Obama’s new “Get out the vote” plan will cost us all

Unless you are living under a rock, you know Obama, desperate for votes, recently announced plans to make changes to the student loan program which they had already tampered with in 2009. What we are witnessing is an attempt by the left to create an equivalent system that they use to scare senior citizens into voting for them – Social Security – for the young generation. Have no doubt that anything they do, as has been the problem with every damned policy they have enacted in the last 3 years, will do very little to address the problems with student loans and the cost of a higher education, but will guarantee that the tax payer will be on the hook for a fortune at some future point. Andrew Gillen has a great post dealing with why this thing is a disaster:

The Income Based Repayment (IBR) program, which took effect in 2009, is designed to lighten the student-loan burden for some students. The basic idea is to limit monthly payments to less than 15% of disposable income. If a student makes these payments for 25 years, any remaining balance is forgiven, meaning that taxpayers essentially pay the rest off. President Obama just announced his intention to lower this to 10% of disposable income and 20 years of repayment before forgiveness. These proposed changes, as well as IBR in general, are bad for the following 6 reasons.

In short, IBR was basically shifting a huge chunk of the massive debt these idiots are straddling themselves with to the tax payers, and the proposed changes are going to make the amount shifted even larger. Of course, the CBO will score this whole thing as a win since they only look at a 10 year window, and as set up the first impact of this idiotic policy will only start, if in desperation they don’t drop the repayment period even more, 2 decades from now. But have no doubt that what we have here is another case of a politically motivated vote buying scheme that does absolutely nothing to address the real problem – the out of control cost of education because of government enforced subsidization – and will create a problem akin to the housing market bubble burst we just had for the politicians and tax payers that are stuck with this asinine program.

Student loan debt is over $1 trillion and surpasses credit card debt in America. It’s not going to do anything but bigger. We are all going to get hammered by this, and the same collectivist politicians will then again blame it on the evil rich and banks, not government. Sound familiar? It should be, because this plan is yet again a case of plain and simple social engineering, and we all saw how well that has been working for us so far. Even more preposterous is how the damned thing is put together to encourage the very students that are most likely to take on the largest possible amounts of debt pursuing the most idiotic and meaningless types of degrees, from not only shifting most of their debt to the future tax payers, but to join government.

While regular people need to make payments for 25 years before loan forgiveness, borrowers who take a job in the public sector or with some non-profits have their debt forgiven after 10 years rather than 25. The message from the government is unmistakable – -we want you to get a public or non-profit job. Why does the government think it knows best where people should be employed or if such public service jobs provide more value to society than private sector ones?

I have to admit that these social engineers sure know how to rig the system in their favor. Must be that whole “the public sector is the growth sector” nonsense Biden was talking about. I however do not doubt that in the end this will result in something just as bad, if not worse, than the housing mess we also remain sure to get a repeat of sooner than later. The problem is that this mess is far from over. The entitled, those hippies and middle class idiots with “Studies” degrees and huge debt after 5 or more years of partying hard at college that predominantly make up the OWS types pretending to be protesting the evil rich, believe US tax payers should pay all of their bills.

Just like the refusal by the social engineers to get rid of the idiotic rules forcing lending institutions to give money to people that should never have even been considered or face the hefty federal government’s cudgel that caused the housing crisis, there is absolutely no chance these crooks will address the cost of education crisis. The out of control costs of an education, benefits one of their most vocal and important constituencies – the academics – and enriches people with some of the most idiotic and destructive set of ideas while totally insulating them from the consequences of reality. Academia is the refuge of the leftard politician. They have no interest in curtailing that boon. So instead they stick the tax payer with the bill, getting a lot of votes in the short term from idiots that don’t even realize they will pay for this cost sooner than later, and when the whole house of cards comes tumbling down, they will blame everyone but themselves. Thsi vote buying scheme comes in an hour of desperation, and it is going to do us mostly harm.

UPDATE: Another article pointing out how this is great politics, but won’t solve anything or help anyone:

But the president’s plan is a far cry from the kind of relief that the Wall Street protesters and other debtors are demanding, and it won’t do a thing to address the roots of their repayment struggles: rising tuition and high unemployment.

Last year the unemployment rate for college graduates under the age of 24 rose to 9.4 percent, the highest level in at least 15 years. Meanwhile, college tuition has continued its inexorable climb, reaching an average of $8,244 for in-state students at public colleges in 2011-12, and $28,500 at private four-year colleges, according to College Board figures released this week.

Another challenge: Next July the interest rate on student loans will double, to 6.8 percent, costing the average borrower thousands of dollars over the life of his or her loan.

