Why does the federal government resist education? Sunday, Sep 8 2019 

Intelligent Americans long have recognized that our future national success rests on the shoulders of our educated populace. They are the ones who will lead us.

That is why today, every municipality offers free education for grades K-12.

On April 23, 1635, the first public school in what would become the United States was established in Boston, Massachusetts. Known as the Boston Latin School..

After the U.S. Revolution, northern states especially emphasized education and rapidly established public schools.

By the year 1870, all states had tax-subsidized elementary schools. The US population had one of the highest literacy rates in the world at the time.

Private academies also flourished in the towns across the country, but rural areas (where most people lived) had few schools before the 1880s.

By the close of the 19th century, public secondary schools began to outnumber private ones.

We live in the 21st century, when a widespread college education is as important to America’s success as a high school education was in the 19th century. Yet still, we cling to the archaic notion that while elementary school and high school are paid for by governments, college and beyond must be paid for by individuals.

The time has come to realize that American leadership always has required universal education, the only difference being that in the 1800’s an elementary school, and then later a high school education were sufficient, while here in the 2000’s, advanced education has becomes necessary.

Sadly, we have not yet learned that lesson. We insist on making it difficult for American students to receive the best possible education:

Bloomberg: U.S. Student Loan Debt Sets Record, Doubling Since Recession
By Alexandre Tanzi, December 17, 2018, 4:00 AM CST
Student debt outstanding reaches a record $1.465 trillion
Borrowers over age 50 debt rises by $28.8 billion in one year

U.S. student loan debt outstanding reached a record $1.465 trillion last month.

Image result for student debt 2019

American college students are drowning in debt.

“Over 90% of student loans are guaranteed by the U.S. Department of Education, meaning that if a recession causes a rise in youth unemployment and triggers mass defaults, this contingent liability could prove burdensome for the U.S. government budget,” said Paul Della Guardia, economist at the Institute of International Finance in emailed comments.

Get it? Mr. Della Guardia is more concerned about a non-existent burden on the U.S. government than on the real problems of youth unemployment and mass defaults.

The so-called “burden” on the U.S. government is non-existent because the U.S. government is Monetarily Sovereign. It never can run short of its own sovereign currency, the U.S. dollar. It can pay any size debt denominated in dollars. Federal debt, no matter how large, never can be a burden on the federal government.

Federal Reserve Chairman, Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

By contrast, indebted students are monetarily non-sovereign. They can and often do, run short of dollars and become insolvent.Related image

A Bloomberg analysis found that students who took a loan in 2012 have had a much more difficult time making their monthly payments compared to students who received loans shortly before and after — students who have had a similar amount of time to pay them down.

A large percentage of those who took out loans in 2012 are currently 24-33 years old, an age where many are generally establishing themselves in their careers.

Borrowers in this group entered the labor force when the unemployment rate was twice as high as today and may have found it difficult to find a career track in their desired field.

Further adding to the difficulties faced by this group was that finding a position in 2012 took almost three times longer than today, according to data from the Bureau of Labor Statistics.

The interest rate for a direct student loan disbursed on or after July 1, 2018, and before July 1, 2019, is more than 100 basis point higher than those issued in 2012 adding to the concern about the size of student loan debt outstanding.

Many student loan borrowers face significant debt burdens. Over 2.7 million borrowers owe in excess of $100,000, of which, about 700,000 owe $200,000 or more, according to data from the U.S. Department of Education. One year earlier, 2.5 million owed in excess of $100,000.

The single largest asset on the Federal government’s balance sheet is Student Loans— the amount students owe to the federal government, which neither needs nor uses the money.

By not recognizing the national importance of advanced education, we have doomed an entire generation to failure — a failure that significantly will reduce America’s competitive and strategic successes.

This is more than shortsighted. It is part of the same plan that attempted to eliminate ACA (“Obamacare”), cut Medicare, cut food stamps, cut Social Security, and cut consumers’ protections against business fraud.

It is a reflection of the Gap Psychology of the rich who run America.

Gap Psychology is the desire to distance oneself from lower-income/wealth/power people, while coming closer to the higher income/wealth/power people.

