Millennials on Their Student Loan Dept: Out of Sight, Out of Mind.

[Spungo]

The main difference is that the government can tax a third party to pay for their debt. To an extreme there could come a time when a government cant get funding aka Greece. The US is far too large, so instead of not getting funding, we get a global recession.

Nope, you get money printing. Japan is doing that right now. Japan is so far into insanity that the central bank buys more than 100% of JGB issuance, and it owns literally half of all Japanese ETFs. Can you imagine the fed owning half of SPY and half of QQQ? Japan has gone full krugman. What are Japanese people supposed to do when the BOJ tries to reverse that policy? Who knows. I doubt they even thought that far ahead. As long as the oligarchs are saved, it doesn't matter what happens to the proles.

It's the same playbook every time. What does Japan do? Print money. What did China do? Print money. What are we doing? Printing money. What is the ECB doing? Print money. What did the Roman empire do to fund its massive army and welfare programs? They replaced precious metal coins with base metal coins; this allows them to create money. France somehow managed to fuck this up twice in the same century.
https://en.wikipedia.org/wiki/John_Law_(economist)#Company_of_the_West

It didn't work the first dozen times, but I'm sure money printing will work this time. It's different this time.

 

[Humpy]

Nah, you can't include those without debt in our discussion. We are talking about the average debt for borrowers, not average debt of everyone including those without any debt. Those without debt likely got full-ride scholarships, rich parents paid, etc.

Looking at those numbers, 55% of borrowers have a debt of at least $20k. A full quarter of those borrowing are in debt $30k or more.

I'm not sure how this isn't an issue especially when it has been shown that people are having a harder time getting a job in their field out of college. When you pull back away from the percentages and look at the numbers of people coming out of schools with large amounts of debt then it starts to hit home.

That would mean 715,000 people graduating with a bachelors degree have at least $20k of debt before even starting the first day of their career. That absolutely has an impact on people.

Income based repayment plan yo! Borrow as much as possible, only pay back 10% of yearly income over $18K and ride it out for 20 years, or just 10 years if you do like I did and get a no-stress government job that comes with a premium health care plan.

Only the financially illiterate use their own money for big ticket purchases.

 

[fskimospy]

I said that the US and Greece are different. Greece as a government did run out of the ability to get loans from any other group than the EU. Both the US and Greece have a government. You may want to reread that again because you should be able to see that I was not saying that what happened to Greece would happen to the US.

Government can get debt in two ways. It can borrow money from others, or it can spend more than it takes in. If the gov borrows money from others, then the debt is very much like private debt. There is a fee to that money that must be paid. Not paying it will incur fees just like private debt.

Yes except that fee overwhelmingly goes to members of the 'household'. When you pay interest to the bank that's money out the door. When you pay interest to people who are part of the same organization it's not. So as you can plainly see it's not at all like private debt.

What is different is that the government can spend more than it takes in and just print more money. That causes inflation though which is effectively a tax on its people and or all of the world depending on the country.

There comes a point when the fee of holding either debt costs more than the benefit of the debt, which is very much like private debt. Unless the debt is used to grow, it hurts the holder of the debt.

Printing money doesn't necessarily cause inflation (just look at the last 8 years), and as mentioned before modest inflation is actually a good thing.

I am also aware of no empirical research that shows your statement about government debt to be true. What's your basis?

Not so if the government owes a foreign government.

While the government holds that debt its painless, but once the government has to pay for that debt then you see the effect.

Foreign governments own a small fraction of our debt and they own it in a currency we control. Once again, not even remotely close to household debt. What would you be more concerned by, owing the bank a million US dollars or a million realibradbucks? You still want to say that owing a million of both is 'mostly the same'?

In the current world sure. But, it does not prove your point to me. If any single person held as much debt as the US government does, it would be the exact same. The US government is far more trusted which is why they were able to get as much debt as they have.

Absolutely not. Individuals are mortal while the US government is effectively immortal. One individual's debts being the underpinning for world finance would be a disaster.

Inflation does not inherently grow the economy either. The reason why small amounts of inflation is presumed to be good, is because it gives a slight incentive to spend money. There is almost zero difference between zero inflation and .001 inflation in terms of growth. The reason we shoot for some inflation is that its a cheaper way of taxing people for projects.

