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One of these things is not like the other … Sober Look

This is a syndicated repost courtesy of Sober Look. To view original, click here. Reposted with permission.

This is the time when everyone is making financial and economic forecasts for the upcoming year and beyond. Here is a simple forecast from Sober Look that did not require much analysis. By the end of 2014, student loan balances held by the federal government will exceed $850 billion and by the end of 2015 the number will be above a trillion. And this is on top of some half a trillion of loans that are not directly held but guaranteed by the federal government.

Source: FRB

So what? We’ve gotten numerous e-mails asking this question. The problem of course is government-subsidized and rising consumer debt burden – all on the back of the taxpayer. When the government is involved on such a large scale, there are usually unintended consequences and market distortions (elevated tuition costs for example). But it’s the borrowers who are stretched to the limit due to outsize student loans and limited employment opportunities that is the growing problem – both for the borrowers and the taxpayers.

Remember the old song from Sesame Street: “One of these things is not like the other…”? The chart below from Wells Fargo shows the one thing that is definitely not like the other.

Source: Well Fargo

Happy New Year!

SoberLook.com

 

Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

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