and corporations enjoyed when the economy was thriving. Instead they would prefer to gut the social programs that help to keep the foundation of America from crumbling. Programs that Americans realized they needed after the Great Depression. They refuse to even consider renegotiating the prescription drug plan that has caused Medicare costs to skyrocket. Instead, the pharmaceutical companies can still charge us more than anyone else for the same drugs. However, they insist we need to cut trillions out of other areas of Medicare. Instead of fixing the part of the system that was broken from the start (non-negotiable drug costs), and is the biggest expense in Medicare (more than 3 times what other countries pay even though they are created in America); they want to continue to allow private companies to rake in our tax dollars, but strip down benefits for our veterans, parents, and grandparents and any disabled Americans.

The healthcare “debate” is just one of the many ludicrous examples of the insanity that has spread like a cancer throughout our political system. They do not even try to hide their intentions of destroying people, parties and lives anymore.

They don’t care about citizens. If there was any doubt, there should be none now.

Standards and Poor’s has lowered the United States of America’s credit rating from AAA to AA+ with both short term and long term outlooks being set to negative.

This is ghastly. This is horrible. This is one more ultimate embarrassment forced upon the American people in the name of the Republican agenda.

It is impossible to know for certain what kind of repercussions this will have for the people of America because this has never before happened in the history of America. Never. Ever.

Economists are scrambling to give some kind of forecast: economic slowdown, increased unemployment, a rise in interest rates. What will happen when the credit worthiness and trust in an entire nation drops? What happens when all of the citizens of a nation experience their debt burden increase, during a fragile economic recovery? This move could bring about changes lasting decades.

Economic Outlook and Fiscal Policy Choices

Economic Outlook and Fiscal Policy Choices

This is what the Republicans have chosen to do. Raising the debt ceiling is one of the more trivial things our government must do. It has been raised 74 times in the last 50 years. That means it has been raised more than once a year, on average. Presidents Bush and Reagan raised the debt ceiling many times, because not doing it would have been disastrous. Now, with the cost of and the interest of the wars they started during the Bush years mounting, with the tax breaks given at the same time cutting down revenue, this one thing has suddenly become a key issue?

This was an unprecedented opportunity for a group of politicians to take advantage of the situation and deal a terrible blow to America, in order to blame the fallout on the current President. They hope to pin this ridiculous insanity on President Obama and the democrats and hope that the American people will somehow forget who dealt us this horrible injury.

They believe they are patriots fighting for what is right, if it is the Republican view. If it isn’t, damn those that disagree and damn those that get in the crossfire.

I believe an American patriot is one that is selfless, and who will do what is best for our country.

I believe an America patriot is one that has the personal fortitude to put aside differences and treat America with dignity.

I believe an American patriot is one who understands that compromise, and doing the right thing, leads to a better America.

My fellow Americans, the horrible circus we just saw from the Republicans regarding the debt ceiling was watched by the world and they did not like what they see.

I do not like what I see.

Thank your Republicans for making a mockery out of your life, your home and you country, for bringing America to a new low. Thank them come next election, by not forgetting what has happened. Thank them by booting them out of office.

Sources

Standrad and Poors Report

General Information on Debt Ceiling

 

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