Deflation is bad but not sure what that has to do with this.

Actually the reason we shoot for some inflation is that it's best to err on the side of too much inflation as opposed to risking deflation.

While there might be almost no difference between zero inflation and the smallest amount of inflation possible in terms of growth, that's not true when you look at inflation as a whole. There is a broad economic consensus that low, sustained inflation is a net positive for real growth.

But they have overlap. To say they are completely different is wrong. Both have negative effects if you have too much.

They do have some overlap, but the differences between them are so large and so profound that to say they are 'very much alike in most ways' is a dangerously misleading statement. A lot of harmful policy has happened over the last 8 years by people who thought that government debts and household debts were similar only to see that idea blow up in their face.

 

[WackyDan]

We also have over $1T in loans for an incredibly depreciable asset: cars

I'm not saying student loans aren't an issue but the focus is skewed especially when you consider that you are still likely to earn $1,000,000 more over your lifetime if you get a college degree. A return of $1M on $10-30k is pretty good. Far better investment than the $1+T in loans people have for their cars

http://www.wsj.com/articles/total-u-s-auto-lending-surpasses-1-trillion-for-first-time-1439478198

Car loans are can be discharged due to bankruptcy or the car can be repossessed. College loans on the other hand can not be discharged, nor are they backed by a tangible item of value.

I say make college loans tied to the degree. Fail to pay off the loan or you miss too many payments and the college is told by the lender (In many cases the federal gov't back loan) to put a hold on the degree/transcript. Then maybe students will reflect properly on the degree they are getting and work more diligently to pay off that debt.

 

[realibrad]

Nope, you get money printing. Japan is doing that right now. Japan is so far into insanity that the central bank buys more than 100% of JGB issuance, and it owns literally half of all Japanese ETFs. Can you imagine the fed owning half of SPY and half of QQQ? Japan has gone full krugman. What are Japanese people supposed to do when the BOJ tries to reverse that policy? Who knows. I doubt they even thought that far ahead. As long as the oligarchs are saved, it doesn't matter what happens to the proles.

It's the same playbook every time. What does Japan do? Print money. What did China do? Print money. What are we doing? Printing money. What is the ECB doing? Print money. What did the Roman empire do to fund its massive army and welfare programs? They replaced precious metal coins with base metal coins; this allows them to create money. France somehow managed to fuck this up twice in the same century.
https://en.wikipedia.org/wiki/John_Law_(economist)#Company_of_the_West

It didn't work the first dozen times, but I'm sure money printing will work this time. It's different this time.

Printing money increases inflation. That is a tax on the population which has the effect of making others pay for things. You needed to read the whole post.

 

[fskimospy]

Car loans are can be discharged due to bankruptcy or the car can be repossessed. College loans on the other hand can not be discharged, nor are they backed by a tangible item of value.

I say make college loans tied to the degree. Fail to pay off the loan or you miss too many payments and the college is told by the lender (In many cases the federal gov't back loan) to put a hold on the degree/transcript. Then maybe students will reflect properly on the degree they are getting and work more diligently to pay off that debt.

I'm not sure if that's a great idea either. The problem with student loans is that we allow 18 year olds who are frequently idiots (because they are 18 and we were all idiots then) to take out huge debts that they can be saddled with for life.

I can't think of anything other than perhaps the military where someone at that age can make a poor decision that can have such dramatically negative lifetime consequences. (to be clear I mean you can get crippled or killed in the military, not that it's necessarily a bad choice)

That's a fundamentally problematic idea to me.

 

[Vic]

Artificially protecting uncompetitive jobs isn't giving free money to the people who have those jobs, it's loving America. Paying for people to become educated so they aren't stuck in uncompetitive jobs is communism.

Bernie's college plan is dumb, but not because its goal is dumb. He just came up with a stupid and completely unrealistic way to accomplish a good goal.

*tap*tap* sarcasm?

Protecting uncompetitive jobs is absolutely wealth distribution in favor of the people who have those jobs. Protectionist policies are not free. Far from it.

 

[realibrad]

Yes except that fee overwhelmingly goes to members of the 'household'. When you pay interest to the bank that's money out the door. When you pay interest to people who are part of the same organization it's not. So as you can plainly see it's not at all like private debt.

Unless all of the fees you pay to the bank go to things outside of your country, its not different.

