Welcome To Unintendedconsequences-ville
Art Carden asks the right question, writing at Forbes:
If Student Loans Might Be Canceled, Why Not Borrow More?
He delves:
Would it be a good idea to cancel student debt? And importantly, how does even the prospect of canceled student debt affect people's incentives?First, let's consider the quality of the policy. A lot of commentators are pointing out that it's fundamentally regressive, meaning that we're basically taxing the poor to pay the rich. As economist Alexander William Salter puts it in the Dallas Morning News, it's "a transfer of wealth to those with relatively high levels of expected lifetime income, at the expense of those with relatively lower levels of expected lifetime income." The idea might have some merit, but it will make wealth and income inequality worse rather than better.
Even saying that the idea might have some merit is perhaps too charitable. In 2011, economist Justin Wolfers called it the "Worst. Idea. Ever." in a Freakonomics post. Why? First, there's the distributional effect. If we're going to have policies that transfer wealth from one group to another, it doesn't make much sense to transfer wealth from taxpayers generally to high-income college graduates. As Will Luther and so many others have pointed out, a college degree brings spectacular financial returns. As a group, college graduates aren't "needy" by any reasonable definition.
Second, Wolfers points out that debt cancellation doesn't make college more affordable because it's a transfer to people who already went to school and who are already enjoying the returns on their investment. Third, he notes that a successful campaign to cancel student debt will encourage further wasteful lobbying for transfers. The "cancel debt" movement is already part of the fallout from past bailouts, subsidies, and transfers. Capitulating will only encourage more lobbying.
Hence, I think we would do well to focus on the downstream effect debt cancellation--or even the reasonable prospect thereof--will have on people's future incentives. Encouraging people to produce and exchange rather than lobby for transfers and special privileges are important parts of the problem of constitutional design that has animated so many scholars, among them Douglass C. North and James M. Buchanan.
The prospect of being able to enjoy good times now and stick other people with the bill later encourages people to be less-than-completely-responsible right now. ...
There are three important effects here. First, the prospect of student debt cancellation encourages us to finance the entire thing with borrowed money. Why pay now or go to the trouble of trying to earn scholarships if we can borrow on the cheap and have a reasonable expectation that taxpayers will ultimately be left with the bill? Second, why should we be price-sensitive college shoppers, and why should colleges work to contain costs if there's a good chance it will all be paid for with other people's money? Third, we have incentives to borrow a lot of money to pursue boutique degrees with limited job prospects if (again) we know that someone else is going to pay the bill.
As I said in response to Nancy's tweet:
It's disturbing when you could pick a random neighbor and put them up there and they'd know more than the candidates.
— Amy Alkon (@amyalkon) June 28, 2019
IF and only if we decide that government intervention is needed for runaway debt, I'd focus on the source of the problem... why is college costing more and more money? Fancy buildings? Too many professors? Too much administration? Too much focus on sports?
NicoleK at June 27, 2019 11:17 PM
If you are against bailing out these students you better be against all the money we spend on Israel and the middle eastern wars we fight on her behalf. If we have trillions to help Israel manipulate the geopolitics of the Middle East we can bail out these students. Also if we bailed out those worthless bankers in the Obama years we can bail out these kids.
1) As I see it these students where exploited, at a very young age, by the entire society which encouraged them to go to college. Society failed them and society has to help them.
2) The banks that loaned the students the money should suffer. These banks made a bad investment and they should have known better then to give kids loans that the bankers were well aware that these kids could never pay off. These fucking bankers thought that they were really clever by making student loans non-dischargeable in bankruptcy. They wanted to create lifelong debt slaves. Well fuck the banks. Cancle the debt and make the banks pay for their bad investments. I don't like the banks or bankers. Most Americans hate them.
3) Universities also encouraged students taking out loans so they could fund sinacures for administrators and anti white/ anti male indorcronation departments. Well let's change the system with how college is funded so that we can trim the fat of Gender studies, Black Studies, etc. from the university.
