The Atlantic Monthly just published an article appraising President Obama’s new “sweeping student loan reforms.” They estimate that it will save approximately $4-$10 dollars per month for student loan debtors who qualify. It is questionable whether a majority of student loan debtors will in fact qualify, but for the lucky few . . . voila! One majestic swipe of the chosen one’s golden pen, and all of those ex-students who are struggling so hard to repay their student loans in an Obamanation economy will miraculously save between four and ten dollars per month (if they qualify)!
How will this miracle program generate such huge savings? Essentially, Obama’s new program permits student loan debtors to consolidate their loans which is estimated to save a whopping 0.5%! Wow! Additionally, it will reduce the maximum payment from 15% to 10% of qualifying students’ annual income. Perhaps the most important component is the loan forgiveness for unpaid balances after 20 years (down from 25 years). It is this component which is so brilliantly Obamanesque. This is the next trillion dollar bubble.
Eighty-Two percent (82%) of all outstanding student loan debt in history has accrued in the last 10 years. That amount is One Trillion Dollars! The reasons? Student loan amounts have increased by 511% since 1999!!! The reason for this — as anyone with a child in college knows — is that tuition has increased dramatically in recent years. Colleges and universities have also begun to nickel and dime parents for an endless list of student fees in addition to tuition in an effort to erroneously boast competitive tuition for their institution.
There are no market forces present in the American school system. That is why its cost has increased at a rate which has out-paced the increases of everything in America with the possible exception of gold. Although, until recently, its cost increase exceeded even gold! The explosive cost of tuition can be traced to government subsidization. All of American education is subsidized by state and federal government. That brings huge amounts of revenue which subsidizes teachers, professors, endomwent investors, and countless others in the education system.
The thing that everyone must understand is that government subsidies always increase cost, but they are always pitched as a cost-spreading savings. The student loan debtor would be absolutely shocked to learn the obscene amount beyond what they paid to their institution in tuition. The taxpayer, however, who never attended the institution may be a little more upset.
The uncomparable increase in college tuition begs the question as to why the Wall Street Protestors are not marching on their over-priced institutions. They selected the college. They attended the college. They received its benefits. Yet, they are protesting the financial institutions that made it possible for them to attend. Why are they not protesting the college which charged them exhorbitant tuition? Instead, they protest the lenders who made their attendance possible.
The reason is simple: ignorance. Implicit in that ignorance is the lesson that modern-day subsidization of colleges and universities produces a setting in which the socialist intellegencia that comprises the academic community is rewarded richly with professors earning more than most others in their town. Their students, on the other hand, are taught that economic success is inherently evil and undeserved. Contrast that with the reality — as demonstrated daily by the Wall Street Protestors — that these institutions are producing generations of students who know all about global warming, feelings, moral relativity, the benevolence of government, and evil Americanism, but they know nothing about the greatest country on earth of which they are self-destructive inhabitants. They know much, but it is not knowledge. The more of it they learn, the stupider they become. Eventually, they are too ignorant to amount to anything, and that’s when the value of their socialist, self-centered education hits them and they relaize that they can always fall back on the one thing they know; protesting, demanding the evil Americans pay for their problems.
Unless ACORN is resurrected and provided with another Obama Stimulus for hiring anti-American radicals, these students will not find an employer willing to pay for their expensive ignorance. That is the value of the student loans they wrought. The most damning evidence in support of this is their cries for student loan forgiveness. That is what they have paid for . . . an indoctrination in the ways of the whiner who believes himself to be entitled to whatever he wants. The alternative — hard work to repay loans for the over-priced education of their choice — does not occur to them. That isn’t taught anymore. Neither is mathematics, science, grammar, work ethic, or any of the former “staples” of the American education system. That would be unfair because some people might get better grades than others, but that is the great thing about teaching ignorance. Anyone can learn it!
The same cost increases can be seen in Medicaid and Medicare whose costs have out-paced unsubsidized medical costs. This is common sense, but we have been dumbed down by Progressives who have made an art form of misrepresentative “packaging.” When government subsidizes (i.e. confiscates money from taxpayers, irrespective of whether they ever utilize the service subsidized) anything, the costs go up almost immediately.
For example, does anyone believe that road construction is accompanied by reasonable costs? Just the allocation process alone breeds seething corruption, and can be illustrated by everyday experiences such as interstate re-surfacing of a perfectly fine road. When the government controls how much of your money is spent (or where it is spent), it is divorced from the natural concerns of the money’s true owner. This process stymies entreprenurial endeavors like invention and creativity, because necessity is the mother of all invention. Government subsidies remove the need for free-willed ingenuity; replacing it with a never-ending supply of other people’s money. This results in a slowed evolution of commercial and industry practices.
“Green” energy is a glaring, textbook example of government subsidies at their worst. Since Jimmy Carter was President, taxpayers have “contributed” more than $41 billion to solar panel technology, and that does not even take into account the expenditures under the Obama administration which allocated $39 billion to its now infamous loan program which is guaranteed by . . . you guessed it, the taxpayers. Have you priced a solar panel lately? They are unaffordable, but just as important is the fact that the technology sucks! Anyone who believes otherwise has yet to do their research. Those who know better are not bragging about the eighty-five degree showers, or the injuries suffered by homeowners who have learned the hard way that the panels’ energy productivity dips when the they are dirty or covered with leaves.