Student Loans & Healthcare – The Two Issues That Will Define American Politics Going Forward

Tyler Durden's picture

Authored by Mike Krieger via Liberty Blitzkrieg blog,

Poverty demoralizes. A man in debt is so far a slave; and Wall-street thinks it easy for a millionaire to be a man of his word, a man of honor, but, that, in failing circumstances, no man can be relied on to keep his integrity.

– Ralph Waldo Emerson, Wealth

Liberty Blitzkrieg readers know that I’ve been extremely critical of our modern U.S. economy for nearly a decade now. I’ve used harsh, but entirely appropriate language, such as rent-seeking, parasitic and criminally corrupt to describe our current financial/economic system. These are not words I use lightly.

I have absolutely no problem with wealth differences within a society, even large discrepancies are fine as long as the general population benefits substantially from overall growth trends. This is not the case in today’s economy.

I support a real free market economy where barriers to entry are low, and in which small business and competition thrives. Unfortunately, this is not the case in today’s economy. Rather, America has largely become a neo-feudal society where a mass of debt slaves are lorded over by government protected, monopolistic, rent-seeking oligarchs and racketeers.

Societies work when people think the system is fair enough and have genuine opportunity for success and standard of living improvement. Societies work when the people who become fabulously wealthy are individuals who have created a product or service that benefits society at large. In contrast, people shouldn’t become wealthy by preying on their fellow citizens and driving them into destitution and debt bondage, but that’s precisely what is happening in many industries today. Our society rewards the worst sort of behavior, and as we observed in the aftermath of the financial crisis, protects and further empowers white collar criminals for destroying the global economy.

Going forward, I believe two issues will define the future of American politics: student loans and healthcare. Both these things (as well as the Federal Reserve intentionally reflating a housing bubble) have crushed the youth and are prevented a generation from buying homes and starting families. The youth will eventually revolt, and student loans and healthcare will have to be dealt with in a very major way, not with tinkering around the edges. Today’s article will examine a couple of disturbing trends in both areas.

Long-time readers will know how offensive and predatory I find America’s healthcare system to be. Here’s an excerpt from last year’s article titled, The Health Insurance Scam – “Coverage” Doesn’t Mean Affordability or Access, which you should read if you missed it the first time around:

While a greater number of Americans having health insurance is a good thing when it comes to protecting against unexpected catastrophic events or extended hospital stays, it doesn’t tell you anything about two very important variables: 1) How much does it cost? 2) What kind of access does it provide? As usual, the devil is in the details.

 

We’ve all seen headlines about higher monthly premiums, but that’s just the tip of iceberg. Once you’ve paid your premium, you’re far from off the hook. Another one-two punch of deductibles, copays and out of pocket maximums appear which can collectively run into the thousands if not tens of thousands of dollars for families.

 

Meanwhile, it appears insurance companies may have recognized the politically toxic nature of higher premiums, so their focus has turned to deductibles as the most efficient way to suck more money from the public for no comparable increase in service.

Healthcare costs are obscene, something I’ve become intimately aware of since getting on individual plans several years ago. Even worse, it seems the predatory behavior continues to get worse and worse with each passing year. Which brings me to a MarketWatch post I became aware of yesterday titled, This Hidden Fee is Becoming Increasingly Common — and It’s a Nasty Surprise on Medical Bills.

Here are a few excerpts:

When Jackie Thennes decided to switch doctors earlier this year, the hospital system in her Chicago, Il. suburb seemed like the natural choice. She’d been to the immediate care facility multiple times before for screenings, and the doctor was in-network.

 

But Thennes, who is 50 and looking for work, got a nasty surprise when the bill arrived in the mail: along with an anticipated charge for the doctor’s visit, she was also charged a “facility fee.” At $235, the fee was slightly more than the doctor’s visit itself.

 

Thennes tried to contest the charge with the hospital system, but to no avail. And while she said she won’t go to the facility again, she worries about getting hit with the same fee somewhere else.

