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The Next Subprime Crisis Is Here: Over $120 Billion In Federal Student Loans In Default
Whereas earlier today we presented one of the most exhaustive presentations on the state of the student debt bubble, one question that has always evaded greater scrutiny has been the very critical default rate for student borrowers: a number which few if any lenders and colleges openly disclose for fears the general public would comprehend not only the true extent of the student loan bubble, but that it has now burst. This is a question that we specifically posed a month ago when we asked "As HELOC delinquency rates hit a record, are student loans next?" Ironically in that same earlier post we showed a chart of default rates for federal loan borrowers that while rising was still not too troubling: as it turns out the reason why its was low is it was made using fudged data that drastically misrepresented the seriousness of the situation, dramatically undercutting the amount of bad debt in the system.
Luckily, this is a question that has now been answered, courtesy of the Department of Education, which today for the first time ever released official three-year, or much more thorough than the heretofore standard two-year benchmark, federal student loan cohort default rates. The number, for all colleges, stood at a stunning 13.4% for the 2009 cohort. The number is stunning because it is nearly 50% greater than the old benchmark, which tracked a two year default cohort, and which was a "mere" 8.8% for the 2009 year. Broken down by type of education, and using the new improved, and much more realistic benchmark, for-profit institutions had the highest average three-year default rates at 22.7 percent, with public institutions following at 11 percent and private non-profit institutions at 7.5 percent. In other words, more than one in five federal student loans used to fund private for-profit education, is now in default and will likely never be repaid!
And while it is impossible using historical data to extrapolate with precision what the current consolidated federal student loan default rate is, we do know that there is now $914 billion in federal student loans (which also was mysteriously revised over 50% higher by the Fed just a month ago). Using simple inference, all else equal (and all else has certainly deteriorated), there is now at least $122 billion in federal student loan defaults. And surging every day.
Ladies and gentlemen: meet the new subprime.
Another that quietly reported today on the change in the Department of Education's default tracking methodology was Bloomberg in "Student-Loan Default Rates Soar as Federal Scrutiny Grows." Needless to say, it was not impressed, because the new data indicated that there had been a concerted push by all sides to misrepresent the severity of the student debt problem, by over 50%. The "why" is quite simple:
The Education Department has revamped the way it reports student-loan defaults, which the government said had reached the highest level in 14 years. Previously, the agency reported the rate only for the first two years payments are required. Congress demanded a more comprehensive measure because of concern that colleges counsel students to defer payments to make default rates appear low.
“Default rates are the tip of the iceberg of borrower distress,” said Pauline Abernathy, vice president of The Institute for College Access & Success, a nonprofit based in Oakland, California.
On the stump, President Obama has touted an executive order that eases the process for applying for a loan program that lets students make lower payments tied to their income -- easing their burden and making it less likely they will default.
Under the new three-year measure, colleges with default rates of 30 percent or more for three consecutive years risk losing eligibility for federal financial aid. Schools can also be barred from the program if the rate balloons to 40 percent in a single year. The sanctions don’t take effect until results are released in 2014.
There it is again: a mega-government which gives amply with one hand, and yet with the other skews the incentives in the system to represent reality as far better than it truly is. One way to underwhelm reality and to soothe the blow of the true extent of the popped student loan bubble was using a shorter data cohort.
Some for-profit colleges encourage students to defer
payments in their early years, in an effort to keep down default rates that could jeopardize their federal funding, according to a report by the Senate Committee on Health, Education, Labor and Pensions released in July.
The report accused for-profits of using the tactic to manipulate their default rates. It singled out the role of SLM Corp. (SLM), the largest U.S. student-loan company commonly known as Sallie Mae. A subsidiary, General Revenue Corp. counsels for- profit colleges on keeping down default rates. University of Phoenix, owned by Apollo Group Inc. (APOL), is a customer, according to the Congressional report
Whether or not the reason for the government to demand more accurate data was to scapegoat the private sector yet again, what it did instead if expose just how deep the student loan hole already is. Because now that we know the revised default data, we can put it together with the recently revised as of a month ago revised total student loan notional number. Recall from the Fed:
The revisions to the data are fairly substantial: as of our August report, 2011Q2 student loan balances were reported at $550 billion. We now estimate that student loans outstanding in that quarter (2011Q2) amounted to $845 billion, $290 billion or 53.7% higher than we reported earlier. These previously excluded loans were also missing from the total debt outstanding; as a result, our estimate of total debt outstanding in 2011Q2 is also revised upward by $290 billion (2.5%).
This is what student debt looked like a month ago when we first reported the data:
One can see why everyone in the Federal administration has been so reticent about disclosing the true state of the Federally-funded student loan bubble. Because if one simply assumes the rising default rate has kept constant across all recent cohorts since the updated 2009 number, it would mean broadly speaking, that of the $914 billion in Federal Student Loans at least 13.4% will end up in default. Over $120 billion.
