Can Spike in Plastic Spike Economy?

Charles Payne

6/10/2014 12:01:00 AM

 

One says that the slow and steady wins the race, but on Main Street, it depresses the have-nots and confounds those who are stuck in jobs with no upside. The slow and steady dissuades dreams and ambitions for those who have seen Americans climb off the canvass to roar with confidence and victory. Therefore, the slow and steady dissuades dreams and ambitions for those who were told that the world is your oyster. The 'slow and steady' actually means losing ground in a fast-moving world where only one nation has a bull's-eye on its back.

However, the slow and steady is great for the stock market, where the greatest fear investors have is an economy that overheats, only to meltdown later. However, enough market watchers understand that America's economy has to do much better in order to justify the rally enjoyed thus far; and I agree. With Friday's jobs report, the US economy has now posted 200,000+ net jobs in four consecutive months and these days, that is good news. What could make this, even greater news is if Americans could feel that the coast is clear; clear enough to invest more and spend more within their limits.

The news did not affect the market, as it has always been overshadowed by the jobs report. It has been a long time since we have seen a sharp spike in spending, which is big news. People are beginning to use their credit cards again, and hopefully, this is a prelude to them seeking business loans to start or to expand their businesses.

Back in July 2008, Americans had more than $1.0 trillion in outstanding credit card debt. Since then, credit spending mostly had been in freefall state, save for the past few months where it has really ramped higher.

Before this shift in spending, the only thing Americans have borrowed for were to cover auto and student loans. In fact, the rise in student loans has many worried...

Learning the Hard Way

I don't know, Ma'am, why they make all this fuss about education; none of the Pagets can read or write, and they get on well enough.
-Lord Melbourne

Briefly in 1834, Lord Melbourne was the UK Prime Minister. However, from 1835 to 1841, he is best known for his amazing mentoring of Queen Victoria, who claimed the throne at age 18.

Let's fast-forward to the imperial President and his Executive Orders. Today, it is an adjustment in student loan payments, designed to rekindle the love from young adults and thumb his nose at Congress. There are actually several narratives to this latest move, which circumvents the idea that there would be balance in governing the United States of America.

* The Imperial President
* The Freedom from Want
* The continued soaring cost of education

"Protect young people from crushing debt or protect tax breaks for millionaires."

Elizabeth Warren and President Obama are pushing a Senate bill that would relieve student loans by taxing millionaires. This seems so farfetched (on so many levels), that it would be comical if it were not so dangerous. Millionaires paying for kids that want to study basket weaving only encourages more basket weaving, underlining a central tenet of progressivism- the freedom from want (see sidebar).

By the way, not only is this idea unfair to all millionaires, but also to those that do not have a college degree.

The list of billionaires throughout history without college degrees include: Thomas Edison, Bill Gates, Richard Branson, Larry Ellison, Michael Dell, Henry Ford, Steve Jobs, Ray Kroc, and Li Ka Shing. In total, there are 55 names on a list compiled by mytopbusinessideras.com.

While the left promotes class envy, their brethren continue to hike tuition to the point that many wonder if it is even worth it anymore.

Soaring College Costs

President Obama's order to limit college loan repayment to 10% of monthly income does not stop soaring tuition costs or help college grads find jobs. It is a gimmick... and a very dangerous one. Also, it is a smokescreen for runaway college tuition, which has never been criticized by the left. Even when the topic is broached in mainstream media, there is not the kind of vitriol reserved for self-made billionaires.

Therefore, the soaring costs of colleges have a lot of smart people- with college degrees- encouraging young adults not to take on the debt. While I think this is a giant mistake not to be prepared for the knowledge economy, I understand the frustration.

Moreover, by not using constant dollars, private college tuition has climbed from $14,909 in 1981-1982 to $33,047. In another review of tuition (not adjusted for inflation), tuition has climbed from $2,107 in 1991-1992 to $8,244, for the 2011-2012 semester- a rise of 291%.

This is a new week, a new executive order, and a new way to stir up trouble in a nation desperately seeking leadership.