economic perspective of a millennial

[lektrode]

Re: economic perspective of a millennial

.... The question is, how do we, as a nation, make the U.S. the land of dreams and opportunities for them, as it was in my youth.

1 - moonshot level funding/program for a massive buildout of... GASP!!! nuke power stations - at least 500 of them, as fast as they can be 'mass produced' and deployed

2 - gasoline tax increase IMMEDIATELY to pay for it.

3 - tell the rest of the world that freeloads off our .mil budget that they are on their own

4 - close all the overseas bases that dont directly cover vital trade routes/resources - BRING ALL OUR TROOPS HOME and put them to work on a major infrastructure rebuilding program.

5 - increase the 'user fees' for ALL GOV SERVICES (incl socsec/medicare) NO LIMIT ON INCOME, WITH ALL INCOME (and i do mean ALL income taxed for FICA, and means-test socsec/medicare)

6 and finally: TERM LIMITS FOR CONGRESS, both houses, with ALL incumbents OUT within 2 more election cycles.

NO MORE CAREER POLITICIANS and NO MORE 'lifetime benefits' for _any_ of them or the rest of the political aristocracy that has taken over The US and is driving the country into the dirt, all to gain a few more votes????

[lektrode]

Re: economic perspective of a millennial

great work, dc!
(as per usual)

[Thailandnotes]

Re: economic perspective of a millennial

Why the big student loan burden? Because the cost of college far outstripped the rate of inflation over the past 30 years? Why did the cost of college outstrip the rate of inflation for the past 30 years? Because of the government-supported funding of students loans for college and the absurd concept that everyone needs/merits/deserves a college education, regardless of whether or not they are educable.

It’s amazing to look back at how hard it was for individuals to get credit. My roommate in college (1974) had a credit card. He was the only one on our hall, probably the only one in the building. Flash forward and you have credit card recruiting tables at freshman orientation. Even when I had been working two years, I couldn’t get a car loan without my parents co-signing.

If you couldn’t pay for tuition, you were told to apply for a grant. The change in the ratio of grant money to loan money is worth checking out. Even as loans became more common, loan rates were subsidized by the government. Student loans were at much lower rates than borrowing for anything else. Private “competitive” lenders were not yet in the game. FIRE had not yet taken over government.

[jiimbergin]

Re: economic perspective of a millennial

It’s amazing to look back at how hard it was for individuals to get credit. My roommate in college (1974) had a credit card. He was the only one on our hall, probably the only one in the building. Flash forward and you have credit card recruiting tables at freshman orientation. Even when I had been working two years, I couldn’t get a car loan without my parents co-signing.

If you couldn’t pay for tuition, you were told to apply for a grant. The change in the ratio of grant money to loan money is worth checking out. Even as loans became more common, loan rates were subsidized by the government. Student loans were at much lower rates than borrowing for anything else. Private “competitive” lenders were not yet in the game. FIRE had not yet taken over government.

I graduated in 1966 (actually on 6/6/66). I got a decent job as an actuarial student for Hartford Life in Boston. My used 1962 Buick had a signifcant repair needed. I had to get a co worker to co-sign my $400 loan. The times have certainly changed.

[Raz]

Re: economic perspective of a millennial

Why the big student loan burden? Because the cost of college far outstripped the rate of inflation over the past 30 years? Why did the cost of college outstrip the rate of inflation for the past 30 years? Because of the government-supported funding of students loans for college and the absurd concept that everyone needs/merits/deserves a college education, regardless of whether or not they are educable.

+1.

[wayiwalk]

Re: economic perspective of a millennial

Well, that's 10 minutes of my life I won't get back.

+1. Thanks for the heads up, I perused it at most.

Much better blogs on this subject elsewhere - that hit on the key points of the generational inequity with a more rational discussion.

[wayiwalk]

Re: economic perspective of a millennial

I'm seeing the struggles of the 20 somethings at work. A recent performance appraisal for person who works for me - he did a kick-ass job all year, and the best I could give him for a raise was 3.5% (the engineering company I work at is fairly large/buearocratic and we don't have sufficient discretion to provide a better raise).

I know he's carrying a fairly significant student loan, and just that week his car with more than 150K miles on it broke down....

I'd hate to be in the shoes of the millenials who went into college/took out loans when the economy looked sound - and I can see where their unhappiness of where they fall in the demographic distribution of the country will push them to become active politically when otherwise they might not have.

[ProdigyofZen]

Re: economic perspective of a millennial

Don't let C1ue enter this conversation. He will vehemently disagree with you on said choice of words.

[Raz]

Re: economic perspective of a millennial

It's no longer something you can thumb your nose at. A lot of people are glib about student loans, and blame the kids for not majoring in business or engineering. But even if you are the type to deem a liberal arts education worthless (which I am not), how many kids do you know who have everything figured out and make brilliant financial moves at 18?

Soon student loans will soon outmatch home equity loans in raw volume of debt. It's the only consumer debt type that has grown (and its growth accelerated) through the recession. Once the volume of student loan debt passes home equity loans, it has only mortgages to contend with for the crown.

Think of it. What is right now the third most common debt by type for Americans, and the fastest growing, is now a type of debt that nothing, not even bankruptcy, can absolve.

When student loans become the biggest debt segment before the bubble bursts, there could well be a generation that will never be able to pay. Throw them in prison, they'll say (and they're doing that occasionally even now). Their crime was trying to get educated.

This has to be the dumbest choice a society has made that I can think of. And yet, here we are.

Boomers had much cheaper tuition, better job prospects, student loans that were written off with bankruptcy, and no debtors' prisons.