 

This is “going to deter me from getting the medical attention I need,” she said. “I’m going to get sick just worrying about it.”

 

These kinds of facility fees are common at hospitals, where they help pay the hospital system’s overhead costs. But as doctors’ offices increasingly are being bought up by big hospital systems, patients are being charged facility fees of up to hundreds of dollars out-of-pocket without warning and without the ability to contest them.

 

The rate of hospital-employed doctors increased by almost 50% between July 2012 and July 2015, according to an analysis conducted by the nonprofit Avalere Health for the Physicians Advocacy Institute. By July 2015, nearly 40% of doctors were employed by hospitals, the analysis found. The trend occurred across the country but was especially prominent in the Midwest.

 

It’s hard for patients to research which doctors charge facility fees, since there’s no comprehensive resource to track it, said Chuck Bell, programs director for Consumers Union, the policy and mobilization arm of Consumer Reports.

 

There is one foolproof option, though, Bell said: ask pre-emptively.

 

Still, “why should patients have to do this?” Bell said. “Health care has become this outlier bad, terrible customer experience. Even a mechanic has to tell you up-front what the estimate is for working on your car.”

Moving along, let’s take a look at a very disturbing trends happening with regard to student loans, which as you know are almost impossible to get rid of, even in bankruptcy. They essentially follow you to the grave.

Also from MarketWatch:

Sens. Ron Wyden (D-Ore.) and Sherrod Brown (D-Ohio) introduced a bill with several prominent co-sponsors last week that would prohibit the government from garnishing borrowers’ Social Security disability and retirement checks to pay for defaulted student loans. This marks the second time the Senators have tried to curb this practice; they introduced a similar bill in 2015 was never enacted into law. And given today’s highly partisan lawmaking environment, getting the bill through this time may not be much easier.

 

“It’s a challenge,” Brown told MarketWatch. Still, he said he’s hopeful lawmakers will respond to growing concern on this topic from constituents. “Senators and House members are hearing about this problem more and more. We’re hearing all kinds of people calling us surprised that [the government] can do this.”

 

And indeed, the government can. The federal student loan program provides many options borrowers can use to manage their debts, but once borrowers default, the government has extraordinary powers to get its money back, including garnishing tax refunds, Social Security checks and wages.

 

A growing number of borrowers are losing out on a portion of their Social Security checks to pay back student loans. The number of borrowers over 65 facing this predicament jumped 540% between 2002 and 2015, according to a report released by the Government Accountability Office in December.

 

Multiple factors explain that spike. For one, over the past several years we’ve witnessed rapid growth in the number of students going to college or returning to school during their career. But perhaps more important, rising college costs over the past few decades means that it’s more likely that an older adult would have taken on a student debt either to pay for their own schooling or that of a child.

 

The challenges these older or disabled borrowers face paying back their loans is increasingly pushing them toward the financial brink. The 1996 law that allows the feds to garnish Social Security benefits over student loans requires that they leave the borrower with a minimum of $750 in benefits. But that floor hasn’t been adjusted since the 1990s to account for the rising cost of living. In 2015, about 67,300 borrowers over 50 had their benefits garnished below the poverty line from just 8,300 borrowers in 2004.

Student loans and healthcare are both ticking time bombs and I see no real effort underway to tackle them at the macro level where they need to be addressed. Watch these two issues closely going forward, as I think fury at both will be the main driver behind the next populist wave.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Intelligence_Insulter's picture

They are taking 40 bucks out of every check i get now.  I make well below the poverty line.  I want to kill.  University was the biggest mistake of my life.

crossroaddemon's picture

You know you can do a consolidation loan to get caught up and go on IBR, right?

Intelligence_Insulter's picture

When my parents pass I'm going to shoot my loan officers.

techpriest's picture

How much do you owe? What work do you have right now?

Sudden Debt's picture

See what you did?.... you scared him off...

techpriest's picture

Well, here's the bottom line:

At some point you're going to have to admit that it's gone. You got scammed. You will have to re-invent yourself, and you will have to turn your anger into productive action.