Of course all else is never equal: Federally funded student loans are now increasing at a rate of over $60 billion per quarter. This means that in just about 18 months, the total size of the Federal student loan market will hit $1.3 trillion. Why is that number important? Because that is how big the subprime market was at its peak in late 2007, when everything went to hell and the last credit bubble popped. From Responsible Lending:
As can be seen on the table above, 20% of all subprime mortgages was then expected to default (the ultimate number ended up being far higher). Note that as mentioned above, already over 22% of for-profit student loans are in default.
In other words, the Federal student loan bubble has not only popped, but has all the carbon copy makings of the next subprime crisis. Only when it pops it won't be New Century and Countrywide Financial on the hook: it will be all of America's taxpayers. Remember: these are Federal loans.
And the biggest problem: unlike housing where there is always at least some recovery of collateral, as the house remains, with student debt there is no recoverable asset as the asset is a human being. Granted said human effectively becomes a debt slave courtesy of the non-discharge nature of the student loan, which can not be wiped out even with a personal bankruptcy, but assuming the taxpayer can recover any money using discounted garnished wage flows of what are effectively perpetual(ly discouraged) debt slaves of the system, is simply idiotic.
We give Bernanke at most 2 years before everyone is aware of the true extent of not only the student debt bubble, but that it has already popped, at which point student loans will be the next "asset" to be monetized by the Federal Reserve.
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The financial system and The Government are all one big pile of crap. There I summed it up. You don't have to give us anymore details.
Bite your tongue! The financial system and The Govenment is a magnificent criminal enterprise. They're the most efficient purveyors of fraud, murder, and theft this world has ever seen. They are a glimmering beacon of evil. They are the ultimate bastion of........well, you get the idea
QE3 just went from 40bn per month to 60bn per month.
Yea, we need it to be only two months instead of three months to bailout the banks for ALL of these bad loans. Don't want to have a bad quarter.
MOAR STRONGERER
-Paul "MOTHER FUCKIN" Krugman
Ben Bernanke, 3/28/2007: "The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained."
Ben Bernanke, 12/10/2012: "The impact on the broader economy and financial markets of the problems in the student loan markets seems likely to be contained."
Ben Bernanke, 4/15/2014: "The impact on the broader economy and financial markets of the problems of the implosion of the US dollar seems likely to be contained."
Ben Bernanke, 6/3/2045: "As part of my deathbed confession, I admit, I don't actually know anything about anything. Joke's on you, though, losers."
So What
Ministry
I vouch for them.
http://www.youtube.com/watch?v=_TjzdbNwTCY
HEY.... ALL YOU SHEEP SHITHEADS!!! Guess what the first order of business will be for #1(Whoever) is predetermined to take the oval orifice position..
The debt ceiling!! remember that?? yeah.. gotta jack it up.. because nothing else matters..
Food and ammo, then gold and silver.
BTW, can they rescind the degrees of those in default (you didn't earn that)? Or just attach the wages (if employed) of the debt slaves?
Didn't I hear a canidate say that the students are uplifted. Now the have to wait for the yellow rain so they can grow green shoots.
It's not like these folks won't pay it back, I mean, look at all the new revenue agents PPACA will bring to the dynamic.
slaves in Africa have nothing
college in America have $100,000 DEBT!!!
Time to move to Africa.
The edumacated debt slaves perhaps should have read the Constitution better- as neither slavery nor involuntary servitude is outlawed under the 13th ammendment. It only takes an act of Congress to the modify federal sentencing guidelines and the debt slaves can actually legally be monetized as indentured servants (or property) of their creditor(s). Thank you Joe Biden, personal bitch of the BofA board, for rewriting the rules so that Student Loan debt cannot be discharged through bankruptcy. Too bad all those edumacated debt slaves probably bought your BS about increasing consumer protection. Thank God I paid for my college out of my own savings.
13th Ammendment
Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Section 2. Congress shall have power to enforce this article by appropriate legislation
Sounds like great opportunity for the good folks in the "corrections" business..
The for profit prison corporations are now demanding minimum occupancy levels in their contracts with the state. It will be up to law enforcement to keep the prisons full, or the kick backs will stop flowing.
Eloquently summed up by Serg and Co.
http://www.youtube.com/watch?v=CzX8lLV94S4
Lyrics:
http://www.songmeanings.net/songs/view/32798/
Much, much more opportunity for the debt collection business.
Our local Tea Party representative is actually a big-money corporate shill. He sponsored legislation to allow telemarketers and others to call your cell phone, even when you are billed for their calls. The financial industry heavily supports this iniative.
http://www.opencongress.org/bill/112-h3035/news
It did not pass, but just wait. It will come up again and again until they can shove it through.
Specific Organizations Supporting H.R.3035- ACA International
- Air Transport Association
- Consumer Bankers Association
- Coalition of Higher Education Assistance Organizations
- Edison Electric Institute
- Education Finance Council
- Financial Services Roundtable
- Housing Policy Council
- National Association of College and University Business Officers
- National Council of Higher Education Loan Programs, Inc.
