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Chart Of The Day: From Pervasive Cheap Credit To Hyperinflation

Tyler Durden's picture




 

The topic of the student loan bubble is not new: having crossed $1 trillion recently, student debt is now the biggest consumer debt category, greater even than US credit card debt. We have extensively discussed the implications of the parabolic curve representing outstanding student debt before, and it is no surprise that the issue of student loans has become of one of the key topics of debate in the ongoing presidential mudslinging campaign. As is also known, an increasing portion of student debt is funded by the government at an ever lower rate of interest: after all it is critical to allow the bubble to keep growing with as little interest expense diverting the stream of cash from the end borrower - wide eyed students who increasingly realize they are stuck with tens of thousands in loans and no jobs available to allow them to repay this debt, in effect making an entire generation debt slaves. Finally, as should be known, student debt is non-dischargeable, meaning once a person becomes indentured, they are so for life, and filing bankruptcy will do nothing to resolve debt claims against the individual. After all there is no other collateral by definition that can be confiscated by the creditor - the only thing the debtor "acquires" in exchange for this debt is a skillset, which sadly in the New Normal is increasingly redundant. But there has always been one question outstanding: just what does all this easily accessible and now pervasive student debt fund? The chart below, courtesy of Bloomberg, provides the answer: in the past 3 decades there has been no other cost that comes even remotely close to matching the near hyperinflationary surge in college tuition and costs.

Source

The follow through question then is: where do all these cheap debt funded dollars go? Why to pay the salaries, and lifetime guaranteed pensions of tenured Keynesian professors in "established" universities, who are delighted to keep peddling cheap debt if it means their compensation rises at a rate of 5-10% each year, every year, no matter how the economy performs.

After all they and their "ZIRP is the answer to all" brethren are the immediate beneficiaries of this 1120% cost explosion since 1978.

As to who foots the bill? It is all those young men and women who are indoctrinated day in and day out by every possible legacy media, whose sole interest is also to perpetuate the status quo, that the only way to succeed in this world is through untenable debt. Of course, it is packaged differently: study, get a loan, get a job and pay off the loan. Sadly, this is no longer the case in the New Normal where one is lucky to get a part-time job paying minimum wage, let alone one which allows the repayment of debt principal (this ignores the possibility of interest rates actually rising at some point in the future).

Some more perceptive readers may ask: did the cheap credit allow this explosion in tuition costs, or did soaring costs require the latest debt bubble. The answer in this chicken or egg riddle is unclear, but is also irrelevant: one thing is certain - a 1,100%+ increase in prices in just over 30 years for any "asset class" is way beyond the ordinary course of inflationary business, and may as well be classified with the -hyper- prefix on a long-enough timeline.

Another thing that is also certain is that this kind of price surge in unsustainable, as is the associated exponential increase in student debt. We can only hope both bubbles pop sooner rather than later, if for no other reason than to put the majority of status quo professors, who have been gladly and quality benefiting from this phenomenon for years, out on the streets, and having to take out a loan to see what it means to become an indentured servant for themselves.

Alas, with ZIRP about to be replaced by NIRP, we may have a while to wait.

 

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Wed, 08/29/2012 - 08:07 | 2745992 Undecided
Undecided's picture

http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/bmo-scotia-capital-look-to-their-trading-desks-for-support/article4506421/

 

BMO, Scotia Capital look to their trading desks for support At least the banks know metals are where its at..
Wed, 08/29/2012 - 12:36 | 2746904 vast-dom
vast-dom's picture

EDUMACATING THE DEBTARDS.

Wed, 08/29/2012 - 13:33 | 2747103 madcows
madcows's picture

correction:

Hypnotizing the Debt-tards.  "you need a higher education.  You must have a higher education.  You can earn more money with a higher education.  You must have a higher education to get a job.  People without a higher education are more likely to be unemployed, but you'll be raking in the dough with your $120,000 liberal arts degree.  Go to college.  Go to college.  You must go to college.  Just borrow the money.  you can pay it off easily with all the bread you'll earn with you degree.  Repeat after me:  i need a higher education"

Wed, 08/29/2012 - 08:07 | 2745993 Aziz
Aziz's picture

Education, bitchez.

Wed, 08/29/2012 - 08:12 | 2745999 bank guy in Brussels
bank guy in Brussels's picture

And the logical deduction is that American college professors are mostly greedy gangsters too, cashing on in on a gravy train while enslaving their students

The USA seems to be in the lead in proving that formal 'Skool' is not the way to go

Wed, 08/29/2012 - 08:17 | 2746014 LawsofPhysics
LawsofPhysics's picture

This is easy to address.  Plot the average salary of a college professor against any banker, venture capitalist, hedge fund manager.  Don't know anyone in education buying private islands.

One thing is certain however, both depend on government and taxation to stay in business.  Wake up sheeple, there are no "free  markets", if there were all poorly run businesses would be allowed to FAIL.

Wed, 08/29/2012 - 08:33 | 2746051 francis_sawyer
francis_sawyer's picture

There sure hasn't been any 'hyperinflation' in intellect commensurate with the high tuition costs...

