The stories you want. The opinions that matter.
No, thanks
Tag: student debt
Surging Economy Leaves Middle Class Behind

Surging Economy Leaves Middle Class Behind

We keep hearing about this wonderful economy of ours. Jobs plentiful. Inflation low. Interest rates low. Where’s the problem?

Problem is, the uptick in pay has been modest while the prices for things the middle class thinks it’s due are beyond reach — or rather, impossible to obtain without borrowing. Thus, middle-class families are racking up big debt to keep up middle-class appearances.

Prudent people (and countries) reduce debt at times of prosperity. This country and its people are not. Such scenarios rarely end well.

Consumer borrowing has hit a record $4 trillion after inflation, not counting mortgage debt, according to an analysis in The Wall Street Journal. Credit card debt is headed skyward, as people borrow for vacations, restaurant dining and other items they can’t pay for outright.

Auto debt has climbed nearly 40 percent after inflation in the past 10 years. Unlike homes, vehicles are rapidly depreciating assets.

Over three decades, average house prices have jumped 290 percent. Not bad if you’ve long owned a home. Really tough if you’re a first-time buyer. More Americans in the middle are putting off homebuying, while many making the plunge have taken on heavy mortgages.

If they have an adjustable-rate mortgage and interest rates go up, so will their monthly mortgage payments. The average size of a new adjustable-rate mortgage is over two times that of a new fixed-rate mortgage, the Mortgage Bankers Association reports. This suggests that homebuyers are choosing adjustable-rate mortgages with their artificially low introductory rates so they can borrow more — a seemingly strange thing to do when rates on fixed-rate mortgages are still low.

Homeowners are increasingly tapping their equity for cash to buy stuff, according to the government-sponsored mortgage corporation Freddie Mac. They often do this through mortgage refinancing. Even when interest rates were rising last fall, more Americans were taking cash out of their homes and assuming a mortgage with a higher principal balance.

The average tuition at public four-year colleges has soared 549 percent over three decades. (That in itself is a scandal.) This has contributed to a frightening level of student debt, now a crisis at $1.5 trillion.

Then there are wheels. Experian reports that the average loan for new cars is now $32,187. How can that be when a brand-new Honda Accord can be bought for under $24,000 and a larger Chevy Impala for under $29,000?

Turns out trucks were the “big story” driving new-vehicle prices higher, according to a Kelley Blue Book analyst. Many Americans feel they must have an SUV or a truck. A sedan just won’t do.

As for stock investments, in these days of trade warfare and exploding federal deficits, who knows? Americans who depend on the farm economy, meanwhile, are in our prayers.

Thus, you have couples with two big car loans, hefty student debt, a sizable mortgage and growing unpaid balances on their credit cards. Some are able to handle it, but just barely. They assume no one loses a job or gets really sick without adequate health coverage.

What’s driving much of this consumer behavior is that people who thought themselves middle-class have not recognized the new economic reality. The median household income in 2017 was $61,372.

Good economic times don’t last forever. Jobs can disappear. Note that the Federal Reserve Bank just lowered interest rates out of concern that the economy is slowing. When things go in the other direction, many Americans will learn yet another lesson in the economic risk of piling on debt. Expect more anger and more pain.

#EndorseThis: John Oliver Deconstructs Those Third-Party “Alternatives”

#EndorseThis: John Oliver Deconstructs Those Third-Party “Alternatives”

Have you contemplated voting for the Green Party’s Jill Stein or Libertarian Gary Johnson as an act of protest or a gesture of despair? Do you think that Stein or Johnson somehow represents a better choice than the “lesser of two evils” that so many voters are lamenting this season? Leaving aside the merits of that argument, John Oliver looked closely at Stein, Johnson, and their signature proposals. His conclusion? “The lack of coverage they complain about so much may actually have benefited them!” Let him explain why — it’s a bit sad, really, but very, very funny.

How Bernie Sanders Made A Meaningless Procedural Document Matter

How Bernie Sanders Made A Meaningless Procedural Document Matter

Bernie Sanders and his supporters cheered a slew of progressive proposed amendments to the Democratic Party platform, but were ultimately dealt a setback in Orlando over the weekend when Hillary Clinton and Debbie Wasserman Schultz’s representatives on the party’s platform committee led the way in voting down amendments that would have supported a nationwide ban on fracking, criticism of Israel’s apartheid regime against Palestinians, the establishment of a single payer healthcare system, and indefinitely delaying a vote on the Trans-Pacific Partnership trade deal.

The setbacks came in the final meeting between representatives on the platform committee and only days before Sanders’ expected endorsement of Clinton Tuesday in a joint rally in New Hampshire, where he defeated her by a 22-point margin in the Democratic primary in February.

The Sanders campaign has been in close contact with the Clinton campaign in recent weeks, as the two sides have tried to find common ground ahead of the Democratic National Convention on July 25. The Democratic counterparts first met in mid-June, a tense meeting during which Clinton reportedly asked what it would take to land an endorsement from the Vermont Senator, who dominated Clinton with the youth vote.

