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In my opinion, this exponential trend failure has a certain look of desperation about it.
This post inspired by Consumer Credit minus Federal Student Loans as seen at Dollar Death $piral.
Source Data:
FRB: Consumer Credit - G.19
St. Louis Fed: Population
St. Louis Fed: CPI
9 comments:
Wikipedia: Desperation
Desperation is an emotional state in which a person feels a situation to be hopeless and without satisfactory options. Decisions made in desperation may be more rash, impulsive, and inappropriate than those made in a rational frame of mind.
Desperation is like stealing from the Mafia: you stand a good chance of attracting the wrong attention. - Douglas Horton
Awesome! This is only area of credit still trying to keep the magic alive. It's not happening without notice, though.
This is the engine driving up tuition faster than inflation. Bad news for me is that just because I am aware of it doesn't mean I can avoid it. My daughter is 4 years away from college and our savings are not keeping up with the twice annual tuition hikes. Sigh.
You might as well ask why a middle-aged man with no criminal record might put a paper bag over his head and rob a bank. I acted out of personal desperation. - Aldrich Ames
Aldrich Ames
Aldrich Hazen Ames (born May 26, 1941) is a former Central Intelligence Agency counter-intelligence officer and analyst, who, in 1994, was convicted of spying for the Soviet Union and Russia. Until the arrest of Robert Hanssen seven years later, Ames compromised more CIA assets than any known Soviet mole in American history.
While spending nine years working in CIA counter-intelligence, he declared an annual income of $60,000 but his plastic spending of up to $30,000 a month funded a lifestyle that included a new Jaguar and a $540,000 house (2011 value: $800,000) paid for in cash.
Mr Slippery,
My daughter is 4 years away from college and our savings are not keeping up with the twice annual tuition hikes. Sigh.
There's a chance that online courses could crater the education bubble within 4 years. Is there a rational long-term reason why it should cost as much as it does to read information out of a college textbook and be tested on what you read?
http://research.stlouisfed.org/fred2/graph/?g=9pX
was an interesting graph showing that TCMDODNS (debt less TBTF) and MZM are on the same trajectory, MZM is just earlier on the curve.
Is there a rational long-term reason why it should cost as much as it does to read information out of a college textbook and be tested on what you read?
Lord, no.
I was paying $400/mo rent and about that per quarter for my UC education, so it had immense value. $100/class! $10 per class-week!
But if your parents make under $80,000 or so UC is actually a better deal now, it's free!
So it comes down to the question should upper middle-class families be expected to pay up to 20% of their net each year towards their kids' education.
UCXX is now $100 per class-week for people who don't get the free ride of being from middle-middle class or below.
That's . . . expensive. Going to a 2-year and then transferring makes hella sense for most fields.
Troy,
Here is an amusing variation of your chart (scatter) that divides each series by wages.
Troy,
I was cheap. I went to Eastern Washington University for 5 years (two degrees, graduated in 1987). My tuition was paid in full by a scholarship and I lived with my parents through most of it. I also used public transportation to get there most days (18 miles each way). No complaints.
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