The outstanding student loan balance now stands at about $870 billion,1 surpassing the total credit card balance ($693 billion) and the total auto loan balance ($730 billion). With college enrollments increasing and the costs of attendance rising, this balance is expected to continue its upward trend. Further, unlike other types of household debt such as credit cards and auto loans, the student loan market is incredibly complex. Numerous players and institutions hold stakes at each level of the market, including federal and state governments, colleges and universities, financial institutions, students and their families, and numerous servicers and guarantee facilitators.
The average outstanding student loan balance per borrower is $23,300. Again, there is substantial heterogeneity in balances of individual borrowers. The median balance of $12,800 is roughly half the average level, which indicates that a small fraction of people have balances significantly higher than the median. About one-quarter of borrowers owe more than $28,000; about 10 percent of borrowers owe more than $54,000. The proportion of borrowers who owe more than $100,000 is 3.1 percent, and 0.45 percent of borrowers, or 167,000 people, owe more than $200,000. The distribution also varies by age group: for example, borrowers between the ages of thirty and thirty-nine have the highest average outstanding student loan balance, at $28,500, followed by borrowers between the ages of forty and forty-nine, whose average outstanding balance is $26,000.”
The next debt bubble right here, folks.
Does that mean online piracy is harmless? Of course not. But the harm is a dynamic loss in allocative efficiency, which is much harder to quantify. That is, in the cases where a consumer would have been willing to buy an illicitly downloaded movie, album, or software program, we want the market to be accurately signalling demand for the products people value, rather than whatever less-valued use that money gets spent on instead. This is, in fact, very important! It’s a good reason to look for appropriately tailored ways to reduce piracy, so that the market devotes resources to production of new creativity and innovation valued by consumers, rather than to other, less efficient purposes. Indeed, it’s a good reason to look for ways of doing this that, unlike SOPA, might actually work.
It is not, however, a good reason to spend $47 million in taxpayer dollars—plus untold millions more in ISP compliance costs—turning the Justice Department into a pro bono litigation service for Hollywood in hopes of generating a jobs and a revenue bonanza for the U.S. economy. Any “research” suggesting we can expect that kind of result from Internet censorship is a fiction more fanciful than singing chipmunks.”
Unlike Mr Ford, Dr Brynjolfsson and Dr McAfee are more sanguine about the impact smart technology is having on the job market. As they see it, those threatened the most by technology should learn to work with machines, rather than against them. Do that, they suggest, and the shake-out among knowledge workers becomes less of a threat and more of an opportunity.
As an example, they point to the way Amazon and eBay have spurred over 600,000 people to earn their livings by dreaming up products for a world-wide customer base. Likewise, Apple’s App Store and Google’s Android Marketplace have made it easy for those with ideas for doing things with phones to distribute their products globally. Such activities may not create a new wave of billion-dollar businesses, but they can put food on the table for many a family and pay the rent, and perhaps even the college fees.
In the end, the Luddites may still be wrong. But the nature of what constitutes work today—the notion of a full-time job—will have to change dramatically ..”
Whatever your political affiliation, it’s hard to argue that the current administration’s economic policies have had a long-term positive impact (setting aside any short term gains from inflating the economy with government cash).
His observations about the ever-decreasing utility (versus cost) of higher education in the US do hit home, but the problem seems to be a misallocation of resources more than anything - if our colleges produced more mathematicians, scientists and engineers, we would structurally be much better off than we are now.