Student Debt

[Forrest]

Re: Student Debt

All of student debt is merely a matter of control...you owe the government money...you do what they say. Same thing on Government backed mortgages. And during the lending process a lot of people make risk-free money, because these debts are guaranteed.

When you borrow money, you become a slave to the lender.

As to the students and the mortgage holders...they have been conned into buying what has doubtful worth. Sure, everyone needs education...go buy a book, or better still, a year at a technical school. As for that McMansion...did you really need that monster of a house? Did you need to refinance every cent of equity from it while you had it to spend on stuff you really didn't need that advertisers wanted you to buy?

As for where we are now...it's too late to do anything about what has already happened.

We merely await consequences, and at best can try to think of a way of rebuilding after the inevitable collapse while holding onto as much of our own personal wealth as possible.

Then when the dust has settled, we might be able to help people begin again...at a profit, of course.

[Ghent12]

Re: Student Debt

Currently there are blockbuster budgets (bi-partisan, naturally) being cobbled together for the replacement fast-attack fleet, as well as new missiles, aircraft, etc. So large they blow out the navy's new ship construction budget. Not to worry, they'll find a way . . . .

David Stockman:

The algos were raging yesterday morning because April durable goods orders were up by an unexpected 0.8%. Well, yes they were: The US Navy inked a gigantic $18 billion order for 10 new nuclear-powered attack submarines during the month. Consequently, the actual 0.8% decline in industrial orders was transformed into a swell “upside” surprise.

But folks, the US Warfare State doesn’t need no more stinking nuclear attack submarines. It already has more than 70 in service, and several more beyond yesterday’s huge order were already in the pipeline.

The reason we don’t need them— beyond the vast redundancy in firepower already extant— is that attack submarines have one primary mission. Namely, to kill nuclear-powered submarines carrying the ICBMs of hostile powers who may have them aimed at US cities.

Here’s the deal. China has just three ICBM capable submarines which have a range under 5,000 miles and which have never been deployed in the blue water; and Russia’s rusting legacy fleet of 10 subs left over from the cold war (that would be the one which ended a quarter century ago) is basically mothballed in port.

During the most recent year, the Russian Navy’s operating tempo was so anemic as to amount to one SSBN submarine on the water at any given time. So even though they theoretically have 160 submarine launched ballistic missiles on their 10 ships compared to 656 for the US, 90% of Russia’s SLBMs could never be launched.

Stated differently, during the peak of the cold-war in 1983, the Soviet Navy conducted 105 patrols compared to 5 in 2012. Yet back then we have far fewer attack subs on the water and what we had were far less lethal than today’s US fleet. Stated differently, the 70 attack subs we already have are advanced technology killers purchased at the peak of the Reagan build-up— and at a time after the current Russian fleet of aging SSBNs were already on the water!

Since the strategic nuclear stand-off ended decades ago, the attack submarine fleet has been given an additional mission to serve as a deterrent against surface ships and especially aircraft carrier battle groups of hostile industrial powers. Needless to say, China has one re-conditioned nuclear aircraft carrier it bought second-hand from the Ukraine! And Russia has one, and yes, it too patrols the languid waters of its homeport.

So the 10 new attack submarine order announced yesterday is just mindless waste. The order amounts to a preposterous exercise in military Keynesianism that adds nothing to the security and safety of the American people, but will result in the drastic waste of fiscal resources in a nation that is already drifting rapidly toward insolvency.

This modern day exercises in sub-sea pyramid building, however, does smoke out the abysmal economic ignorance of the so-called financial press. The writer of the story below, one Jeffry Bartash, had no trouble with the idea that pouring steel and electronics into Davy Jones’ locker was a sign that the American economy is coming back to life.

I think that David Stockman has no clue about the subject matter of this rant in this case. "Nuclear Attack Submarine" is a name, but being a nuclear-powered submarine capable of attack missions against ballistic nuclear submarines is far from a complete description of these ships. I have great sympathy and understanding for the notion that the resources spent on creating military hardware could be utilized better in other regards, but I also have a certain understanding of history and human nature. Military parity tends to invite military conflict. Despite what you may think of the wars in Iraq and Afghanistan, they were extremely minor engagements compared to the proxy wars with the USSR or the American Civil War or the seven world wars fought throughout history which America (the country and its precursors) have fought in. Right now, aggressive policy options leading to major war with the United States are pretty much closed for every rational nation.