Let's say its a typical $100k debt (sadly, that is typical). You're going to have to start working 50 or 60 hours a week doing shit jobs (at first), drive shit box cars, and all your free time is going to be spent hitting the books. I would highly recommend books on marketing and how to sell, first. Then, get whatever experience you can selling. This step should take 1 year, 18 months tops.

Once you have that, you will learn how to understand what other people find valuable, and how to convince them that you have it. At this point you should be pulling in $40-50k. Live on $20k and throw everything else at the debt. Since you'll have some experience at something at this point, use the salesmanship/marketing skills to sell yourself to better employers to earn $60k-70k. Promote yourself regularly - LinkedIn, blog, etc. After 2-3 years, your loans will be paid off. If you are just out of school its not that bad, at 30 you will be debt free and have some savings.

Here's a sample path, which btw is a real path taken by a friend of mine. His initial shit job was data entry for a bank pulling $10 per hour. During the day he punched keys, at night he taught himself to program. Some of his work was for me and I've been to his apartment, he had next to nothing. Pretty soon his skill grew and he was earning $30/hour coding, but even then he was also teaching what he learned on YouTube. He has no debt and was able to save enough to move to Finland and marry his dream girl. Last I heard he's applying for steadier work in the ~$70-80k range, but he's making enough to pay the rent and take care of him and his wife. And he's not stopping there, but every time we talk he's more successful than before. The whole transition took about 2 years.

To the OP or anyone in this situation - If you knew that doing the above would get you out of your current situation in 2-4 years, and you would be free the rest of your life, would you do it?

TheGardener's picture

@techpriest

Your plan would work out alright. Not the kind of comment to get you plenty of upvotes on an essentially doomsters site .

Reading books and charging yourself up for success is all good as long as you are ready and longing for it.

It does work for solid achievers to become less timid and bolder and the really all out pushing alpha types

that want to get far ahead of the crowd no matter what.

Everage losers though, can`t self instruct by reading books and would only be charged up to be more ambitious than their most basic capabilities and thus urged on to push themselfes over the cliff. Not everyone is born to be a winner and anyone young enough to have student debt got nurtured on the loser take it all narrative where falling into debt at any state of your live is somehow acceptable.

 

 

 

 

 

techpriest's picture

I'm passionate about this mainly b/c I was a total loser 10 years ago, and over the years I learned how to break the old mentality I had. I am not a millionaire or wildly successful, though each day tends to be better than the one before it.

When I was in high school we would go rock climbing in the Boy Scouts, and when it came time for rappelling, there was always one kid who would be terrified and start crying. We would persuade the kid to go over the cliff, and without fail, he ended up loving it more than anyone else on the trip.

I found that this is a major part of life. In my case, I was a failure at work, money, dating, prayer, most everything, and many times the solution involved doing something "scary" or admitting a fault (terrifying). And re-orienting your life to succeed has got to be one of the more fear-inspiring things you can do.

In my case, it was admitting I was mediocre at what I was studying in school, which meant that I had to re-invent myself. I am completely sympathetic to feeling of your dreams blowing up, feeling powerless, and starting over, but again I'm super passionate because I was able to get out of that place and help 1 other person so far to do likewise.

83_vf_1100_c's picture

+1 for your views. Everyone has some sort of skill outside what they do. I love motorcycles and now rebuild multi carb racks and do quite well at it. I get to set my own hours and work only as hard as I want/need to. There is always a way up and out of whatever bad situation you find yourself in. You do have to be willing to work at it. Or, you can sit on your ass and wait for someone to rescue you. You could be sitting a long time.

techpriest's picture

These articles get buried too soon, but +1 for your motorcycle gig. That's winning.

Larry Dallas's picture

+1000 to you for the advice on reading books on Sales & Marketing.

 

Today, its all about grit. Do you have it or not?

techpriest's picture

Also, the big mystery I was never taught, even after getting a PhD, was that slaves follow orders, and free men trade. In fact, people in academia sit around reinforcing the slave mentality - "Marketing is all about conning people!" No, it's about showing how what you have is what someone needs.