Printing money doesn't necessarily cause inflation (just look at the last 8 years), and as mentioned before modest inflation is actually a good thing.

Except they did not really print money or increase the money supply. What they did do was change the balance sheets, but made that money off limits to use. They gave money away, and then told them they had to hold onto it.

I am also aware of no empirical research that shows your statement about government debt to be true. What's your basis?

Not sure what you mean here. Are you saying you want research that if a government takes on too much debt it can hurt the economy of that country?

Foreign governments own a small fraction of our debt and they own it in a currency we control. Once again, not even remotely close to household debt. What would you be more concerned by, owing the bank a million US dollars or a million realibradbucks? You still want to say that owing a million of both is 'mostly the same'?

Foreign governments about 15%, but your argument was that debt paid to its people is good, vs paying to groups that are outside of your group.

If you combine foreign and governments you get almost 50%. That means any fees get taken out of our economy.

Absolutely not. Individuals are mortal while the US government is effectively immortal. One individual's debts being the underpinning for world finance would be a disaster.

Except you can transfer assets to others upon death. If I am the son of the man who owned that debt, and his estate was bequeathed, I assume that debt if I choose to take it.

Actually the reason we shoot for some inflation is that it's best to err on the side of too much inflation as opposed to risking deflation.

Yes.

While there might be almost no difference between zero inflation and the smallest amount of inflation possible in terms of growth, that's not true when you look at inflation as a whole. There is a broad economic consensus that low, sustained inflation is a net positive for real growth.

No. Inflation does not help. Its the cause of the inflation that is the benefit. The cost of inflation is lower than the benefit to an extent. If you do too much, inflation will go too high and there is a breaking point. But in now what is the inflation a benefit to the economy.

They do have some overlap, but the differences between them are so large and so profound that to say they are 'very much alike in most ways' is a dangerously misleading statement. A lot of harmful policy has happened over the last 8 years by people who thought that government debts and household debts were similar only to see that idea blow up in their face.

The most important part is the overlap. There comes a point when you can take on too much debt. There is a huge difference in the amount, but the issue is still the same. That is why I brought up Greece. The US is far larger and more dynamic, but it still has a limit. That limit would not likely to be met before other issues caused a collapse though.

But, saying that government can simply not worry about debt is wrong. Either by an outflow of fees or a worry that the government is going to cause a recession.

There is a reason Japan right now is having trouble getting funding from outside sources. Most people know that there is not much worth investing in terms of projects.

 

[Vic]

There is a huge difference. He is advocating giving free education to anybody that can fog a mirror, regardless of ability, motivation, and outcome. This provides no societal gain and is ultimately the real goal of socialism, lowering the bar for everybody so even the most idiotic can be "even".

Protecting industry from some competitive practices, such as foreign government subsidies, currency manipulation...etc, is not socialism, it is rational capitalism. This is ultimately the problem with anarchocapitalists /libertopians. They see everything in a vacuum.

Take the ex im bank for example. Terrible from the basis of capitalism, as long as it is capitalism in a vacuum. However, outside of the vacuum, every country has one. Without it we would be putting put major exporters at an international disavantage.

Bernie only sees the problem through the vacuum of big government. He refuses to see that universities are big governments gone amuck. But those are his type of people. Liberal socialist fuckwits who rarely have ever held a real job

How do you keep track of all of your idiotic straw men?
First, no one is talking about free college to anyone who can fog a mirror. There will still be admission and academic standards in order to ensure societal gain.
And if you want to talk about lowering the bar, then there is no better example of such than government protection of uncompetitive jobs. Government guarantees of employment for unskilled losers to get paid in excess of their job's value added in exchange for their votes is a disgusting and societally costly form of socialism. It's basically welfare with a job. But it's exactly what you're supporting while pretending to call it capitalism.
Like your savior, you're just a lying piece of shit.

 

[Vic]

Let's talk about lowering the bar for a minute. Somehow, making it easier and less expensive for someone to better themselves through education is lowering the bar, but increasing the cost of consumer goods through protectionist policies which also increase the size and cost of our military and immigration enforcement just so unskilled Joe Sixpack can keep his uncompetitive job isn't lowering the bar. That's some fucking amazing logic there, LK.

