Student Debt Bubble From Hell

Over one third of all students will default on their student loans within 15-years of graduation. Over half of today’s graduates are leaving college and forced to take on minimum wage service sector jobs—they lose their knowledge, skills, job learning opportunities and more each year that goes by, putting them farther behind economically than those who were lucky enough to secure a job with their higher education upon graduation. In other words, college was a bad investment (about 50% of all graduates will end up on the slow and low earnings career path now).

The federal government has learned how to lie to the American people by tricking them with false facts and statistics. They love to make things look much rosier than they really are in the real world. For example, food prices have been removed from the national inflation calculator. Some food products have risen over 100% and others 6% per month with an average of 3% based on the current trend. Eating has gotten more expensive. However, wages have not went up, which means Americans are getting poorer.

Over-all wages have been flat or dropped for decades due to a global free trade and the continued excess glut of labor in the US market. Americans now have to compete directly with Third World country labor that even works the very old and children for $1 per hour (countries that pollute 20 times more each day to make the same products–countries that have no investment in infrastructure, social programs, or global aid programs like the US—countries that violate human rights in uncountable numbers).

In the US, our labor pool is getting overfilled each day under the federal government’s anti-worker policies. America is still importing skilled and unskilled labor amid a wage crisis. Over 4 million legal immigrants and job takers are pouring in each year (twice as many if Comprehensive Immigration Reform passes into law). The taxpayers are still maintaining subsidies for over 12 million illegal immigrants (an estimated 5-million who are holding good paying, middle-class jobs that include positions in federal, state, and city governments, IT, the movie industry, construction, city maintenance, mining, you name it). Therefore, as business are being offered a rising glut of labor in the market, they are continuing to lower wages or keep them flat. In the meantime, the wage earner is each day less able to buy goods and services with a shrinking dollar (a dollar that is shrank even more by a process known as quantitative easing).

Meanwhile, other federal policies are driving businesses out of the US, slowing new start-ups, and forcing employers into more lay-offs. Most Americans do not realize it yet, but the economic harms of the Affordable Care Act system are so extensive that economic analyst are predicting the new law will be the direct cause of the next Great Depression. We are currently seeing major insurance companies pull 40% of their portfolios out of the national investment pool–the very pool that keeps much of our economy running is headed toward collapse. The insurers are doing this because they need cash reserves to handle upcoming cost crisis projected to come under the new healthcare system. Meanwhile, health insurance rates are now skyrocketing, making healthcare unaffordable to tens of millions of middle-class workers. Some rates have doubles and more!

Our GDP is also running flat, at near recession levels, and is now projected to likely plummet as more employers are forced to cut their workforce sizes—why—because over-all economic consumption is falling in the US—employees are earning less, hence have less to spend on goods and services, hence there is lower demand for goods and services—employers have to cut back on labor, which keeps the cycle going. And these things are just for starters—and they all impact student debtors!

We have to understand that virtually all student debtors are workers so whatever affects the economy, jobs and wages or hiring and layoffs as well as cost of living, etc. will hit this group hardest—remember, student debtors also bear the added weight of student debts on top of independent living costs.

As more and more students find it impossible to make ends meet, student loan default rates will skyrocket and aggressive debt collections will pursue–forcing many students into student debt hell from which there is little hope of escape. At some point in the near future, perhaps by 2016, the student debt default bubble over well over $1 trillion will finally explode and with it will come social unrest and worse. The banks will start to default and the dominoes will fall across the financial system, forcing the government to conduct another bail-out that will not help student debtors, only banks, which will then upturn the social unrest dial!

BEST ADVICE

For now, if you are a new student, consider simply going to community college and working minimum wage and staying student debt free instead of becoming the next student debtor victim and statistic. Try learning a trade instead. If you find a job and discover an illegal alien has that job, then file a lawsuit against the employer and the illegal alien both. Sue them for breaking the law and denying you an opportunity that is guaranteed under the US Constitution—get rich using the court system as an ally!

Basically, do what you need to do to get employed, stay employed, and remain student debt free because the economic outlook up ahead is very gloomy (and by the way, consider voting out all incumbents and getting a whole new batch of leaders)!.

 

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