To trade, you have to sell your product, and in work, that product is you. It's easier to sell your labor/business now than ever before, but again, no one teaches you how. Usually learning how to sell is the main first step. You are You, Inc. and you need to find some customers.

The alternative is to give a resume to the university career office and hope someone gives you a call. It won't work these days. We can argue about how bad things are (they are), but first you need to take whatever you can get, so you can be in a position to help others. It's the only way we will get the needed resources to tackle the MSM.

TheGardener's picture

"When my parents pass I'm going to shoot my loan officers."

That was his cool sarc part. Many people carry on just for those last remaining courtesy part towards their family, that outgoing

basis of civilization as we knew it.

Let`s guide him through the process where he in a few years owes nothing and can`t be accused of promoting mayhem

of any socialist color and variety just because he is hopelessly feeling owned beyond rescue.

Sudden Debt's picture

When your parents pass, you'll need to be able to take care of your own.

 

So lay down the bong, stop with the weed and act like an adult.

 

Why are there so many dopehaeds on this site so suddenly????

To Lazy to work

No money to invest

And the only reason they want to talk about the economy is to give themselves a reason not to work.

 

You're poor because you're lazy as hell.

Reading a blog doesn't make you a specialist on economics.

And you can avoid growing up for a long time but that bitch will bite you in the ass in due time. You're missing out on life!

And last: drug addicts always end up on the streets. And those idiots who hide behind the medical drugs? You're all worthless people. And weed is drug, don't fool yourselves, only idiots do.

LocalBoy's picture

Where do the addicts to living beyond their means and up ?
Those addicted to benefits and immunities, special rules and access to stolen posterity.....how many lives do these adddicts destroy ?

Is entitlement an addiction ?

Glassport's picture

I don't know about entitlements, but greed is certainly an addiction.  Far more destructive to far more many lives than drugs or alcohol could possibly be.  But TPTB have decreed that all of this money and the outrageous zeal to make money is good.  Bullshit.

Come to think of it, maybe entitlements are a form of greed.

LocalBoy's picture

By entitlements I was refering to corporate owners.......

techpriest's picture

There's no question those people are awful, but here's the question, regardless of them, what are you doing, right now?

Yes, there are some official thieves out there. But saying "there are thieves out there, therefore I'm not going to face the fact that I burn 4 hours/day on the couch/computer" is not going to make your life better.

I remember one mentor giving me a chart that broke up the week int 30-miute intervals, and he told me to write down what I did each 30-minute period. It told me everything that was wrong with my life.

LocalBoy's picture

I dont consider taking earned leisure time discussing with other stock holders how best to manage our servants, the government and the corporations that grew up around it, a waste of time. In fact I consider it a civic duty and a cost owed for the liberty I cherish.

Pointing out the thieves gives other free people, who I trust, the chance to pick their own path. We colloborate and exchange info just like all free people should do.

From my view time with other free people is not burning time, it is investing it.

I trust my neighbors, who do you trust ? 

PresidentCamacho's picture

People start doing the weed and other drugs as a way to escape the reality that is fucking them in the ass.

You can tell alot about a person by the drug addiction they prefer. Those on opiates like to be sedated so that they are unaware of their reality. Those on stimulants like that high it brings, you can figure out the rest etc.

 

TheGardener's picture

I was brought up to resent any drugs and users illegal at the time and even refrained from my local tribe alcohol addiction throughout my years of commercial success.Ever since now stretching decades I`m enjoying the mind enhancing effects of my beloved and cherished red wine.

Never ever posted a comment sober .

TheGardener's picture

Some time ago this sudden debt member was struggling big time and admitting as  such here publically.

That quickly you go throughout bancruptcy in the state of Belgium ? Around here it is 7 years plus

and anything government related like taxes and social security charges can no longer be discharged by

bancruptcy.

