The official federal government debt now stands just a tad over $19.5 trillion. Yet few talk about it, and even fewer are concerned.
Off-balance sheet liabilities (commitments that have been made but funds not set aside for) are some where north of $100 trillion dollars. Rarely talked about.
Social Security ran a $39 billion deficit in 2014, closing out five years of consecutive cash-flow deficits. According to the 2015 annual Trustees’ Report, the 75-year unfunded obligation of Social Security is $9.43 trillion.
Student loans are another dire debt issue facing America, now standing at a whopping $1.35 trillion. About 10 million borrowers — 43% — are currently behind or no longer making payments. More than a third of the borrowers are in outright default.
Student debt is rarely discharged because of extremely stringent requirements for doing so. A 2012 study calculated that 99.9% of bankrupt student loan debtors do not even try to discharge their debts.
Here’s another rub: universities and colleges have become addicted to money from student loans. I was told — but have not clarified — that 80% of the revenue that Arizona State University receives comes from student loans.
Even if the funds that ASU receives via student loans tuition is half that, it is clear that universities and other schools have become accustomed to revenue that is higher than what it would have been if the student loan program had not been instituted.
With the growing recognition that the student loan program was flawed (Aren’t most government programs?), what is to be done?
Let’s say that student loans are forgiven. Would the program be continued? If discontinued, what would happen to the schools that have become so dependent on that money? This issue will most likely not be addressed anytime soon, which means that the problem will grow even worse. Student loans in 2015 were up 6% over those in 2014.
As I’ve said here before, the climate is perfect for gold and silver investing. The world is awash in debt and paper money.
Right now, pre-1965 US 90% silver coins — commonly called “junk silver coins” because they have no numismatic or collector value — are carrying their lowest premium in years. If you like silver, seriously consider junk silver coins.
If you like gold, we currently have some small European gold bullion coins at very low premiums on our Gold Specials Page.