Like...OMG... TOTALLY!

~~~

But let's put a positive spin on this... The 'Girls Gone Wild' in Cancun videos are getting better & better... Finally teaching the co-eds what it takes to be a real slut...

Wed, 08/29/2012 - 08:53 | 2746114 economics9698
economics9698's picture

As I write this I am having to do power points and correct page after page of propaganda from a author that has his head in his ass when writing about economics.  It fucking sucks the complete bull shit taught to kids to cover up the theft of the Federal Reserve, Wall Street and federal government.  

It's fucking bull shit education for a dumbed down society that cannot figure things out.  A degree today is worthless.

Wed, 08/29/2012 - 08:57 | 2746133 fonzannoon
fonzannoon's picture

Make it happen economics9698 we are counting on you.

Wed, 08/29/2012 - 09:36 | 2746269 ParkAveFlasher
ParkAveFlasher's picture

"ZH, I'm putting you on double secret probation!"

Wed, 08/29/2012 - 15:34 | 2747565 Sun_Tzu
Sun_Tzu's picture

This chart shows that today's crop of college grads will learn at least one lesson they won't soon forget -- in elementary arithmetic.

Wed, 08/29/2012 - 09:28 | 2746235 TrumpXVI
TrumpXVI's picture

The college perfessers may not be in the same league with hedge fund managers, but they're doin' just fine.

I've worked all my life in academic institutions and know some of these folks.  Our former post doc is making as much as my boss in a temporary professor position.  Another, a professor of scientific illustration is putting two thousand dollars per month into his TIA/CREF.  I wish I could do that.

Wed, 08/29/2012 - 08:24 | 2746030 Thomas
Thomas's picture

Faculty are self interested like any group, but it is not at all about the greed of college professors. They are paid reasonable wages. A former student recently took about a 30% paycut to leave Pfizer and take a job at a four-year college. Some faculty are even well paid. There is, however, a definite paycut one takes by chosing academia over the private sector. When we interview assistant professor candidates (chemistry), the folks we are bringing through the door are the cream of the cream--the top 10 ranked PhD candidates in the world. When I left my PhD program I was god damned famous. Goddamned famous. I took that fame and parlay it into an $18K Ivy League starting salary. Even today, academic starting salaries are maybe 25% below their industrial counterparts. I am not compaining; I love my job. I also very well paid now (years later) but I earned it.

There are problems at universities. There is an arms race. It is not, however, the greed of the faculty.

Wed, 08/29/2012 - 08:28 | 2746044 LawsofPhysics
LawsofPhysics's picture

Like anything else it seems to me that there is a lack of real leadership and no-one takes any reasponsibility for their bad decisions.

Care to comment on the salaries of administrators?

Wed, 08/29/2012 - 08:33 | 2746058 RacerX
RacerX's picture

That seems to be the consistent thread with schools; public/private/primary/secondary.

Every time I turn around my local SD is asking for yet another levy. And it's always the scare tactic "remember our children!!". I always wonder how they get the $$ to send the full color brochures, run ads, etc. And there are quite a few highly-paid administrators..

Wed, 08/29/2012 - 08:45 | 2746089 economics9698
economics9698's picture

Thomas you are the exception not the rule.  Most professor are grossly overpaid and don’t know shit.  They study useless shit and get useless degrees and only through the gross misallocation of resources by the state are they able to get a job teaching new students useless shit.

The text books are full of propaganda and lies and a college degree, with a few exceptions, just means daddy has money, you are a minority hire, or you are a compete dumb ass that went into $100,000 of debt to get a women’s study degree that not worth shit.

I know this shit because I teach this shit at a university.

Wed, 08/29/2012 - 08:50 | 2746101 LawsofPhysics
LawsofPhysics's picture

If you teach eCONomics, then yes you teach shit.  

Personally I poached a great engineer from a local university.  Very smart guy, doubled his salary from $55K to $110K and he left in a hurry.  Has worked out great so far. I guess it all depends if you are studying a real science and if you actually know how to apply it to create something real.


Wed, 08/29/2012 - 08:56 | 2746124 economics9698
economics9698's picture

My students get their moneys worth.  They leave my class understanding the Federal Reserve and legalized theft.

Wed, 08/29/2012 - 09:01 | 2746131 LawsofPhysics
LawsofPhysics's picture

Then you are different from every college eCONomics professor I have ever met.  I provide two summer internships to a local University.  At a recent meeting of the "master's in Biomanufacturing program" one of the economics professors spoke after an engineering professor and said that the only thing that they did on their side of campus was "make money".  So pretty much admitting that they don't create anything of real value and I suggested that he rephrase his talk to say something like "facilitate bringing value to the marketplace through true price discovery".

He looked at me like I was nuts but thanked me for providing the internships just the same.

Wed, 08/29/2012 - 09:53 | 2746339 bigwavedave
bigwavedave's picture

They could learn that on ZH for free. QED squared

Wed, 08/29/2012 - 09:46 | 2746308 Spastica Rex
Spastica Rex's picture

In K-12, teacher salaries and benefits make up somewhere close to 70% of all education dollars spent nationally. That's because there are so many of them: about one for every 30 kids.

However, there are way too many administrators, consultants, trainers, bureaucrats, and etc. These people are HIGHLY paid (I was one).

The real job of these folks is to work out ways to lower the compensation of teachers - this is called "education reform."

Why?

Because even a small reduction in the number of teachers and/or their compensation frees up big chunks of money for education "service providers" operating through public/private partnerships.

Soon, children in America will be taught in for-profit McSchools. These schools will be cheap, popular, and highly profitable. Learning will be as important at these schools as nutrition is at McDonald's.

Wed, 08/29/2012 - 10:17 | 2746402 bigwavedave
bigwavedave's picture

I agree. I have been thinking about starting a McSchool myself.

Wed, 08/29/2012 - 10:27 | 2746434 Spastica Rex
Spastica Rex's picture

Just pick a few three letter program acronyms, hire some Broad Foundation consultants and adminstrators, give the Feds what they want, and it'll be way easier than running a McDonald's. You'll have guaranteed profits provided through captive tax payer money. Actually, I think McDonald's is in the EBT game now, so maybe it won't be that different.

Risk is for suckers.

Wed, 08/29/2012 - 10:32 | 2746446 HardAssets
HardAssets's picture

If you were/are in public 'education' you miss a very important point. Your job isn't to 'educate' at all. Its to dumb down and indoctrinate the students who are forced by law (or the wallets of their parents) to attend. The greatest attacks on the intellect of Americans for the last 100 years came out of public 'schools' - - and from television.

Refer to the works of John Taylor Gatto, for a start. I doubt if you have a 'masters' degree (they all seem to) in education that you hear of him in class.

Wed, 08/29/2012 - 10:36 | 2746467 Spastica Rex
Spastica Rex's picture

Yeah, well I left public education after 20 years for a life of poverty because I couldn't live with the scam. Compulsory public education in the US has never been about learning, it's been about sorting and controlling. If you think this is changing through "education reform," you're even stupider than you sound.