With almost 10% unemployment and annual tuition costs skyrocketing, students are getting a bum deal. Doubly so with a ridiculous 6.8% rate on the way. WTF? No wonder they want to just have other people pay for their debt.

The Chronicle however, gets this wrong:

To be fair, there isn’t much Mr. Obama can do about the rising cost of college, which is driven largely by cuts in state appropriations and other factors outside his control. And student-loan interest rates are set by Congress. Mr. Obama has certainly tried to tackle unemployment, offering a sweeping jobs bill that could have put some borrowers to work. He just hasn’t been able to persuade Congressional Republicans to accept the bill’s proposed tax increases for wealthy Americans.

Yes there is something Obama could do: stop the existing government backed loans program completely. Kill that program, or limit it to schools that offer drastically lower rates, and watch all these schools charging insane amounts of money & living large, either reduce their costs or go the way of the Dodo bird.

The cost is insane precisely because schools assume they can charge whatever they want since someone else is then responsible for the money. When they have to compete or loans can be discharged in bankruptcy, without the US tax payer footing the bill, they will learn to swim or they will sink. When government stops wasting more of our money, the employment situation aught to get better too.

Comments are closed.

  1. Manwhore

    Well, since taxpayers funded these people to be educated in the first place, I wonder what happens next? Your disdain for your fellow American is noted.

    Fannie and Freddie are bankrolled by the American people. If we (as a people) decide for debt forgiveness, we already paid for it, like we paid for rich’s retirement.

    Smoke that.

    Thumb up 0

  2. AlexInCT *

    Well, since taxpayers funded these people to be educated in the first place, I wonder what happens next?

    Ah, so your point is what? Since we already blow a shit load of tax payer money in a bloated, union dominated, and with very few exceptions the cost not being close to worth the return we get from the primary education, we should do more of the same after that as well? Why not demand the tax payers take care of you from cradle to grave like a good collectivist?

    Your disdain for your fellow American is noted.

    My disdain is with crooked politicians, freeloaders, and people that feel they are entitled to anything and everything paid for by others. There are plenty of Americans, myself included, that didn’t expect others to pay for their education. Unfortunately there are too many Americans that have been told just showing up and putting time in a college, cost and type of degree be damned, is enough to guarantee them a ticket on the gravy train, and have believed that nonsense, so they now demanding others pay for their mistake. I am now convinced you are one of those.

    Fannie and Freddie are bankrolled by the American people.

    You forgot to mention how that’s because the social engineering politicians have to make tax payers bankroll Freddie & Fannie or they would have long ago gone broke and those social engineering attempts with them. For a “conservative” – and that’s between quotes for a reason – you sure seem intent on continuing to believe the propaganda from the left that justifies your demand others pay off your school loans.

    If we (as a people) decide for debt forgiveness, we already paid for it, like we paid for rich’s retirement.

    Translation: If the mob decides it doesn’t want to be held responsible for its debt obligations and mistakes, and wants someone else to pay for the cost, then that’s fine, because the majority wants it, and all they have to do is pretend that others are already getting theirs, so they should too.

    Smoke that.

    Your point is well made dude. You are willing to swallow the leftard propaganda hook, line & sinker when it benefits you personally. If I remember correctly, the Greeks knew that when the masses started voting themselves whatever they wanted, it was the death of democracy. And they knew it some 3K years ago. some conservative you are.

    Thumb up 4

  3. richtaylor365

    Same old same old, punish the responsible and reward the profligate.

    Does anyone know what interest rate students have on their educational loans?

    I would favor lowering the interest rate (or even offering interest free loans if they still wanted to keep their sacred cow government run lending programs) on student loans, but no way would I go for lowering or removing the obligation of paying it back. The change I would make is making the monthly payment, percentage of salary, tied to the amount of salary earned. Say anyone making 50K or less would pay 10%, 50K to 80K pay 15%, and anyone above that must pay 18% (like a car loan).

    Just like the refusal by the social engineers to get rid of the idiotic rules forcing lending institutions to give money to people that should never have even been considered or face the hefty federal government’s cudgel that caused the housing crisis, there is absolutely no chance these crooks will address the cost of education crisis.

    I’m going to disagree just a smidgeon with you here on this. The banks had a gun to their head and were threatened into making bad loans, they were bad because the people getting the loans were in no position (or showed a trend of elevating themselves to a better position) to make good on those loans. With young people entering college, the sky is the limit as far as potential, they have no real track record, so I have no problem with the government loaning them money (with the requirement of paying it all back) to further their education with the possibility that one of these guys might find the cure for cancer, discover that elusive self perpetuation machine, or discover a newer cleaner energy source. We want our youth to get the best education possible.

