On Crushing Student Loans, Worthless College Degrees And The Millennials

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The existing social and financial order is crumbling because it is unsustainable on multiple levels. The central state is not the Millennials' friend, it is their oppressor.

No generation of young people is ever politicized by hunger in distant lands or issues of the elderly. It's no rap on youth that self-interest defines what issues have the potential to radically transform their political consciousness; the transformative cause must reveal the system is broken for them and that it intends on sacrificing their generation to uphold the Status Quo.

The Millennial generation, also known as Gen-Y (Gen-Y comes after Gen-X), is generally defined as those born between 1982 and 2004.

The oldest Millennials were children during the first Iraq War in 1991 (Desert Storm) and just coming of age in 2001 (9/11 and the war in Afghanistan) and the start of the second Iraq War (2003).

The Millennials have entered adulthood in a era characterized by permanent low-intensity wars and central-bank/state managed financial bubbles--2001 to the present. In other words, the only experience they have is of centralized state mismanagement on a global scale.

The gross incompetence of the government and central bank--not to mention the endless power grabs by these centralized authorities--has not yet aroused a political consciousness that the system is irrevocably broken, not just for older generations but most especially for them.

Anecdotally, it appears the Millennial generation is still operating on the fantasy that all they need to do to get a secure, good-paying job and a happy life is go to college and enter the Status Quo machine of government/corporate America.

There are two fatal flaws in this fantasy: the $1+ trillion student loan industry and a transforming economy. The higher education industry in the U.S. operates as a central state-enabled and funded cartel, limiting supply while demand (based on the fantasy that a college degree has critical value) soars. This enables the cartel to keep raising prices even as the value of its product (a diploma) sinks to near-zero.

Since the Federal government issues and guarantees all student loans, the higher education cartel is (like sickcare, national defense and the mortgage industry) effectively socialized, i.e. funded and managed by the central state.

If you understand the student loan system is predatory, parasitic and exploitive, you have reached first base of a meaningful political awareness. If you understand the central state (Federal government) funds and enforces this system, you've reached second base. If you understand the vast majority of college degrees do little to prepare you to be productively employed in the real economy, you have reached third base.

If you understand the Status Quo is unsustainable and does not operate according the the fantasy model you've been told, congratulations, you're close to home base.

I have covered all the salient issues repeatedly:

The Fatal Disease of the Status Quo: Diminishing Returns (May 1, 2013)

College Grads: It's a Different Economy (May 3, 2013)

Bernanke's Neofeudal Rentier Economy (May 7, 2013)

Degrowth and Anti-Consumerism (May 9, 2013)

Centralization and Sociopathology (May 21, 2013)

Present Shock and the Loss of History and Context (May 22, 2013)

Generation X: An Inconvenient Era (guest post) (May 23, 2013)

The Nearly-Free University (November 15, 2012)

The central state is not your friend, it is your oppressor. The loan shark that won't let you discharge your student loan debt without appealing each ruling against you three times is the government (and its hired-gun proxies).

The oppressor who demands you work your entire life to pay interest on public debt squandered on neocolonial wars and various cartels (sickcare et al.) is your central state.

The entity who demands you pay higher taxes so the generation entering retirement gets all that it was promised, even though the world has changed and the promises are no longer sustainable? The central state.

The oppressor that will devote its enormous resources to investigate and crush you if you actively resist the bankers and financiers who pull the political lackeys' strings? The central state.

At some point, the Millennial generation will have to awaken to the fact that the only way to change its fate is to grasp political power and redirect the policy and mindset of the nation. Centralization is the black hole that is destroying the nation's social and economic vigor. Decentralization, transparency, accountability, adaptability, social innovation, a community-based economy--these are the key features of a sustainable social order.

The existing social and financial order is crumbling because it is unsustainable on multiple levels. The Status Quo will cling to its false promises and corrupt centers of power until the moment the whole thing implodes.

