I've been doing a lot of reading about the current state of the economy and what the next "bubble" is going to be (there's always one on the rise). And it's a sensitive subject, but needs to be addressed. Student loans are now surpassing credit card debt and looking to hit 1 TRILLION dollars by the end of the year. It doesn't take a super genius to figure out that lending out a couple hundred thousand dollars to someone that can't even get a credit card with a 2k limit is a recipe for DISASTER. The thing is, these loans are worse than a bad mortgage for most, since there's no way they can ever get out from under the burden if they over do it. Everyone says, education debt is GOOD debt.
And hence, this is how bubbles are created. "I just got a great deal on a house! The markets going to skyrocket!" "Check out this IPO, the web is HUGE!" This sort of brainwashing is what gets the economy in all sorts of pickles. A college diploma isn't all that it once was. It used to be a guarantee of at least getting a foot in the door SOMEWHERE. But tell that to all the arts majors that are coming out and moving back home, with 50, 100, eek 150K in debt....
It's bad for the US economy as a whole, even if these loans are supposedly guaranteed and unbankruptable (? is that a word?).. the money isn't going to come out of thin air if people just don't have it. So we're essentially creating all of this money for people to spend on the promise that they'll pay it back... it's no better than a stimulus plan. The increase in college tuitions is equally as staggering and should be cause for major alarm... I just know we'll be too late to do anything about this mess, status quo.
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