Public school "educated" yourself?

Wed, 08/29/2012 - 11:21 | 2746632 HardAssets
HardAssets's picture

Spastica Rex - - - My apologies if I came on too strong. This is a sore spot for me. (I didnt down vote you - I don't down vote people for an opinion different than mine.) I applaud your leaving the public 'ed' system. Many seem to just hang on for the pension despite harming the kids.

I agree that 'school reform' has been and always will be a completely useless joke. The mandatory public 'schools' do exactly what they were designed to do.

Yes, I was public school indoctrinated. - - - Thankfully,  I educated myself.

Wed, 08/29/2012 - 11:34 | 2746695 Spastica Rex
Spastica Rex's picture

Thanks. I was a dick, too. Sore spot for me, as well. I'm not one of the bad guys.

The pension thing is amazing (although I won't get one, and many of the teachers who think they will, won't.) It is common for adminstrators to retire in one state, collect their very generous pensions, and then go to work in another state.

Teachers as a group are far from perfect - just like the rest of humanity - but they are the least worst part of the scam. As a group, they have the BIG money, and Gates, Broad, Walton, et al want it. The Feds and their lackeys in state govt are happy to give it to them, and school district adminstrators are the biggest frauds of the whole picture (that was once my job).

I am very familiar with Gato. There are others like me who agree with his diagnosis but are ambivalent about his cure.

Wed, 08/29/2012 - 08:35 | 2746061 fonzannoon
fonzannoon's picture

Is there a pension system in place in college similar to the High School teachers in my area that all retire at 54 with a 100k/yr pension?

Wed, 08/29/2012 - 08:46 | 2746090 LawsofPhysics
LawsofPhysics's picture

I imagine this depends on what school/state you are in.  Thanks to the recent developments in Cali, we all now know California promises great pensions for their college professors.

Wed, 08/29/2012 - 08:52 | 2746105 fonzannoon
fonzannoon's picture

I get that the people that are responsible for teaching our children should be well paid.....but free healthcare for life and a pension that in many cases is as large as their final and largest years salary of their career is the most absurd thing out there. Well second to the bankers pay of course.

Whatever...why are we even talking about this. Takes 5 seconds to come back to the reality that we are totally fked.

Wed, 08/29/2012 - 10:28 | 2746394 drB
drB's picture

Yes, it depends on state. In TX faculty at state schools have no defined benefit pensions and no free healthcare for life. Only the "ruling class", such as the police and Governator has those benefits.

With respect to education being "useless", very recently one of my former PhD students who works at a private company developed a $ 0.5 bn/year process for making a chemical intermediate in Big Oil. Hard sciences are not as sexy as bullshit economics or Lesbian Eskimo Basket Weaving Studies, and also more difficult, but people with degrees in engineering actually can get jobs and accomplish something useful for themselves and society. Of course they do not get paid nearly as much as Wall Street individuals who do "God's work".

BTW, most of education price increases come from subsidizing sports and increase in senior administration - there is now a bureaucrat for every instructor. Additionally, about 75% of profs/instructors in US are non-tenured and can be fired at will.

Wed, 08/29/2012 - 10:36 | 2746466 HardAssets
HardAssets's picture

"I get that the people that are responsible for teaching our children should be well paid"

they don't teach them (in mandatory public school) - they indoctrinate them. Most teachers are completely unaware of this fact.

It was well known in my science & engineering orientated university - - that the students in the 'education' department were the dumbest.

Wed, 08/29/2012 - 08:29 | 2746048 bigkahuna
bigkahuna's picture

I tend to think of faculty as egomaniacs who were too timid to try their hand in the big game, so they resort to brow beating their students for pleasure.

Wed, 08/29/2012 - 08:44 | 2746081 Stock Tips Inve...
Stock Tips Investment's picture

We can not ignore the cost of education has increased significantly in U.S.. Probably more than any other item of the economy. It is also true that the income of the universities seem to fall into a black box from which very few people speak and less known. But so is our economy and we should not intervernir on it. It's free and dynamic.

Wed, 08/29/2012 - 08:55 | 2746125 LawsofPhysics
LawsofPhysics's picture

In most states the salaries of all public servants, including teachers at all levels is public record. Very easy to find.

You do know that there is a difference between a public university and a private one?

If a university doesn't take any federal funding, there really isn't shit you can say about how they pay their people.

Wed, 08/29/2012 - 10:38 | 2746471 tj3
tj3's picture

Construction, construction, and more construction. Football stadiums being the most egregious.

Wed, 08/29/2012 - 12:44 | 2746928 takinthehighway
takinthehighway's picture

At most schools, profits from the football program fund ALL of the other sports programs.

Wed, 08/29/2012 - 14:08 | 2747232 zerozulu
zerozulu's picture

I just checked my son's first semester's fee and it is $400 for tuition and $1500 for his health insurance for one semester. wtf..

American's are being robed by insurance crooks

Wed, 08/29/2012 - 08:45 | 2746087 KidHorn
KidHorn's picture

Having taught at a university and worked at the federal government, I can tell you, the employees at both places are completely clueless about the outside world. They think they're making a personal sacrifice by taking their job when in reality, they're paid better and treated much better than those in private industry.

In the real world, there is no job security. People work on saturdays. People have to put in 12 hour days. People have to produce. People have to pay for all or much of their health care out of pocket. People don't get 26 days of paid sick leave and 26 days of paid vacation every year. People don't get the summer's off. People don;t get a month long sabbatical every 5 years.

Almost everyone I worked with who had worked for a long enough time to be protected, wouldn't last a week at a real job.

Wed, 08/29/2012 - 09:18 | 2746197 Doubleguns
Doubleguns's picture

Thomas,  your former student that took a 30% paycut to leave Pfizer and take a job at a four-year college works a lot less days than he would at pfizer. Summers off, numerous holidays (paid), spring break (paid), winter break (paid), sick days (paid), vacation (paid)....Beats the hell out of 1 week vacation AFTER working for one year. I would think the pay reduction is well paid out in benefits.

Wed, 08/29/2012 - 09:28 | 2746226 LawsofPhysics
LawsofPhysics's picture

Not if he is at a research institution or medical school where faculty must raise 80% of their salary on their own through contracts and grants.  In this case, no time off and they work 80 hours per week.  In both cases the public is getting lots of innovation as a result.  Funny how people don't complain about all those new cures...

Wed, 08/29/2012 - 10:22 | 2746422 drB
drB's picture

Or how public does not complain about low nat gas prices because of government-supported fracking technology development...or new artificial hearts developed by academics funded by NIH...

Wed, 08/29/2012 - 10:42 | 2746490 HardAssets
HardAssets's picture

'government supported' ?   The employees in govt don't support squat - - taxpayers paid for that.

The difference between govt and the private sector is that -ultimately - govt forces you at the point of a gun to take their 'product'.  - - No, I'm wrong - there is an exception in the private sector  - the Mafia - - -

