Free education for all and the student loan scam

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

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.

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I just endured a long, painful discussion with a person who claimed that social benefits like Social Security, Medicare, Medicaid, poverty aids, education aids, etc. cause “dependence” (his word), so we should eliminate those programs.

He also assured me that soon, people no longer will accept the U.S. dollar, and that the housing bubble, inner-city poverty, and recessions, all were caused by federal deficits. And  “recession/depression is how the economy heals itself,” (his words) and the graphs and data I showed him — graphs and data that proved his ideas wrong — are “misleading” (his word).

As you undoubtedly have learned, it is useless to try to teach people who cling to very strong beliefs and will not accept mathematical data and other facts. If a believer closes his eyes to facts, where can one go?

The only reason I tolerate such people is in hopes that others will learn from the discussion.

O.K., now that I have vented, let’s get to the real subject of this post: Student loans.

To be competitive in an increasingly complex world, America needs educated students. And, as the sciences have become more sophisticated, America needs more highly educated, advanced degree students— masters, doctors, teachers, and researchers.

These are the people who develop the ideas, and it is ideas that keep our nation competitive. 

Physical work is necessary, but growth also requires the imagination that comes from mental work. The world has grown past the point in which physically planting, hammering, and sewing are keys to national success.

Because education greatly benefits America, one would expect America to want to pay for education. And in fact, because of the enlightenment of our founders, America does pay for education, but mostly for grades K-12. It was all that was needed in days of yore.

Somehow, though the world has changed, there has remained a tacit assumption that college is unnecessary and elitist, and most suitable for those who can afford to pay for it.

Today, instead of paying for advanced education, America lends money to students –not to rich students, but to those having less money. The parents of rich students understand that student loans are a scam and financially are able to avoid them.

Repayment of these loans impoverishes parents and young students who otherwise might be able to use their educations to start new businesses and build better lives, not only for themselves, but for all of us.

Our Monetarily Sovereign federal government has no need of, nor use for, repayment — the government creates, ad hoc, all the money it uses — and the loan program causes money to be siphoned off by wealthy, and sometimes crooked, lenders.

Navient sued over student loan operations
Company denies abuse allegations, says action political
By Jesse Hamilton, Bloomberg News

Navient Corp. was sued by a federal regulator over allegations that the student loan giant “systematically” cheated borrowers.

“For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans,” CFPB Director Richard Cordray said in the statement.

Illinois Attorney General Lisa Madigan, who led a multistate investigation into Navient, said Wednesday that her office has also sued Navient and its subsidiaries for “widespread abuses across all aspects of its business,” including putting customers in subprime loans the company knew were going to fail.

The suit calls for restitution, the return of unlawful profits, civil penalties and canceling or revising agreements with Illinois consumers.

Whether or not Navient is guilty as is claimed, clearly our federal government subjects  America’s future to unnecessary and impoverishing loan-plus-interest repayments. The government allows, even forces, our less wealthy children to be cheated out of their futures.

The federal government allows, even forces, our less wealthy children to be cheated out of their futures.

Navient handles a portfolio of about $300 billion in student loans and acts as a servicer for the Department of Education.

Why does the U.S. Department of Education use a private servicer for those unnecessary student loans? Why does the government add injury to injury, by forcing less financially-endowed students to pay interest to rapacious lenders — lenders whose profit motives are not in the best interests of America, but rather the lining of their own pockets?

The answer: It is the same reason why not a single criminal banker has been prosecuted and jailed for the rampant lawlessness that caused the Great Recession of 2008.

The answer is: The rich have bribed Congress and the President with campaign contributions now and promises of lucrative employment, later.

It also is the reason why you have been told federal deficit spending is “unsustainable,” and will “lead to inflation,” and will “end the American dollar” This is all part of the Big Lie (See: You understand the Big Lie), sponsored by the rich.

The Big Lie says taxpayers fund federal spending.  While state and local taxpayers do fund state and local spending, the federal government is different. It uniquely is Monetarily Sovereign (See: Monetary Sovereignty)

It never can run short of its own sovereign currency the dollar. Even if all federal tax collections fell to $0, the federal government could continue paying its bills, forever.

The Big Lie is a lie that has been force-fed to the American public for at least 75 years (See: From “ticking time bomb” to looming collapse.”) It is a lie that tells us federal deficit spending causes inflation — even hyperinflation — a lie that gives us the false scare-examples of the Weimar Republic and Zimbabwe. (See: What causes hyperinflation?)

Seventy-five years of scare tactic lies that continue even today, and still we never have had hyperinflation, and even inflation itself is controlled by the Fed via interest rate control. (See: Much ado about nothing. The end of the dollar as a reserve currency)

One final factor inhibits the education of our young: The Gap between the rich and the rest.

The dynamics of groups is such that each of us belongs to an income/wealth/power group that wishes to distance itself from “lesser,” groups while drawing closer to “superior” groups. (See: How does the Big Lie enable the Gap?)

Thus, the public is predisposed to believe the Big Lie because people do not want those poorer to receive Gap-closing benefits — what has been derided as “free stuff.”

The rich have led the public willingly to believe Gap closing is “unfair” because it uses “taxpayer money” and causes “dependence.” (See:  Looking down. The disdain for those below us) all false, all part of the Big Lie.

In Summary:

1. America’s growth and competitiveness are based on education at all levels.
2. For the same fundamental reasons why the federal government pays for roads, bridges, and the military, it should pay to educate our young people beyond grade 12.
3. The rich bribe Congress to pass laws that widen the Gap between the rich and the rest
4. The rich also bribe the media (via ownership) and economists (via university and “think tank” contributions) to tell the public deficit spending is “unsustainable,” “paid for by taxpayers,” and will “cause inflation,” aka the Big Lie.
5. The Big Lie readily is accepted because the public emotionally doesn’t want the Gap below to be narrowed.

We, the American public must grow up and overcome the allure of the Big Lie. We must resist the dominance of the rich; we must insist that our federal government fund free college for everyone who wants it.

“Free education for all” costs us taxpayers nothing, while our future, and our children’s future, depends on it.

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY