–Our biggest economic threat? Putting a fork into an electric outlet.

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●Austerity is the government’s method for widening
the gap between rich and poor.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Everything in economics devolves to motive,
and the motive is the Gap.
==================================================================================================================================================================

Last week, Suze Orman of CNBC, wrote an article for USA Today, titled: Biggest economic threat? Student loan debt

I believe the biggest economic threat is the public’s stubborn ignorance about Monetary Sovereignty, and it is that stubborn ignorance which allows the rich and powerful to impose truly horrible laws and initiatives like FICA (the most regressive tax in America).

But, I do agree the student loan debt is a huge economic threat, which directly is attributable to the above-mentioned public’s stubborn ignorance.

Here is what Suze Orman says about it.

We have more than $1.2 trillion of student loan debt. About 10 million federal students loans are taken out annually, and then there are the insanely dangerous private student loans on top of that staggering number.

More than $1.2 trillion! Way more. Let that roll around in your brain.

And while 6.7 million borrowers in repayment mode are delinquent, the sad fact is that many lenders aren’t exactly incentivized to work with borrowers.

Unlike all other forms of debt, student loans can’t be discharged in bankruptcy.

Moreover, lenders can garnish wages and even Social Security benefits to get repaid. A new report by the Consumer Finance Protection Bureau details just how bad the situation is for private loan borrowers.

(From Oct. 1, 2013, through Sept. 30, the agency handled about 5,300 private student loan complaints, an increase of nearly 38% from the previous year.)

And private student loans aren’t the only problem. Do you know that from 2007 to 2012, the government made $66 billion in profit on federal student loans?

Our Monetarily Sovereign government, which has the unlimited ability to pay any bills of any size, instead deliberately chooses to impoverish the middle- and lower-economic groups and to discourage higher learning for Americans.

We can all debate how our government should generate revenue to support federal spending programs, but doing it on the backs of young adults who need an education to compete in the increasingly competitive global workforce is just appalling.

What’s even more appalling is that Suze Orman is completely clueless about Monetary Sovereignty. She believes the federal government’s finances are like state and local government finances, wherein revenue must be “generated” (aka. “tax”) to pay for things.

Wrong, Ms. Orman. The federal government does not need to tax to pay for federal spending programs. Even were all federal taxes to drop to $0, the federal government could continue to support all federal spending programs, forever.

Anyway, to demonstrate the abject ignorance of the American public, here are some verbatim comments about Orman’s article:

[Ignorance #1] I have medical school debt, but if I can’t pay back my student loans it’s my own fault. Even if I’m going to be paying them off for 30 years they will be paid off. I may not have an Audi or Mercedes but I have a job that I love and enough coin to drive a used Toyota, insure it for cheap and take care of my family. I’m sorry that I’m not sorry that the average American can’t have a luxury vehicle.

[Ignorance #2] With exceedingly rare exception children do not attend college, adults do. They may be your offspring but they are not children. When you agree to a contract it should be binding. Raise your offspring to use their heads. Teach them to read and understand agreements before signing. Teach them to honor their word. Teach them that the college bound are NOT necessarily the most intelligent. The above article should be evidence enough of that.

[Ignorance #3] College is a privilege, not a right. There are many good, affordable schools in this world (online as well) so the debt you take on is your choice. If you look at average incomes of college graduates vs. high school graduates, you’ll realize that the college grads have ample additional income to pay off their loans over time. Look at the data. Avg. college grad debt in 2013 is $32k. Avg. starting income $60k. High school grad? $30k avg. income, no debt. You choose. I think we all know the correct answer.

[Ignorance #4] Other than the massive 18 trillion dollar Federal debt the next worse threat is from the 5 trillion dollar state debt due to state public employee pensions and post-employment benefits.

[Ignorance #5] my plan is to treat student loans as an asset. and if you default you have to return it, just like a foreclosure or a repo or a bankruptcy..

cancel your degree in exchange for cancelling the debt, which means you have to give up on your career choice. If the job requires a VALID 4 year or post grad degree and you dont have one you cant sue for discrimination

although a lot of jobs one step below doesn’t require the degree such as give up your JD and be a paralegal, or give up your dentist degree and be a highly qualified dental assistant. you lose the ability to open your own business but then no debt over your head.

I am fully against writing off the loan in BK without some serious penalties, i paid mine off and so should you.

[Ignorance #6] The greatest threat to our economy are people who demand everything be risk-free like this pathetic author.

[Ignorance #7] What a strange article…what do you propose, forgiving their debt like we did in housing crisis, creating even more of a deficit? They got their degree, they will now be earning more than otherwise, they have a marketable resume..yes they will need to buckle down and budget and live within their means for a while…that is the price they pay for securing their degree in short order and without breaking their parents retirement savings!

[Ignorance #8] Suze takes shots at the government for making a profit on the money it lends out, conveniently forgetting that from 2017 onward there will be a huge number of people having all debt discharged by the government under the ten year public service loan forgiveness program. They are gonna need a lot more money than what they’ve been bringing in to offset that.

[Ignorance #9] Americans have this mindset that they don’t have to save for college. They just expect to get a loan and then complain about how they will repay it. Student loans should be limited to less than 50% of college costs to force students/parents to plan for college and save. If a student graduates and gets a job then the interest rate should be lowered since there would be less risk of default.

[Ignorance #10] If you reduce the burden of student loans, the price of college will go up just enough so that the burden returns to the same level. There already is scant restraint on the price that can be charged, debt forgiveness will make this explode.

It goes on and depressingly, on. Hundreds of comments and not one commenter understands that the federal government neither needs nor uses tax dollars.

Nor do they even ask, “If state and local governments pay for grades K-12, why can’t the federal government afford to pay for advanced education?”

K-12 was O.K for an agrarian economy. The U.S. no longer is an agrarian economy. We compete worldwide with sophisticated economies. We need our young people to be educated beyond grade 12. (See Steps #4 and #5 in the “10 Steps to Prosperity,” below.)

But if you try to explain it, you will be met with hostility.

Yes, the biggest threat to our economy is the public’s stubborn, aggressive ignorance.

Sometimes, this feels like trying to tell an obstinate child, “Don’t stick the fork into that electric outlet, ” knowing he will refuse to listen, and so, get burned.

Should we just accept that it serves him right? Or should we keep trying?

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually. (Refer to this.)
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

29 thoughts on “–Our biggest economic threat? Putting a fork into an electric outlet.

  1. In terms of debt – is it the same if the government prints the dollars and pays all these loans (aka, your solution) – versus people like me (yes I have tons of student loan debt) who will have WORK to repay the loans.

    You REALLY think that it’s the dollars the banks are after and not the FUTURE capital it represents? Seriously Rodger?

    This stuff doesn’t take a lot of math but this is getting seriously annoying…

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    1. Yeso,

      You don’t seem to think that acquiring an education – acquiring knowledge and skills – has, in itself, a desirable and positive outcome for society in general. That there is value and usefulness in the act itself. As such, you want to enslave and penalize those students who bothered to acquire skills and knowledge by having them work their butts off in order to repay those loans – loans which the monetarily sovereign federal gov’t could very well afford to write off. Loans which are unnecessary to begin with because the state, recognizing the value inherent in the acquisition of knowledge and skills, should and must subsidize the education of its people.

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    2. Rodger,

      I’d be happy if I didn’t have to go into debt to get an education in the first place. Just 30 years ago, you could have paid for your schooling by working part time on a pizza shop during your off hours. Today, that may help pay a 1% of your tuition.

      Why the disproportionate increase in prices? Well, ask the same government you are glorifying how.. Perhaps because the same government started giving loans to anyone that could breath? Loans that most likely never or will never get paid anyway. I bet that is what drove prices through the roof..

      Now you have various banks on the hook and banks go bankrupt without sufficient capital – you should know that Rodger. So write off the loans, repay the loans with funny money and the banking system will quickly become insolvent.

      Zen,

      I’m not sure where your mentality comes from – but I almost choked when I read your comment. Penalize students for having to work? Are you freaking serious?

      So all of a sudden we need to bow down to students? I thought the days of slavery were behind us – are you for slavery? Try going out and selling that to the folks that never went to college.Try going out and telling everyone that they have to work their butts off, except if they have a collage degree. I’ll make sure to record that conversation from a mile away.

      The question I have for you is – if you went to college and borrowed the funds to get yourself through it, like I did, were you thinking of repaying those loans when you signed up or no?

      The reason I ask is because if you borrow – with the intent of not repaying – it’s a federal and punishable crime. You see, there’s a little thing called FRAUD. So you are advocating for fraud?

      You also keep pushing this “recognize value” while at the same time asking why students should work their butts off? Which one is it? Isn’t it the work that makes an educated person valuable?