Related links of interest:

Dear Class of ‘13: You’ve been scammed How the College-Industrial Complex drove tuition so high

Overdue Student Loans Reach Record as U.S. Graduates Seek Jobs

Bureaucrats Paid $250,000 Feed Outcry Over College Costs

Welcome, Robot Overlords. Please Don't Fire Us?

My Generation’s Disease

Podcast with Mike Swanson of WallStreetWindow.com on student loan debt and the Nearly Free University: Charles Hugh Smith On the Forces of Centralization and Soaring Education Costs. I always enjoy discussing issues with Mike, a polymath with a wide range of interests and experiences.

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q99x2's picture

How darest thou. I live quite well going to college to obtain my degree. How else do you suggest I survive? Work. Hell no we worn't go. Hell no we won't go. I swear we'll march on the Hamptons.

Big Slick's picture

I’m bored of this constant parade of what’s wrong with the system, how the Central State is our oppressor, our debt will be the death of us, blah blah blah…

I AGREE WITH EVERY DAMN WORD!

But I’m bored of reading the interminable modifications of the same message.

No one cares. 

The only solution will occur upon catastrophic crisis.

Think about that last sentence.

Think about your position in relationship to what a catastrophic crisis looks like.

Are you ready?

(Apologies fellow ZH’ers - Maybe I just got hold of a bad glass on a Friday night.)

in vino veritas

 

Dr. Sandi's picture

I've sharing that glass with you, Slick.

The unhappy forecast: It sucks and it's not going to change until it gets a lot worse.

Beam Me Up Scotty's picture

When I was going to college, late 80's, most kids had a summer job and worked their way through school.  Today, most kids just take out a loan.  They don't even realize what being a debt slave is.  All that matters is that they can make the minimum monthly payment.  Who cares if it ends up costing 2 or 3 or more times as much.  Kids today only think in terms of payments they can afford, not what something actually costs after they have made those payments.  And they roll one debt to the next to the next.

FreeMktFisherMN's picture

that's exactly the mindset. Same with many people taking on mortgages. They're focused on 'can I make the interest payment' instead of the ability to actually make a legit down payment. So what if you locked in a low rate? What happens if interest rates keep rising, and then house prices go down? You may have locked in  a low rate (if that, since ARMs often) but now you're underwater. 

phyuckyiu's picture

What you're describing is a short horizon payoff. Anything that has a payoff many years down the road won't cut it. Why drive a shitty car now and miss out on all that quality pussy that will flock to my hot leased car? You think they actually give a shit about your career and your college and your IQ? Pulllleeeezz. They can't get likes on facebook with your career and your mensa badge. Which is why there will never be a housing recovery, or a marriage recovery, or a recovery recovery.

Gen X was the last generation that was able to develop brains without the 3 second cutaway that MTV developed at around age 13-14 in our lifespan. Anyone born after us was immersed in 3 second cutaways in TV from birth. Anything longer than 3 seconds and you lose the youngins.

Mr. Saxby's picture

Actually, the dumbing down process started with GenX and was perfected in GenY. I was perfectly able to get through high school in the late without doing a damned thing, but the colleges hadn't been dumbed down yet. Thus, I was forced to atone for prior indiscretions. Now, the whole thing is a joke and your average new college grad doesn't know his ass from third base.

strannick's picture

At some point, the Millennial generation will have to awaken to the fact that the only way to change its fate is to grasp political power and redirect the policy and mindset of the nation.

-uh. Any grasp for political power becomes grasping for personal power. The only revolution is overthrowing the tyranny of selfish sin in your own soul.

Why go to university and bankrupt yourself listening to tenured radical windbags, when a good reading list and a trades apprenticeship would give the goods in a tenth of the time, while making $ instead of becoming an indentured servant. 

Zwelgje's picture

I wish I followed your advice. I bought the lie and now live a nightmare. Wrong planet.

economics9698's picture

Looking back on it my degree was pretty worthless financially but I was able to work and pay the tuition cost and books.  I paid $30 per semester hour and grad school got up to $100 per hour but I was able to stay out of student loan debt hell.

I have no idea how I would do that today.

