Suppose you had a co-worker. You both make the same salary, say $75,000/year takehome.
You and your coworker are chatting, and you mention that you are buying a house.
Your co-worker says “I wish I could do that. I have too much credit card debt.”
“How much debt do you have?” you ask.
“$600,000,” he replies.
“Oh, my,” you reply. “Well, how did you spend that much? Who loaned you so much money? What about your budget?”
“Yeah, I should budget more wisely. I still have to borrow enough to cover my bills, about $110,000 per year. But even if I stopped overspending today, most of my debt is just interest accrual. I might as well keep spending until someone stops me, right?”
And that’s the U.S. in a nutshell. Yes, we can get by for another day or another month or another year - until we can’t. And then it all comes crashing down with a quickness.
Notice that the last time our debt ratio got this high, it was WWII. After the war, the financial repercussions were addressed, the money was paid back and we got on with our lives. When budget shortfalls started to spike again in the 90s, Democrats and Republicans worked together and brought it back down.
So, if the debt is to be reduced, we either need to work together or we need a world war. Which do you think is more likely to happen?
And also why are you using an example of 600k cc debt? 6k debt cc is more realistic and would be easily payable by someone on 75k. Dont get me wrong, the american debt situation is not good but society still moves along while people fall through the cracks.
Suppose you had a co-worker. You both make the same salary, say $75,000/year takehome.
You and your coworker are chatting, and you mention that you are buying a house.
Your co-worker says “I wish I could do that. I have too much credit card debt.”
“How much debt do you have?” you ask.
“$600,000,” he replies.
“Oh, my,” you reply. “Well, how did you spend that much? Who loaned you so much money? What about your budget?”
“Yeah, I should budget more wisely. I still have to borrow enough to cover my bills, about $110,000 per year. But even if I stopped overspending today, most of my debt is just interest accrual. I might as well keep spending until someone stops me, right?”
And that’s the U.S. in a nutshell. Yes, we can get by for another day or another month or another year - until we can’t. And then it all comes crashing down with a quickness.
Look at the graph here: https://en.wikipedia.org/wiki/History_of_the_United_States_public_debt
Notice that the last time our debt ratio got this high, it was WWII. After the war, the financial repercussions were addressed, the money was paid back and we got on with our lives. When budget shortfalls started to spike again in the 90s, Democrats and Republicans worked together and brought it back down.
So, if the debt is to be reduced, we either need to work together or we need a world war. Which do you think is more likely to happen?
The world isnt America.
And also why are you using an example of 600k cc debt? 6k debt cc is more realistic and would be easily payable by someone on 75k. Dont get me wrong, the american debt situation is not good but society still moves along while people fall through the cracks.