    Thumb up 1

  4. AlexInCT *

    I’m going to disagree just a smidgeon with you here on this. The banks had a gun to their head and were threatened into making bad loans, they were bad because the people getting the loans were in no position (or showed a trend of elevating themselves to a better position) to make good on those loans.

    And that’s still the case despite all the blathering to the contrary.

    With young people entering college, the sky is the limit as far as potential, they have no real track record,

    High school? I know that might be unfair because some people goof off in high school then do a lot better when they mature, but the point I really wanted to make was that our education system, which puts emotional well being over achievement and competition, right now is doing them a disservice. They are used to getting laurels and a slap on the back just for showing. Grade inflation is rampant. Some kids do hard work, but most just don’t care. Playstation and the nanny state are more important.

    It’s no wonder that so many wrongly think the sky is the limit when it should be obvious they lack both the education, skills, and the inclination to do the work, to reach the sky. They want to reach the sky just by showing up and putting in the time. That’s in a nutshell the bigger part of the problem.

    so I have no problem with the government loaning them money (with the requirement of paying it all back) to further their education with the possibility that one of these guys might find the cure for cancer, discover that elusive self perpetuation machine, or discover a newer cleaner energy source.

    I however have a huge problem with this characterization. Reality is that not all degrees are equal. The people going into medicine – the ones likely to discover your cure – along with those going into engineering, law, hard sciences, and business, tend to be able to find jobs and pay off their loans. They often have a chance to reach the sky. These degrees are not a requirement, but they do help. Most also never borrow tons of money and waste time in school. At least they didn’t do it when I went to college. Those are great investments by the anyone, including the government, and I often have said that we should have programs that encourage people to follow career paths in engineering, science, medicine, and business (not the Keynesian nonsense which they will quickly unlearn) and even subsidize them while at it.

    But if you give a loan to someone doing one of those “Studies” degrees, even if at an ivy league institution and the person is an outright genius, a couple of hundred thousand to finish – and at that point I would call the intelligence of someone that puts themselves that far in debt to get a worthless degree – such a degree not being unreasonable these days, you are not going to get the cure for anything, unless what you are trying to “cure” is sanity. These are the people that carry the bulk of the loans and are those crying the loudest for someone else to pay for their bad investments, Rich. These are horrible investments. It was money flushed down the toilet.

    In fact, I blame government for this too, just like I blame them for the housing collapse and what followed. These kids have been lied to by asshole social engineers that told them they where special and to just follow their dreams, and that’s to make them dependant on big government. Real life doesn’t work that way, and while I encourage people to follow their dreams, they need to do so with their feet firmly planted in reality. Dreamers are a dime a dozen. Successful dreamers are one in a billion.

    We want our youth to get the best education possible.

    That’s the problem. We need to recognize that not all education is equal, and more important, that not everyone is able to get “the best education possible”. Especially when you waste more than 4 years on all this progressive tripe they tell people actually means anything. The real world is a bitch, and we are about to be eaten alive by former third world countries that are not bessoten by this idiocy that premeates our education system.

    Note also that the crooks I refer too are not the students that have been duped, but the politicians and the left. And the problem remains the ridiculous cost of a secondary education, which has grown at multiples of inflation, not the loans and need of loans per se. The loans are a symptom of the problem.

    Thumb up 3

  5. Manwhore

    I know that might be unfair because some people goof off in high school then do a lot better when they mature, but the point I really wanted to make was that our education system, which puts emotional well being over achievement and competition, right now is doing them a disservice

    Which list of your idiotic colleges do this?I know mine kept me up until 3 in the morning half the time, and I remember spending my fourth term awake 48 hours and asleep one of the days between. Like I said, you have no clue.

    Thumb up 1

  6. Manwhore

    The banks had a gun to their head and were threatened into making bad loans,

    I’ll disagree with you here, too. No one has a fucking gun to their heads, and any bootscrappy “ruged individualist” who owns stock should never invest in a company that’s gonna cave to such a thing. Did you do that?

    U mad bro?

    Thumb up 1

  7. AlexInCT *

    When I was doing my masters in EE, with a few exceptions, my 3 roommates all spend every night, except Monday & Tuesday – they had no money until their Wednesday payout so they watched MTV, drank cheap beer, and smoked dope when they fiugred I was not around and going to kick their ass for being morons – going out to the bars or frat parties. All three were doing bachelor degrees in arts. One was on his 6th year of “general studies”. I spent my nights studying because I was in engineering and the Chinese, Korean, and Indian students would murder the grading curve for those that didn’t do the work. I talked to the few Americans in my class and they all pointed out how their roommates pulled all nighters every once in a while and then spent the rest of the time hitting bars. And I went to a real good school in case you think this was all a joke.