Jewish Cat at June 28, 2019 3:02 AM
Why is college costing more and more? Because there’s all this free (to the college) money in the system and the only way for the college to get more of it is to raise tuition.
Once the money’s obtained, it will be spent on something.
Conan the Grammarian at June 28, 2019 4:15 AM
Lets assume people don't run up debt right before the great loan writeoff just to cash in on the opportunity (and they will). What about after? We would have just wiped out trillions of debt. Why wouldn't we do it again? Why wouldn't people just run up the same and even more debt expecting to not pay it?
The proposed plans solve none of the problems they claim to be solving.
Ben at June 28, 2019 4:42 AM
Lets assume people don't run up debt right before the great loan writeoff just to cash in on the opportunity (and they will). What about after? We would have just wiped out trillions of debt. Why wouldn't we do it again? Why wouldn't people just run up the same and even more debt expecting to not pay it?
--Ben
When it comes to college loans I don't see the problem. College loans are already a peculiar form of debt since they are non-dischargable in banrkrupcy. This non-dischargablity is what allows bankers to turn kids into lifelong debt slaves. Well, a special type of debt deserves a special solution; and debt forgivness on college loans, and only college loans, sounds good to me.
As to your point about this never happening again I hope that the banks and U.S. gonvernment learn their lesson and never make a debt non-dischrabagle in bankruptcy again since it leads to so much trouble. I also hope regulations are put in to protect the young and the low IQ from financial exploitaiton.
Also I notice that in America a lot of right wing types complain about helping out their own people and never shut up about the national debt but then suddenly forget about fiscal responsiblity when it comes to giving money to the ones with the small hats. It's pathetic.
Jewish Cat at June 28, 2019 5:21 AM
The assumption underlying your assertion is flawed, JC. A student loan is dischargeable in bankruptcy. However, discharging it is difficult. The courts generally require the applicant to meet all three requirements of the Brunner Test.
In non-student consumer loans, the lender is left with an asset that can be seized - i.e., a house, a car, a TV, etc. Even unsecured loans (credit cards, etc.) come with some measure of risk tolerance - e.g., higher interest rates.
Student loans, however, have no security that can be seized in default and are generally low-interest - meaning no measure of risk was involved in setting the price of getting the loan. Hence, the difficulty of discharge - nothing to ameliorate the loss to the lender.
Conan the Grammarian at June 28, 2019 5:48 AM
JC, banks don't make federal student loans anymore. The federal government nationalized the student loan program and started directly lending to students in 2010.
Banks can still lend to students in a program of their own devising, but the taxpayer is not on the hook for those defaults.
Prior to 2010, federal student loans were issued by banks, guaranteed by the federal government, and the interest rates were subsidized by the same. In an eerie presaging of the run-up to the mortgage crisis, banks had little say in who received a loan; they were merely money conduits in an ill-conceived and poorly-regulated federal program.
Loan servicing guidelines then were cumbersome and strict, so a bank failing to properly service a loan had to eat the loss - in that sense, the banks had some stake in the risk of default. Today, that risk is entirely on the lender, the US taxpayer.
Conan the Grammarian at June 28, 2019 6:35 AM
Conan. Even if they got the loans from the government the fundamental problem is the same. Weather your a bank or a government it should be completely obvious that handing out loans to students so they can study English Lit is a bad idea. It should also be obvious that most of the population is not smart enough for college (assuming getting a degree takes about a 110 IQ). In short it was obvious that this was a bad and risky investment.
Either the banks or the government made a mistake. This mistake needs to be rectified. The loans should be forgiven. After student loans are forgiven whoever gave the loans, be it the government or the bank, will learn their lesson and hopefully never try anything so stupid again. I don't blame the kids who took out the loans I blame the adults in the room who should have known better.