[Thailandnotes]

Re: Student Debt

whole thing...

http://www.salon.com/2014/06/08/coll...?src=longreads

2 paragraphs

What I mean to say is that the tuition price spiral is part of the larger history of inequality, just as is the ever-rising price of Andy Warhol paintings, or the ever-growing size of the McMansion, or the ever-weightier catalogs issued by Restoration Hardware—and, of course, the never-increasing wages of American workers. As the rewards that can potentially be won by members of the white-collar class have gone from meh (in the egalitarian 1970s) to Neronian (today), it feels natural that the entrance fee for membership in that class should have escalated in a corresponding manner. The iron logic of inequality works the other way as well: Although a college degree doesn’t necessarily guarantee a life of splendor, not having one pretty much makes a life of poorly compensated toil a sure thing. Finding ourselves on the receiving end of inequality is a fate we will pay virtually any price to avoid, and our system of higher ed exists to set and extract that price.

Put it another way: Over the last 30-odd years we have essentially privatized higher ed. In saying this I’m not referencing the defunding of our State U’s (an explanation for the tuition spiral, by the way, that doesn’t get nearly enough journalistic attention). And I am aware that a good chunk of our institutions of higher ed have been private all along. What has changed is that they aren’t “our” institutions of higher ed anymore. Maybe they never were, but not too long ago it was possible to think of them—from Milton Friedman’s University of Chicago all the way down to Michele Bachmann’s Winona State University—as serving some sort of public function. Whether founded by the grace of Rockefeller or by Act of the Minnesota Legislature, they manufactured good citizens; they taught us scientific farming techniques; hell, they built the atomic bomb and created the Internet. This is why our government subsidized (and still subsidizes) them with grants and earmarks and tax abatements and preferential treatment of every description. But the other part of the bargain doesn’t work the way it used to anymore. Everyone in the age of inequality knows that the purpose of a college education isn’t to benefit the nation; it’s to give the private individual a shot at achieving a High Net Worth.

[EJ]

Re: Student Debt

whole thing...

http://www.salon.com/2014/06/08/coll...?src=longreads

2 paragraphs

What I mean to say is that the tuition price spiral is part of the larger history of inequality, just as is the ever-rising price of Andy Warhol paintings, or the ever-growing size of the McMansion, or the ever-weightier catalogs issued by Restoration Hardware—and, of course, the never-increasing wages of American workers. As the rewards that can potentially be won by members of the white-collar class have gone from meh (in the egalitarian 1970s) to Neronian (today), it feels natural that the entrance fee for membership in that class should have escalated in a corresponding manner. The iron logic of inequality works the other way as well: Although a college degree doesn’t necessarily guarantee a life of splendor, not having one pretty much makes a life of poorly compensated toil a sure thing. Finding ourselves on the receiving end of inequality is a fate we will pay virtually any price to avoid, and our system of higher ed exists to set and extract that price.

Put it another way: Over the last 30-odd years we have essentially privatized higher ed. In saying this I’m not referencing the defunding of our State U’s (an explanation for the tuition spiral, by the way, that doesn’t get nearly enough journalistic attention). And I am aware that a good chunk of our institutions of higher ed have been private all along. What has changed is that they aren’t “our” institutions of higher ed anymore. Maybe they never were, but not too long ago it was possible to think of them—from Milton Friedman’s University of Chicago all the way down to Michele Bachmann’s Winona State University—as serving some sort of public function. Whether founded by the grace of Rockefeller or by Act of the Minnesota Legislature, they manufactured good citizens; they taught us scientific farming techniques; hell, they built the atomic bomb and created the Internet. This is why our government subsidized (and still subsidizes) them with grants and earmarks and tax abatements and preferential treatment of every description. But the other part of the bargain doesn’t work the way it used to anymore. Everyone in the age of inequality knows that the purpose of a college education isn’t to benefit the nation; it’s to give the private individual a shot at achieving a High Net Worth.