There were times in America, when Gap Psychology ruled:

When it was a crime to teach slaves how to read and write.

When women were not allowed to vote.

When immigration from Ireland was blocked: “The refugees seeking haven in America were poor and disease-ridden. They threatened to take jobs away from Americans and strain welfare budgets. They practiced an alien religion and pledged allegiance to a foreign leader. They were bringing with them crime. They were accused of being rapists. And, worst of all, these undesirables were Irish.” (Does this sound familiar?)

As is usual with the very rich, Gap Psychology is far more important than compassion for the less fortunate or concern for America’s future. Thus anything that would benefit the middle- and lower-income groups, i.e. narrow the Gap, is strenuously resisted.

Even some in the middle-classes are complicit, when they adopt the shortsighted, “If I had to pay, they should pay” position.

It’s the old question,  “Why can’t crabs escape a bucket? Answer: When some try to climb out, the others pull them back down.” That is a version of Gap Psychology in which a man doesn’t want former peers to succeed, opening a new Gap between him and them (aka, “envy.”)

And that is why today, we do not have a national system of free advanced education. It’s urgently needed, but the rich don’t want it.

Most parents can’t afford to place their children in exclusive, private or preparatory schools.

For the majority of U.S. families, public education is the only option. Public elementary and secondary education money usually flows from three sources: the federal, state and local governments. According to the U.S. Department of Education, states contribute nearly as much as local governments, while the federal government supplies the smallest share.

Yet, it is the federal government that is best able financially to pay for education.

We’ll close with excerpts from the following article:

The former student loan ombudsman for the Consumer Financial Protection Bureau (CFPB) believes that agency has been a “complete failure” over the last year and has “completely walked away from its mission” regarding student loan borrowers.

Seth Frotman, who resigned in protest in August 2018, expressing outrage at the then-leadership’s treatment of the nearly $1.5 trillion student loan industry, asserted that things have gotten even worse since his departure.

“I honestly don’t say this lightly, but I don’t know how you could look at the things that have happened over the last year … [and] under the new leadership of the bureau and not say that it is a complete failure in doing its job on behalf of student loan borrowers,” Frotman said. “The current political leadership at the CFPB has prioritized the interests of the student loan industry over the very real plight of the 44 million Americans who have student loan debt.”

We have suggested as part of the Ten Steps to Prosperity, Steps #:

See: 4. Free education (including post-grad) for everyone (Tuition, supplies, transportation, meals, etc. all should be funded by the federal government.)
See: 5. Salary for attending school (Many students drop out of high school to enter the employment world early because they and their families need the money. Even with scholarships, many families cannot afford to send their children to high school, let alone to college and beyond.)

In summary
Millions of our best and brightest young people are hamstrung by lack of money. Not only do finances force children to leave high school or college early, but those who are able to attend college face onerous loan repayments to a government that has unlimited money and does not need to collect money from students.

These loan repayments prevent many young people, who are in the usually most productive growth years of their lives, from investing time, money, and talent into businesses and scientific pursuits that would have benefitted America. Lack of finances turns productive years into lost years.

America is forgoing the national benefits that these young brains could provide.

As a result, America no longer is a world educational leader.

Excerpts from 11 FACTS ABOUT EDUCATION IN AMERICA

–30 years ago, America was the leader in quantity and quality of high school diplomas. Today, our nation is ranked 36th in the world.
–1.3 million high school students don’t graduate on time yearly. States with highest rates (80-89%) are Wisconsin, Iowa, Vermont, Pennsylvania and New Jersey. States with lowest (less than 60%) are Nevada, New Mexico, Louisiana, Georgia and S. Carolina.
–A student living in poverty is 13 times less likely to graduate high school on time.
–In the workplace, 85% of current jobs and 90% of new jobs require some or more college or post-secondary education.
–Only half of the students who enter a 4-year school will receive a bachelor’s degree within 6 years.

Advanced education is as important a protector of America’s future as is the military. The government should be doing everything possible to fulfill this need.

The federal government should stop resisting education, and pay off all student loans, then eliminate the need for student borrowing and student indebtedness. America needs an educated populace.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

Free education for all and the student loan scam Friday, Jan 20 2017 

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 usall 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

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