- Student Loan Servicing Alliance
- Student Loan Servicing Alliance Private Loan Committee
- The Clearing House
- SoundBite Communications Inc.
- American Bankers Association
- Mortgage Bankers Association
- U. S. Chamber of Commerce
Interests that oppose this bill:When you're in default, you cannot get 'official' copies of your degree or transcripts, so they effectively do 'rescind' your degree depending on whether or not you're applying for a job that wants the official documents. Trust me...I know....
They also take your tax returns eventually, but I think it happens after like 3 or 4 years of being in default. If you're smart, you call the gubmint around the middle of December or January and tell them you want to pay your defaulted debt; you get on a cheap-as-possible payment plan; you make a couple of payments to get back in semi-good standing, then you get your tax return, and then stop paying again. Trust me....I know...
I'd honestly love to just pay those fucking loans off and get on with my life, but it's kinda difficult when you're living paycheck to paycheck even WITHOUT forking out several hundred dollars a month for the loan payments.
Pretty soon college kids are going to lose it and may go postal against college administrators.
college administrators usually have degrees from much shittier places.
given that it's been generally agreed here that degrees are worth-less pieces of paper, why rescind?
the "you didn't earn that" line - sure, degrees are purchased with student loans, but there are some people who have put in the time & effort to earn their degree, but cannot use them in employment because of the state of the world economy - why continue to stomp on them?
as for "attach the wages" - no wages, no attachments - voila! and from what I've read, a defaulted student loan means no "social security" bennies. . .cue hollow laughter. . .
The USA is a banana subprime-rate republic with financial and security/military oligarchy in charge.
Now, America is a "subprime land" where it doesn’t pay to be honest or work hard. The best way to make a good living is to steal from taxpayers and/or the government. The US financial oligarchy and government employees are really good on it. The only question to ask: how long will Chinese subsidize and pay for it?
For the last 10 years, America has used its military might to threaten, intimidate, and invade other countries to support its unsustainable level of living but, as Iraq, Afghanistan, Syrian, and Iran have shown, this is coming to the end. US military is not that mighty any more. It is just a matter of time when America will have a direct confrontation with a strong adversary following a major American retreat from all over world.
Unfortunately, the impact on the broader economy and financial market of the fecal matters in Bernanke's brain is NOT contained. That why the whole thing smells like crap now
Optimistic to expect Bennie to still be alive in 2045?? With the obvious love for him and his "friends" awash through ZH (and other sites too don't you know!) I was rather expecting him (and others) to be acting as lamp-post decorations within no longer than the next decade!
500+ House and senate members and a few other choice persons decorating light poles on Constitution Ave..... Thats the change you can believe in!
No wonder senators Hagan & Corker have been working so hard (on behalf of their handlers) to pass the covered bond bill, allowing, among other things for student loan debt to be rolled into marketable securities guaranteed by the FDIC. So far the FDIC has not played along. Write garbage loans then stuff the losers into somebody's pension fund.
let's see, for the young, make education unaffordable & the job market unreachable. For the old make the markets untenable. I'd say they pretty much have this covered
Easy college loan money has allowed for constant building, typically $100 mil - $200 mil projects at larger universities.
No wonder foreign students want to tap into the infrastructure of U.S. higher education. It would be prohibitive to replicate in almost any other country.
One can always tell a bubble when the spending gets stupid, though. Ohio State president's $64K bow tie expense since 2007.
Bonds are nice, but student loans should be 0% coming directly from the Fed/Treasury for math and science course tuition with international end demand. Some 2-yr technical degrees, like CNC machine training, should be covered. Degrees with low market demand and room and board expenses should not be backed by government funding.
Big banks and now five administrative middlemen with political connections (Aspire, etc) are too involved in writing the legislation. That makes the program a subprime bubble.
stupid'r,
save a lamp post for Mr. Gee, and maybe one for his pal Mr. Lynch (these stories just get more entertaining as we go, right?)
End demand driven education? That would require 100% upheaval in the current system of primarily liberal academics.
And the crowd wondered why their favorite pizza at Sam’s Club increased 10% in price this week.
It's all of those damned government contractors.
Actually, the problem is that a very low number of pizzas actually pay taxes. Most pizzas just live off the system, parasitically, producing nothing.
Many pizzas also engage in speculation. This has a lot of bad side effects.
And that's your MSM analysis for Friday. Have a pleasant tomorrow.
ParkAveFlasher
The vast majority of pizzas posting here have never produced anything or had a job producing anything.
And they never will.
All those hypocrites who read Rand and consider themselves candidates for Galt's utopia, would actually be shat upon by Rand herself.
The problem I have with your parasite statement is those who game the system understand it better than those who complain about the system being gamed. I consider it jealousy on the part of those lacking the wit to capitalize on a flawed system and deriding others for doing so.