Wed, 08/29/2012 - 11:05 | 2746577 drB
drB's picture

Mafia...or Wall Street...or utilities where you do not have choice...etc
Probably only in small businesses we REALLY have choice. Large companies, at least in this country, have fused with government.

Wed, 08/29/2012 - 10:35 | 2746463 drB
drB's picture

I work in academia and I do not get off Spring break, Summer break, my sick days are not paid, I have to raise my own summer salary, and I get much worse health insurance/retirement benefits than my students who have taken jobs in chem industry. I have also worked in industry (although in Europe), and I know enough of the US industrial system - they do NOT start with one paid week vacation. In companies such as Merck, they get 2 weeks paid vacation the first year, and paid holidays off, such as Christmas, New year etc. Also, they typically do not work on Saturdays (unless these are startup companies) while most faculty at research schools do.
The reason why people choose faculty positions over much better-paid industrial ones are job security and, within some limits, ability to do what they like in research.

Wed, 08/29/2012 - 10:46 | 2746506 Doubleguns
Doubleguns's picture

I worked 4 years at GE Evendale plant and worked 12 hrs per day 7 days a week and had to wait one year to get my ONE miserable week off. 5 personal days off were heavily frowned upon if you took them, heavily frowned upon. I only dared take mine the year I left the company. Two weeks off my 4th year.....woohoo.

Wed, 08/29/2012 - 11:08 | 2746588 drB
drB's picture

Then GE stinks. My students work for Merck, Exxon, Shell etc and they have not informed me of anything like that. Must be company- or position dependent.

Wed, 08/29/2012 - 08:21 | 2746023 Stoploss
Stoploss's picture

Just invert the chart for the 'level' of education to complete the picture.

Looks like i finished at the top, after that, all downhill from there!! LOL!!

Wed, 08/29/2012 - 08:26 | 2746040 Sudden Debt
Sudden Debt's picture

WE DONT NEED NO STINCKING EDUKATION!!

SKOOL OF LIFE BITCHEZ!

NOW TAKE OF MY SNEAKERS, GIVE ME YOUR WALLET AND FUCK OFF OR I'LL CAP YOR ASS!

 

Wed, 08/29/2012 - 08:44 | 2746083 Rakshas
Rakshas's picture

This bill and the foregoing remarks of the majority remind me of an old Arabian proverb: "If the camel once gets his nose in the tent, his body will soon follow." If adopted, the legislation will mark the inception of aid, supervision, and ultimately control of education in this country by the federal authorities...... Barry Goldwater 1958 

Betchall wish somebody kicked that four legged fleabag ooot the tent back then.......... thats the problem with allowing a leviathan into the house, pretty soon you've got sea serpent shit all over the carpets........ what a fucking mess...

Wed, 08/29/2012 - 08:55 | 2746123 The Wizard of Oz
The Wizard of Oz's picture

No more pencils
No more books
No more teacher's dirty looks

Wed, 08/29/2012 - 10:41 | 2746483 tj3
tj3's picture

Billion dollar baby
Rubber little lady, slicker than a weasel
Grimy as an alley
Loves me like no other lover
Billion dollar baby
Rubber little monster, baby, I adore you
Man or woman living couldnt love me like you, baby
We go dancing nighty in the attic
While the moon is rising in the sky
If Im too rough, tell me
Im so scared your little head will come off in my hands
I got you in the dimestore
No other little girl could everhold you
Any tighter, any tighter than me, bay
Billion dollar baby
Reckless like a gambler , million dollar maybe
Foaming like a dog that's been infected by the rabies
We go dancing nighty in the attic
While the moon is rising the sky
If Im too rough , tell me
Im so scared your little head will come off in my hands
Million dollar baby
Billion dollar bay
Trillion dollar baby
Zillion dollar baby

Wed, 08/29/2012 - 09:05 | 2746156 mess nonster
mess nonster's picture

Auto-didactical education, bitchez.

Wed, 08/29/2012 - 08:14 | 2746001 buzzsaw99
buzzsaw99's picture

the maggot banksters found the perfect gubbermint guaranteed bubble to blow. student loans = lifetime indentured servitude for many.

Wed, 08/29/2012 - 08:38 | 2746070 Taint Boil
Taint Boil's picture

 

 

Well of course, the government guarantees it and it is debt that is not dismissible through bankruptcy. The banksters win and the students lose – is anyone surprised.

 

Evil to the power of 10 ……….

Wed, 08/29/2012 - 08:44 | 2746085 AynRandFan
AynRandFan's picture

Student loan debt can be discharged in bankruptcy on a showing of undue hardship.  Look it up.

Wed, 08/29/2012 - 08:48 | 2746097 fonzannoon
fonzannoon's picture

I did look it up. Good freakin luck with that...

http://www.studentloanborrowerassistance.org/bankruptcy/

Wed, 08/29/2012 - 08:52 | 2746107 AynRandFan
AynRandFan's picture

Gee, sorry.  It's hard to discharge student loan debt.  You have to be poor.

Wed, 08/29/2012 - 09:00 | 2746139 fonzannoon
fonzannoon's picture

Could you imagine if they discharged student loan debt for your average kid who racked up a bunch of debt and legitimately could not find work, or work that paid a decent wage? The precedent that would set? That would be something.

Wed, 08/29/2012 - 09:05 | 2746157 AynRandFan
AynRandFan's picture

Yup, that would be something even dumber than loaning money to a teenager with no job, no credit, and no guarantee of graduating or getting a job.  Might as well just throw money down a hole.  Of course, if you want to risk your money this way, go right ahead.

Wed, 08/29/2012 - 09:07 | 2746163 fonzannoon
fonzannoon's picture

Ah but how about you have that dumb teenager's parent co-sign the loan?

Wed, 08/29/2012 - 09:02 | 2746143 DOT
DOT's picture

Imagine you are the gobmint.

 

Now a  peon comes before you and does pray for the relief of college debt. You may discharge all or part of the debt if the poor soul does not have the means to provide "minimal" support.

 

Now: Define minimal.

Wed, 08/29/2012 - 09:06 | 2746160 AynRandFan
AynRandFan's picture

Over 40% of Americans receive government support.  How's that?

Wed, 08/29/2012 - 11:38 | 2746711 HardAssets
HardAssets's picture

Hey . . . give us a break. The Soviet Union had 70 years to get that up to 100% !

We're still working on it.

We're Number One !
Wed, 08/29/2012 - 10:58 | 2746555 Matt
Matt's picture

minimal: Interest + $10 monthly as not more than 30% of income.

If the student's income is less than that, adjust the loan until the payments are 30% of income, based on previous year's tax receipts.

 

Wed, 08/29/2012 - 08:13 | 2746002 LawsofPhysics
LawsofPhysics's picture

The health care costs seem grossly underestimated.  How many baby boomers left to retire and what kind of shape are they in?

Regarding education, nothing the military can't handle.  Hell, I might even go back if there is a shortage of instructors.

Nothing like a military education to wake people the fuck up.

Wed, 08/29/2012 - 08:56 | 2746130 DOT
DOT's picture

Maybe the sheeple will wake up, however, they will still be products of the inability to think for themselves and incessant thought conditioning from TPTB.

btw.  Navy Doc.s get better chow.

Wed, 08/29/2012 - 09:03 | 2746149 LawsofPhysics
LawsofPhysics's picture

"Navy Doc.s get better chow."

No kidding, and they usually don't have to eat it in the mud.

Wed, 08/29/2012 - 10:48 | 2746510 HardAssets
HardAssets's picture

"military education" - - - are you freakin' kidding ?

Roman recruiters probably used that same stupid line.

(Yeah, I have US military experience.)

Wed, 08/29/2012 - 08:13 | 2746003 HelluvaEngineer
HelluvaEngineer's picture

Can we get the value of a college education plotted as well?

Wed, 08/29/2012 - 08:28 | 2746043 Sudden Debt
Sudden Debt's picture

that dropped to zero a long time ago...

Wed, 08/29/2012 - 08:36 | 2746063 buzzsaw99
buzzsaw99's picture

no shit

Wed, 08/29/2012 - 10:59 | 2746554 HardAssets
