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The loan wolf

27 Apr

The President never saw a loan to a potential voter that he thought needed to be repaid. Everyone is all a twitter that interest rates on student loans are scheduled to go up.  So sad, too bad.  If you borrow money, you really should expect to have to pay it back.

First, let’s get some facts straight.  The current 3.4% rate is not going up for any current loans. The 6.8% rate will only apply to new loans.  Much of the President’s rhetoric and scare tactics have been simply wrong, implying that current loans will go up. Some might even call it a lie, because with the huge federal deficits we have there is certainly someone employed by the federal government who could give the President the correct information.

The President, who also never misses an opportunity to try to buy votes with public money, wants to extend the current 3.4% loan rate. Regrettably, Republicans seem unwilling to take on the President on this issue. So much for financial rectitude.

Keep a few things in mind. The federal government has essentially nationalized student loans, so no matter what happens the public loses. Either we lose by subsidizing the rate now or lose by subsidizing future defaults later. Heads the taxpayer loses; tails the taxpayer loses. How’s that for an example of the fairness the President is always blathering on about?

Eventually even the students will lose, too. How so? Well, if Congress extends the 3.4% rate reduction then money will end up being added to the deficit to make up the difference. Who will pay that? In the future it will be the same students whose rates are being subsidized who will hopefully be gainfully employed and will have to pay the cost of the deficit.  Basically, this is why government subsidies never work, eventually everyone ends up losing.

I guess one thing college doesn’t teach a kid is that they have to meet their obligations when they sign their name to a loan document. Sounds to me like a good place to start educational reform.

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4 Comments

Posted by on April 27, 2012 in politics

 

4 responses to “The loan wolf

  1. crazycrawfish

    April 27, 2012 at 4:22 pm

    Your scare tactics are also misguided. No one is suggesting the money shouldn’t be paid back. There is also a benefit to the US economy from having college educated tax payers rather than high school and GED only ones. The economy and tax payers have to pay for the undereducated, and those costs are much higher in the form of higher incarceration rates, lower lifetime earnings, more entitlements, unpaid emergency room visits, children less likely to complete high school and college, etc. But by all means spend that Monet on tax breaks for exxon. Feel free not to post this. Right wingers are terrified of anyone who doesn’t agree with them and I take the lack of publicizing my responses as a compliment and vindication.

     
    • Chillingworth

      April 28, 2012 at 11:15 am

      Actually, tuition prices would be lower, not higher, if the government stopped interfering and subsidizing.

      “Feel free not to post this. Right wingers are terrified of anyone who doesn’t agree with them and I take the lack of publicizing my responses as a compliment and vindication.”

      Actually, in my experience, liberals are much more likely to be unable to deal with disagreement and information that contradicts their position than conservatives—of course you’ll find a few conservatives who can’t, but it’s largely a liberal problem, it seems to me. (For an amusing example, just check out this liberal blog I commented on just today.)

      Of course, since our hosts here at Disrupt the Narrative did permit your comment, I trust that you’ll take it as a vindication of conservatism and take back what you said about “Right wingers” “terrified of anyone who doesn’t agree with them”.

       
    • P. Henry Saddleburr

      April 28, 2012 at 6:59 pm

      Terrified? By you? Other than you goofy avatar, I’m not much terrified.

      Let me put it to you this way, crawfish. Exxon makes 3% profit on a gallon of gasoline while the government make 3.4% profit….soon to return to 6.8% profit on school loans, where the Education mafia doesn’t teach these kids shit. Or more aptly put, allows them to delude themselves into believe that a college degree…..any college degree, is a worthwhile investment.

      Latin American Womens Studies isn’t a degree with much of a market. Sociology? Not so much. African American Studies? Environmental Sciences? Early American Poetry or whatever useless things these EduMafia put forth are taken hook, line and sinker by these poor suckers.

      And there is no accountability or thought of cost reduction in that area, while the leftists drones shake their fists mightily at Big Oil, Big Pharma, Big Banking, Wall Street……. But never BigEd.

      There’s absolutely no chance that BigEd brainwashed these kids into being anti-corporatists, unless the big corp is big ed.

      Feel free to chime in any time. You’re viewpoint is welcome here. I suspect that the sites you regularly visit wouldn’t allow my viewpoint.

       
  2. Chillingworth

    April 28, 2012 at 11:06 am

    “The federal government has essentially nationalized student loans, so no matter what happens the public loses.”

    Very true.

    “The President, who also never misses an opportunity to try to buy votes with public money, wants to extend the current 3.4% loan rate. Regrettably, Republicans seem unwilling to take on the President on this issue. So much for financial rectitude.”

    I also agree with you that ideally (i.e., if they didn’t have to be worried about the politics of it), Republicans should oppose this additional subsidy or bailout (however one wants to look at it), and I’m as permanently disillusioned with our politicians as the next guy. But I want to give credit where credit is due:

    Although, as you say, Republicans are agreeing with the Democrats (presumably for political reasons) in keeping the interest rates low by law, Republicans are also “taking on” the Democrats in pointing out that the Democrats created this problem. From Speaker Boehner’s blog, “With Student Loan Mess, Democrats Reaping What They Sowed”:

    The answer is it was a case of Democrats’ election year promises making for half-baked policy. As the Associated Press noted last week, “it was House Democrats who cut interest rates on the school loans in 2007 and included an expiration provision that placed the looming increase in the middle of an election year.”

    (Link in original.)

    As for fiscal rectitude, the Republican version of the interest-rate extension would actually try to pay for it, by cutting some of the funding from Obamacare. I think that’s clearly superior to the Democrat’s version, which apparently would also try to “pay for” the interest-rate extension, but by raising taxes (“higher revenues” is their preferred formulation, or “closing loopholes”). (Source for both: Washington Post.)

    Again, I agree with you that it’s not ideal. I’m just saying, credit where credit is due. Our guys are getting some of this right.

     

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