Imagine you have a child who is a student and is living off of student loans. The last time your child made money was in the year 2001. At that time your child was already $50,000 in debt. Since that time your child has accrued another $180,000 in student loan debt for a total of $230,000 in student loans. You as a parent are making the interest payments on your child’s debt.
In 2020 your child got sick and took out another $34,150 in student loans bringing their total student loans outstanding to $264,150 in student loans. To thank you for co-signing the loan they gave you $2,710 out of the $34,150 loan.
Your student decided they needed another $19,270 loan this year. An argument ensues between the parents. One parent wants their child to be happy and co-signs the loan for both parents over the objections of the other parent. The parents are on the hook now for $300,000 in student loans and are paying all of the interest.
As a thank you though, your child has sent you $4,220 out of the new $19,270 in loans that you are paying the interest on.
Now substitute “you” with the Taxpaying American Public.
Substitute “child” with the U.S. Federal Government.
Substitute “student loans” with Federal Debt Outstanding
Substitute “thank you” with Total Stimulus Payments
Substitute “parent” with Democratic Party
Substitute “other parent” with Republican Party
Add “,000,000,000” to the numbers and you now have the reality of what is going on in America. While many of us are eagerly awaiting our $1,400 checks (that’s the good news and pretty much all you hear), the bad news is that the $1,400 came from a $19,270 cash advance that we are going to have to pay interest on and will be due in full in the next 30 years.
|Loans in 2019||$230,000||$23,000,000,000,000||(Federal Debt in 2019)|
|Debt Added in 2020||$34,150||$3,415,000,000,000||(CARES + R&R + Families First + PPPHCE)|
|Debt Added in 2021||$19,270||$1,927,000,000,000||(COVID Relief Act)|