As they say a picture is worth 1,000 words but due to Internet word price inflation, perhaps 1 million words.

[gugion]

Re: Student Debt

As they say a picture is worth 1,000 words but due to Internet word price inflation, perhaps 1 million words.

So this graph ties into the Itulip theory that credit-finance that really took off in 1980's fueled inflation in non-traded goods and services like medical care, housing, schooling, while traded goods like apparel and food inflated much less due to globalization and productivity and technology efficiencies. The idea being that when credit replaces savings for major purchases that used to be paid for with savings (school, medical care, housing), you get a huge demand spike as credit makes it easier to make immediate purchases/leases of these large-cost goods and that demand spike increases the cost of these? Thank you.

[BK]

Re: Student Debt

EJ,
Any commentary of the debt that Colleges and Universities are loading up on to attract students.

The larger question is the College and University debt being collateralized? If the massive institutional debt being run up by colleges and universities are there banks or other large companies that may be at risk if this debt goes bad?

Is another debt crisis possible emanating from college institutional debt?

Have you had a chance to read http://www.amazon.com/College-Unboun.../dp/0544027078

[ST]

Re: Student Debt

So this graph ties into the Itulip theory that credit-finance that really took off in 1980's fueled inflation in non-traded goods and services like medical care, housing, schooling, while traded goods like apparel and food inflated much less due to globalization and productivity and technology efficiencies. The idea being that when credit replaces savings for major purchases that used to be paid for with savings (school, medical care, housing), you get a huge demand spike as credit makes it easier to make immediate purchases/leases of these large-cost goods and that demand spike increases the cost of these? Thank you.

need to see it in log scale

[lektrode]

Re: Student Debt

whole thing...

http://www.salon.com/2014/06/08/coll...?src=longreads

2 paragraphs

What I mean to say is that the tuition price spiral is part of the larger history of inequality,....

uh huh... right... and so, suspecting the typical... eye went looking for it...

and of course - found it - 2 more paragraphs:

Let me repeat, as a fact of some significance, that the great tuition price spiral began in 1981. That was the same year in which Ronald Reagan brought his jolly band of deregulators to Washington, in which Congress enacted the landmark Kemp-Roth tax cut, and in which the air-traffic controllers’ union went down to humiliating defeat. In 1981 the old order was crumbling, the soldiers of the free market were strapping on their Adam Smith neckties, and colleges all across America were deciding they needed to jack up tuition prices far in excess of the rate of inflation, something they had not done before.

When considering the significance of this point of beginning, a 1987 inquiry into the tuition problem threw up its hands. “Nobody knows why tuition increases lagged behind consumer prices in the 1970s and jumped ahead in the 1980s,” according to an Associated Press summary. But in retrospect I think the answer is obvious. It happened then because these things are all related: deregulation, tax cuts, de-unionization and outrageous tuition inflation are all part of the same historical turn.

"nobody knows WHY..." ?

what - that JFK's 'little skirmish' in vietnam, his exec order allowing the unionization of the .gov workforce - and we'll just ignore HIS TAXCUTS - followed up by LBJ's 'surge' and subsequent denial of what was really happnin in SE asia - then his vision of a 'great society' and HUGE SPENDING THE WHOLE WAY THRU THE '60's on both of these failures - along with US foreign policy in the mideast and its effects on the imported oil price and the subsequent dumping of bretton woods/closing the gold window - as The US teetered toward bankruptcy - and just never mind what the peanut farmer 'did for us' - make that did TO us -

nope - none of any of that HAD ANYTHING TO DO WITH THE DOUBLE DIGIT STAGFLATION that happened from the 70's on thru '81 - including the quadrupling of oil prices, the stock market krash and subsequent recession, that was 2nd only to the 'great depression' ???

at least until the one that started in 2008-09, anyway...

yeah - it was them bad ole conservatives and that bastard reagan's fault...

uh huh....

