Daily Digest 3/15 - Total U.S. Debt $69T, Student Loan Defaults On The Rise
Overall, there were 4.2 million borrowers in default in 2016, up 17% from 3.6 million the year before, as some borrowers exited default while others remained in the red.
But, this year, many rank-and-file Republicans seem more resigned to a reality that the deficit — nearly $3 billion through next summer, according to the state's nonpartisan Independent Fiscal Office — cannot be swept away easily.
South Carolina's pension plan is in trouble. According to the state treasurer, it is 24-billion dollars in debt. Teachers, law enforcement, county and city employees could lose their retirement if something isn't done soon. A bill making its way through the state house is supposed to save the state's pension plan. However, local leaders believe it would kill small counties. Not only will state employees have to pay more into their retirement but the bill would also force local governments to pick up the tab.
A federal control board on Monday said Puerto Rico's government needs to cut its public pension system by 10 percent, furlough tens of thousands of its workers and eliminate Christmas bonuses if it cannot generate other types of savings amid a nearly decade-long recession.
After years of low rates fueled a private equity "feasting" on retail firms, the number of troubled chains has tripled over the past six years, and is now at its highest level since the Great Recession.
Chinese authorities are devoting more resources to tackle corporate restructurings and bankruptcies as bad debts at banks soared to an 11-year high in 2016 and bond defaults more than quadrupled in the period.
The Consumer Federation of America released a study Tuesday that found that millions of people had not made a payment on $137 billion in federal student loans for at least nine months in 2016, a 14 percent increase in defaults from a year earlier. The consumer watchdog used the latest data from the Education Department, which manages $1.3 trillion in federal student debt owed by 42.4 million Americans.
The issue is serious for the BOK because Lee for months has been stressing the need to curb household debt, which reached 1.34 quadrillion won as of the end of 2016, or about 83 percent of gross domestic product.
Lacy Hunt, an economist with Hoisington Investment, estimated at a recent conference held by Grant’s Interest Rate Observer that debt of all kinds in the U.S. now totals more than $69 trillion. That’s more than double the $30 trillion recorded by Fed statisticians as recently as 2000. If the Hunt figure is correct, then total debt is now about 370% of GDP, up from 294% in 2000.
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