Jewish Cat at June 28, 2019 6:47 AM
If I have to give Donald Trump one plaudit, it would be that he has resisted military action in the Middle East. The drone shot down by the Iranians would have, in any other modern president, Democrat or Republican, elicited an immediate retaliatory missile strike. With him, it elicited economic sanctions and calls for negotiations.
The world is shifting away from direct military action as a measure of a nation's power and toward economics. The Iranians, like the Germans in 1914 and the Axis powers in 1941, are slow to realize and adapt to ongoing changes in world power brokerage.
Conan the Grammarian at June 28, 2019 6:48 AM
So, you think nothing of hitting the federal budget with a trillion dollar loss?
Tell me, once you've "forgiven" this money (and demonized the uninvolved banks while you're at it), what is your solution - so we're not "forgiving" another trillion dollars of outstanding debt in 10 years?
And, JC, "free" college is not the solution. That's just putting the free money game in a different carnival booth. Different carnival game, same outcome.
Conan the Grammarian at June 28, 2019 6:54 AM
The world is shifting away from direct military action as a measure of a nation's power and toward economics. The Iranians, like the Germans in 1914 and the Axis powers in 1941, are slow to realize and adapt to ongoing changes in world power brokerage.
Conan
You have a demented view of the world. Your post implies that Iran is the agressor. The truth is that the real agressor is Israel. Israel and American Jews bribe U.S. politicians into attacking countries they don't like. That's what happend in Iraq and Afganistan. However those wars went so poorly that it's very hard to gin up war with Iran.
Israel is pushing so hard for a war with Iran now because they know that soon Iran will get nukes and then Israel won't be able to touch them. Also Israel would prefer to have the Middle East run by religous fanatics (think ISIS and Saudi Arabia) because they are stupid and easiy to manipulate. They are scared of Iran and people like Bashar in Syria because of how competent they are.
Jewish Cat at June 28, 2019 7:07 AM
No body is talking about free college Conan.
Here's my 4 point plan:
1) You realize that giving out so many college loans was a mistake.
2) You realize that the people to blame where the adults in the room, not kids who just graduated high school.
3) You forgive the debt.
4) And then you restructure your education system so that you have less people going to college in the future.
In other words clean up your mess then make sure it doesn't happen again.
If you don't do this and still maintian this system where anybody can get a college loan you will end up with a socialist like Bearnie Sanders, or someone more radical, voted in eventually and then America will have free college, free healthcare, and open borders.
Jewish Cat at June 28, 2019 7:15 AM
"Be it the government or the bank?"
Huh? What banks? They're no longer in the program and haven't been for almost a decade, some longer than that.
Student loans have been a government program since 1959 - sometimes administered through banks and sometimes directly. In all that time, banks have not had a say in who gets the loan or the degree or certificate to be pursued; the government mandates the terms of lending and, as is par-for-the-course in a government money giveaway, there has been no risk assessment involved.
"Learn their lesson?"
Um, when has a politician ever learned a lesson when the cost is paid in other people's money?
The government made this mess, not the banks, not the students, and not the schools.
Schools, JC, not just colleges. Trade schools are in the program, too. The inclusion of proprietary trade schools into the program, a move driven by Ted Kennedy, introduced massive fraud into the program. By the '90s, fly-by-night proprietary trade schools represented the biggest pool of defaults.
Did politicians "learn their lesson" from that? No. They introduced direct lending - an outstanding loan on the books is an asset, but a reserve for potential default is a liability. So, with direct lending, the politicians could claim to have reduced the deficit and provided the government with a pool of "investment" assets.
The only practical solution is to eliminate the program entirely. Force colleges to compete for students on price - like they did before the government muddied the waters.
Those "kids" were 18, old enough to sign a binding contract, vote, and serve in the military. At what point do you assign them responsibility for their own choices?
Conan the Grammarian at June 28, 2019 7:23 AM
Can I borrow about $70k and pay off my mortgage? asking for a friend!