Sad the government fucks up everything it touches.

The one thing that was good about college was I got away from the pressures of the day, and reality, and thought what I was doing would lead to a better life.  It was a lie but I enjoyed fantasies and the interactions I had with students and teachers.  I guess for me it was worth it.

The_Dude's picture

Why is it the GenY,Z fault that they are being charged up the ass by the GenBoom that is controlling the tuiton rates and Gov. purse strings?  Sure, they are partaking and should likely throw a middle finger salute but what options do they have outside of getting a job at the local strip mall.

 

And don't tell me...'well, I did it'...its a different time, place and price.

And don't tell me...'they could just start a revolution'...as you sit in your squishy chair on your big ass.

 

They don't understand the dangers of gov+finance and how it inflates and destroys cause no one even gets close to teaching them this shit.  They get trained to sit like a drone in front of a screen like you and me both but everyone is so fast to ridicule.

Kobe Beef's picture

The "Greatest Generation" & the Baby Boomers made abortion a choice. 

Generation X and The Millenials will make euthanasia a choice.

BidnessMan's picture

So what if you are "underwater"?  It is all funny money anyway.  Think of it as tax deductible rent that will not go up for 30 years.  Cheaper than rent in many cases.  If the Bernanke will lend at 3.75% for 95% LTV fixed for 30 years, take it. Minimize the down payment, and pay it off after hyperinflation for a couple ounces of gold. 

jerry_theking_lawler's picture

it was starting in my generation....shortly after college, i had a friend with a normal paying job, but lived in a nice house, drove 2 nice vehicles, had a boat, etc.

i asked him how he did it and his reply was....

 

Fucking Finance It!

 

The moto of the late Gen Xers and beyond...thanks The Nixon Shock....

 

not to be confused with The Shocker.

ACP's picture

Apologize for what? Being angry? It is your right, and shows you have a pulse.

Soon we shall see survival of the fittest in action......even 2,000 years ago, Aesop wrote about what is happening today:

The Squirrel and the Grasshopper

The squirrel works hard in the withering heat all summer long,
building and improving his house and laying up supplies for the
winter. The grasshopper thinks he's a fool, and laughs and dances and
plays the summer away. Come winter, the squirrel is warm and well fed.
The shivering grasshopper has no food or shelter, so he dies out in
the cold.

Don't be a grasshopper with a Liberal Arts major.

infinity8's picture

And most people hate squirrels. Where do these kids get their grasshopper mentality? Can't blame it all on MSM/video games/etc. If they're in college, they got thru their pap public education and if they don't see any way besides taking out loans, they probably have their parents to thank, at least in part, for that hobbled mentality.

Jugdish's picture

Ready? Nahhh. That's for survivalists. Live now -eat, drink, be merry. If my food ran out I'd come for yours though.

ACP's picture

Nice. I just wished I knew the exact moment when hyperinflation begins so I can max out my credit cards and front-load some gluttonous eating, drinking and being merry.

Harbanger's picture

I couldn't enjoy myself if I thought I wasn't prepped and should be.  But after that, it's full fun.  I'm physched today because I'm picking up my 2013 motorcycle tomorrow.

ACP's picture

Exactly. Luckily we can still do that, for now. Just got my first red dot last week.

RED DOT, WHERE HAVE YOU BEEN ALL MY LIFE?!?

Big Slick's picture

Someone put it well on ZH a while back.  When it begins, I'll max out my credit cards and assume dischargable debt to pay off my non-dischargable student loans.

In Vino Veritas's picture

@Big Slick: you called?

(Sorry, couldn't resist :-) )

Jumbotron's picture

"I’m bored of this constant parade of what’s wrong with the system, how the Central State is our oppressor, our debt will be the death of us, blah blah blah…

I AGREE WITH EVERY DAMN WORD!

But I’m bored of reading the interminable modifications of the same message.

No one cares. 

The only solution will occur upon catastrophic crisis."