    If you spend a lot of time studying, more power to you. If you took on ridiculous debt for a degree that won’t retrun the value however, don’t try to fuck me over for that. I already had to pay for the politicians screwing the housing market over. I do not want to have to do that for them doing more of the same in the student loan market. I guess that as long as they keep socio-engineering however, I am going to be forced to pay more because I did the right things. That’s what social justice basically amounts to: the people that do the right things and do not cut corners pay for the idiots.

    Thumb up 4

  8. Seattle Outcast

    I’ve been waiting for some moronic dipshit to use the term “bootstrappy” at this site, and you’re the winner. Go shove a sharp stick up your behind and peddle that line of libtard BS someplace else.

    No one has a fucking gun to their heads

    Disagree all you want, doesn’t change the reality that you’re wrong on this. Banks answer directly to regulators and auditors – that gun was most certainly there.

    Thumb up 5

  9. CM

    And you NEED to be able to blame one factor in isolation. It couldn’t possibly be a combination of factors, such as the growth of securitization, a glut of foreign savings pouring into the US, a lack of yield from other asset classes, ratings agencies operating with minimal knowledge but lots of optimism, a faith in the ever-rising housing market, high oil prices, consumers looking to flip high-interest unsecured debt into lower-interest home-equity debt, a short-term federal budget surplus eating into the availability of Treasury debt, Fannie and Freddie’s mixed mission, the evaporation of profits from investment banking and brokerage, unrestrained shareholder demand for high profit margins, off-balance sheet financial innovations such as SIVs, unconvincing and non-influential risk managers, risk-pricing of MBS based on CDS pricing, a White House (under both Clinton and Bush) dedicated to expanding low-income and minority home ownership for partisan political reasons, economists touting the positive externalities of home-ownership, a poor understanding that heterogeneous populations have different responses to market movements and over-reliance on centralized and automated mortgage underwriting.

    Apparently acknowledging these other factors is too nuanced and doesn’t fit with the simplistically stupid “business = good, government = bad” mantra.

    Thumb up 0

  10. richtaylor365

    You left out the best part from your link that you did not identify as a link:

    Just to make things clear, I think that to really blow things up we needed low interest rates, the growth of securitization, a glut of foreign savings pouring into the US, a lack of yield from other asset classes, ratings agencies operating with minimal knowledge but lots of optimism, a faith in the ever-rising housing market, high oil prices, consumers looking to flip high-interest unsecured debt into lower-interest home-equity debt, a short-term federal budget surplus eating into the availability of Treasury debt, Fannie and Freddie’s mixed mission, the evaporation of profits from investment banking and brokerage, unrestrained shareholder demand for high profit margins, off-balance sheet financial innovations such as SIVs, unconvincing and non-influential risk managers, risk-pricing of MBS based on CDS pricing, a White House dedicated to expanding low-income and minority home ownership for partisan political reasons, economists touting the positive externalities of home-ownership, a poor understanding that heterogeneous populations have different responses to market movements and over-reliance on centralized and automated mortgage underwriting.

    But there really shouldn’t be anymore room to doubt the significant role played by the CRA and the regulators charged with enforcing it.

    Thumb up 5

  11. CM

    I thought the best part was:

    Perhaps the worst argument they make is directed against a claim that I’ve never heard anyone make—the imaginary claim that the CRA somehow caused the entire mortgage mess, financial crisis and economic depression.

    He should visit here if he wants to see people claiming it.

    Apologies for not providing it as a link. No way I could write that, obviously.

    EDIT: BTW I came to that link via this one, which appears to be an honest attempt to explain it all
    http://articles.businessinsider.com/2009-06-27/wall_street/30009234_1_mortgage-standards-lending-standards-mortgage-rates
    Most discussion online on this issue appears to be propaganda for one side or the other. That’s depressing enough in itself.

    Thumb up 0

  12. Manwhore

    Interesting, I’ve been waiting for some dip shit to get all boot strappy and call someone a dip shit while actually being a dip shit with a sharp stake up his ass.

    The question stands. Why would anyone invest money in a bank and then decry how foul and regulated they are? I mean, what are you, a dip shit?

    Thumb up 1

  13. CM

    Interesting, I’ve been waiting for some dip shit to get all boot strappy and call someone a dip shit while actually being a dip shit with a sharp stake up his ass.

