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Congress, Debt, and One Trillion Reasons Why...

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Two worrisome economic events were reported yesterday that just might be missed in light of the country's attention on the horrific events unfolding in Boston, Massachusetts and West, Texas this past week.

Student loan debt, which slid past the trillion-dollar mark a few months back, has now surpassed credit card and car loan debt for the first time in American history.

The second worrisome, and inextricably linked economic event that occurred this week made the front page of the Huffington Post yesterday.

There was a congressional hearing on unemployment before the 19-member Joint Economic Committee and no one bothered to show up.

HuffPost reported that the hearing opened with only one senator present, and only a paltry three more trickled in as the 90-minute hearing progressed. From a political standpoint, it looks like unemployment has reached the status of an "orphaned disease."

As painful as it may be, it's not worth anyone's time.

And this is a tragic mistake.

It is widely accepted that the double-edged sword of crushing student debt and high unemployment is not just a problem for twenty- and thirty-somethings. It affects the broader economy. And not just in the short term.

The housing market is likely to be one of the long term, big-ticket casualties of the student debt crisis. The first hit to the housing market originated with bad loans. The second blow will likely come from no loans - or at least, far fewer loans. Who can take on a mortgage to buy a house if they are holding a jumbo mortgage on their college degree? Oh, but wait, that issue is moot. How can you buy a house if you don't have a job? And to be precise, if you are in your twenties and a recent college grad, there's an 8.8% chance that you don't have a job at all. That figure jumps up to 18.3% if you include those working part time, or who stopped looking all together. And over half of those recent grads who are employed, are currently working at jobs that don't require a college degree.

Unfortunately, a depressed housing market has a nasty way of sneaking back to increase unemployment. While it may be obvious and simplistic, it's worth reminding ourselves that when houses aren't being built or turned over, building materials aren't being manufactured, sold, or shipped, and tradesmen - carpenters, plumbers, electricians and the like - are out of work as well. They don't buy houses or new trucks, or gas for their old trucks, or put food on their family tables, which means that... well, you get the picture.

If you want to examine another long term, big-ticket item likely to be impacted by the student debt crisis as it works in tandem with the now longstanding unemployment issue, just consider what retirement savings are going to look like for a generation that started out a trillion in the hole and then can't find quality employment - often for years.

I know what you are thinking, who is worried about retirement when they are in their twenties?

Well, all of us should be. And under better circumstances more of us would be.

Since time and compounding are the most critical factors in savings growth, the most critical decade for retirement savings is the first decade of employment - between age 25 and 35. But of course, if you can't find a job, you can't pay for health insurance or eat, let alone save for retirement.

And if you want something else to look forward to in your old age, here is one final blow to your unemployed, twenty- or thirty-something stomach. The Federal Reserve Bank of New York reported that 4.3% of outstanding student debt is held by people over age sixty.

4.3% of a trillion dollars is $43 billion.

Which means that in addition to lowered retirement savings, some of us may very well have some residual college loans tagging along with us well into our golden years.

As for the United States Congress? I don't know where you were yesterday, but we all know where you should have been. Is it possible that you weren't all that interested in showing up to discuss unemployment because you happen to have a job? Or is it just that it isn't an election year?

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