I R A Darth Aggie at June 28, 2019 7:34 AM
And who gets to decide in this restructured system of yours which students go to college and which ones don't.
By the way, JC, you're still operating under the erroneous assumption that the program is only for college. Wrong. It's being used to finance a wide array of post-secondary education or vocational-training programs.
At least half the Democrats currently running for president are. And the idea is gaining traction with large segments of the public.
Your anti-semitism is showing. And it's ugly.
Conan the Grammarian at June 28, 2019 7:36 AM
JC, banks don't make federal student loans anymore.
For the most part, that's so. I have heard that Discover will make student loans, but it isn't obvious if they can be discharge in a bankruptcy.
https://www.discover.com/student-loans/
This blog claims one can discharge a student loan in bankruptcy, but it is a fairly narrow window.
https://blog.credit.com/2018/10/can-you-discharge-private-student-loans-in-bankruptcy-113463/
I'm surprised that many of these worthless degreed SJWs aren't chasing the public service loan forgiveness route, working for a non-profit or government entity.
studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-serviceIn light of that, these are whining whiners who want other people to pay for their shit. And when Normals get fed up with paying for colleges and universities and stop the stream of money, they'll be called anti-intellectual.
I R A Darth Aggie at June 28, 2019 7:48 AM
be it the government or the bank, will learn their lesson and hopefully never try anything so stupid again
Ha. Ha hah. BWAHAHAHAHAHAHAHA!
Government learning lessons and avoiding stupidity? here's the money quote, if you'll pardon the expression:
Remember, the housing loan market melt down became noticeable years before the banks bailed on the student loan program. But FedGov picked it up and ran with it because it isn't their money. The bureaucratic 4th branch of the government strikes again!
Banks might be more institutionally capable of learning that lesson, and maybe that's why they exited the market. But I think it really came down to realizing they couldn't compete with FedGov.
I R A Darth Aggie at June 28, 2019 7:59 AM
Your anti-semitism is showing. And it's ugly.
-Conan
The antisemtism trick is not going to work on me, considering I am a Jew with a Jewish wife and Jewish kids.
I stand by what I said. Jews have a lot of power in Washington thanks to the legalized bribes (lobbying) they give to polticians. One thing Jews lobby for is wars that adance their geopolitical interests in the Middle East. Most of the neocons who planed these wars out in the late 90s and early 2000s where Jews.
And I will add two more things to this.
1) A lot of Jews have a genocidal hatred of Europeans and their descendents in the U.S. because of the holocaust and real and imagined grievences going back to medevil times.
2) Jews promote mass immigration and liberalism in foreign countries while mainting a facist state back in Israel (facism and nationalism for me and liberalism and multiculturalism for thee).
These are unfortuante facts and I wish they weren't true but I don't deny them. I say what I think is true and right to show the world that there are good Jews out there. Hopefully I can also persuade some of my own people to act better.
Also I want to show my kids that you should always say what you think is right, even if you have to go against your own tribe to say it.
And Conan if you are white, which I suspect you are, my people don't respect boot lickers. That's why no matter how many concensions Trump gives us (the Golan Heights, moving the Embessy)the overwhelming majority of U.S. Jews hate Trump.
Jewish Cat at June 28, 2019 8:05 AM
Bearnie Sanders, or someone more radical, voted in eventually and then America will have free college, free healthcare, and open borders.
Not for very long.
I R A Darth Aggie at June 28, 2019 8:05 AM
Your post implies that Iran is the agressor.
They are. They've been at war with us for 40 years, from the moment their "students" seized the US Embassy in Tehran.
More than a few of the injured or KIA service members in Iraq got those courtesy of the Quds Force and their armor penetrating IEDs they provided to the Shiite militias.
I R A Darth Aggie at June 28, 2019 8:12 AM
I guess that answers Crid's question, "Is Jewish Cat really Jewish?"