    LMAO. Brilliant.

    Thumb up 1

  14. balthazar

    Why, because you’ll get all pissy and cry in your cereal?
    Maybe throw some lame, idiotic insults out there and then some “facts” that really are just your opinion?

    Please go fuck yourself whore.

    Thumb up 4

  15. Seattle Outcast

    By using the term you’ve pretty much just identified yourself as a complete leftist tool. All of your comments can now be ignored as either unimportant or totally ignorant.

    Thumb up 3

  16. CzarChasm

    Apologies for not providing it as a link. No way I could write that, obviously.

    How was it “obvious?” You totally lifted that. And you didn’t have to link to it to give credit to the copywrited source. I remember one time you getting all excited about me not sourcing a short quip from Palin, and when you “caught” me on it, I explained that I only heard a reporter on TV reiterate the line and didn’t hear who it was attributed to. In this case though, you copied and pasted it ummm…. verbatim and didn’t even mention that it wasn’t your own analysis. (If anyone is curious about why I emphasized the word “verbatim,” go to the link and you’ll find that CM doesn’t understand that word any better than he understands the difference between failing to link and failing to credit another’s intellectual property.) How on Earth is it obvious that it wasn’t yours? Plagiarism isn’t mitigated by the plagiarist’s assertion that it’s “obvious” they could not have been the author, and apologizing for failing to provide a link doesn’t mitigate your failure to provide credit. I’m frankly amazed that no one else has chastised you for such a blatant attempt to come off as an honest analyst of issues when clearly you can’t form an honest opinion until it’s spoon-fed to you, and even then, you invalidate the spoon-fed opinion by leaving out the author’s summary point.

    Good catch rich.

    CC

    Thumb up 1

  17. CM

    For someone who chose a different name to enable the baggage to be left in the past (to the point of pretending not to know those you’ve engaged with for years) you’re sure quick to reach back and drag up something historic. In that example you decided to concentrate on the meaning of the word verbatim, rather than the fact that you’d made the exact same argument as Palin with an extremely similar turn of phrase. The laugh I had was that you sounded like you were channelling Palin, not whether it met the definition of verbatim.

    Anyway, in this case it was a list of other factors that I was interested in. The argument that the Great Recession isn’t about one factor isn’t exactly intellectual property.

    Also, IMHO the summary point doesn’t accurately sum up the rest of the single piece. And I’m not attempting to use the entire piece (or any argument within it) as evidence to make a point. I was after a list of other factors (which I could have taken from elsewhere).

    But, anyway, I already (immediately) fessed up and apologised when it became clear that someone had an issue with it. Do you want me to apologise a second time? Or can we just be honest and both admit that nothing I ever do would ever be right with you, and no admission would ever make a blind bit of difference because you’ve got a permanent hard-on?

    Seems to be like you’re just getting that itch again.

    Thumb up 0

  18. CM

    Or maybe, just maybe, he’ll lose it completely and anonymously click on thumbs down symbols!! Now I’m sure none of us want it to get that serious. After all, nobody likes it when people just vote “present”.

    Thumb up 1

  19. Manwhore

    Wow, anointed by the “Clown Prance”. I don’t know what to do with such an honor? Do I first cower in front of the Prance who has the biggest dick in the universe, and is the most badass karate dude on the planet? One who also points guns at Mormons at the door?

    I humble myself before you.

    Thumb up 2

  20. Manwhore

    Why, because you’ll get all pissy and cry in your cereal?
    Maybe throw some lame, idiotic insults out there and then some “facts” that really are just your opinion?

    Please go fuck yourself whore.

    Why because I come here and post just the slightest nuance against the “get off my lawn” group of three that have no clue how the world is working these days? Sorry for pissing in your wheaties. Just like the Oakland cops (once again) shooting unarmed civilians (this time unarmed Iraq war vets) and then fragging the people trying to drag them to safety after the damage is done.

    Real classy. Really American. I supported the tea party, and I support anyone questioning the motives of our elected officials. Funny that our authors have been the most ardent against civil protest.

    Sometimes I do fuck myself. Sometimes others need it. Downding away, all of you brave souls!

    Thumb up 2

  21. balthazar

    Wow, you should work msnbc with that misdirection. Someone who gets hit by a tear gas canister because they are actually part of a group that was told to leave a place LEAGALLY and refusing. Thats now getting “shot” by the police. Are you Rev. Al Sharpton? Or Perhaps Martin Bashir?

    embellish much?

    Thumb up 2