HardAssets's picture

Value depends on the degree. I talk to other parents and their kids and try to tell them that if their kid doesnt study something that will give them specific skills that'll pay when they get out, that they are fools. (You can get a broad, well rounded education on your own if motivated to do so. That is, one emphasizing critical thinking skills, philosophy, values, etc.) Even though many kids have no idea what they want to do, parents seem guilty at the thought of not spending lots of money to send them to some univeristy.

If a kid replys to the question of what he wants to do/study with 'uh . . I dunno'  . . off to community college for a couple years for them !

Wed, 08/29/2012 - 08:14 | 2746004 tony bonn
tony bonn's picture

higher education is a criminal racketeering enterprise whose professors and bureaucrats are terrorists who should be assassinated under ndaa and i nominate larry summers as first sacrifice....

Wed, 08/29/2012 - 08:15 | 2746006 docj
docj's picture

Doesn't have to be this way. My daughter (a HS Senior) is terrified of student loans. The deal we have with her, which she seems enthusiastic to take, is state school, which her Mom and I will principally pay for, "extra" expenses paid for by her income from summer jobs, for 4-years. She's going into early childhood education - at least it's "portable".

If she holds to that, she gets her BA debt-free and is off to the races. Of course state screwel in MA is still going to be upward of $18K PER YEAR (resident), but we can swing that (painfully, it must be said) out of current income.

Wed, 08/29/2012 - 08:21 | 2746025 LawsofPhysics
LawsofPhysics's picture

Similar discussions around our dinner table.  I will also add that a BS is now what a high school degree used to be and there are many great schools that you can attended for under 5K per year.  Advanced degrees in engineering and science actually pay their graduate students.

 

If my children want to go to medical school I told them they must follow the same route I did for funding.  ARMY AMEDD Corp. 

Wed, 08/29/2012 - 08:25 | 2746038 docj
docj's picture

a BS is now what a high school degree used to be

Absolutely - if that. It's really shocking how ill-prepared for the world is your "average" HS graduate these days. Perhaps it's in no small part because our Public Ed system as it exists today is designed to prepare students for an America that faded from the world about 30-40 years ago.

Wed, 08/29/2012 - 12:24 | 2746865 Joe Sixpack
Joe Sixpack's picture

THat is not true in engineering and sciences [real sciences].

Wed, 08/29/2012 - 12:45 | 2746934 docj
docj's picture

Not a great many engineers and (real) scientists who are HS graduates, it must be said. My father-in-law (RIP) was a chemist, HS diploma only, worked (more-or-less happily) in the same lab for about 40 or so years until his 3rd heart attack forced him into early retirement at, I believe, 63. Not many of that type around anymore, I fear.

I get to interview a fair number of Engineers with BS/BEng degrees - generally, I'm spectacularly unimpressed. The interview typically goes something like, "Yeah, I've heard of thermodynamics, may have even taken a course in it, probably got my 'Gentlemans C', but I know who to write Python so where's my $85K/year job with full benes and 5-weeks of vaca?" I blame the schools - I can't expect the stupid 22-year old's to know aby better.

Wed, 08/29/2012 - 08:37 | 2746066 pazmaker
pazmaker's picture

Same here DOCJ with a slight variation.  My daughter is now in her second year at a local state community college. She wil complete her first two years there debt free, while waiting tables at a decent restaurant where she gets good tips.

She will transfer to a 4 yr state school after completing this year and can complete her four year degree debt free.

Wed, 08/29/2012 - 08:45 | 2746079 bigwavedave
bigwavedave's picture

Will she then be able to compete with her Indian or Chinese peers? Or do you believe she only has win the local battle? Will she do Python/Javascript work for GOOG or AAPL?

I hope you realize that everyday that goes by when she isn't running her own Delaware company onshoring skillsets is another day closer to the fire.

Wed, 08/29/2012 - 08:53 | 2746111 pazmaker
pazmaker's picture

we shall see, my other child followed the same path and is doing fine. she will graduate with a BS in medical laboratory technology with a lot course work in chemistry and biology.  As of right now there are plenty of jobs available in that field if you like that stuff.

If not, she can come work with me on our homestead/minifarm .

Wed, 08/29/2012 - 08:41 | 2746075 Michelle
Michelle's picture

Docj, doing the exact same thing for my daughter, we pay college expenses for her in-state education and sorority and she pays for play through summer jobs. We are fortunate that we have structured our financial lives so that we can do this for our children, but isn't that part of the deal of having kids? I think so.

It is a travesty how outrageously expensive college education has become and the biggest reason for this exponential surge in prices is cheap credit. Homes, autos, and education are the direct beneficiaries of cheap credit - it's all about the freaking MONTHLY PAYMENT. Nobody looks at how much something costs, they just care whether or not they qualify for the loan, hence the birth of the 40 yr mortgage and the 8 year car loan.

Wed, 08/29/2012 - 08:51 | 2746104 KidHorn
KidHorn's picture

I have 3 kids. 13, 9 and 4. I'm hoping they can take college on-line. If not an option, i'll sedn them to community college and then to the local state university. No way am I paying for an Ivy league education. I have too many family members and relatives with an Ivy league degree who can't find a good job.

Wed, 08/29/2012 - 09:58 | 2746348 bigwavedave
bigwavedave's picture

What do you expect them to learn that we do not already know? 

Will they learn what we know already better than their peers?

Will they be able to apply what they learn (what we know) cheaper than the Indians/Chinese?

Or...

Are you expecting them to bullshit better than thy neighbour?

Wed, 08/29/2012 - 14:06 | 2747217 drB
drB's picture

Kidhorn -

good luck with studying engineering online. Especially chem engineering. Or other hard sciences such as chemistry or physics, with their lab courses. My best guess is that they can probably learn eCONomics, or Marxist philosophy, or gender studies online. Those are unlikely to get them anything useful in life. May be computer sciences can be studied online, but I do not know enough about that subject. Also, recruiters at major oil or pharma companies are highly unlikely to hire someone with online degree...may set plant on fire.

Wed, 08/29/2012 - 10:01 | 2746360 docj
docj's picture

FWIW - my point here was simply this... don't expect this to change because of some grand act of political courage that finally calls-out the education bubble for what it is. Making a HS diploma worth somehing again, and bringing college costs in line with reality again, are only going to be the result of dinner-table conversations with our kids.

Expecting politicians to fix this is as silly as thinking politicians who created any such probelm (AHEMhealthcareAHEMfinanceAHEMjobsAHEMetcAHEM) can actually fix them.

Wed, 08/29/2012 - 08:15 | 2746007 scatterbrains
scatterbrains's picture

Do you think there will be a college loan debt jubilee?  I'm thinking they'll throw them on the front lines of the battle field in exchange for loan forgiveness or something along those lines. If you miss a payment you move to the top of the draft list kinda thing.

Wed, 08/29/2012 - 08:31 | 2746055 Shizzmoney
Shizzmoney's picture

The only thing I fear about a Debt Jubilee is the government and big banks will make the poeple sign an agreement basically giving their life away to the state.