Really you are either a victim or you aren't. Victims have a mentality where they choose to blame others for their own flaws. They see everyone from Jews to unwed mothers as the source of all their ills.
It's always simpler to blame others than to take charge of your own life. Then you can never claim to your failures because it always is the fault of the other guy.
you write in bold letters because you have a small penis.
does one become a flasher if one has a small penis?.............and why he would pick park ave is beyond me, way too many cameras and sharp shooting (not) nypd infantry.........................
This is why you are always one step ahead of me. I had flasher and small penis and I could not throw it all in there together like you did. It does still leave the confusion of why the small penis exhibitionist would choose park ave....
not really a step ahead, just had absolutely nothing to throw out there except for an inane thought....my little kids are still running wild at this hour...not good.........i need another pumpkin ale.................
"And the crowd wondered why their favorite pizza at Sam’s Club increased 10% in price this week."
I haven't noticed that, but I did see that Sam's dropped the rotisserie chicken back down to $4.98 (same as Costco's price) from $5.99. Fifty pound bag of rice $18., 50 pounds of popcorn $21. now's the time to stock up.
Jeez, you would struggle to get 50Ibs of rice in the UK for $18, these days! I managed 25kgs (55Ibs, give or take) in LIDL a few weeks ago for £13.99 ($22.65) but that's as close as I've managed recently.
No VAT at Costco M8
Yes, indeed. Just a few tips from my own experience. Old freezers and clean 50 gallon drums make excellent storage units but tend to become damp over time. Place a small 4 watt lightfixture at the bottom,allowing some space for air circulation. Just leave the drum/freezer open a crack and that will prevent any mould and spoilage. I,m pulling for us, we,re all in this together except for politicians, employees of the Fed,Banksters and other half-wit degenerates who have anything to do with Gubberment.
All my grain gets stored in five gal. buckets, with sealed mylar bags using the dry ice oxygen replacement method prior to sealing. We are now eating rice that was stored this way four years ago, no bugs, no taste difference.
fifty pounds of (GMO'd) popcorn for only $21 hmm? no popcorn for the feedlots, but they're getting all the stale candy - hopefully someone is showing them a great movie to go with it. . .
Food Inc.
http://vimeo.com/30620523
http://candyprofessor.com/2010/01/06/candy-is-for-humans-not-cows/
I have to write in bold now?
just one more example of the arbitrary fascistic rules increasingly imposed on the zh community
YOU HAVE TO WRITE IN BOLD *AND* ALL-CAPS, DAMMIT!!!!!!
AND *NO* PUNCTUATION!!!
(EXCEPT FOR MULTIPLE EXCLAMATION POINTS!!!!!!)
AND LOTS OF "......"!!!
AND DON'T FUCKING BOTHER ABOUT PARAGRAPHS .... OR EVEN RUN-ON SENTENCES ..... OR SENTENCE FRAGMENTS .... ITS ALL GOOD!!!!!!!!
AND THE 'BITCHEZ'!!!! NEVER FUCKING FORGET TO ADD 'BITCHEZ'!!!!!!
Just the FAQ?
Tylers' army subtracts one from infinity. Is it a victory?
I PREFER WHEN PEOPLE WRITE IN ALL CAPS, BOLD, ITALIC, AND UNDERLINED BECAUSE IT LETS ME KNOW THEY ARE SERIOUS!
BITCHEZ
you forgot the word conspiracy
He also forgot to underline.
This is how it's done....Bitchez!!!
so you are anouncing that you pay to enter a store to shop?
sigh....there really is no hope
Tell you what, you get that membership fee back in spades at costco tasting samples.
And there's good supply of XXXL size clothing.
wait.
hopefully.
because after eating all that cheap'r fud, and those cheeeeezy pizzas, XXXL is a given.
Krugman is grinning from ear to ear.
where do i get my free phone?
jb
As soon as you turn 18, you can apply to get your ObamaPhone. 200 free minutes per month, and discounted additional minutes if needed.
Not sure if the iPhone 5 is available yet as a free ObamaPhone? Data plan may be extra, but can be paid for with your welfare EBT card.
Student loans, the loans you can't get rid of in bankruptcy. The anchor that will follow you forever.
Another collapsing bubble? Fuck!! Ok, hold on, Imma get my checkbook.
http://imageshack.us/photo/my-images/641/33591232.jpg/
Since Fed can bailout the world, Student loan is peace of cake~
If everyone stops paying, has anyone actually defaulted?
A life of student loan debt with a career in fast food! YES WE CAN!
The FED will print to cover the student loan bubble, just like all of the other government debts are being monetized.
Lordy, I miss Marla. Such is life. Well, at least ZH has a new theme song.
http://www.youtube.com/watch?v=UH-AafkQPEo
Same here. I need to spend time in my cave.
http://www.youtube.com/watch?v=PIDvH3uKaSI
http://www.youtube.com/watch?v=HREKKEcwdHU
I miss her late night ZH Radio. She had great taste in music. And she would take the occasional request...if it was weird enough.