When people start making noises about an ethnicity-wide conspiratorial machinations, I take it with a grain of salt, a big one.
I don't believe Israel and American Jews are conspiring to maneuver the US into war with Iran. Iran is doing a bang-up job of that on its own. Yes, Iran is the aggressor and, as Darth points out, has been "at war" with the US since the '70s.
America going into a shooting war with Iran will not actually benefit Israel, as Israel will be targeted by Iran, much like it was by Iraq in the Second Gulf War; only Iran's attacks will be more effective and, possibly, nuclear.
Trump's restraint in the Middle East, while unexpected in someone as bellicose as he, is welcome.
American Jews may hate Trump, but the concessions he's given Israel have not been to placate them; they've been in US interests. Moving the embassy served to give Palestinians notice that their plight is no longer the cause célèbre of US Middle East diplomacy; that the US will no let the siren song of a two-state solution lure it to batter its ship on the rocks of Palestinian obstinance. Our patience has run thin.
And, yes, you can be both anti-Semitic and Jewish.
Conan the Grammarian at June 28, 2019 8:26 AM
Um I.R.A the Iranian revolution happened because the U.S. overthrew the legitimate Iranian government and then installed the Shah. The Iranians were kind of pissed about that. So I guess your wrong on that point.
Where you're really wrong though is that looking at the Middle East today you have a U.S. that has attacked three (more?) countries in the last two decades, and is constantly threating to attack more (especially Iran) because Israel tells them too (or I guess Jewish donors in Israel and America tell them to). Only someone who watches U.S. news (by the way who owns more than 90% of that?) could think Iran is the agressor.
The idea that Iran is the agressor is especially stupid since Iran knows it will lose a war with the U.S. That is why it's not going to try to provoke the U.S. into war. It's not in Iran's interest.
I guess Iran might be trying to get nukes, but honestly can you blame them? Once they have nukes they don't have to worry about getting taken out like Libyia was.
Jewish Cat at June 28, 2019 8:28 AM
>> I'd focus on the source of the problem... why is
>> college costing more and more money?
-- NicoleK
Depends. At the state school where I got my graduate degree the underlying cost has not gone up too much...tuition has gone up because the state is covering less. The number I saw was in 1979 at the school the state paid 80% of the cost leaving tuition to cover 20% in 2012 it was reversed.
At the small college where I got my undergraduate degree...the department that oversaw academics (who you declared your major with and kept the school accredited with various groups) was 5 + a couple of student helpers. In 2015 it had a division...9 people still did the one part of the job,,,the accreditation group was now 80 people. This from a family friend who was one of the 9. Oh...same number of students.
>> Fancy buildings?
No buildings paid-off. New one paid for by donation.
>> Too many professors?
Maybe...doesn't seem like there are profs sitting around with nobody to teach
>> Too much administration?
Yes...but you have too look at why.
>> Too much focus on sports?
Not for financials...sports actual pay into the school maximum amount allowed by law.
The Former Banker at June 28, 2019 8:31 AM
You know who Rebbe Schneerson is Conan? He was a very influential Jewish holy man in New York who claimed that gentiles have demonic souls and are not even human. He said gentiles where to be our slaves and our cattle when the messiah came. Interestingly enough Hillary Clinton and every major New York politician still kissed his ass (I guess they know who schmears their bagel).
The point being that if looking at Jews objectively (the good and the bad) is so hard for you then maybe you really are nothing more than cattle.
Actually one more point. My guess is that even though you complain about the slightest criticism of Jews you have nothing to say about the hatred people like Rebbe Schneerson feels about non-Jews. Or for that matter you have nothing to say about all those left wing Jewish journalists who tweet every day about how white males should die. This sort of unqeustioning blind obedience to Israel is something I see in baby boomers all the time. Though I guess you could also be Jewish.
Would you mind telling me your race and age Conan. Like if you where a black millenial that would be very surprsing.