Racism actually HINDERED the slave trade.  Why only have colored slave, when you can have white AND black slaves?

Wed, 08/29/2012 - 09:30 | 2746242 LawsofPhysics
LawsofPhysics's picture

Only if the people have debt.  Debt-free folks might have a thing or two to say about all this.

Wed, 08/29/2012 - 08:15 | 2746008 fijisailor
fijisailor's picture

Hey this is unregulated capitalism.  What else would you expect?

Wed, 08/29/2012 - 08:37 | 2746065 buzzsaw99
buzzsaw99's picture

unregulated capitalism? omg fiji pull your head out

Wed, 08/29/2012 - 10:04 | 2746365 fijisailor
fijisailor's picture

Maybe you just don't understand.  When banks and large corporations are able to control government and the economy, this is the result of lack of regulations to begin with where those corporations should have never been permitted to do what they have done to the free market system.  Their size and power should have been regulated.  What's so hard to understand about that?

Wed, 08/29/2012 - 10:50 | 2746521 TheCanadianAustrian
TheCanadianAustrian's picture

You expect the corporations to be governed and regulated by whom? The very people in government that are bought and paid for by those very corporations? How in the hell is that going to work out well?

Wed, 08/29/2012 - 11:10 | 2746591 HardAssets
HardAssets's picture

What you don't seem to understand is that there is no difference (at the top ruling levels that count), between large insider corporations and government. They are the same people and move freely back and forth between the sectors.

Thus, US Treasury secretarys tend to come from the big leading banks. . . . Other cabinet and agency head level people also come from large corporations.

 

Wed, 08/29/2012 - 12:24 | 2746866 docj
docj's picture

Here is your "unregluated capitalism" ...

http://www.gpo.gov/fdsys/browse/collection.action?collectionCode=FR

10's of thousands of pages, literally millions upon millions of words, regulating the hell out of "capitalism". Government - doing the bidding of their corporate and special interest handlers - picking winners and losers in the economy, promoting some and bankrupting others.

Moral to the story? Give politicians and bureaucrats billions of other peoples' money to throw around, and give them the power to decide who's businsses get to live and die, and what you see before us will be the inevitible, pitiful result.

Wed, 08/29/2012 - 12:34 | 2746900 fijisailor
fijisailor's picture

Despite all those pages they still go on effectively unregulated and control the system.  I know, I'm an idealist.  Sure govt is bought and paid for but there's no reason to believe that it should be that way or that it inevitably has to be that way.  Ron Paul has stood by his beliefs all these years so he is proof that there is some honesty and that we could have more of that.

Wed, 08/29/2012 - 15:32 | 2747557 malek
malek's picture

You are effectively still a believer in big government.

Regulators =  a small group of people to whom the task of deciding what is permitted and what not, has been outsourced. They can then hijack the system, or more likely become hijacked, as all others are saying "not my problem"

But we already had that and are getting more of it all the time, and it didn't work out so well so far.
Will you now come with the Kruman defense: we just didn't do big enough?

And who controls the regulators?

Wed, 08/29/2012 - 08:16 | 2746009 RiverRoad
RiverRoad's picture

The banksters do WAY better than the professors ....as usual. 

Wed, 08/29/2012 - 08:18 | 2746011 Shizzmoney
Shizzmoney's picture

College Students Are Going Homeless and Hungry -- And Corporate America Is Trying to Exploit Them

Corporate America is looking for even more ways to take advantage. Business Week has reported an increase in for-profit "educational" outfits--such as the University of Phoenix and Chancellor University--targeting homeless people to fleece them of financial aid money, often leaving them with a mountain of defaulted student loan debt.

These predatory "colleges" are big business. One of Cleveland-based Chancellor University's major investors is "Neutron Jack" Welch, former CEO of General Electric, who got his nickname by firing some 100,000 GE workers. Goldman Sachs owns 38 percent of the for-profit Education Management Corporation in Pittsburgh.

Chancellor and Phoenix have sent recruiters into homeless shelters to sign people up for classes, regardless of their ability to pay or even attend school. After they get tuition money--paid for by student loans and financial aid--these companies can churn through yet more students, never worrying about pesky facts like graduation rates or what happens to their would-be students.

BTW, when it comes to grants for for-profit colleges - guess who pays for that?

Yup, the US taxpayer. 

 

 

Wed, 08/29/2012 - 08:41 | 2746073 AynRandFan
AynRandFan's picture

Ten percent of college students are enrolled in for-profit colleges, and those students are twice as likely to default on their student loans.  Oh, those poor students.

Consider that maybe the 90% of college students enrolled in your local Marxist University are the problem.

Wed, 08/29/2012 - 08:25 | 2746037 LawsofPhysics
LawsofPhysics's picture

No shit sherlock, the fucking world is having a debt crisis.  Nothing changes until the bad debt is cleared, period.

In the meantime the capital and resource misallocation and malinvesment continues.

Wed, 08/29/2012 - 10:11 | 2746381 TrulyBelieving
TrulyBelieving's picture

And nothing changes until a free market and rule of law are reinstituted. Corruption can never be eliminated, but can be made to sit on the sidelines instead of thowing the passes. 

Wed, 08/29/2012 - 10:14 | 2746390 bigwavedave
bigwavedave's picture

Yeah. We need more Sports metaphors. 

Wed, 08/29/2012 - 08:20 | 2746018 Zero Debt
Zero Debt's picture

"The greatest shortcoming of the human race is our inability to understand the exponential function"

- Albert Barlett

Fortunately the education industrial complex is working hard on educating the students on this topic.

Wed, 08/29/2012 - 08:28 | 2746045 Red Heeler
Red Heeler's picture

"Compound interest is the most powerful force in the universe." - Albert Einstein

Wed, 08/29/2012 - 08:37 | 2746067 bigwavedave
bigwavedave's picture

Compound NIRP is the most powerful force in Finance -- BigWaveDave

Wed, 08/29/2012 - 09:05 | 2746155 LawsofPhysics
LawsofPhysics's picture

Hey dave, does this mean banks will soon pay me to take out another business loan?

Wed, 08/29/2012 - 09:47 | 2746313 bigwavedave
bigwavedave's picture

No. It means the Govt will pay the banks to offer (and then deny) you another business loan. Dont forget that with NIRP what is up is actually down. What is down is up. Capiche?

Wed, 08/29/2012 - 08:20 | 2746020 Capitalist
Capitalist's picture

Gold is the money of kingsSilver is the money of gentleman. Barter is the money of peasants. Debt is the money of slaves.

Wed, 08/29/2012 - 10:59 | 2746561 Grinder74
Grinder74's picture

+1000

Wed, 08/29/2012 - 08:24 | 2746034 hardcleareye
hardcleareye's picture

A little more detailed insight into this subject matter, by Kevin Carey.

 

http://www.tnr.com/article/politics/99415/college-tuition-afford-higher-...

Wed, 08/29/2012 - 08:25 | 2746036 lolmao500
lolmao500's picture

The education bubble.

Wed, 08/29/2012 - 08:32 | 2746057 madcows
madcows's picture

Just imagine what it would be if they didn't manipulate the number. /s

Wed, 08/29/2012 - 08:36 | 2746062 AynRandFan
AynRandFan's picture

Why do we keep paying more and more for college professors?  Because they are the chief proponents of our Marxist utopian future and reliable propagandists for the Democrat party.

Wed, 08/29/2012 - 08:41 | 2746074 buzzsaw99
buzzsaw99's picture