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      1. Good lord, it gets weirder and weirder.

        You think:

        1. Student loans made school prices go up, because more kids went to college, which is a bad thing for America. What America really needs is fewer college students, so college prices could go down.

        2. And because of student loans, banks are going bankrupt.

        3. And helping students financially actually is “bowing down to students,” which is slavery.

        4. And if you don’t have a college degree, you don’t have to work.

        5. And students who cannot afford to pay for college, should not borrow. Instead, they simply should not go to college, but rather reserve college for rich kids.

        6. And those kids and their families, who find themselves deeply in debt, never really intended to repay. Instead, they hoped the banks would foreclose on their homes and garnish their salaries and their retirement funds, which is what is happening now.

        YIKES!

        Your last paragraph is even more incomprehensible than usual (if that’s possible), so no comment on it.

        BTW, somehow you forgot to answer my question: “So if the federal government paid off your student loan debt, that would annoy you?” Better to change the subject, eh?

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        1. I would be much more than annoyed.

          You are proposing that our government collapse society – how would you be if that was the case?

          The only way the government could pay down my loans is by taking over the banking system, and we all know what will happen next. You see, banks give loans because it provides a nice capital stream for them over time, capital that comes from you working your behind off. Capital = purchasing power.

          If the government creates the money out of thin air, there is no capital backing those payments. There is no purchasing power behind them – the goods and services that were there the day before the passage of such idiocy would still be the same.

          So repayment in this form is essentially worthless. Yes Rodger, the inflation rate will immediately be greater than the interest return on those loans. Not only does it kill the capital banks were hoping to earn, it eats away at the capital they have on their books in the form of dollars. Essentially, we become another Cuba/Venezuela/Argentina. Yes, there, I said it….

          I want to believe that we have tasted the most of socialism and communism we will ever have with the current senate/house, etc… Americans didn’t like it and I think it’s clear from their voting what happens next. If Dems and Republicans can’t cut it – there will be other parties lining up – like the Libertarian for instance. I can’t wait for people to develop some brains.

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          1. Yeso said; “The only way the government could pay down my loans is by taking over the banking system, and we all know what will happen next.”

            The central banks have already co-opted the governments through use of the immoral corporate structure and the Noble Lie, they are the government, they are in control of the menticide that makes you believe that the control of interest is fair and that you have an electoral process that is responsive to the will of the people. Nothing could be further from the truth.

            Roger is right, but all is moot until you regain control of governments.

            Deception is the strongest political force on the planet.

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          2. Warren,

            I thought it was clear from my comments that I am against communism, socialism, Keynesianism and any other form of central government control of our markets. I do not want the Fed to control rates and the money supply, and equally – I do not want the government doing it either.

            I also think you are being completely mislead into thinking that the Fed is controlling the government – quite the opposite. The government uses the Fed to spend as they wish and always have a scapegoat. See – if things are honky dory, the government will take credit. If we end up having a crisis, like the housing crash, well – it was the Federal Reserve and the bank’s fault. Remember the Occupy Movement? A bunch of sell out doofuses for the Democrats – weren’t they?

            As much as I despise the Federal Reserve, I would prefer to have them – with banks looking over their shoulders while safeguarding the currency. The banking system is designed for banks to extract the wealth out of the population slowly over time, but the banks need a stable currency for that to happen. With that said, banks have a profit motive and will ensure that the Fed does not destroy the currency.

            The government, on the other hand, has zero profit motive. It’s willing to make everyone happy as long as they stay in office. Most people in office can’t do math, let alone think through what impact their policy will have on the economy. Giving these morons power to do as they wish with the currency is looking for trouble. Unless, you don’t really care about the good of our society – and only care about your own little world. Which by the way, is exactly what the majority thinks. It’s all about me, me, me…

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          3. Yeso, the ignoramus on Monetary Sovereignty, said this :

            “The only way the government could pay down my loans is by taking over the banking system, and we all know what will happen next. You see, banks give loans because it provides a nice capital stream for them over time, capital that comes from you working your behind off.”

            And this :

            “If the government creates the money out of thin air, there is no capital backing those payments.”

            Rodger had said it a hundred times already (and he had a recent post on this very subject) that banks do create money out of thin air by issuing loans. But for you, when private banks do it, you call it capital. When gov’t does it, it will collapse society. See the weird disconnect?