Indeed @ weird
She loves to run this one during her sets -- in memory of Marla: http://www.youtube.com/watch?v=7oZc_LcWDgs
Also forgot to mention during my digging over her disappearance, that there's a chain of connections that heavily implied this is the blogger formerly known as marla's current (though seldom active) blog: http://www.finemrespice.com/
yeah...she had a flare for cool.
Yup. I can't find any evidence that she's currently DJing online anywhere, which is a shame. She seems to be pretty active on twitter -- or at least it's someone that sure sounds like her.
Oh my, we've got a negative nancy in our midst!
I'm going through some of the old radio zero posts in the archive -- one of the shoutcast links is still active and remnants of a playlist of long ago on it, if I find something complete I'll post links.
Agreed. I miss ZH Radio, as well.
alien-IQ
She and the Israelis were the only ones to claim squirt guns were used by the inavding Israeli forces on the Palestinian armada, you know those squirt guns that killed people.
She was only one of two bitching about Wikileaks and Assange just before the first major release.
I guess everyone forgot that.
We were talking about her taste in music, not her political leanings.
I don't care for Itzhak Perlman's political leanings, but I can still admit he is a brilliant violinist.
Ayn Rand was a evil, heartless bitch, but a very skilled writer.
People are not one dimensional.
Anorexics are one dimensional. At least they want to be
http://www.dailymail.co.uk/news/article-2210240/Gunman-wearing-camouflag...
Apropos squirt guns, this is what happens when you criticize the Euro.
It's amazing how student loans are "non-dischargeable". I'd say 99+% of students to realize that.
Maybe our prez can include "free" student loans along with the free cell phones. That'll be next.
Socialism is great.
when you consider that employers are now routinely running credit checks as part of the employment screening process, that will put those who got educated in "truly" socialist countries (not the faux socialism so many here take such pride in railing against) will be at an advantage since they will not be burdened with non-dischargeable six digit debt.
So yeah...there are some advantages to true socialism.
First there was steel and computer chips, now other countries are "dumping" their subsidized students on us.
Wait. I'm confused. I thought from reading many posts here that people who are on their own to educate themselves beyond high school and who are forced to borrow money from bankers to support a consumer driven economy of debt slavery is socialist. Are you saying that there are countries where the people pool their resources and send people to school so the students have no debt? What is that -- capitalism?
While I agree what we have here is neither capitalism or socialism I disagree with your description of socialism. It's not people pulling their money together, that suggests free will to do so, it is another person taking money from one group of people and giving it to another. A concept completely opposite of freedom.
here we take money from people and give it to corporations. I'm pretty sure Mussolini would have called that Fascism. And he knew a thing or two about fascism.
“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”
Benito Mussolini
Personally, I'd rather have some of my money go towards people who need it rather than corporations that want it.
Did you even read my post? I said this is neither capitalism or socialism. Yes what we have here is fascism I didn't think I had to spell it out. I guess I was wrong.
Of course I read the post...and realized that you did not name it. By not naming it, it's sort of like giving it a pass.
I would rate capitalism above socialism, socialism above fascism and fascism above having red hot needles poked into my eyes.
Sorry, it's not fascism either. The fascists didn't have gigantic and elaborate welfare programs like we do ( SSDI, food stamps, WIC, medicaid, medicare, etc.)
No, what we have here is some sort of sick, three-headed monster of socialism, fascism, and cronyism/elitism.
Many do so by free will. Some are forced.
It always amazes me that otherwise intelligent seeming people cannot understand that human beings must co-exist with each other. Lions and Zebras live in a world of true freedom where the strong survive, and the weak are dinner or starve. Humans have the ability to form societies and work together. Some humans don't like that concept because they consider themselves exceptional and they believe they will do better on their own. Other humans are exceptional. The most successful society in the history of our planet -- modern Western civilization -- is founded on the concept that we are not all equal (notwithstanding the preamble, we all know that some people are smarter and/or more motivated than others, and those people win in our society), but we all deserve an equal chance anyway and we all have equal value and we all deserve to eat even if we don't have the ability to feed ourselves. Why? Because no one needs to suffer. No one needs to starve. That is success as a species. You wish to return to the jungle. You believe you are exceptional because you've done well in a society that you seek to dismantle because you want more for yourself, when you already have more than you could ever need. Funny.
I think the key LTER is what Lawsofphysics always says....prosecute the fraud. Then we all get along and we all know there are consequences if we take advantage....
The Lions have taken over, while the Zerbras complain amongst themselves about the high death count from the latest hunt.
Lions is too nice. Maybe parasites?
The Lions took over because a bunch of Zebras said, "Here, Lions, we want you to have a lot of power, so that you can protect us from other Lions, and oh by the way, please don't abuse this power that we've given you, pretty please, okay? Thanks."