Jewish Cat at June 28, 2019 8:52 AM
Since the biggest debt is the national debt, perhaps we should lobby the government to forgive its own debt.
Curtis at June 28, 2019 9:02 AM
I suspect the candidates know better. They hope a useful proportion of the potential voters actually believe them.
Richard Aubrey at June 28, 2019 9:08 AM
Not necessarily. The North Vietnamese proved that the US has little tolerance for a long drawn-out conflict with high casualties.
The US military is a quick strike, firepower-directed military. We deliver firepower on-target better than any military in the world, but we don't do grunts in the trenches well; our public will not stand for its sons and daughters being sacrificed for statecraft.
Iran does not need to defeat the US to "win" a war with it. If Iran can claim it made the US cut and run, it gains prestige in the Middle East, prestige it can use to increase its influence and decrease that of its rival, Saudi Arabia.
Iran is not looking to defeat the US, merely to lessen American influence and that of Saudi Arabia. The bipolar power contest in the Middle East is between the Sunni Saudis and the Shi'ite Iranians - Sunnis vs. Shi'ites has been a centuries-long conflict in the Muslim world and that's what is in play today.
Yes, Kermit Roosevelt was the mastermind behind the CIA's 1953 overthrow of the recently-elected Prime Minister Mohammad Mosaddegh. The US and UK favored a stronger monarchy with the Western-leaning Shah Reza Pahlavi on the throne. Mosaddegh was seeking to - depending upon which party you talk to - nationalize the Anglo-Iranian Oil Company (now part of BP) or to audit its books. The Majli (Iran's legislature) had already voted to nationalize the oil industry and the US feared a communist takeover.
Mosaddegh was a descendant of the Qajar dynasty, the one the Pahlavi dynasty succeeded, and considered the Pahlavis to be usurpers and illegitimate rulers. So, there was already tension between them.
The Shah believed he had more public support than he actually did after witnessing the public outpouring of sympathy for his injuries sustained in a 1949 assassination attempt.
The origins of the current Islamic Republic in Iran and its anti-US animosity are directly traceable to the 1953 coup.
I am not familiar with him (I'll do some research), but all religions have their fanatical nutbags, some of whom even rise to high levels of influence and power in the mainstream.
I'd look upon his claims with the same skepticism with which I look upon claims that all Jews are in conspiracy against Christendom or upon anyone who promote The Protocols of the Elders of Zion as truth.
As an anti-collectivist Gentile, I would take umbrage at being referred to as "cattle." I'm kinda used to the "demonic" charge, having been raised Catholic among Baptists. I was once told by an evangelical Baptist coworker that "Catholics aren't Christians."
I am not a black Millennial. According to Ancestry.com, I'm probably as white as white can be - Irish, German, and Scottish heritage. I'm too young to be a real Baby Boomer and too old for conventional parameters of Gen-X, although I identify more with their cultural touchstones than with any other generation's.
Conan the Grammarian at June 28, 2019 9:19 AM
I would look favorably on any candidate — of any party — who, when faced with the "eliminate student debt" issue, would give a thin smile and say, "Yeah, we're not going to do that."
Kevin at June 28, 2019 9:28 AM
I notice the rallying cry is "eliminate student debt" and not "reform the hugely profitable loan system".
Walking the fine line between the voters and the owners.
Gog_Magog_Carpet_Reclaimers at June 28, 2019 10:00 AM
What competition? In 2010, banks lost the federal guarantee and subsidy on student loans. That's why they got out of the business.
Here's a short history of the student loan program.
Prior to the nationalization of student loans in 2010, banks made the loans through the schools. The banks then either held them or sold them to SLMA or to another guarantor (state or private).
The holder of the loan then hired a servicing agency to navigate the cumbersome federal servicing requirements, violation of which resulted in the removal of the guarantee - the servicers were liable for any and all violations of the servicing requirements and lost guarantees.
