mg height=50 src="http://img.photobucket.com/albums/v253/chode6/chode2.gif">
Posted on 10/26/2011 6:09:05 PM PDT by Kaslin
Government: President Obama wants student loans to be more like student handouts. Too bad he hasn't learned one of the lessons of the 2008 mortgage crisis: Free money costs plenty.
The global financial crisis has its roots in the U.S. government's politicization of mortgages. Washington decided that all those real-life versions of mean old bank president Mr. Potter from "It's a Wonderful Life" shouldn't just turn into big-hearted Jimmy Stewarts.
No, they should practically become welfare officers, doling out money to people with bad credit ratings to buy homes, without requiring a down payment.
And when this pyramid scheme collapsed, the investors who bought the safe-seeming, sliced-and-diced mortgage debt were left holding the bag.
And millions of Americans lost their jobs.
Making a loan of hundreds of thousands of dollars to someone is serious business, but the government for years systematically pressured mortgage lenders with accusations of racism. Many feared the Department of Justice more than the default risk of their debtors.
Now President Obama proposes applying the same mortgage mistakes to student loans.
On a day on which the College Board reported the cost of public colleges rose 8% — about twice the inflation rate — Obama unveiled a student loan forgiveness plan.
(Excerpt) Read more at investors.com ...
That's the plan.
Massive Amounts of New Debt on the poor taxpayers, all for votes with no care about what happens after re-election.
The student loan program that King Obama announced this week is typical vote-buying welfare that invites abuse and fraud.
True story. I struck up a conversation with a woman in an airport while waiting for a flight. The economy and the plight of recent college graduates came up. She openly (without a hint of shame) told to me how her daughter plans to take advantage of Sugar-Daddy Obama’s generosity.
Her daughter is majoring in a graphic design program at an expensive CA university and already has $56,000 in student loans.
Realizing that the labor market is depressed, instead of graduating, she is staying in school and living off student loans as long as she can. Which is what millions of others will do too.
She has no incentive whatsoever to limit how much debt she racks-up. She knows that she will not be held accountable to pay it back. Why stop at $56,000? $100,000! $150,000! $200,000! Sky’s the limit when you are spending free money!
After 20 years of repaying not much if any of her student loans, her debt will be forgiven.
How neat! Like free money or something!!
She added insult to injury by telling me that in her daughter’s line of work, many times she will be paid cash or on a 1099/self-employed basis.
So, since her daughter doesn’t plan to show much income tax on her tax returns anyway, the 10% of discretionary income will be practically 0. She plans to pay back almost ZERO!!
I shudder to think that we already have $1 trillion in student loan debt. With a government give-away like this one, we could easily double that to $2 trillion. What happens when the gov’t has to start forgiving 100s of billions in dollars in student loan debt?
Who pays for it? The money was spent. Somebody expected to get paid back. Who loses and/or who pays it if not the student?
That is exactly how the system will be gamed.
Those brainwashed kids standing behind Obama and cheering in front of him have idea how quickly he is destroying their country. So sad.
Easy, cheap, government-guaranteed money caused the housing bubble. Now it has caused a higher education bubble.
This is the vote-buying politicians’ way to keep the bubble inflated and keep the money flowing to one of their best mouth-pieces... liberal professors.
And the politicians won’t stop bribing the people with their own money until we are Greece on steroids.
I am profoundly sad to say that this woman was NOT an Obama-supporting liberal.
That is what happens when a country goes Socialist.
Everyone takes as much as they can, until there is nothing left to take.
As Prof. Alexander Frazer Tytler supposedely said back in the 1800’s (paraphrasing): A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largesse out of the public treasury. From that moment on the majority always vote for the candidate promising the most benefits from the treasury with the result that democracy always collpases over a loose fiscal policy, always to be followed by a dictatorship.
That describes Greece today. It could very well be America soon.
mg height=50 src="http://img.photobucket.com/albums/v253/chode6/chode2.gif">
Crisis or bribe.
Does congress have any say in the matter?
Good post.
No, it's America's next crisis.
This is why I think Obama has ‘created’ this ‘crisis’ at OWS. He needed another one so the students would vote for him. Have you noticed his campaign stops? Universities. Even BEFORE OWS. Same with the black community, the MLK ceremony, and the hiring of Al Sharpton at PMSLSD, and the Maxine Watersssss attack on the Tea Party.
EVERYTHING is contrived. Everything.
Obama has one solution to all problems: More free sh** for people who put him in the White House.
I don’t think Congress can stop it.
He’s going around screaming, “if Congress won’t act to help you, I will!”
These kids have no intellectual defense against this type of manipulation.
As they say, if you are not a Socialist when you are 18, you have no heart. If you are still a Socialist when you are 40, you have no brain.
He’s counting on these kids not having a brain yet.
In Obama’s simple little world , the loans exist in a vacuum.
They originate nowhere and are heading nowhere and un affected by anything.
No way he ever completed any courses beyond the 101 series .
How can this be done without a singe vote in Congress?
I wish the in house chefs would spike his food and drink with valium or some other pacifying drug.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