No, the Lions have convinced the Zebras that there are too many weak Zebras and the Lions will be nice if we just give them more weak Zebra meat.
Stringing together logical fallacies does not constitute a winning argument. FFS...go have a few drinks, then come back. Please.
No, its more like the fat lazy lions want to lay around and do nothing, while the other lions do all the work. Then they want in on the feast.
You make it sound as if the reason most people don't have a job is bad luck. Most people live in shitty situations because of the shitty choices they have made in life. They were handed equal opportunity, and they decided to throw it away.
Fuck off. I hope the hordes get you first.
hmm,
maybe not "bad luck" but the reality of the amrkn ponzi-economy? you and your currently 16 upvotes that believe it's the "individual's fault" there are hundreds chasing after each reasonable paying job on offer, with corporations doing drug & credit checks for possible job-winners - may want to reel in the rhetoric before things get much worse.
Let me explain why I disagree. I hope you'll excuse me because I've had a little wine tonight. The problem I have with socialism is that a person can not be free. If something is taken from me then you are taking freedom. But if I choose to give something it's because I have free will and I can see the benefits for society. The other problem I have is dependency. I don't mind a temporary safety net... Shit happens and I understand that. But what I do mind is a system where people are propped up indefinitely. I don't feel that's good for society and I especially don't feel it's good for the individual as a person. While I agree a person should and deserves to have an equal opportunity anything beyond that I feel is not the best path because if we say to one group" well you can't do it on your own so we are going to give you a little extra push above everybody else" then you have a system where the most qualified person doesn't get the position. And if we aren't utilizing the most qualified then we aren't going to get the best results.
I hope I'm clear... I probably should have eaten something before having a glass of wine :->
You aren't even slurring, and you are making sense. Like you always do. The social safety net has become a hammock for many. There is never an effort to kick the undeserving off the system when it runs short of money, the answer is to always just raise taxes on the people who work and are responsible. Think of all the billions that are wasted by our government and there is never any effort whatsoever to eliminate it. How many educations would the government waste fund?
Thank you I appreciate the compliment. The thing that I don't think socialists get is that for us limited government people it's not about greed. It's about what we feel benefits society the most and what is the best allocation of capital. But most importantly of all , it's about what promotes a free society. Dependency, in my view is certainly not freedom, you are beholden to the government. Neither is confiscation freedom, because then you not only have to provide for your family but you have to provide for another. So what happens is, eventually there is not enough income earned and the family may require a second income. This becomes destructive to the family, and therefore destructive to society.
"The social safety net has become a hammock for many."
Is that yours or did you borrow the phrase?
"But what I do mind is a system where people are propped up indefinitely."
Wine is good. I'm drinking some too. I agree with many of your points, including that we should cut off the helping hand once we educate and give equal opportunity to succeed, which does not include giving less opportunity to others.
My issue is that socialism by definition includes giving free education and opportunity to those who want to take advantage of it, and I think that's a good thing.
Yeah, we can just give people all kinds of handouts from the government just for existing and they'll take advantage of it to the fullest and end up as our next generation of doctors and physicists.
I guess you being completely drunk off your ass at all times explains some of the things you post here. I just feel sorry for you now.
"The most successful society in the history of our planet -- modern Western civilization..."
Thank you God. While I have you attention, can you give me next weeks lottery numbers?
5,4,3,2,1... Hmm, looks suspiciously like a countdown, maybe not so lucky numbers after all...
So what is the dif. between socialism and paying taxes ?
What if you live in a socialist country and pay no taxes, what does that make me?
Honestly , you had more like a bottle than a "glass" ..
The problem with Socialism is eventually you run out of other people's money. Margaret Thatcher
the problem with Thatherism is you eventually run out of North Sea oil, and state assets to sell off. . .
We have to come to grips with what crony, government partnered capitalism does to the world. There’s no end to the brutality of the partnership between corporations and governments. And no end in the amount of devastation they have reaped upon the world in order to boost balance sheets.
The majority of the world’s population is living in squalor thanks to this thieving, extractive government partnership. The destructive score sheet tallies the amount of human beings, communities and resources that have been destroyed. What we have to understand is that there’s no way to control this power or partnership. At the point we are now, it’s self propagating.
Starve the Beast.
"forced to borrow money"
Hmmm.... I had a job and zero debt upon graduation.
Wait. I'm confused.
That, and clueless. Education actually used to be cheap and of higher quality, that changed the moment government decided to interfere with it. So instead of capitalism, we have socialism now, making education worse and far more expensive than it needs to be. This is not even a point of discussion but perfectly demonstrable.
It's funny how everything you see wrong in this world is precisely the result of what you see as the solution. I have to assume it's some malfunction in the brain that inhibits you to make the required connection. Or maybe it's just the public school system?
"non-dischargeable"
That language is only in there to appease the sheeple. Once they start defaulting in earnest, they will be "discharged" into the taxpayers' pockets.For-profit institutions had the highest average three-year default rates at 22.7 percent
I AM IN SHOCK!!1!!!!
