Have you ever notice that evertime you go out shopping, the first thing the casier ask you is, "WOULD YOU LIKE TO APPLY FOR A CREDIT CARD TODAY". They use the sales pitch "IF YOU GET APPROVED YOU CAN TAKE 20% OFF OF YOUR PURCHASE TODAY". But wait 20% off once for a trade of 12 months at, well lets say 12% intrest. Not really a good deal.
Total debt in america has risen to a all time high, how high you ask? Well its ten times the amount of currency that is currently in circulation.
12.73 trillion to be exact. This number will only get bigger.
Now lets take into consideration that there are only 321.4 million citizens in the United states.
That means that each citizens of the united states owes $39,607, yes that includes the children as well.
Now we all now that our children do not have debt, so lets dig a little deeper into the true number.
According to the census Bureau 74.2 million americans are under the age of 18.
So that puts our new debt per person to,, $51,496 per Us Citizen that is over the age of 18.
So we have 12.73 trillion dollars worth of debt with only 1.2 trillion US dollars in circulation.
This is a problem, a huge problem. At the rate we are borrowing we will not be able to pay this debt back as a total.
My point behind this soft rant is...... when that cashier ask you would you like to apply for a credit card today, just say NO THANK YOU. dont get tricked into the sales pitch, trust me you are not really getting the 20% off.
Now the next thing that I see wrong with this debt crisis is automobile loans.
Graph by NY times.
Auto loans make up 9.2 % of American debt. Now I understand that most people in our country needs a automobile. But have you really done your homework before you go out and purchase one. I mean it is very difficult to find a brand new car for less than $25,000, and thats just the basics, no upgrades. I looked at a new pickup a few months back and I could not find one on the car lot for less than $35.000 and some all the way up to $70,000. I just do not see the value in this.
Automobile loans are to easy to obtain. We have dealerships helping us citizens live beyond there means and this is very dangers. I see this aumobile bubble popping and it will be bad when it does.
Prices are so high on automobiles in America, I dont ever see my self buying a brand new one again, I will buy a good used before new.
So I will end this with this, not all debt is bad, not all debt is unavoidable, but if we could only stop the avoidable debt we would be in a better place.
Follow me @raybrockman
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