 

[fskimospy]

Unless all of the fees you pay to the bank go to things outside of your country, its not different.

Uhmm, it's entirely different. If you pay $100 to your wife your household is not poorer. If you pay $100 to the guy at the end of the street your household is poorer. If a US entity pays the US government $100 the country has a net change of $0 in wealth, and vice versa.

Except they did not really print money or increase the money supply. What they did do was change the balance sheets, but made that money off limits to use. They gave money away, and then told them they had to hold onto it.

No, the government has purchased huge amounts of securities in excess of capital requirements. They have dramatically increased the money supply, but because of the nature of the liquidity trap printing money doesn't necessarily lead to inflation.

Not sure what you mean here. Are you saying you want research that if a government takes on too much debt it can hurt the economy of that country?

Yes there's actually very little evidence of a causal effect of excessive debt by a country in currency it controls and poor economic growth. That was the big Reinhart and Rogoff finding that was supposedly new and exciting that turned out to be wrong due to an excel error if you remember.

Foreign governments about 15%, but your argument was that debt paid to its people is good, vs paying to groups that are outside of your group.

If you combine foreign and governments you get almost 50%. That means any fees get taken out of our economy.

Your chart pretty clearly shows about 1/3rd, and ignores reinvestment which is huge. Sorry.

Except you can transfer assets to others upon death. If I am the son of the man who owned that debt, and his estate was bequeathed, I assume that debt if I choose to take it.

Yeah and maybe nobody wants to take that debt so it's a worldwide meltdown. Again, it is simply illogical to place a mortal person in the place of a government for debt purposes.

No. Inflation does not help. Its the cause of the inflation that is the benefit. The cost of inflation is lower than the benefit to an extent. If you do too much, inflation will go too high and there is a breaking point. But in now what is the inflation a benefit to the economy.

Yes, inflation is often a benefit to the economy as I already showed? It is a benefit because of behaviors it encourages but it is in many ways a requirement for those behaviors.

It's kind of like how working out isn't actually what lets you lift more weights, it's that your muscles react to stress by getting stronger. If we could just make our muscles stronger without working out, working out would be mostly a waste of time. That's not how it works though.

The most important part is the overlap. There comes a point when you can take on too much debt. There is a huge difference in the amount, but the issue is still the same. That is why I brought up Greece. The US is far larger and more dynamic, but it still has a limit. That limit would not likely to be met before other issues caused a collapse though.

But, saying that government can simply not worry about debt is wrong. Either by an outflow of fees or a worry that the government is going to cause a recession.

There is a reason Japan right now is having trouble getting funding from outside sources. Most people know that there is not much worth investing in terms of projects.

I never said the government couldn't worry about debt, I said that government debt and household debt are almost nothing alike. The nature of the debt is different, the method of funding the debt is different, the outcomes of excessive debt are different, how society views the debts are different, the durability of the debts are different, the quantities as compared to income are different, the role in the worldwide financial system are different, etc, etc, etc.

I'm sorry but Krugman was 100% right that household debt and government debts are nothing alike. In fact I'd imagine you would find it very challenging to find a single reputable economic organization that would say US debt and household debt are 'mostly the same'.

 

[ElFenix]

Except you can transfer assets to others upon death. If I am the son of the man who owned that debt, and his estate was bequeathed, I assume that debt if I choose to take it.

owned a debt and owed a debt are not the same thing.

and no, that's not really how debt of estates works, except in maybe a very rudimentary in a misleading fashion sort of way. debts owed by estates are paid prior to any probate assets being handed out to heirs (assuming claim is made by the holder of the debt). for secured assets the holder may claim the security, and if someone wanted the asset itself they could enter into an agreement with the holder, but that's not really any different than you taking over your brother's car payments (with appropriate paperwork) if he were to move overseas.

in any case, the debts owed by a natural person couldn't be collected upon once all their assets are exhausted. that person's children aren't liable for the person's debts. so it's not at all like the immortality of the US government.

 

[LegendKiller]

Let's talk about lowering the bar for a minute. Somehow, making it easier and less expensive for someone to better themselves through education is lowering the bar, but increasing the cost of consumer goods through protectionist policies which also increase the size and cost of our military and immigration enforcement just so unskilled Joe Sixpack can keep his uncompetitive job isn't lowering the bar. That's some fucking amazing logic there, LK.

