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Tag Archives: Debt

How Student Debt Harms the Economy

Hard to buy a house when one already has the equivalent of a mortgage attached to one’s name. Hard to start a family when the Sallie Mae payments take all the money for diapers. Hard to start a business when one enters the world already less than zero on the capital ledger.

Zero’s hard enough.

The problem is easy money to students. Think about it. Who in their right mind lends $50,000 to an 18 year old who has never had a real job, no credit history, etc? The federal government does.

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The Federal Reserve Has Declared the Winner in the Generational Financial War

Sorry baby boomers but you are killing us. You enjoyed an economic rising tide for pretty much your whole lives (a tide which today’s young adults can’t even dream of)  and, well, if you haven’t squared yourself away financially by now (I am speaking generationally here) I don’t have a whole lot of sympathy. The money is running out. Sorry. I’m not inclined to run my financial life and that of my country into the ground just because you’ve been “promised” a certain standard of living.

It sounds harsh, and perhaps in some ways it is. But you’ve gotten the breaks. You got to party. You guys divorced each other, did blow, and leveraged the country to meet your “needs.” Now my generation has to clean things up and put things in order, like adults.

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Forget College For Everyone: Forgive Student Loans (?) And End Further Subsidies

The recent proposal from the president to have the middle class pay for community college for “everyone” (Largely by raising taxes on 529 plans. How stupid is that?) is little more than an attempt to buy votes from potential students who don’t know better and to reward a university industry which overwhelmingly supports the president.

Again it is the middle class, not the rich (as has been sold) which will pay for this.

Below is a not so modest proposal for a better way. It has some merit. This is not an endorsement, but it deserves thought. We certainly need to stop the academic gravy train in this country and government sponsored debt servitude.

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David Stockman: In Praise Of Price Discovery

I think that it’s funny that David Stockman, Ronald Reagan’s former budget chief, starts his column with this sentence:

“This morning’s market is more erratic than Claire Danes off her lithium.”

Seems a little gratuitously mean. Accurate (?) perhaps but mean. But that is one of the things we like about the guy. His acid.

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There is no “free lunch” and there is no “free” community college either

When the president says that he wants the government to pay for everyone to go to 2 years of community college what he is really saying is that he wants you to pay for everyone to go to community college. There is no “free” college. There is no “free” anything. Everything has a cost and I have to pay for college for 3 kids of my own in the not so distant future already. I don’t need yet another bill just because the president wants to throw some gifts to folks who voted for him.

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How Financial Aid Drives Up the Cost of College

Give anyone who can register a pulse a student loan and guess what? All that money will find its way into the system and will inflate the cost of “education.” It’s simple. It seems obvious. And yet so many people fail to understand that the reason college is unaffordable is because of all the efforts to “make college affordable.”

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How Government Handouts Erode the Economy

Getting the government to create regs in favor of one’s business, to the detriment of one’s competition, or both, is hugely destructive to the economy. Such cronyism may (and perhaps in the long run may not) benefit one firm, but overall society loses. Products tend to be more expensive and they tend not to be as good as they would be in a free market, or free price system. Once the regulators have been captured (and they nearly always are) we lose.

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