That's just about how they ALL end, really.  People are just too blind, stupid, afraid, and/or part of the system so much that the system simply has to collapse.  And that may be over the course of several decades in fits and starts....not just a blinding flash and the whole thing dissapears.

Once the year 2020 hits....shit starts to get REALLY real and noticable to all....even the mouth breathing dumbasses of the planet.....and there are BILLIONS of them worldwide.

orez65's picture

"But I’m bored of reading the interminable modifications of the same message."

 But we need to keep checking actual data with what we believe is going to happen.

In case that adjustments have to be made.

orez65's picture

"But I’m bored of reading the interminable modifications of the same message."

 But we need to keep checking actual data with what we believe is going to happen.

In case that adjustments have to be made.

RafterManFMJ's picture

Collage paid off for me alto I may be exceptional. I recieved SSD while I go to schools on my computer!

I now have a degree in computer repairs with minor in Comparitive Phrenology! All for 70,000 in studant loan!

I come to your house, pull new motherboard in your HP and read your head, same session! Thanks you very much, Universotie of Pheonix!

Rusty Shorts's picture

Fucking HP's laptops, what a piece of crap they were...

Jumbotron's picture

"Fucking HP's laptops, what a piece of crap they were..."

WERE !!???

Still are. I sold these things back in the middle "oughts" 6-7 years ago.....the only thing worse were Sony laptops...and that's saying something.

My wife got a fairly new (year old) HP laptop from her mother.....still a piece of crap.  She had used one of my Thinkpads for about a year.  After getting used to that keyboard (still the best of any laptop around) she HATES that HP....and she didn't even pay a dime for it.  LOL !!!

Good luck Meg in turning that dinosaur of a company around....LOL!!!!

rbg81's picture

At some point, the Millennial generation will have to awaken to the fact that the only way to change its fate is to grasp political power and redirect the policy and mindset of the nation.Centralization is the black hole that is destroying the nation's social and economic vigor. Decentralization, transparency, accountability, adaptability, social innovation, a community-based economy--these are the key features of a sustainable social order.

 

Oh, please.   As a college professor, I work with these kids on a daily basis.  Thanks in large part to my "colleagues", they have been brainwashed into believing that Government is the answer to everything.  These kids support the very policies that are suffocating them. Obama is their G-d whose edicts you may not question.  They have been anesthetized by cheap entertainment, Facebook, celebrities, smart phones, and the most biased education money can buy.  The only way they wake up is if there is a real Depression where people are allowed to feel the pain.  We have a depression now, but its a painless one because no one goes hungry and disability is an easy way out.  If you try to explain how current policies are robbing them of a normal future, they look at you like you're a space alien.  In a way they deserve what they get--along with the rest of America.

g speed's picture

fuck you--- I don't deserve it-

forwardho's picture

And that says it all, "I don't deserve it"

The world is and has always been a brutal place.

You get what you get,  how you control that which you can is what sets you apart or makes you just another herd beast.

look to no other. for in the end its your own stokes that will decide if you sink or swim.

 

TheReplacement's picture

Nah man.  There are tens of millions of people lying in graves today who were powerless to prevent what happened to them.  You can stroke it the right way all day long and when these brainwashed kids come for you they come for you.  In the end all you can do is live right.  During times of massive upheaval the decision on your sinking or swimming is most likely not your own.  If comrade student puts a bullet in your head you are dead.  If he doesn't you get to live.

Waiting to see what happens is the problem here.  All need to actively engage the people we see in real life and educate them.  Maybe you only reach 1/10th but 10% is much better than none.  Start planting seeds so trees can grow.

orez65's picture

"Start planting seeds so trees can grow."

Better to exchange as much of your fiat money into gold and silver.

That will make a difference. 

Fake_nation's picture

You're just seeing the bad parts of the generation if you're teaching at a college. Especially among the raw recruits, (those kids just getting out of high school now), the high dropout rate is a good sign. Everybody I know with talent is awake and not supporting the system anymore. They've reached peak everything, and won't be able to shut down the internet without their own systems collapsing, so we are the future. Things are so bad people are realizing that being principled is the only way out, not a sacrificial martyrdom. 