Tijuana Donkey Show's picture

I'm no loser, and I smoke plenty of weed. Losers are losers. Weed is weed. Losers stoners are just losers with weed.

WorkingPoor's picture

Congratulations, you just got a nice big red flag by No Such Agency.  Besides, do you know how expensive ammunition is?

Intelligence_Insulter's picture

Economics is a joke, bullshit theory explained by pre algebra equations.  Not a real science.

Chupacabra-322's picture

Here's what's on my "Economics" breakfast table.

$200 Trillion in Unfunded Liabilities.

$20 Trillion Debt.

homebody's picture

Switch to psychology or anthropology.   

an unreal future lol

Sudden Debt's picture

It teaches you management skills and other valuable skills a lot of companies are looking for.

So what did you study? What job do you have?

 

 

Abaco's picture

Bullshit.  Economics teaches you nothing about management. Macro economis is horseshit taught by donkeys. There isn't a whole lot more to micro-economics  that is more complicated than distinguishing between fixed costs and variable costs and the ramifications of each.

DEMIZEN's picture

macroeconomists = bible reading club, feeding of the stupid

DEMIZEN's picture

price theory makes sense, the rest is esotheric bullshit.

TheGardener's picture

They call it the dismal science, abusing math to prove anything but.

silverer's picture

Degrees are for thermometers. lol

LocalBoy's picture

Labored my whole life, and now my savings is worth less than 1%....................
In other words the commodity known as money is worthless.

I hear young people complaining about how they cant pay back what they borrowed - on this we agree.
Even if they return the new money to the bank, will the bank ever return the real capital it stole to create new money from thin air ?

 

DEMIZEN's picture

is the kind of economy where everybody gets fucked but chosen and licenced tribe

homebody's picture

Populist wave - go to hell, I've gone Galt and will not pay your bills.

LocalBoy's picture

Galt started his own community, made his own energy and did not recieve benefits and immunities from the thieves.....

silverer's picture

Dear college students,

Your new job for the rest of your lives is to try to figure out how to not constantly be in debt to banks, businesses, corporations, individuals, or the government. (Or your own parents!)

techpriest's picture

Dear everyone else,

Start talking kids out of seeing college, esp. the expensive ones, as the door to the future. It's the door to financial hell right now, save for the very rich.

P.S. Isn't it funny student loans were sold as a way to make college available for all and not just "the rich," but now, student loans have made the universities affordable only for the rich?

silverer's picture

You got it. Because what happens is even if you get a good job, you have to hold onto it. Jobs are changed as often as underwear these days. You can afford your college loan for six years, then suddenly your company is bought out, or goes under, you have health issues, etc.. There are no guarantees to future sustained income.

I am Jobe's picture

But But college is an experience and the spring break parties , beer , sex, drugs were all thrown in.

 

Did'nt realize that I had to spend over 60K to know what Finance was all about. 

Signed : Students of today. I am too inbred to think. 

DEMIZEN's picture

you need 2k/m for shared one bedroom and expenses in LA , add the cheapest state tuition at 15 k for year + material = 40K.  add private school for those who dont make it into state system and you are 60K min

 

it became impossible to commute within the city.  it will take you about 2hr+ to commute from Burbank to UCLA to attend your 10 am class. No way to park btw. students are not issued parking placards so must be uber.

LocalBoy's picture

Student loans and managed care have one thing in common - both use credit arrived from thin air.
New money fresh off the printing presses always destroys the value of the old money - and raises prices in that sector.

From my view the idea capital can be fostered or created from thin air is THE PROBLEM......living beyond our means on the backs of the future earnings of the unborn.
This idea the American people can create capital from a printing press,backed by the Pentagon, will destroy what was once a great nation.

We are not a capitalist nation nor do we have free markets - are we really entilted to the fruits of our labor when it is backed by theft and plunder ?

Capital is saved production 

Sudden Debt's picture

The fatest people in Europe are called skinny in America.

But let's call the farma industry the thiefs... yeah...

Half of America is taking mental pills and the other half can't unzip their pants in a safe way