Throughout high school, I was always taught that student loans were always good debt that helped the young man grow in the world. Student loan debt was a sign that he was “on the path,” and with that debt, he would be able to work hard and earn more and better wages. When I had $30k in debt and still couldn’t pay the rent, it was because my employer didn’t pay enough in wages. Don’t get me wrong, student loans are great but you need to know how to use them and where to look for them. One of the best options now a days can be found at SoFi.
With the financial crash of 2008, we all knew that the economy was in a terrible situation. Unemployment skyrocketed, and many young people were forced to take out huge loans in order to be able to survive. This led to people in my generation, both students and older people, to think that student loans were good debt.
For years, the financial bubble of the 2008 economy was on everyone’s minds. I think many millennials took it for granted that this bubble was going to last forever. However, it has now blown up in our face and destroyed our economy.
In fact, the overall wealth distribution is quite distorted in today’s economy. The majority of people are actually getting a net negative distribution of wealth, with less of the nation’s wealth than it was before 2008 going to the rich and more of the wealth going to the poor. We as a nation need to rethink how we organize wealth creation and distribution and go back to the days where wealth creation was based on merit. Instead of trying to be one of the wealthiest countries in the world, we need to work to end this injustice.
Some of the recent headlines out of Switzerland make it easy to understand why we as Americans are frustrated and concerned. The country has struggled to balance its budget over the last few years, even while managing to stay largely unaffected by the Great Recession and the rest of the world’s economic downturn. Yet, despite having one of the best credit ratings in the world, it was unable to reduce its massive debt by any significant amount even while the rest of the world moved in the opposite direction.
In a paper published in 2013, we examined Swiss public sector debt and its implications for the United States. Our analysis revealed that despite Switzerland’s strong rating, it is the second largest debtor in the world. If this analysis is correct, our budget problems could be even worse than we think.
One of the most pressing problems facing the United States is the amount of debt it owns. With more than $16 trillion in debt, this has enormous implications for future generations. One can see how this could pose challenges for our budget. As of July 1, 2013, the government borrowed a total of $871.2 billion in the U.S. Treasury. Approximately $460 billion of this total is in the form of public debt. This has an impact on how we must manage this debt as the U.S. economy is already struggling. How much debt does the U.S. Treasury own?