I might argue that the bankers who fought for non-dischargeable student loan debt in bankruptcy and a gubbermint guarantee in the case of default or death are wholly to blame.

Wed, 08/29/2012 - 08:56 | 2746126 AynRandFan
AynRandFan's picture

To blame for high costs of college?  Makes no sense.  If student loans are always paid, colleges never lose money.

By the way, people take out student loans voluntarily.  If you think banks are making lots of money on student loans, try loaning money to someone with no job, no credit, and no certainty of even graduating.

Wed, 08/29/2012 - 09:03 | 2746147 fonzannoon
fonzannoon's picture

Voluntarily is a very loose term here. These kids are young and stupid and do what they are told. Many of them think they are doing the right thing because the generations in front of them have their best interests at heart. When they end up getting totally fked to tell them they did this voluntarily is a bit disingenuous.

Wed, 08/29/2012 - 09:10 | 2746173 AynRandFan
AynRandFan's picture

Don't you know that a kid in an undergraduate program has to have a parent sponsor the application?

Wed, 08/29/2012 - 09:14 | 2746186 fonzannoon
fonzannoon's picture

Yup as I said above.

Wed, 08/29/2012 - 08:38 | 2746068 Catullus
Catullus's picture

I went to Tulane from 01-06. Every year the administration justified a tuition increase by saying they were remaining competitive with their peers. They would show us how Rice, Emory, Duke, and Stanford were all increasing their rates. It's just what they had to do as they told us.

The worst is the tuition increase when you're already two years in. What are you going to do? You've already thrown $20-30k down the drain, might as well keep leveraging yourself up. I blame accreditation standards and the fact that schools don't let you easily transfer credits for that.

The university presidents knew what this was. They raised tuition because they could. The debt bubble is the symptom of the problems.

What's worse is that at least student loans used to be indexed to something like PRIME rate. Now the government is "protecting" you by locking in your rate at 7.5%. My loans from the earlier part of the decade were variable rate and were charging .8-3.0%. Seems kind of fishy that the government borrows money for 30 years at like 2% and and turns around and charges a student 7. Just saying.

Wed, 08/29/2012 - 08:38 | 2746069 game theory
game theory's picture

For 10 years now I've been hearing increasing complaints about the overpaid university staff. In NJ, that scam is still in full swing...with a nutritionist being paid well over $150k. Many profs (mid-career) are taking down more than that in salary alone...and then when you add what they take from their research grants, now you are talking real money.  Too many people I know left the private sector and got pay raises when they joined the university staff in the last six years...and man, these are not people you want teaching the next generation. But whatever...buyer beware and whatnot. 

I think education is good...but shit...at some point, it just ain't worth it (especially when you consider the product).   The prices are all haywire.  This bubble is already bursting...because it is hard to prevent reality from intruding...even in the ivory tower. Watch for what the gov't will do next...student debt forgiveness...increased grants to university startups...basically an attempt to paper over the effects of yet another bubble.   Awesome.

Wed, 08/29/2012 - 08:44 | 2746086 madcows
madcows's picture

Be an electrician or plumber.  Make good money, have no debt.

Or, join the armed forces, spend 4 years guarding a fence, and then get an education.

That, or be freak athlete, and get free tution.  I'm thinking of putting the kids on roids as I type.  Gotta get a head start you know.

Wed, 08/29/2012 - 08:42 | 2746076 DavosSherman
DavosSherman's picture

That chart is FUCKED.  Food is WRONG!

Wed, 08/29/2012 - 08:43 | 2746080 Metalredneck
Metalredneck's picture

My son leaves for college tomorrow, two year program.  Minor loans, summer jobs, and a father who hasn't had a decent motorcycle since he was born.  Life is full of little trade-offs, but at least he chose a course he loves, and looks to be (as much as possible in this market) a field with job prospects.  I will be riding rat-bikes for a few years to come, as his sister goes next year.

Wed, 08/29/2012 - 08:46 | 2746091 madcows
madcows's picture

Why send him to college when he can knock up his girlfriend and live for free off the gubmint.

Wed, 08/29/2012 - 09:38 | 2746275 Shankopotomus
Shankopotomus's picture

Yes it does. Like in having to sell my Harley and fishing boat because I had 3 going all at the same time. Oh well at least  I can still fish from shore. However, I'll have to admit that having to sell the Harley, which I'll probably never be able to replace again, really pissed me off big time.    

Wed, 08/29/2012 - 09:49 | 2746324 bigwavedave
bigwavedave's picture

You should have taught that one how to fix Harleys. That shit aint gonna be outsourced.

Wed, 08/29/2012 - 08:46 | 2746088 DOT
DOT's picture

Bingo! Administration of the ever expanding "economic engine" of Major Universities is THE problem. They can spend, spend, spend. Building cranes abound on campus. Tuition and fees are up and so is the State subsidy (re-distribution).

 

Don't forget secondary Ed. PHDs abound and they don't add jack to the quality of education.

 

Brain washing sure does cost more today than when I was young.

Wed, 08/29/2012 - 10:51 | 2746528 jerry_theking_lawler
jerry_theking_lawler's picture

the whole 'educational system' is a mess. administrators are killing the system. this is a great example.

 

The state published the salary of a VP at a local community college. This CC has about 4,000 students. His salary was about 20% more than the Plant Manager of the company that I work for. This plant manager produces a major US brand and the plant has revenues of >$200MM per year.

You know the system is in total disarray when through tuition increase (on the back of .gov loans) and federal/state grants, that the adminstration can demand these LARGE salaries + benefits + vacation when the real WORKERS and PRODUCERS make less and less due to taxes, regulations, and fees.

Yep, this is why when the brats are finished with school, the only opportunies are either more .gov subsidies (unemployment, disability, food stamps) or possibly joining the ranks of .gov subsidized institutions (health care, education, government).....

what a joke America has become.

Wed, 08/29/2012 - 08:46 | 2746092 Fix It Again Timmy
Fix It Again Timmy's picture

Hey, at least the price is right! 

http://www.uopeople.org/

How much can it hurt?

Wed, 08/29/2012 - 08:46 | 2746093 You Didn't Buil...
You Didn't Build That's picture

Oil, gas, food, PMs...expect them all to keep rising as the dollar is diluted with yet more billions of dollars and purchasing power declines.

 

1+1=2

Wed, 08/29/2012 - 08:47 | 2746094 SheepDog-One
SheepDog-One's picture

Edumacashun! BISHEZ!

Wed, 08/29/2012 - 08:53 | 2746113 tedstr
tedstr's picture

We started visiting colleges two years ago for my daughter and we visited 14 schools!!!!!!  For the most part, as I see it, the spending has been in state (no big surprse there) schools where the amoutn of multi million dollar building has been off the charts for obviously the past 15-20 years.  Huge beautiful libraries, theaters, dorms that are the equivalent of million dollar condos, and the athletic facilities.....!!!......beyond belief.  This is just the visable part.  One can imagine the staffing, pensions etc that are below the surface.  And these are mostly state schools who do not have donations from affluent allumni, its all debt and tax fueled riches.  Hope she enjoys it.

To me it is easy to see where all the money went.

Wed, 08/29/2012 - 09:00 | 2746134 buzzsaw99