            Nobody here is saying that the recipient of those loans (or subsidy) from gov’t should stop working. He will continue to create value for society, his family, and himself by applying his acquired skills and knowledge because he needs an income for sustenance of, at least, his basic needs – food, clothing, shelter, health.

            By subsidizing his education, you merely free him up from the burden of allocating part of his income to loan repayment. It does not mean, by any stretch of imagination, that he doesn’t have to work or create value.

            Or capital, in your banking world.

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          4. “If the government creates the money out of thin air, there is no capital backing those payments. There is no purchasing power behind them – the goods and services that were there the day before the passage of such idiocy would still be the same.”

            That would be a good argument except that money is being removed from the system, because of the ever widening gap. You fail to understand that the wealthy spend a smaller portion of their income than poorer people, and that extra savings is equivalent of money being destroyed. During the housing bubble, that money was being channeled to poorer people through mortgages, but those days have not returned. So if you are using the argument that money is created out of thin air, you must look at the whole picture — money is being destroyed “out of thin air” by the gap.

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          5. “Essentially, we become another Cuba/Venezuela/Argentina.”

            Argentina pegs their currency to the dollar — a small point that means everything.

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          6. I meant to say that Argentina pegged their currency to the dollar for most of their history, when they had their most severe crises. Now Argentina’s problem is that its debt is in dollars.

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          7. I think you are all confused as to how banks create money. Banks do create money by giving loans – but they are not just marking accounts up. That’s false.

            What banks do is re-lend money that is already in existence. So you deposit 1 million bucks into a checking account (which is supposed to be available on demand) and they re-lend it anyway. By doing this, banks are essentially creating money – because theoretically – that money should only belong to one person – not 2. In this case, you own the 1 million and by lending it again, the bank is acting as a second owner.

            And to be clear, the money lent by the bank is not capital – not one bit of it. It’s debt and there is a huge difference between capital and debt. Capital/cash is money available on demand or assets that are extremely liquid. When a bank lends out money that does not belong to them on a long term basis, that money is not liquid and is exactly the reason banks were about to go under in 2008.

            If banks were able to create money out of thin air the whole entire 2008 fiasco would have never happened.

            Also, let’s stop being disingenuous here – the government paying off loans for students, is the same as others paying for my loans. As I said above, those loans represent future capital. If the government created the dollars to pay off these loans, the banks will have some major losses. Most likely, at the end of the day, banks will likely pass on these costs to the regular Joe via higher rates, etc….

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          8. Conservatives fought FOR govt control of markets. It was called “Progressive” and it was 100% Republican. They argued — correctly imo — that Capitalism would fail without govt protection, new over-arching govt laws and rules for business, govt management of markets, govt expansion of foreign trade and domestic consumption, and govt spending.

            Conservatives advocated for bigger massive govt spending since 1945 — to fight Satan, the Evil Empire. Also to permanently fund Pentagon contractors including all manufacturing and high tech. Including the INTERNET and dev of computers by the way.

            Debt peonage is a form of mass social control — what conservatives call “communism” — but it’s now carried out by Big Finance along with govt pro-poverty policies. High unemployment and mass underemployment — and weak sales — is mandatory policy. It’s nonsense under this NAIRU theory. It’s obsessed with ideology over empiricism and real life — like Soviet Marxism.

            The politics of ENVY, that some US citizen might get an education that he didn’t pay for. This was our national policy during the Cold War and with the post-war GI Bill. It helped create the Middle Class and boost productivity, as well as legit Defense. Now we want the opposite policies and wonder why the Middle Class is vanishing.

            At least FDR — and Keynes — understood the obvious, that business is driven by *sales*, not engineering or investment, by sales. Sales and marketing is considered the most important department in most companies. Sales means consumer demand, and consumer demand means not only that people *want* the products but that they possess the cash or income to pay for it.

            Yet many business owners were and are also very happy when Govt provides that Demand. Whether it’s Pentagon contractors or Section 8 landlords or retail stores that thrive on food stamps, the corporate profits and incomes of employees and management is often funded by Govt spending, with those employees then spending *their* incomes which creates “velocity” of money and boosts aggregate Demand …. sales .. jobs to serve those customers.

            That’s why “war is good for the economy” as my father used to say … govt deficit spending, i.e. taxes and fees substantially lower than net spending, leaving MORE money in the hands of consumers.

