Are We Jeopardizing Our Economy? - A realistic look at student loans and reparations.
Greetings to all. Now, this is a controversial topic. Is it politically based? Is this all a tactic since we are in an election cycle? I have my opinion on those questions, and the answer is yes to both. However, this is a democracy, and I respect your opinions. You can decide for yourself.
Tonight's topic is one that I believe the American people do not comprehend the cost of these things. First, our nation's debt already totals into the trillions. Approximately $32,318,681. Six hundred sixty trillion and climbing each minute. Take a look. That is a number that most people cannot even conceive of since you can't lay it out on a table and get a sense of how much that is.
The cost of going forward with student debt relief adds at least another 42 BILLION dollars to that figure. As for reparations, it originates in California and could cost a state with a 32 Billion dollar deficit another 800 BILLION dollars for reparations. As most things do, this concept can travel across the nation, and that cost would be absurd. Exactly, who are we trying to keep happy here, or is it a form of buying votes?
Let's look at some basics first. Like most nations, the United States has numerous ways it collects income. The taxes we all pay each week by working is only one.
There are also excise taxes, corporate taxes, customs duties, tariffs, payroll, individual income tax, and more. Payroll taxes account for approximately 33% of its revenue, and personal taxes account for about 52% of its income. Take a look.
It is safe to say that we, as taxpayers, are the largest source of revenue for the country, so we have the more significant burden. This means most of our nation's debt falls back on us to pay. That gives us a say regarding where and how this money is spent. And we do. We have it in the form of the people we elect to office. How's that working out for us?
Look at it this way. As individuals, we are no different than the government. We have debt, we have to pay it back, and we have income. Those who practice good money and fiscal management principles do well. Those that don't do not do well. It's basic math 101. Of course, we all realize it is somewhat more complex, but the basics still apply. When we spend more, we must make more to pay our bills. If not, we go further into debt. The government is no different. Those still in the workforce end up working two jobs. However, what about those who are elderly and retired?
Therefore, we must ask ourselves, how far can a dollar stretch? Remember what I said. When the government mismanages money or overspends, we have to pay more money to the government. The cost of goods goes up, and we must pay those prices. Hence, inflation. That, my friends, is where we are now. With that said, the government wants to spend more. Spend more on things not as vital to our nation as others. Others, such as defense, our military, medical costs, etc. It is a vicious cycle. Let's move on. I think you get the point.
Anyone who has gone to college and had to take out a federal student loan knows that once you graduate, at least when I did, I had to start paying it back in six months. I paid it until it was paid off. Why? Because I borrowed it and it was my responsibility to pay it back. When I completed college, economic times were very challenging. Finding a job was difficult. However, the current work environment is different regarding how many people now have degrees. It's been quite some time since I've gone to college. Honestly, I am not familiar with modern-day loan repayment terms. However, I am sure the student loan must be paid back, whatever the duration.
Students did get a well-deserved break during the pandemic, as they should have. Their payments were deferred. According to officials, the pandemic is now over. It's time to pay the devil its due. Let me say that I am 100% for higher education, and online degrees are an excellent way for people to achieve this. Online degrees have helped many achieve a degree they may not have gotten otherwise. However, it comes with a price. When I went to college, having just a bachelor's degree was like owning a piece of gold. Now, so many have Bachelor's degrees that companies are looking for those that have post-graduate degrees. Master's degrees. When the market is flooded with all these folks with Master's degrees, what will people need to get a job? A Ph.D.? Where does it end?
Due to this situation, the workforce has seen a significant decrease in skilled labor. Mostly because everyone believes a piece of paper will get them much more money, but that's not true in many cases. It all depends on what your degree is in. Doctors who graduate do not start at a pay scale that many think they do. Some need to work another job to make their student loan payments until they finish their residency or other levels of schooling. In today's workplace, it is also experience that counts. Some companies have opted to go with experience rather than a degree. A degree shows you did the bookwork, and experience shows you can do the job. They go hand in hand. Having both is certainly a plus. This is why so many people with degrees are not working in the field they studied. The jobs are not there, and they lack experience. A vicious cycle that takes time to come together. The problem is financially surviving until it does.
However, what about student debt relief? I am not for it. No bank gives you mortgage debt relief. You lose your house if you can't pay your mortgage or make arrangements to pay it. I worked two jobs to pay back my student loan. It was a responsibility I had. One of the problems with our youth today is that they are not held accountable for their responsibilities. How can we expect them to learn anything in life and survive? Mommy and Daddy are not going to live forever. The only way to learn how to survive is to work so you can survive. Sacrifice breeds responsibility.
I am sorry, but a student made this debt and should have to pay it back. Another thought is, is this fair to all those who have already paid their student debt back to the government? Or do we give everyone who ever repaid their student loan money back? Where does it end? What is fair? With all this said, do I believe the government should work something out to extend or lower their payments, especially in today's economy? YES! However, forgiving the debt or deducting $20,000 from it is unacceptable, and the government should not, nor should we, as taxpayers, have to shoulder that additional burden. A dollar is like a rubber band, and It can only stretch so far before it will snap.
There are numerous opinions on this issue. However, most polls show that the American people are against it. Of course, I would expect any student with this debt to favor this. If I were a student with debt, I probably would be as well. Ladies and gentlemen, every problem has a solution. We may not always like the solution, but there always is one. Sometimes, compromise is the solution. Unfortunately, any President who thinks they can do whatever they wish, regardless of the rules, can cause additional problems. This is why the Supreme Court blocked this proposal. Now, he will look for other ways around it. The President does have some authority through executive order to spend money under certain circumstances. This is not one of those circumstances. The facts are simple. Congress holds the key to the purse. Not the President. This provides us with a system of checks and balances. That is the purpose of how it works.