And with employers running credit checks on job applicants . . . these students are double "f"ed. Student loan defaults will increase, but the debt is never forgiven. So much young talent unable to climb above the debt they incurred trying to build a future following the axiom implored on education education. A sad day in America. The Fed can buy all the Sallie Maes but it won't fix the problem.
The goal was never "education"...it was "debt serfdom". And by that measure, it has been a smashing success.
The goal was never "education"...it was "debt serfdom"
Don't forget indoctrination.
yeah, but they do that for free. It's called k-12.
if you dare to want to know more, you must become a debt slave.
Free k-12?
Is that why the taxes on my house go up 5% annually even though the assessed value has dropped roughly $3K?
One should learn FROM JOHN TAYLOR GATTO !!
TRAGEDY AND HOPE - Commentary and Analysis: The Ultimate History Lesson by JOHN TAYLOR GATTO
(16+ hours / mp3)
The Ultimate History Lesson with John Taylor Gatto was released in audio format during October and November of 2011, featuring the original 5-hour interview with John as well as an additional 11-hours of commentary and analysis, including almost 1000 footnotes, books, videos, and other references provided. These conversations were published as Peace Revolution episodes 041-045. For the film version of The Ultimate History Lesson, click this link. You can also access the Bibliography as well as the Sourced Transcript.
Ways You Can Effectively Help
Learning is the Answer. What's the Question?
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This site is free, please consider helping us; so that we can continue producing projects which enable Cognitive Liberty.
Tragedy and Hope / Purpose (Form and Function)
Tragedy and Hope provides a portal through which individuals can discover, identify, and integrate useful tools, resources, and activities which stimulate and fortify Cognitive Liberty, providing primary sources, research, and educational methods which facilitate consciousness.
More here: http://bit.ly/RKfSS3
His books include: 'Dumbing Us Down: The Hidden Curriculum of Compulsory Schooling' (1992); 'Underground History of American Education' (2003); 'Weapons of Mass Instruction' (2008).
More about John Taylor Gatto: https://www.johntaylorgatto.com/
--------------
"Children who know how to think for themselves spoil the harmony of the collective society that is coming." -- John Dewey (1859-1952), 'father of progressive education.'
Gatto rocks!
So what you're saying is that I shouldn't have enrolled in the University of Phoenix Dropout-to-PhD program?
Christ - how can you afford it? For just the the High-school-grad-out-to-bachelors parts it's almost $40k
Thank God all those kids have jobs waiting for them upon graduation so they can pay their loans back.
I am sure glad I do not work for a company that supports Higher Education .
Can the next round of QE bet set to MUSIC?
Wondered why my check was late. Where's the Rothschilds when you need them. There goes my Obamaphone.
If I help him he gonna help me
Finally some justice from the CFTC. Oops... my bad. What was I thinking?
http://tradewithdave.com/?p=12504
Peak education during a deep trough of skill and ability.
They'll learn...
That is easier said then done, many employers today seek candidates with at least an AA for entry level jobs. Some cases I've seen help wanted ads for entry level bookkeeping positions that require a four year accounting degree. These are not CPA positions, they are entry level bookkeeping positions. I realize this is a heavily regulated industry, but in all reality it does not take a rocket scientist to differentiate between an asset and liability. I'm not disagreeing with you necessarily, but the reality is in many cases without some sort of college education many will not even be considered for an interview.
I paid off my student loans, after defaulting on them. These people better too. I'm not paying for them.
You already are for a portion of them and they want you to pay even more.
Obama Student Loan Forgiveness
About Obama Student Loan Forgiveness
Earlier in his presidency, President Obama announced a student loan forgiveness plan one that has become known as the Obama student loan forgiveness program- for students who were unable to complete their student loan payments or had already completed a significant part of their payments for a long period of time. The Obama student loan forgiveness program automatically clears the remaining debt of anyone who has made regular payments on their federal student loans for a minimum of twenty years. People in military service or who are working in other government departments might have their debts cleared even earlier than that as per Obama Student Loan Forgiveness.
more
http://www.simpletuition.com/student/obama_student_loan_forgiveness.html
It's been such a success they are running out of YOUR tax money
Student Loan Forgiveness Programs Short On Funds
http://www.forbes.com/sites/alisongriswold/2012/07/16/student-loan-forgiveness-programs-short-on-funds/
Learn What the Student Loan Forgiveness Act Could Mean for You
On March 8, Congressman Hansen Clarke (D-Mich.) introduced H.R. 4170, the Student Loan Forgiveness Act of 2012.
http://www.usnews.com/education/blogs/student-loan-ranger/2012/03/21/learn-what-the-student-loan-forgiveness-act-could-mean-for-you
Now it's clear why the "middleman" was eliminated and the gov't took on the debt burden. The financial institutions would have otherwise been saddled with these defaults. Gov't "guarantee" or not. The ostensible reason was to lower the costs to students by lowering the rates. Uh-huh. It was to unload the loans onto the gov't. See? Things make sense if given time to ferment in the mind.