            With the financial sector — the service sector that provides cheap and efficient credit to business — grabbing 40% of all corporate profits, that leaves much less available to support strong business growth in non-financial business. That’s what those “morally just” student loans do:saddle potential consumers with so much debt that it kills the REAL economy of goods and other services. Debt & interest paid to Big Finance is like a giant TAX, but it’s a private tax like Feudalism.

            Austerity and other conservative fetishes prove to be rigorously Anti-Capitalist, if capitalism means anything real like production, services, sales, and jobs.

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          9. Yeso says:

            I think you are all confused as to how banks create money. Banks do create money by giving loans – but they are not just marking accounts up. That’s false.

            What banks do is re-lend money that is already in existence. So you deposit 1 million bucks into a checking account (which is supposed to be available on demand) and they re-lend it anyway.
            ——————–

            No that is NOT how banks operate. Alan Holmes of the Fed explained this in 1969, which is a long time ago. It was known before that, Holmes was just explaining the obvious.

            Banks create loans by a process called “balance sheet expansion”. Banks DO NOT lend out deposits. Banks create a loan agreement that the borrower signs — which is a legal paper asset of the bank, because it represents a steady flow of income to the bank (excepting defaults). With that asset, banks then create matching liabilities, when they create an account balance credited to the borrower (or designee).

            That is NEW MONEY — matched by a corresponding debt agreement which zeroes it out over the long run. But in the short run, there’s a flood of new money.

            As banks expand their balance sheets — creating both assets and liabilities — and creating liabilities plus assets for borrowing customers — they expand the total volume of money in circulation. That volume created by a loan decays and disappears as the loan is paid back. The bank’s assets (outstanding income) disappears as the bank’s liabilities (total loan proceeds) that were placed into an account disappear, both shrink to zero.

            ZERO NET FINANCIAL ASSETS is created by bank credit. The only net financial assets aka net savings that exists in US Dollars was created by deficit spending. In the absence of deficit spending, one party could have savings or wealth ONLY by driving others in the population into negative savings or debt. That would be a win-lose economy. Winners would exist by making directly other people losers.

            With the US govt acting in its role as fiscal monetary sovereign over the US Dollar, it is possible for some people to have net savings or wealth WITHOUT driving others into negative wealth, because the assets of the savers = the Govt’s liablities not someone else’s liabilities to a bank.

            When the fed gov spends, they use a convoluted process similar to banks, but they DO create Dollars out of thin air, NOT FROM TAX REVENUE.

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  2. The money lenders know where their bread is buttered. Student loans is one place they’ll continue to hover over like buzzards. If government tries to take it away they’ll scream interference and socialism.

    You either make money or you make sense, not both. Money toward free education makes sense in many ways, e.g, eliminating stress of repayment, improving lives, opportunities and self-image, as well as acknowledging our real wealth to be metaphysical, not the number of zeros in your bank account or cars in you garage.

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    1. “e.g, eliminating stress of repayment, improving lives, opportunities and self-image, as well as acknowledging our real wealth to be metaphysical”

      Is that the best you can do? Stress of repayment? So you mean to tell me you didn’t know you would have to repay after getting a LOAN. Why have loans then? Scrap them, just give money away – forget about lending for anything.

      Amazing…

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      1. Finally, after all this time, a sensible comment from Yeso.??!

        “Why have loans then? Scrap them, just give money away – forget about lending for anything.”

        That is exactly what this post and Prosperity Steps #4 and #5 suggest. Our Monetarily Sovereign government never should lend, since it doesn’t need to be repaid.

        When it wants people to receive money, the government should give, not lend.

        (O.K., I know. You don’t understand Monetary Sovereignty. So, you became confused, and didn’t realize you actually were agreeing with the concept.)

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          1. Let’s just say I speak the same language as Cubans for now. And let’s also say that Cuba was the economic leader in the Caribbean and Latin America prior to 1960.

            Since then, it’s probably in last place at the moment. Neighboring countries that were light years behind are now creating times more wealth, even with corrupt politicians. Heck, Cuba is not even the leader in baseball anymore – Dominican Republic and Puerto Rico put out more and much better players at the moment.

            That, my friend, is what communism/socialism does. It’s like putting lipstick on the devil. It looks all pretty from the outside – while the insides slowly rotten away.

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      2. “…So you mean to tell me you didn’t know you would have to repay after getting a LOAN.”