buzzsaw99's picture

And these are mostly state schools who do not have donations from affluent allumni, its all debt and tax fueled riches.

You did zero research and are totally wrong about this. Every new building and stadium in the two major state universities here was paid for with private money. Every. Single. One. Fat, drunk, and stupid is no way to go through life son... [/dean wormer]

Wed, 08/29/2012 - 11:44 | 2746705 hangemhigh
hangemhigh's picture

 

“There are problems at universities. There is an arms race. It is not, however, the greed of the faculty.” 

Administration of the ever expanding "economic engine" of Major Universities is THE problem. They can spend, spend, spend. Building cranes abound on campus. Tuition and fees are up and so is the State subsidy (re-distribution).” 

“…….. the spending has been in state (no big surprse there) schools where the amount of multi million dollar building has been off the charts for obviously the past 15-20 years.  Huge beautiful libraries, theaters, dorms that are the equivalent of million dollar condos, and the athletic facilities.....!!!......beyond belief.  This is just the visible part…………..

 

 

I have seen this from inside the construction industry and can say without a doubt that a big part of what has happened is educational empire building. 

 

the availability of student loans encourages enrollments, which encourages faculty hires, which encourages facility build-outs. It’s a big time economic development ‘virtuous circle’ that fuels local economies. 

 

everyone gets a piece of the action. as the momentum grows, what is built becomes increasingly lavish.  schools competing with each other for enrollments want increasingly costly infrastructure to  use as a marketing tool to lure both more students and more high profile faculty.  

 

where I live the state university has a core campus, a major downtown healthcare complex, two far flung satellite campuses and a ‘research/tech incubator’ that has been a “see thru” facility for most of it’s short lifespan.

 

The process is unsustainable but there is so much at risk that the basic funding mechanism supporting the whole charade can’t be easily altered.  halting the 'franken-growth' that feeds the system is a death sentence for all concerned. 

 

The same kind of rococo grandiosity is visible at the secondary level where high schools, fatally infected by american idol syndrome, build outrageously expensive ‘performing arts centers’ where wannabe students can master their hip-hop/karaoke  chops.

 

The prison industry operates on a similar build-out paradigm especially in states where illegal immigration is a major political  issue

 

 “You should have taught that one how to fix Harleys. That shit aint gonna be outsourced.”

 

a college degree ain't what it used to be.......it has become part of the con.......as existing infrastructure degrades a skilled trade or  solid technical education will be a  much better investment ........

Wed, 08/29/2012 - 09:53 | 2746115 grimey
grimey's picture

Don't blame professors, all that student debt funds endowments at the behest of institutional money managers and the wall street machine, it's just another back door stock market "stimulus" aka a perpetual handout to the investor class.  Thats why nothing will ever be done about it, it's too neat a synergy of the two major parties' needs - to further fluff the well-off while maintaining the illusion of social benefit. Please do an ounce of research before jumping off at educators, though based on the strength of your argument I can see how you might have developed an adversarial relationship with your teachers at a young age.

Wed, 08/29/2012 - 08:55 | 2746116 dolph9
dolph9's picture

It's all about finding a place for the unpayable loans issued by the criminal banks.

In this case, it's on college students, on young people, with the idea that they will pay them off over a lifetime, making them debt slaves.

The Anglo American financial world is now obsessed with the letter of the law, rather than the spirit.  Fiat loans must be payed off!  The contract is sancrosanct!  "Creditors" must never, ever take a loss.

What they'll never admit is that the loans are fraudulent in the first place.

It was always going to end this way.  The endgame was hazy but in sight...we would be done in by the banks.

The result is obvious but will take some time to play out...the end of American Empire as it's people are reduced to debt slaves, the end of Anglo power and a return to a multipolar world.  That's the big picture.

Wed, 08/29/2012 - 09:01 | 2746142 AynRandFan
AynRandFan's picture

There is nothing unpayable about a student loan.  If you don't want to be "victimized" by a criminal bank, don't borrow money.  Earn it and pay for your education out of pocket.

Or, make money by lending to people in their teens with no job, no education, no credit, and no guarantee of graduating or getting a job.  Bonanza!

Wed, 08/29/2012 - 08:55 | 2746121 AU5K
AU5K's picture

Weird.  You subsidize something through below market loans, partial payments (scholarships), and state paid tuitions, then prices skyrocket.  Who wouldve ever thought....

Wed, 08/29/2012 - 09:09 | 2746164 nantucket
nantucket's picture

exactly.  i's basic economics.  and the polititicians loved it...they got votes because they passed laws that make school more "affordable" and they locked in the education profession vote because they were virtually guaranteeing a rising supply of students.  win-win (which is actually a lose-lose in the real world, but who's living in that anymore).

Wed, 08/29/2012 - 09:02 | 2746141 SafelyGraze
SafelyGraze's picture

"where do all these cheap debt funded dollars go?

(1) to pay the salaries, and
(2) lifetime guaranteed pensions of
(3) tenured Keynesian professors"

wrong, wrong, and wrong.
follow the money

(1) salaries flat vs inflation (not rising exponentially) 
http://www.psuaaup.net/blog/uploaded_images/Salary-Inflation-707434.jpg

(2) pensions not rising exponentially, and are self-funded from 401k 
http://www.investmentnews.com/storyimage/CI/20080414/REG/376367573/V2/0/... (3) increasing number of "part time" adjunct faculty 
http://www.psuaaup.net/blog/uploaded_images/Figure-4-793324.jpg if the money isn't flowing into self-funded 401k's of a diminishing fraction of tenured faculty that have flat or decreasing inflation-adjusted salaries, then where *is* it going? *that* is your higher-ed bubble. 
Wed, 08/29/2012 - 09:47 | 2746316 grimey
grimey's picture

It goes to endowments, which are increasingly shifting from bonds/equities to equities/commodities/PE/hedge funds

http://www.nacubo.org/Research/NACUBO-Commonfund_Study_of_Endowments/Pub...

Wed, 08/29/2012 - 09:03 | 2746151 cabtrom
cabtrom's picture

So if we have a "death pannel" now for healthcare does that mean a "career pannel" is needed to decide who is worthy of what education? Hmmm, What would we call this kind of cammand and control economy?
This is getting creepy.

Wed, 08/29/2012 - 09:12 | 2746178 nantucket
nantucket's picture

How about "Workers Paradise".  has that been used already?  oooohhhh right.  it was used for cuba, soviet union, east germany, etc, etc, etc.  oh well, you're on your own for this one.  

Wed, 08/29/2012 - 09:08 | 2746167 dow2000
dow2000's picture

Any recommended strategies on how to trade this bubble?  Short text book publishers comes to mind...anymother ideas out there?

Wed, 08/29/2012 - 09:47 | 2746312 Bicycle Repairman
Bicycle Repairman's picture

I wonder how real estate will do in towns that exist solely because of a university?

Wed, 08/29/2012 - 09:48 | 2746317 bigwavedave
bigwavedave's picture

Very very well. Usually very nice towns. 

Wed, 08/29/2012 - 10:01 | 2746361 bigwavedave
bigwavedave's picture

Emigrate

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