Colleges don't care. They have already gotten paid, and that is what they care about. Times are challenging, and we must help our young people navigate them. However, we need to do this properly. No one is entitled. Are the taxpayers burdened enough? Lower their interest rate, extend the term of the loans, do not forgive the debt, or reduce the amount using taxpayer dollars would come to approximately $ 300 to 400 billion dollars. Take a look.
This is a highly controversial subject. What is reparation?
A reparation is the making of amends for a wrong one has done by paying money to or otherwise helping those who have been wronged.
Although this initiative was started in California, I am sure it will spread like wildfire. The plan was to pay monies to those descendants of enslaved people. Slavery was part, and might I add, an embarrassing part of this country's history. But also the history of many other countries, which has existed in many cultures and can be traced back 11,000 years ago.
As difficult as it is to believe we could have done this to other human beings, we have moved forward from this practice and must put it in our past as a learning experience. This is not the same as a civil lawsuit where someone sues another for personal damages, and that reparation is paid directly to the individual. We cannot make these payments to those who were the direct victims of slavery. Those are the people who would deserve it. Not their descendants.
In addition, what about other cultures or people who have suffered over the centuries from disservices done to them? Don't they count? My point is these events were tragic. But it is time to move on from them and take measures to ensure they NEVER occur in this country again. Wouldn't the better solution be to put money into stopping some of the things that are still ongoing today? Things such as sex trafficking, human trafficking, and those things we know are happening to individuals crossing our southern border. The cartels sell people, in turn, to get them across the border. This is most prevalent with children.
It is estimated that human trafficking generates over 150 billion dollars yearly in profits, and over 40.3 million people are still enslaved in one sense or another worldwide. Take a look. I am sure many efforts are underway to stop this, but is it enough? Wouldn't the money be better sent to crack down on this continuing to happen?
The problem with society and certain groups is they focus on one type or group of people rather than humanity as a whole. No one can take back what has been done. However, we can make sure it does not continue. That is the key here. Anyone who has an opportunity to get money from the government is going to take it. This is the primary cause of all the fraud that took place with funds paid out to individuals and companies during the pandemic. However, no money is free, and it always comes with a price tag.
I ask you, is it fair to single out one group of people and forget others? Once again, is it fair for taxpayers to shoulder this burden? No country can continue to use the printing press to keep printing money. That comes with a high price, and the results can be catastrophic. Economies have been known to collapse. Do we want to walk that road?
I am sorry to say that the scary part is I believe many of these issues are politically motivated to get the votes. Regardless of the cost or the price, we or future generations must pay for it.
There comes a time when our leaders must come to their senses and be responsible for and take responsibility for the decisions they make or propose.
Depending on who you talk to, some will say economic times are good, and others will say economic times are the worst in many years. Who do you believe? I think the answer to that question is simple. Look at your own life and ask yourself. Are you living better today than in years past? Polls and studies are not accurate. A poll depends on who is polled, how the questions are presented, and who runs the poll.
Using yourself as an example of answering these questions is your best poll and gauge. Have your energy bills increased, food, dining out, gas, oil, goods and services, and many others? Are you saving more or less than in the past? How about vacations? Can you afford one? Can you still afford to send your child to play sports or dance lessons?
This is reality—the reality of day-to-day life for most. I am not attacking the concepts of the ideas. I am just commenting on the necessity of this additional spending and other ways to achieve the same goal or use the money more productively.
Let's compare. In 2020, the interest rates on average were 3.11%. Inflation was 1.23%. At present, inflation is 4.05%, down from over 9%, and the current interest rate on average is 7.31%.
What does that tell you? Inflation is only coming down because the FED has raised the interest rate to slow down spending. What does this cause? Rents and housing prices are through the roof. The average middle-class family cannot afford a new car or a home. The cost of everything has risen. Your dollar is stretched to the max. Is this the American dream? Is this what you want for your children?
Inflation and interest rates are a numbers game. Where you save on one end, you spend more on the other. You are not getting ahead. The best economy was in 2020, when inflation and interest rates were low. Houses were selling at a strong pace and a reasonable price, and people could afford them. It does take an accounting degree to see that.
So I ask you again to answer this question. Were times better for you three years ago or today? Economically, we are swimming in dangerous waters. The question is, is the storm over? Will the waters settle down? The answer is not if we keep doing what we are doing. If changes are not made, the storm will get worse. The waters will get rougher.
There will always be those who make tons of money and do not feel the effects as much as others. However, the middle-class American makes up the majority of our country. I could go on and on about this, and I am sure you have heard everything in the press and on the news several times. To add more fuel to the fire, it is an election cycle. All the promises for a better future will be made just as they were in 2020. Personally, we elected a President who made these promises, and it's gotten worse. Whether you like Trump or not. There is no disputing these facts.
Think about all of this as we approach the next set of elections. Listen to all the candidates and look at their track records. Forget about political parties. The days of voting straight Democrat or Republican are long gone. Political parties are not what they were when our parents were voting. Politics and life have changed. Our next Presidential election is a critical one. One that will define our future. Both domestically and globally. Both are equally important.
Each week that goes by, China and Russia taunt our military. Test our resolve. Things that neither country would think of doing years ago. Did that happen in 2020? As a nation, do we display strength? Do we display resolve? Do we have respect?
The streets of our major cities are crime-
infested. People literally get away with looting and other crimes. I will leave you with this question. ARE THINGS BETTER NOW? Thank you.
Please feel free to leave comments, or if you have a topic you would like me to discuss, you can email me at email@example.com. Thank you.
Be safe, stay well, and focus on being happy. And remember to always:
Live with an open mind,
Live with an open heart,
Live your best life.
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