        OOps sorry. You do have to repay a loan. But not if it’s a grant or scholarship. That’s what I meant by…. Money toward free education, second paragraph, second sentence. Not the best I can do, but certainly the best the federal government can do.

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      3. There’s better reasons than “stress” for the Govt to pay for education for all.

        1. For the benefit of the United States of America in having an educated population and electorate.

        2. For the benefit of Americans.

        3. For the fiscal benefit to Americans and to increase overall business profits — in areas outside of education — so we don’t have boarded up small businesses all over town and people struggling with part-time casual labor to survive.

        In other words, to have an economy like we had when both conservatives and liberals were committed to massive govt spending during the Cold War, and especially during World War One and World War Two, times when the economy was booming because of a new Big Customer on the block, Uncle Sam.

        Keynes insight was that no law of physics or law of nature requires a country with a sovereign independent currency to actually wage a war in order to justify wartime spending, it could be done purely for the economic benefit of the entire population.

        4. Conservatives do favor reducing stress on borrowers all the time. That’s why the Fed Gov backs some corporations and some banks with “loan guarantees” — like for sales of military weapons to foreign nations, and other interesting endeavors — so corporations and investors can engage in the risks and rewards of capitalism with the risks reduced to near zero, a whole bunch of sure bets.

        #4 is the whole substance of conservatives watering down Dodd-Frank as well as the fact that the Fed Gov *does* guarantee student loans … but to the banks and lending corporations like SALLIE MAE, and not for the actual students. Many other examples.

        Risk reduction and guaranteed income was what got the Republican & Conservative ACA or Obamacare to pass. It was cooked up for decades in Conservative think tanks like Heritage Foundation. Conservatives said mandatory participation for everyone was required, forcing everyone to buy a product of insurance companies. The Fed Gov role is also to subsidize the insurance cos’ profits, to *guarantee* that they have a substantial profit margin, to eliminate their risks.

        If there was some catastrophic nationwide illness like Ebola that was so big that it threatened to bankrupt insurers, there is no question whatsoever that the Fed Gov would pick up the tab vs. leaving insurers and big shareholders (including banks) at risk of failure.

        That might be “morally wrong” in the eyes of some people, but THAT IS HOW CAPITALISM ACTUALLY WORKS and there have been examples of this going back to early America and to the rise of capitalism in England. This includes confiscating people’s common land and forcing people to “get a job” in some new capitalist’s factory or else get thrown in jail, and forbidding people to relocate to get a job in another region.

        Conservatives are *not* in principal opposed to any of this spending stuff that Liberals support, Conservatives strongly support it but *only* for the very rich. If rich people are suffering “stress” —- or “uncertainty” about the market — conservatives can manufacture some kind of justification for all the spending AND risk protection their constituents want.

        These days, this includes retail corporations like Walmart and Target (I think more state and local direct subsidies, while the feds back retail with foreign diplomatic relations with China and other countries). Of course your Mom & Pop grocer or Dad’s machine shop doesn’t get such direct benefits and risk protection, but that needs no explanation.

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  3. I have more bad news for you Yeso.

    The scheme of providing free education from elementary to college is already in place in, you guessed it, France. It did not, in any way, collapse their society. In fact, they were a major ESA partner in the recently successful mission to land a spacecraft on a comet. A most valuable feat in humanity’s quest to better understand the natural world – one of the higher purpose of education.

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  4. Mr. Yeso,

    Do you believe that countries that provide free or almost free higher education to their citizens, such as Germany, are harming their economies? That they would be better off charging thousand dollar fees for higher education?

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    1. Ian Winograd says:
      November 21, 2014 at 8:15 am

      http://www.yesmagazine.org/new-economy/how-the-government-could-end-the-student-debt-crisis-today

      “Instead of loaning students money, the federal government could just pay for their tuition, without causing any significant economic problems.”
      ——

      More to the point would be the vast economic benefit to *other* parts of the economy outside of education (and health care), such as small business plus the fact of having more educated workers (like the post-war GI Bill and when JFK promoted the New Frontier) instead of people educated to a level suitable for subsistence farming (if that) and retail clerking and unskilled light industrial.

      The latter is the “competitive future” that conservatives want for Americans, yet they *claim* to be “patriotic” about our country while deliberately engaging in a social engineering experiment of reducing most of the population to serfdom.

      Like

  5. yeso = “..When a bank lends out money that does not belong to them on a long term basis..

    Why no indication/deduction on my monthly statement if it’s my money?

    Like

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