To that end, Sanders’ camp has been able to force Clinton to earn his endorsement by pushing the presumptive nominee to the left on issues such as $15 minimum wage and health care: The language on the minimum wage — complete with Sanders’ very own “starvation wage” campaign terminology — was included in the final platform draft, and Clinton has included language supporting a “public option” for healthcare in recent statements to the press — mirroring some elements of Sanders’ medicare-for-all proposal. Sanders also was able to secure commitments from Clinton to support free in-state college tuition for families earning $125,000 or less annually.

Sanders has praised Clinton for the speedy progress in recent weeks, noting that “the Clinton campaign and our campaign are coming closer and closer together.” But Sanders has avoided an all-out endorsement, to the frustration of most in his adopted party.

In addition to the stalemates on fracking and Israel’s occupation of the West Bank, Clinton’s representatives on the platform committee voted down multiple initiatives relating to Social Security: an elimination of the cap on Social Security taxes as well as a new cost-of-living index for Social Security benefits. Sanders also has criticized the Democratic Party for its embrace of the Trans-Pacific Partnership, a trade deal he has railed against and for which Clinton has switched her stance after initially calling it the “gold standard in trade agreements.”

Sanders has been much more vociferous in his opposition to TPP, slamming it as a corpotist attack on American jobs and regulatory measures and a potential source of human rights violations around the world. Sanders recently said as much in an op-ed for the New York Times, calling upon Democrats to “defeat the Trans-Pacific Partnership.”

While Clinton has said she opposes TPP, her campaign and many of her representatives on the platform committee have a history of sticking close to the legislative priorities of President Obama, who has promoted TPP repeatedly as a partnership that would give the U.S. an edge over China and would strengthen America’s relationships with countries around the world.

Amid frustration from the left on the committee’s refusal to pass Sanders’ reforms — particularly on the issue of TPP — some Sanders supporters observing the process chanted “Shame!” and “Are you Democrats?”

Nevertheless, the party platform, usually a symbolic document, has hewed left perhaps more than Sanders expected and is probably enough for him to proceed with his planned endorsement of Clinton Tuesday. In fact, he could use the platform to hold Clinton accountable to his base — as a checklist of issues on which Clinton has pledged to reach out to progressives in the party.

It is the most progressive Democratic platform ever, thanks to Sanders directing his supporters’ attention to the drafting process. It will be up to those supporters to hold Clinton and other Democrats to the promises that document makes.

 

Photo: U.S. Senator Bernie Sanders holds up his notes while speaking about his attempts to influence the Democratic party’s platform during a speech in Albany, New York, U.S., June 24, 2016.  REUTERS/Brian Snyder

Clinton, Sanders Spar Over Immigration In U.S. Presidential Debate

Clinton, Sanders Spar Over Immigration In U.S. Presidential Debate

By James Oliphant and Luciana Lopez

MIAMI (Reuters) – Democratic presidential hopefuls Hillary Clinton and Bernie Sanders sparred over who was more committed to immigration reform at a presidential debate on Wednesday night, but both promised they would not deport undocumented immigrants without criminal records.

Debating in Miami a few days before Florida’s crucial primary election, Clinton and Sanders took turns thrashing Republican front-runner Donald Trump for his vow to round up and kick out millions of undocumented immigrants.

Moderators at the debate, which was aired by the Spanish-language network Univision and CNN, pressed both candidates on whether they would deport children of undocumented immigrants. Progressive activists have heavily criticized President Barack Obama’s administration for a policy of deporting such children.

One of the evening’s most dramatic moments came when a Guatemalan immigrant in the audience at Miami-Dade College asked a question in Spanish of both candidates, noting that her husband had been deported, leaving her and her five children behind.

“The essence of what we are trying to do is to unite families, not to divide families,” responded Sanders, a U.S. senator from Vermont.

The issue of deportation, and particularly separation of families, has been a major question among communities of undocumented immigrants, with recent deportations ramping up those fears.

“I will do everything I can to prevent other families from facing what you are facing,” Clinton, a former U.S. secretary of State, told the woman “and I will absolutely protect your children, yourself and try to bring your family back together.”

Clinton also blasted Sanders for voting against a 2007 bipartisan immigration reform package. Sanders has said he voted against the bill because of a provision for guest workers, a program he again called “akin to slavery.”

Sanders also used the immigration issue to blast Trump, who has called for deporting the estimated 11 million undocumented immigrants in the country.

“Look, in this country immigration reform is a very hot debate. I would hope very much that as we have that debate we do not, as Donald Trump and others have done, resort to racism and xenophobia and bigotry,” Sanders said.

“His idea of suddenly one day or maybe a night rounding up 11 million people and taking them outside of this country is a vulgar, absurd idea that I would hope very few people in America support.”

 

(Additional reporting by Jonathan Allen; Editing by Jonathan Oatis)