Posted on 03/14/2015 6:33:43 PM PDT by RightGeek
With global moral hazard having long ago become institutionalized, and codified as "monetary policy", catering almost exclusively to the TBTF entities in the financial sector, we were surprised it took as long as it did for Obama to announce (as he did last week), that the administration is now studying "new bankruptcy options" for student loan borrowers: code word for an across the board student debt moratorium, or forgiveness.
To wit from "Student Aid Bill of Rights: Taking Action to Ensure Strong Consumer Protections for Student Loan Borrowers":
The President is directing his Cabinet and White House advisers, working with the Consumer Financial Protection Bureau, to study whether consumer protections recently applied to mortgages and credit cards, such as notice and grace periods after loans are transferred among lenders and a requirement that lenders confirm balances to allow borrowers to pay off the loan, should also be afforded to student loan borrowers and improve the quality of servicing for all types of student loans. The agencies will develop recommendations for regulatory and legislative changes for all student loan borrowers, including possible changes to the treatment of loans in bankruptcy proceedings and when they were borrowed under fraudulent circumstances.
The President is directing his Cabinet and White House advisers, working with the Consumer Financial Protection Bureau, to study whether consumer protections recently applied to mortgages and credit cards, such as notice and grace periods after loans are transferred among lenders and a requirement that lenders confirm balances to allow borrowers to pay off the loan, should also be afforded to student loan borrowers and improve the quality of servicing for all types of student loans. The agencies will develop recommendations for regulatory and legislative changes for all student loan borrowers, including possible changes to the treatment of loans in bankruptcy proceedings and when they were borrowed under fraudulent circumstances.
Well, it didn't take long for virtually every leftist group: from the Daily Kos, to Democracy for America, to Campaign for America's Future and many more, to jump on this bandwagon, and demand - you guessed it - that the administration "cancel all student debt."
Sure, why not: leaving aside the very touchy topic of personal responsibility and accountability, in a world in which record debt is merely "replaced" by even more debt, and in which profits are privatized but losses are always socialized with taxpayers and future generations bearing the brunt in the form of a record $18.2 trillion in public debt (and some $7 trillion more if one adds the government-backed GSEs which one should), why not go ahead and "cancel" the debt. And don't bother trying to explain the simple math that debt is never cancelled, as every liability is someone's asset, and that asset holder will demand to be made whole in the form of more debt elsewhere or else, like Hank Paulson in 2008, it will scream mutual assured destruction and threaten to blow up the world unless bailed out.
In short, what all the concerned entities listed above are saying is not "cancel all student debt", which is impossible, but share the burden of the 43.2 million "student debtors" shown in the chart below, with everyone.
After all, "it's only fair."
Finally, since nobody, anywhere is harboring any doubt that any of the record debt the world is burdened with will ever be repaid, and instead will eventually be hyperinflated away even it means paradropping bags of cash, this proposal actually has a good chance of passing (sorry future generations not only in the US but around the globe).
Once it does, and once colleges know they can charge anything for tuition, room and board - because the debt funding it will be socialized and ultimately "forgiven" - prepare for the green line below, already exponential, to go... vertical.
You’ve pretty much nailed it....
(I’m actually old enough to remember when the MSM actually mentioned the budget deficit now and then, I think it was when Bush was POTUS)
You wrote
“We should complain about racial discrimination that this will cause. After all, blacks go to college at a lower rate than others so they do not take out as many loans. “
This is a good argument
Lets just skip all this nonsense and go to the final step which is “Everything is FREE!”. The ultimate in Hippie economics.
I think the Gibsmedats are more generational than racial.....
Ya know, I paid my college in full at the beginning of each semester. Taking as many hours as possible and going year round, I graduated in 3 years. I did get a scholarship that almost covered my books as long as I purchased the cheapest used texts as possible. When it didn’t, the library came in handy. I worked p/t for spending money. Funny how I didn’t owe a dime upon graduation. Our kids don’t owe a dime for their college, either. I’ll be if after we’ve sacrificed to stay on budget to let all those who can’t get off scot free with us footing their bill.
It will happen and the communists democrats will gain millions of voters. America will go deeper into communism than it is now. America is finished.
By substituting debt for constitutional money, the banks have solved their age-old dilemma: If you owe the bank a thousand and you can't pay, YOU have a problem. If you owe the bank a million and you can't pay, THEY have a problem.
The debt-consumption based economy is dying. The signs are everywhere.
The socialization of risk will end here, as it has ended in Iceland.
I started my full-time college in January 1982 and graduated in August 1984. I did have the old GI Bill that earned me $420 per month and I had a full-time job. Like you I paid everything with cash the day I signed up for classes.
My children have jobs and pay for their college. Since they both attend a University very close to us they get free room and board at home. With the price of college so high letting them stay at home is the equalizer for them.
I guess when you can print all the money want, play golf everday, jet to any place in the world on a whim, and not have to work for it, its has no value to you. Not like it does for someone that has to wok 40 hrs a week just to take home only $500. Likewise I guess the money the banks lent weren’t put in there by customers who worked their tails off and its all just 1’’s and 0’s in the netherworld in the Internet, right? So by 0’s logic anybody should be able to write a check for any amount they want even if i means they’d be overdrawn because it will all be forgiven right? Sorry POS CIC but the “real world” doesn’t work like that. Every time you forgive a debt you’re telling the noteholder screw you; I ain’t payin’. Its like going into a job after working a month and the boss telling you, you’re not getting paid. Why because I said so? So what does that make the CIC if he forgives all those notes? Nothing but a two-bit thief. But then again he wouldn’t understand that bcause he never had to earn any money and pay any bills on his own with all that Saudi and Commie investment money being shoved his way as a down payment for the destruction of America.
0, Shame on you if you do this. Sure the college tuition is high but the students were told that infirmation before they signed on the dotted line.
Yep. Turnabout is fair play. Liberal heads will explode.
since i was dumb enough and worked hard enough to pay mine off... if this goes through, do i get my money back???
No way we cancel that. We are totally broke and I want my tax dollars back!!!
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