Debt of America: National, student loan, credit cards, auto loans, mortgages

By Jan Dolcater

Do any of these types of debt trouble you? If not, I encourage you to take a few minutes and review some of the information in regards to each of these debts, and how they affect you and your family.

Over the last 20 years our nation has been led into believing that credit was easy to manage with come-ons for low-doc, no payment loans, and credit card balances which led one to believe that you only had to pay the minimum balance. This in turn has in many ways dulled the thinking of many individuals and families to turn a blind eye to the massive increase in our national debt of $19 trillion, which is far more in excess of what most can comprehend. For a graphic example of our debt, utilizing $100 dollar bills see http://www.huffingtonpost.com/2011/07/26/us-debt- visualized- graphic_n_906239.html.

Unfortunately, today the candidates for president of either party have not offered any genuine solutions on how to deal with the problem of our nation being the largest debtor nation in the history of the world. For the most part these candidates put forward more and more programs that we cannot afford. Student loan debt of $1.1 trillion has now exceeded the total of all credit card debt of $659 billion, according to Sen. Mark Warner, D-VA (http://www.politifact.com/virginia/statements/2014/jun/10/mark-warner/warner- says-us- student-debt- has-surpassed- credit-c/) .

Automobile loans are approximately $875 billion and the largest single element of personal debt, mortgages, total $8.2 trillion. This 2014 data was verified by the Consumer Financial Protection Bureau and the Federal Reserve.

In other words, our household debt was just shy of $11 trillion and has increased since that date. A major factor in the rising total of student debt is the average tuition increase of 79.5 percent from 2002-13 according to data from U.S. Department of Labor. For comparison, the Consumer Price Index grew by 26.7 percent during the same period and average wages grew by 30.1 percent .It is apparent that the cost of tuition must be significantly reined in and at the same time, provisions by both political parties need to provide relief in the form of reduced interest rates that service the student loans.

The proportion of Americans whose households carry credit card debt from month to month as been reduced from 44 percent in 2009 to 34 percent in 2014 (https://www.nerdwallet.com/blog/credit-card- data/average-credit- card-debt- household/ .) However, this burden of an average of $15,762 credit card debt per household that carries debt needs further reduction.

One positive factor is bank credit card approvals for those under 21 years of age must now have an adult co-signer or prove that they have sufficient income to pay the bills. It is encouraging that the millennial generation has far more fear of debt than the Boomer’s or the Gen-xers that have preceded them. Both of these latter groups have scrambled to keep up with the lifestyle of their elders.

Another area of credit card debt that is far too often overlooked is the debt carried by small businesses. Only 50 percent of small business owners pay off their business credit cards every month. Twenty-five percent say they carry a balance of less than $10,000, 15 pecent say they carry a balance of $10,000 to $25,000, and still 9 pecent carry a balance of more than $50,000. This information from https://creditcards.com explains why many families and small businesses struggle on a month- to-month basis.

In the beginning of this article, I listed the total of $19 trillion of our national debt but I should emphasize that beyond that total exists unfunded liabilities to support Social Security, Medicare, and Medicaid, which are in excess of another $125 trillion that must be funded. In addition to these enormous national figures of debt, the global economy has more than $230 trillion of debt.

Printing more money to provide stimulus for the economy and maintaining very low or negative interest rates place not only our country but also the world economies in a very precarious position.

Regardless of political persuasion, I believe it is imperative for you to make a consistent, concerted effort to not only reduce your personal debt but to press as hard as you can on all elements of government, local, state, and federal to stop promising goodies that we cannot afford and make reductions in spending in all areas. If this is not accomplished, I firmly believe that our nation and many others will spiral down an economic abyss.

Jan Dolcater of Rockport is a member of a group of concerned Midcoast citizens who meet to discuss issues of public interest. Their weekly column “Another View” has been awarded by the Maine Press Association.