The loans were usually offered to students at below-market interest rates with the federal government paying the difference, so the lender was making market rates on the loan. While the borrower was in school, the federal government paid the entire interest amount due for that period.
Various programs were available to assist borrowers having difficulty repaying loans with the federal government picking up the tab for deferred interests payments. You literally had to work to default a student loan.
Fraud was already rampant throughout out the lightly, if at all, regulated program. Then, in the early '70s, Ted Kennedy led an effort to open it up to proprietary trade schools, arguing that it would help the poor.
Attendees of these fly-by-night proprietary trade schools found they couldn't get jobs in their fields or were outright defrauded. The application forms included a FAFSA form with "distribute full amount to the school" pre-checked. The tuition was, coincidentally, set at the maximum amount available for a student loan. The school only stayed in business long enough to collect money and then went kaput. Borrowers found themselves thousands of dollars in debt for a school that had declared bankruptcy years earlier.
When I worked in student loans, some of our most heartbreaking collection stories came from students who attended these proprietary trade schools. One guy, possessing only a third grade education, was thrown out on Day 1 after failing the placement test - although the admissions folks had earlier told him he passed the admissions test with flying colors and even helped him fill out his application (FAFSA included). He didn't know to apply immediately for a pro-rated refund and when he found out he could, the school had been closed for years, so he was left on the hook for the full amount.
Eventually the legitimate schools caught on and raised their tuitions - like a carnival money booth: get in there and grab as much as you can while it's flying around.
Conan the Grammarian at June 28, 2019 10:26 AM
Seven or eight years ago, you could break down the student-loan-poor into three groups:
1. The ones who paid out big bucks to get influential degrees from top-rated schools (law and medicine mainly).
2. The ones who were unemployable because they got degrees in XYZ Studies.
3. The ones who had good degrees but couldn't get a job because the economy was bad.
The third group has shrunk a lot as the economy has improved. They're not much of a concern anymore. The other two groups I have a lot less sympathy for. Group #1 is entirely capable of paying back their loans; they just don't want to. Group #2 basically went to school to party and cosplay at political activism, and they avoided any courses where they might actually have had to learn something. They can go jump as far as I'm concerned.
Conan: "...too old for conventional parameters of Gen-X, although I identify more with their cultural touchstones than with any other generation's."
I'm the same. Born in 1959, I fall into most people's definition of the tail end of the Boomers. But I have few experiences in common with that generation; my cultural touchstones are those of Gen X, and that is how I think of myself.
Cousin Dave at June 28, 2019 10:55 AM
By all means,let's reward people who paid big money for useless degrees and penalize people who went to community college for 2 years and to a state school and worked part-time and thus had little debt.
The cost of something is not only a payment, it is also a signal of supply and demand. If you have to borrow big-time for a degree (or a school) that does not have a good return on that investment, a smart person will choose not to get that degree (or go to that school). If you make it free, those price signals go away and more people will study useless things and then be angry later. It also removes the incentive for colleges to control costs (as has already happened due to the loans in the first place).
What people miss about the "college is free" promise of Bernie and others is that it means that colleges could not charge tuition and would have to make do with whatever money they get from the gov. This will mean not only quotas (only so much $ will in fact be allocated) but also likely deterioration of college quality. In Germany there are strong quotas for this reason.
cc at June 28, 2019 10:57 AM
Jewish Cat: the fed gov took over student loans many years ago so the banks did not exploit anyone. It was federal policy to make loans available.
"society" failed them? These students have parents who should have given better advice. These students also proclaim constantly that they know better than "society" on every issue, so tough shit if their economics skills are worse than they think.
As to "not everyone should go to college": bingo. But society has been trimming out trade-school type courses (electronics, auto shop) in high school for 50 yrs and the conventional wisdom is that everyone should go to college. This obviously can't work, it is like saying everyone should be a doctor. The consequence has been the lowering of standards in many schools (grade inflation) to not flunk out the customers. The message is only slowly penetrating.
cc at June 28, 2019 11:09 AM
FormerBanker,it's my understanding that most sports programs are a net loss for schools, they are only profitable when they are winners and there are only ever a few potential winners in any given division.
