Economic Recovery Is Here? Senior's Debt Rising

What is the call from so many talking heads these days, it's that the economy is turning around and we are headed for good times again. Really?

I find all this glowing rhetoric some what suspicious in that so many of us are still unemployed and so many small business are still hold off expansion or hiring. What about all the people that exist on fixed incomes with the gas and food prices rising every day? 

Where do the talking heads get the idea that we are doing fine when the GDP for the last quarter was .04% is beyond me. And why should we believe these people at all when they have been wrong so many times?

And after all the good news, why is it a good thing that the federal reserve is still capitalizing our debt by buying more then 110 billion dollars of debt last month alone, and more then 85 billion every month? How can they do this without causing serious problem in the future?

Why is a jobless recovery a good thing?

I am not an economists and my knowledge of economics is limited , but if everything is going great, what's all the spin about? What benefit is there for the 'experts' to spin this information?

Debt on the Rise for Seniors
Source: Josh Boak, "Rising Household Debt a Game Changer for Seniors," Fiscal Times, March 28, 2013.

April 3, 2013

Traditionally, younger generations have benefited from wealth transfer from older generations. However, this trend may disappear as more elderly Americans rack up greater debt in their later years. The average debt load of senior citizens has risen rapidly over the last decade, though the exact reason is unknown, says the Fiscal Times.

• Between 2000 and 2011, the median amount of household debt for Americans older than age 65 more than doubled from $12,702 to about $26,000.
• While individuals in the economy as a whole were borrowing less, the rise in senior borrowing is still far below the overall median of $70,000.
• Median credit card debt for seniors older than age 75 increased from $838 in 2007 to $1,800 in 2010, while the percentage of seniors with mortgage debt rose from 10 percent to 24 percent.

It appears that seniors are now thinking about debt differently in the aftermath of the Great Recession, which wiped away an estimated $16 trillion -- a portion of which was the retirement nest egg of seniors.

• More than 582,000 seniors have maintained their cash flow by taking out reverse mortgages, which have a default rate of 9.4 percent.
• The Congressional Budget Office (CBO) estimates that Medicaid spending will grow from $265 billion in 2013 to $536 billion by 2022.
• The CBO also estimates that Social Security spending will grow from $816 billion in expenditures in 2013 to $1.35 trillion in 2022.

The rise in senior debt is alarming because if retired Americans cannot service their debt or exhaust their savings, they will become more dependent on Social Security. Increased reliance on public programs will increase the tax responsibility of all Americans.

• Efforts to curb spending, including President Obama's compromise of adjusting the Consumer Price Index, was met with substantial resistance from liberal senators who claim that any adjustments to the program will push seniors into poverty.
• More than 44 percent of the nation's 26.2 million senior citizen households carry some debt, including roughly 2 million women over the age of 65 whose assets average just $7,754.