[anon49124]

Stupid^3. When (not if) the dollar is dropped, within a decade, as the de-facto intl currency, the American economy, combined with the insane and unsustainable public and private debt, will tank like nothing before.

http://www.usdebtclock.org/

[jimmy1]

Are you placing any bets? What are you putting it up against, the Euro? That's a bet I would love to take.

[anonuser123456]

Everyone will be trading in <strike>gold</strike> bitcoin.

[hemantv]

This combined with student loan debt is disaster in making

https://goodlyapp.com/clock

[013a]

Student Debt is a weird one. The purpose of all debt is to act as an investment to increase net productivity for the borrower at a rate higher than the interest rate.

When phrased like that, you realize there is literally no debt an individual could possibly take out which offers a higher return on investment than student debt. For example, lets say you take out $60k @ 4% and plan to pay it off over 20 years. You'd pay $27k in interest. But if that enables you to upgrade from a $40k/year job to a $70k/year job, you've literally paid for the interest in the first year.

The reason it gets complicated is because not everyone invests their student debt as well as they could. So not everyone sees a rate of return like that. Lets say we solve that by allowing student debt to be subject to default; sounds like an interesting idea because banks would make smarter investments. That means investing in students who take traditionally high-earning degrees (STEM?) and students who have a good academic history.

Uh oh. Now this doesn't sound so good. We'd probably see discrimination against lower income students because they statistically show poorer academic success in high school, discrimination against poorer performing schools, centralization of students into high performing schools causing wait lists and overcrowding, discrimination against liberal arts and low-performing degrees, the list goes on. This probably isn't a better world we've created.

The big things schools need to fix is overwhelming growth in administrative costs. I don't think that problem is in student debt itself and as a concept, but where the problem actually lies doesn't have an easy answer.

[ceejayoz]

If I'm Googling correctly, there's $1.5 trillion in US student loan debt right now. We spent about that on the F-35 thus far, and it's only an extra year and a half of the current annual deficit to pay it off entirely.

Or, to put it another way, wiping out all student debt in the US would increase the national debt about 7%. Hardly catastrophic sounding.

[gizmo686]

There is a major moral hazard in just canceling student debt. Unless it comes along with serious reform of higher education financing, the problem is just going to come back much worse because, not only did we not resolve the original cause of the problem, but now borrowers think that their debt will be erased if they wait long enough.

[ceejayoz]

Maybe you're fixing the wrong moral hazard.

Maybe forcing people into debt to pay for a necessary education is the moral hazard, and we could pay off that debt and publicly fund secondary education like most of the rest of the developed world already does.