Why should anyone expect some millennials not to feel targeted?

CONgress banned cigarette advertising on billboards (Remember "Joe Camel"?) because the tobacco companies were accused of "targeting our children".
Yet CONgress subsidized and assisted another industry (Higher Education) to "target our children" with this crap, and furthering ridiculous salaries and perks for college administrators and professors.

How did student loans become eternal and non-dischargable? More bipartisan skulldugery?

[dcarrigg]

Re: economic perspective of a millennial

CONgress banned cigarette advertising on billboards (Remember "Joe Camel"?) because the tobacco companies were accused of "targeting our children".
Yet CONgress subsidized and assisted another industry (Higher Education) to "target our children" with this crap, and furthering ridiculous salaries and perks for college administrators and professors.

How did student loans become eternal and non-dischargable? More bipartisan skulldugery?

Good point. It is congress' fault, not societies. Bipartisan skullduggery it is. Here's a timeline of how it went down.

1976 - Department of Education regulations altered to prevent government loans or loans made directly by a not-for-profit institute of higher education from being discharged in bankruptcy during the first five years of repayment. Unless they represented undue hardship.

1979 - For the first time this is in place with the force of law - not just regulation.

1984 - The 1979 law is altered to exempt the words "institute of higher education." This opens the door for not-for-profit financial entities to get in on the action.

1990 - The law is altered to replace the number "5" with the number "7."

1991 - Two law changes this year. The first eliminated the statute of limitations on collections, and the second allowed a 10% garnishment of wages.

1996 - Law changed to allow for withholding of Social Security payments for those who default on student loans.

1998 - The number "7" is removed from the law entirely. Student loans from not-for-profit sources (government, credit unions etc) are now completely non-dischargeable in bankruptcy.

2001 - A DoEd regulation standardizes a 15% garnishment rate from wages and Social Security payments.

2005 - For-profit section added to law. Loans from any financial institution are now non-dischargeable. All student loans are now completely non-dischargeable in bankruptcy.

2006 - 15% wage and Social Security garnishments now law instead of just regulation.


So that's it. It is something new. You can see these kids are viewed as prey by the law now. It is different than it was. One simple law would fix this, of course, but both the government and the banks are beneficiaries at this point, so...well, let's just keep it polite and say it would be a tough sell.

[lektrode]

Re: economic perspective of a millennial

I graduated in 1966 (actually on 6/6/66). I got a decent job as an actuarial student for Hartford Life in Boston. My used 1962 Buick had a signifcant repair needed. I had to get a co worker to co-sign my $400 loan. The times have certainly changed.

whoa! jb, thats quite the set of numbers.... (esp for a faithful guy like yerself ;)
sez the guy who grad'd HS on 6/6/76

and my ole man, self empl'd (ins adj) type he was, had to borrow money (short term) from the... uhh... ummm.... 'alternative financiers' to build a house, in '65, since the banks wouldnt lend to him on a construction loan (til the place was finished, only then did they)

[jk]

Re: economic perspective of a millennial

Good point. It is congress' fault, not societies. Bipartisan skullduggery it is. Here's a timeline of how it went down.

1976 - Department of Education regulations altered to prevent government loans or loans made directly by a not-for-profit institute of higher education from being discharged in bankruptcy during the first five years of repayment. Unless they represented undue hardship.

1979 - For the first time this is in place with the force of law - not just regulation.

1984 - The 1979 law is altered to exempt the words "institute of higher education." This opens the door for not-for-profit financial entities to get in on the action.

1990 - The law is altered to replace the number "5" with the number "7."

1991 - Two law changes this year. The first eliminated the statute of limitations on collections, and the second allowed a 10% garnishment of wages.

1996 - Law changed to allow for withholding of Social Security payments for those who default on student loans.

1998 - The number "7" is removed from the law entirely. Student loans from not-for-profit sources (government, credit unions etc) are now completely non-dischargeable in bankruptcy.

2001 - A DoEd regulation standardizes a 15% garnishment rate from wages and Social Security payments.

2005 - For-profit section added to law. Loans from any financial institution are now non-dischargeable. All student loans are now completely non-dischargeable in bankruptcy.

2006 - 15% wage and Social Security garnishments now law instead of just regulation.


So that's it. It is something new. You can see these kids are viewed as prey by the law now. It is different than it was. One simple law would fix this, of course, but both the government and the banks are beneficiaries at this point, so...well, let's just keep it polite and say it would be a tough sell.

there was some rational motivation for the original regulations and laws. i remember publicity about some clever law students who had racked up student debt as undergrads [and in law school, too? i don't recall] who promptly filed bankruptcy as soon as they graduated so as to clear the decks before they made any money or had any assets. the original intent of the regs was to prevent such abuses.

this was extended later by fire interests who were in the process of lobbying to make bankruptcy a more difficult and onerous proposition across the board.

[oddlots]

Re: economic perspective of a millennial

Educable? Is that a word?

But beyond a little good-humoured snark, the cost of education is going up because, like healthcare, it largely can't be deflated by off-shoring. The things that we most need and value (education for our young, healthcare for our old or sick) are stuck on the high-ground with us while the revenue streams that might support them are heading out with the tide. It's not that healthcare / education costs are going up as much as they're being exposed as being fixed costs not subject to international labour-arbitrage.

[oddlots]

Re: economic perspective of a millennial

Wow, it's a word! Apologies.

[c1ue]

Re: economic perspective of a millennial

Don't let C1ue enter this conversation. He will vehemently disagree with you on said choice of words.

Another excellent example of your 'neener neener neener' style of discussion.