NicoleK at June 28, 2019 11:44 AM
Trade schools and apprentice programs that work with industry are not a bad idea. You'd get a business degree by working for a. business, while taking a couple classes in a school consisting of just a classroom, and earning a very small salary.
Free or nearly free college really only works if only the cream of the crop of academic students go to college
NicoleK at June 28, 2019 11:47 AM
"These students also proclaim constantly that they know better than "society" on every issue "
This may be the first time in history this has happened.
Gog_Magog_Carpet_Reclaimers at June 28, 2019 11:58 AM
NicoleK that is my understanding on sports programs as well. A few schools turn a profit but most are run at a real loss (even if false accounting shows otherwise).
It is also my understanding that states have not been reducing their contributions to higher education. It is just that the increase in tuition prices has been faster than the increase in support. Hence the lower percentage coming from state sources.
As for crazy Israel conspiracies, the US spends around $3 billion on Israel each year. That is 0.07% of US spending. Would I be happier if it was less? Sure. But lets be honest. This is a drop in the bucket. It doesn't really matter. And despite Jewish Cat's claims in prior threads $3 billion isn't enough to impact our $2.5 trillion in 'mandatory' spending on Social Security and such.
Now if Trump decided I was a better choice for all that Israel money I certainly wouldn't turn him down. I hear by pledge to spend it in the bestest and greatest and most Trumpian way possible for this greatest nation on the greatest planet of the greatest solar system out there. (Psst. Anyone know where I can shove a few more greatests in? Trump seems to love that word.)
Ben at June 29, 2019 6:32 AM
Hey Ben. Two things:
1) If a country has citizens who can't afford health care or education it has no business giving even a dime to foreign states.
2) As I have said many times I'm not just talking about foreign aid. I'm talking about all the middle Eastern war Jewish donors and Israel have lobbied the U.S. into. Iraq alone cost more than 2 trillion. And yes Israel is the reason for these wars. If anyone doubts this they can start by reading the Clean Break Memo (prepared under Netenyahu in 1996) which called for the removal of Saddam Hussein years before it happened. They can verify what sort of foreign policy the neocons promoted in the Bush years and what tribe the neocons come from. And then they can look up for themselves what sort of foreign policy Jewish billionaires like Haim Sabaan and Sheldon Abelson lobby for.
So ben stop lying as If I am only talking about foreign aid.
Jewish Cat at June 29, 2019 12:26 PM
Name your time base JC. You had to add several years up to get that 2 trillion. Social Security is roughly 1 trillion every single year. Which doesn't include Medicare or Medicade which are another trillion each year. If you are going to bitch and moan about spending and the budget at least educate yourself even minimally on the topic. I get you hate Israel and are pretty anti-semitic. But come on! You bitched and moaned about rich bankers taking advantage of poor students as ignorantly as our senators. Even after you were informed that no bankers are involved, that this is 100% a US federal thing, you continued to bitch and moan about those nonexistant rich bankers.
If you are going to lie at least make your lies a bit more plausible.
Ben at June 29, 2019 12:42 PM
"If a country has citizens who can't afford health care or education it has no business giving even a dime to foreign states."
Well, this is the best example of the difference between a thoughtful commenter, like Conan, and a merely opinionated one.
Gentle sir, you have not bothered to define "health care", and for these purposes you in fact must, because there will always be a procedure or treatment beyond the means of anyone, not just the bum on the street corner.
You have also forgotten the existence of public schools, which once did and may still provide every opportunity for you to learn how to make a living. A good one, if it occurs to you that the material in class is a mere fragment of what is available.
Radwaste at July 1, 2019 10:14 AM
Leave a comment