If someone were to try and explain what were the causes of the dire economic conditions the US is facing, the easiest way would be to say that Americans are living in an economic fantasy world that in no way is sustainable. Today, the GDP numbers were released showing a dismal 1.2% growth for the United States, yet the media keeps raving about how the housing market is returning and everything is all better. It doesn’t take a rocket scientist to figure out that things are not getting better and if anything this could only be called the new normal if it doesn’t get any worse. Right now, Americans should be filing filing for bankruptcy to eliminate the unsustainable debt they have accumulated, but instead they are robbing Peter to pay Paul by taking out new credit cards and personal loans so they can continue kicking the can down the road. Back in 2012, the Fed reported that the average American has $16,000 in credit card debt. While in today’s economy, $16,000 doesn’t sound like a lot but four years before that number was only $4000. The reason that many Americans should be filing bankruptcy and are not is banks are making credit available to these individuals. Back in 2010, the US saw a record number of people filing for bankruptcy because they had no other choice and were up against the ropes. At the same time many of these people lost their homes to foreclosure and had to stop aggressive creditors that might’ve been attached to the home through liens.
Everyone wants to know why all this is happening, but no one really looks at the root of the problem. The government continues to gain power and control by putting people into entitlement programs where they need them to survive. This was not the intention of how the country was founded as the founders wanted small government. Many people are currently unemployed and as long as their unemployment insurance continues why look for a job because unemployment might pay them as much as working would. Add to that the ability to borrow more money from creditors and you have a group of people that should be in a bankruptcy filing, but refusing to file. I understand the dilemma but it still doesn’t make it right. With taxes going up and pay going down, there is no longer a real incentive to work hard. With all the new regulations it’s next to impossible for small businesses to even get a start, thus eliminating the American dream. The federal government keeps telling everyone how to live, but it would sure be nice if they would lead by example. The fight continues on and the government continues to raise the debt ceiling as the US debt is closing in on $17 trillion. Someone recently made an interesting point about how the Fed has been printing US dollars infinitely and why do they need to raise taxes if they can just print their way out of debt. It doesn’t seem to make any sense except that middle-class America will soon be gone if people don’t take responsibility for their own financial actions.
Up until the 1970s, Americans prided themselves on being debt free and living within their means. Once the 1970s hit, credit cards were sent to everyone even if you didn’t ask for one. Creditors ramped up ad campaigns of being able to buy it now and pay for it later using plastic. It almost seemed like free money and many overindulged sending them into a bankruptcy filing. The latest generation knows no other way to live but on credit. The average college graduate leaves school with $25,000 in debt. They don’t even have a job yet and they’re already in bondage for life. The clincher for young adults leaving college is the student loan debt that they have acquired. After graduation if they can’t find a job, it doesn’t matter they still have to find a way to pay that debt. Thinking about filing bankruptcy? Not a chance, it’s next to impossible to file bankruptcy on student loans. While everyone believes the US is a land of opportunity, no one really knows the dark side of how the only thing driving this economy is debt fueled prosperity. It’s all fake, most so-called millionaires, are leveraged beyond belief and if their line of credit gets taken away, it’s game over. What’s wrong with going back to the way her grandparents lived and try a debt-free lifestyle? Even if that means filing bankruptcy to put an end to all this debt, in the long run it will add a dash of happiness and alleviate a lot of stress.