Quote from Eight:
BK's stay on the record, simple credit card defaults can be removed if you know the right lawyer.. The student debt is in a class by itself. The IRS keeps your tax refunds if you default for one thing. That puts a wrinkle in things.
In this time when the economy should be in full recovery and it's not, student loans are keeping the 20-30 yo crowd from participating in the economy.
Let me see if I get this right: Government intervention into housing loans caused the current crisis. Government intervention into education financing is partly responsible for the slow economy. Government debt is leading to higher taxation and higher taxation is partly responsible for the slow economy... OK, is there a pattern here that anybody can grasp? Believe me, people still do not grasp the pattern, they will not grasp the pattern even when inflation has starved their grandparents to death. That is why history repeats itself! I'm thinking, with regard to history repeating itself that we might as well try to just be on the right side of the trade all the time.
Perhaps this is not exactly correct. It seems to me the real underlying pattern is government legislation friendly to special interest groups, at the expense of the taxpayer and also at the expense of students, in the case of student loans.
It can be said that it was a
lack of "government intervention", i.e., failure of the Greenspan Fed to regulate mortgage lending, that led to the mortgage and financial industry crisis. Certainly government debt, and the need to partly monetize it, is leading to high indirect taxation of the lower and middle classes due to inflation, as you say. But the real culprit and underlying pattern is constant pandering of Government to special interests. with the cost reflected mainly in inflation, that insidious indirect tax that hits the poor harder than the wealthy.
For a long time the student loan program was a giveaway to banks because the risk was shifted to the taxpayer. Students, by and large, also got screwed. The Obama administration has made some headway in reining in some of these excesses.
State subsidies of higher education have been shrinking in nominal dollars even in the face of significant inflation, whereas State expenditures for Prisons has been growing. California spends nearly half again as much on prisons as they do on higher education. This is a pattern repeated in all the States with prisons run by for-profit corporations. U.S. prison populations exploded after prisons were privatized. This is just another example of the underlying fundamental problem: Government subsidy of corporations at taxpayer expense driven by special interest legislation at both the Federal and State levels. It's ruining the country.
The often repeated exhortation from the political right that government can't do any thing right and that virtually everything except the military should be "privatized" is simply wrong. This right-turn down the wrong road we owe mainly to the Reagan Administration and an irresponsible Congress. It seems too late to do anything about it now that the Court, too, has weighed in on the side of special interests and their firm control of what was "
our" government.
Government debt is completely out of control, but it is a common fallacy to blame the welfare state, and in particular the self-funding entitlement programs for this. Only one entitlement program is in real trouble and that is medicare. And it is because medicine in the U.S. is a government protected Cartel of private interests. The real culprits however are government subsidies of the Banking and Corporate sectors, and in particular the "military industrial complex". It would be hilarious if it were not so pathetic to read on ET that the only part of the government that is well-managed is the military, when in reality that's were the greatest malfeasance and inefficiencies occur.
The government still, in fact, does a lot of things quite well, but the pentagon and extra-constitutional NSA and CIA operations are
not some of them. If I give you a blank check to do almost anything, and also, in particular, in the the case of the NSA and CIA, allow you to hide your budget from public scrutiny, I dare say the result can be quite spectacular, but at tremendous inefficiency of expenditure.
So I see unpaid student loans as just another manifestation of a far more serious problem.