/sarc

this is just another propaganda piece to make sure the 'educated' (or indentured, take yer pick) stay the course - by giving away the treasury again - to buy some more votes - for the return of the hil&bill show....

that... uhhh... just so happens to be 'headquartered' (bankrolled) - where???
quite likely somewhere in NYC

and hey - we've even got the 2nd coming of reparations - again, just in time for the upcoming 'reeeely beeeg sheow' - as ole ed sullivan would put it...

[Thailandnotes]

Re: Student Debt

and hey - we've even got the 2nd coming of reparations - again, just in time for the upcoming 'reeeely beeeg sheow' - as ole ed sullivan would put it...

It's an hour. Did you watch it or just link to it? Reparations will never fly, but there's plenty of meat in that interview. Thanks for the heads-up.

[lektrode]

Re: Student Debt

It's an hour. Did you watch it or just link to it? Reparations will never fly, but there's plenty of meat in that interview. Thanks for the heads-up.

adding: a +1
and yer welcome

listened to parts of it last week - altho i try to make it all the way thru her show, i seldom can...

and: methinks that whether they fly or not isnt the point - its that merely resurrecting this particular 'issue' and talking about/pumping it will have the effect of 'rallying the base' (on the hard left, her specialty), since if thats what it took for the last 2 rounds - after the prev calculation that a white woman wouldnt rally the inner city crowd - so they (teddy k, et al) stabbed hil in the back 'for the good of the party' - and they went with who would bring in that extra couple % to make certain they'd control all 3 branches going into what i believe was an intentional market meltdown to drive them (and the bailout$) across the finish line in 08-09...

just my conspiracy theory .02

[don]

Re: Student Debt

it's heart-warming to see how 'much better' the private sector is doing . . . .

Source: American Association Of University Professors, Losing Focus:The Annual Report on the Economic Status of the Profession, 2013-14

[lakedaemonian]

Re: Student Debt

Mark Cuban....portrayed as a "maverick" by mass media, is repeating what we've been covering on this forum for years:

http://www.inc.com/mark-cuban/video-...ns-bubble.html

[lakedaemonian]

Re: Student Debt

Duplicate post

[photon555]

Re: Student Debt

it's heart-warming to see how 'much better' the private sector is doing . . . .

Source: American Association Of University Professors, Losing Focus:The Annual Report on the Economic Status of the Profession, 2013-14

The ol'boy network is alive and well, and even growing. But this is just a symptom of a growing sickness is every sector of our society, that many more people are no longer content to make a living, but are determined to make a killing. They want to make enough to retire in a few years, but then get caught up in excessive consumption, and the economic killing must continue and be expanded. The problem is that a large percentage of the herd has now been "killed" and the available targets are getting sparse. Many twenty and thirty year olds have been economically slain by student debt and so are unable to participate in the economic life of the country. They are the economic equivalent of zombies, and so the lethal infection spreads. But the root cause is unfettered greed. This is a moral and spiritual failure, and only a moral and spiritual healing can lead to a better economic future for our children. More people must 'want' to do what's right and work hard before there can be any improvement. More government, more laws, more QE isn't going to solve this problem.

[littleshark]

Re: Student Debt

The ol'boy network is alive and well, and even growing. But this is just a symptom of a growing sickness is every sector of our society, that many more people are no longer content to make a living, but are determined to make a killing. They want to make enough to retire in a few years, but then get caught up in excessive consumption, and the economic killing must continue and be expanded. The problem is that a large percentage of the herd has now been "killed" and the available targets are getting sparse. Many twenty and thirty year olds have been economically slain by student debt and so are unable to participate in the economic life of the country. They are the economic equivalent of zombies, and so the lethal infection spreads. But the root cause is unfettered greed. This is a moral and spiritual failure, and only a moral and spiritual healing can lead to a better economic future for our children. More people must 'want' to do what's right and work hard before there can be any improvement. More government, more laws, more QE isn't going to solve this problem.

Here you go: Student loan high finance subsidized by the govt just getting started abroad...

http://www.bloomberg.com/news/2014-0...in-brazil.html