Win/win. Financial institutions don't get defaulted on, and Obama is a hero to the kiddies, and gets their votes by none other than buying them.
yup a two fer the 1% is doing great under obama
Wealthy Americans Gain in Obama Term
snip
since Obama took office in January 2009, wealthy Americans have continued to pull away from the rest of society. In the aftermath of the recession, income inequality in the U.S. reached a new high in 2011, Census Bureau data show.
Even as the president has decried the hollowing out of the middle class, the fortunes of labor and capital have diverged on his watch. Quarterly corporate profits of $1.9 trillion have almost doubled since the end of 2008, while workers’ inflation- adjusted average hourly earnings have declined.
“At the very high end, people got a whole lot wealthier whereas income stagnated at other levels,” said Anne Mathias, director of Washington research for Guggenheim Securities LLC. “Fifty years ago, people talked about the other half, how the other half lived, and now we’re talking about the other 1 percent.”
Bank profits rebounded in third quarter
I've never seen such a losing win
I'm looking forward to the onslaught of lawsuits from students filing charges against schools for teaching them fraudulent information.
I think they've got a fairly air tight case. Let's face it...there is no lack of evidence.
These kids are going to suffer. Their parents are going to suffer.There will be a point where parents will not allow the kids to take out loans and waste 50k a year on college. Kids will go to trade schools, community colleges or right into the family business if there is one. College costs will implode in the next ten years.
I'm sure the government has a plan for that. They will let them work it off by " serving their country" in one fashion or another. It's easier than a draft.
Its not like we didn't try to tell them...ultimately, it has always been about our labor & our consent to its use.
I smell bacon...BLT night ;-)
nmewn I can tell you that where I am, no one tries to tell them (or very few). They still get pushed into these debts by people thinking they are doing them a favor. People like me get my voice drowned out.
Same here. I have screaming for years about this (and other subject so obvious to folks around here).
Society at large is brainwashed. When it comes to education, people are played for their fears that their children will not "live the American Dream." So, they readily cash out thier retirement funds and sign on the dotted line for more.
They know the system is broken - but won't admit it. And nothing you and I can do will get them to "think critically." They are petrified for thier children. And society self-reinforces the whole thing. Some day, these parents and kids are going to look back at what happened - and they are going to be pissed off like never before. This bubble has the potential to be a real show stopper. I have wagered before that it very well might be the last debt bubble that folks willingly walk into.
Ah but it might become handy if a draft becomes necessary.....you can do what you want with a debt slave.
In the US, military service is indentured servitude (albeit a usually voluntary practice).
The very first piece of paper you sign in the term of indenture.
And once you are an indentured servant of the State, the very next peice of paper you sign is the surrender of all the protections, priveledges, immunities, and rights afforded to US Citizens (and all other human beings) under the US Constitution...
However, given the preponderance of the fat, lazy, uneducated (w/ or w/o papers to the contrary), and unskilled among the populace, perhaps more should give it a try...
I tried to get my kids into a trade school in order to develop a skill set now and pursue college once they have been around the block at least once. Unfortunately they refuse to listen and will choose instead to do the same shit everyone else does.
Already at that point with mine. 2 of 3 are out with degrees and zero debt. The youngest still in college knows there will be no loans, and no funding from me if he 1) gets bad grades, or 2) majors in a useless degree. Why parents support bad grades and useless degrees is hard to understand.
So...has Bernanke paid off his student loans for his worthless degrees in Economics and the History of The Great Depression?
School didn't cost a fortune when he went.
Hell, it didn't cost a fortune when I went in the mid 80's. At least it was nowhere near what it cost now. I took no loans at all.
The notion that everyone deserves a higher education is foolish. It's a big lie, colleges are turning out waves of indebted unemployable grads into an abysmal economy with no prospect of a real career.
A principle of democracy is the education of all citizens.
America has stopped being a democratic republic, and instead become a fasicst plutocracy. Therefore, citizens are NOT wanted! Only bullshit consumers are wanted. Every citizen deserves an education, in order to be a citizen. However, after the powers of government have already been 99% privatized, then citizens have no more role to play. This became a vicious spiral. The triumph of lies and violence destroying the American repulblic has been picking up speed at an expontially accelerating rate. Therefore, the primary role of Americans, to be citizens, has atrophied down to almost nothing! That is the primary way that everthing was driven to get even worse, while freedom and democracy transformed into debt slavery, providing a fake education, which fits inside what is now a totally fake democracy, run by an out of control fiat Emperor.
Save us Barry!!!...we did what you asked!!!...it was an "ïnvestment"...lol.
Help Mr.Wizaaard!!!...Haaalp!!!
Fuck, more shit sandwhich...
Are federal student loans securitized?