 

We at Fakenation believe that humor and mockery will sustain us through these dark hours. It's a joke, and the more people we have laughing at it the sooner it will all be over. The people on top are idiots, and only get away with everything because nobody calls out the ridiculous culture they've created, not because of any political genius anybody believes them to have.

 

For instance, try going to Spencer's at the mall and see the supposed retail clothing business of the future. Send us your pics and captions. Public shame and ridicule are very powerful things, and it's high time all the nonsense that passes for daily life in Fakenation gets called out so people feel some shame in destroying their society. 

 

http://www.fakenation.info/please/spencers-the-orgy-at-the-end-of-puritanism

rbg81's picture

I got news for ya man:  Spencers wasn't much different in the 1970s.  

Fake_nation's picture

Yeah, maybe nothing has changed. Spencer's went away for a while, and it seems to be making a comeback. 

But maybe that's the point. Nothing has changed. It just keeps getting faker and faker. What may have been radical in 1960 or 70 (are you listening Baby Boomers?) is just an sad old joke at this point. 

Mr. Saxby's picture

They've finally created the Perfect Consumer. GenY is Amerika's first disposable generation.

AnAnonymous's picture

'Americanism' at work. A real depression opposed to a depression... The way 'americans'.

It wont change anything, it will only toughen the resolve of the 'american' y generation to use every opportunity an 'american' society can provide through its State.

TheFourthStooge-ing's picture

.

It wont change anything, it will only toughen the resolve of the 'american' y generation to use every opportunity an 'american' society can provide through its State.

...said this guy employed by 50 Cent Party spouting tofu-dreg propaganda.

ceilidh_trail's picture

We in America are "depressed" over all of the dead cows, chickens, pigs, fish...etc,etc,etc floating down cHinEeSe rivers. We realize that we can never match cHinEsEe results in animal husbandry. How come all flu diseases seem to come out of peoples paradise???

dr kill's picture

Wait until July and stop by the Bridgehampton Polo Club. I'll join you during halftime.

William.M.Tweed's picture

When can I go long an ETF that tracks 3x College tuition and fees?

 

The appearance of the law must be upheld, Especially when it's being broken

A Lunatic's picture

We're gonna need a lot more unicorns over here........

sitenine's picture

And for even more Friday humor, here's the Debt Brother's speech today on keeping student loans 'affordable':

http://www.cnn.com/2013/05/31/politics/obama-student-loans/index.html

Spitzer's picture

I am a Millennial. Thanks  Charles Hugh-Smith of OfTwoMinds blog, for acknowledging our existence.

We have never lived a day on this earth to see interest rates going anywhere but down.

This is what brought me to Austrian economics and this site.

Die bond bubble die.

CrashisOptimistic's picture

How can you have interest rates go up when GDP is weakening relentlessly.

Everywhere.

Oil scarcity eats up joules to get what you can get from the ground.  The net joules input to global GDP is in freefall.

That's forever, btw.  Thank the preceeding generations for burning it to the point of scarcity.

Spitzer's picture

Sir.

When South East Asia's GDP fell in 1997, their interest rates went up. Way up. Not down. Same thing happened in all of South America, European and Russian contractions since the beginning of time.

Interest rates are not supposed to fall when there is GDP contraction.

 

newworldorder's picture

Since you have managed to find ZH, you know that rules of macro economics have been deverted by the FED and the government. As such, we are all living in a controlled bubble. We are off the economic map and into uncharted territory. Your fellow millenials will have to come up to speed very quickly, in the future. Question is: Are they capable of it.

Turin Turambar's picture

Economics is economics.  Rid yourself of the garbage "macro" designation.  It's kind of like saying mass human action.  LOL

 

orez65's picture

"How can you have interest rates go up when GDP is weakening relentlessly."

EASY, just have the Federal Reserve stop buying bonds, or even cutting back on how many bonds they buy.

And when interest rate go up you will get a bonus, the bond bubble will burst and there will be panic selling in the bond market.