Debt Slavery

Disabled Middle Aged Woman Living Well Below Poverty Line is Ordered by Judge to Pay $37,400 in Student Loans

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Poverty demoralizes. A man in debt is so far a slave; and Wall-street thinks it easy for a millionaire to be a man of his word, a man of honor, but, that, in failing circumstances, no man can be relied on to keep his integrity.

– Ralph Waldo Emerson, Wealth

Most of you will be aware that it’s almost impossible to discharge of student loan debt once you have it. It stays with you for the rest of your life almost no matter what, even if you file for personal bankruptcy.

Why does this matter? Well, we’ve all seen charts depicting the disturbing surge in student loans outstanding over the past decade or so. Charts such as these:

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So what do you produce when you encourage an explosion of debt that can never be repaid and can never be defaulted on? Debt serfs. Millions upon millions of hopeless debt serfs.

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The Debt Bubble Expands as Auto Loan Amounts Hit a New Record

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Is anyone surprised that the poorest and least credit worthy of Americans are being saddled with piles of debt in order to buy new cars? It’s not enough that a generation of our citizens will toil pointlessly to pay off more than $1 trillion of student loans, we may as well add some other form of debt burden on top of it.

It’s hard to even imagine this is happening so shortly after the last credit bubble train wreck, but happening it is. Creative ways for people to purchase cars they can’t afford have been on my radar screen for some time now, and if you recall, I posted an article last April titled: Just Keep Dancing: Introducing the 97-Month Auto Loan.

Well the dancing has continued, and now we have Americans borrowing at all-time record levels to buy cars. USA! USA!

From CNBC:

A combination of higher prices for new cars and relatively low rates for auto loans means Americans are borrowing a record amount to pay for their new rides.

According to Experian Automotive, which tracks millions of auto loans written each quarter, the average amount borrowed by car buyers last quarter climbed above $27,000 for the first time ever.

According to Experian, the average auto loan in fourth quarter 2013 was $27,430—an increase of $739 compared with the same period of 2012. The average used car loan was $345 higher, coming in at $17,974.

Those with non-prime credit ratings—or credit scores between 620 and 679—had the highest average auto loan. For these borrowers, the average new car loan rose more than $1,500, to a new high of $29,385.

Not surprisingly, those with subprime credit ratings—credit scores between 550 and 619—had the highest average monthly payment, of $499.

Yep, no doubt this will turn out just peachy.

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Forget Student Loans…Introducing Day Care Loans

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Now that enough college age Americans have been stuffed with over a trillion dollars in student debt only to get a job a McDonalds and live with their parents, folks in New York City have come up with a brilliant new concept to ensure the production of an entirely new generation of debt slaves. Introducing day care loans…and here’s the best part, they are “interest only” from childcare to kindergarden!

Of course it makes sense that these loans would originate in my hometown of NYC, which has in the past 15-20 years fully transformed itself into a corporatized, generic and unaffordable Wall Street whorehouse. From CBS:

NEW YORK (CBSNewYork) — After housing, child care is one of the largest expenses for families in New York City.

But now, there is an option for parents to get their kids into some of the city’s top pre-kindergarten programs with loans just for day care.

As CBS 2’s Janelle Burrell reported Monday, tuition without room and board for undergrads at Harvard University is $38,891 for the 2013-2014 school year. For Princeton University, it is $40,170.

Pre-school in Manhattan is not far behind, with some elite day care costing families more than $35,000.

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Chart of the Day: Inflation Since the American Revolution

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As is clear by this chart, inflation was virtually unheard of until the Creature from Jekyll Island (the Federal Reserve) took over.  However, more importantly, things didn’t really start to get bad until the 1970’s right after Nixon took the nation off the gold standard in 1971.  Since that time, America has seen a period of … Read more

Welcome to the New America: Indebted “Boomerang Parents” Move in with Their Children

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A very sad article from the New York Times, but I can’t say I’m really surprised.  In the ultimate irony, in many cases throughout America it is actually parents that are forced to move in with their kids due to the piles of student loans taken out on their behalf.  We are officially a nation … Read more