So explain Germany, their protectionist policies, and their ability to sort the wheat from the chaff and educate only the best/brightest for free?

There's a difference between protecting J6P for no reason and protecting him against unfair practices.

There's a reason why Japan desperately wants TPP, because they know it provides yet more trade surplus for them. Why? Because they don't have "Free trade". Nobody but America really does. And they all love it.

 

[LegendKiller]

How do you keep track of all of your idiotic straw men?
First, no one is talking about free college to anyone who can fog a mirror. There will still be admission and academic standards in order to ensure societal gain.
And if you want to talk about lowering the bar, then there is no better example of such than government protection of uncompetitive jobs. Government guarantees of employment for unskilled losers to get paid in excess of their job's value added in exchange for their votes is a disgusting and societally costly form of socialism. It's basically welfare with a job. But it's exactly what you're supporting while pretending to call it capitalism.
Like your savior, you're just a lying piece of shit.

Bitch, please, there is pretty much no standard for getting into college. Almost any retard that wants a sociology degree can get it, hence why we have so many soft-science bullshit degrees at ridiculous costs. The government is subsidizing those, plus social benefits, by hundreds of billions per year. All of that is a cost borne by society through taxation, that is imputed indirectly into the cost of goods.

The student loan problem is far worse than most realize. The amount of students that are actually making their full payments on time is at, or lower, than 50%. Get that through your thick skull, the jobs they are getting cannot even support the loans they are taking out to get them.

Most 1st world countries have realized this and allow only the best/brightest into college while preserving low-skilled labor for tradesmen who don't go to school.

 

[Spungo]

No. Inflation does not help. Its the cause of the inflation that is the benefit.

Remember to differentiate between good inflation and bad inflation.

Anyway, you will never convince eski of this. His model says inflation is good, and he conveniently ignores all of the cases where inflation did not correspond to a better economy. In most cases, a collapsing currency is caused by a shit economy.

-1970's America had high inflation and a shit economy.
-Venezuela currently has astronomical inflation and a shit economy.
-UK had very high inflation during WW1, and it lead to widespread civil unrest and labor strikes. Keynes extensively wrote about it, and this is why Keynes was strongly against inflation. He lived through it, and he saw the damage it did.
-Argentina currently has very high inflation and a shit economy.
-Russia currently has very high inflation and a shit economy. This also happened in the late 1990's. Shit economy leads to inflation.

Canada's inflation rate skyrocketed when their economy became shit. Just a few years ago, Canadian prices and American prices were virtually the same in nominal terms because Canada had a strong economy, and that creates a strong Canadian dollar. A video card that cost $300 US would also cost $300 CAD, so Canadians had lots of purchasing power. They could buy lots of stuff and create demand for products, which is a good thing. Oil and other commodities crashed, Canada's economy crashed, and now everything in Canada is 40% more expensive. This forces Canadians to drastically reduce spending. If you were to ask eskimospy's opinion on this, he would probably say the rampant inflation means Canada's economy is even stronger than ours.

It's just simple accounting. A debt instrument is only as good as the underlying assets. When oil prices are high, a bond issued by some shale oil company might be worth something because the assets are worth something. When oil crashes and those assets become worthless, the bonds become worthless as well. A country is exactly the same. The central bank issues money, which is a debt instrument, and it is backed by the productive assets of that country. A decline in the value of a country's money is the natural result of that country's economy shrinking.

 

[fskimospy]

Remember to differentiate between good inflation and bad inflation.

Anyway, you will never convince eski of this. His model says inflation is good, and he conveniently ignores all of the cases where inflation did not correspond to a better economy. In most cases, a collapsing currency is caused by a shit economy.

-1970's America had high inflation and a shit economy.
-Venezuela currently has astronomical inflation and a shit economy.
-UK had very high inflation during WW1, and it lead to widespread civil unrest and labor strikes. Keynes extensively wrote about it, and this is why Keynes was strongly against inflation. He lived through it, and he saw the damage it did.
-Argentina currently has very high inflation and a shit economy.
-Russia currently has very high inflation and a shit economy. This also happened in the late 1990's. Shit economy leads to inflation.

Canada's inflation rate skyrocketed when their economy became shit. Just a few years ago, Canadian prices and American prices were virtually the same in nominal terms because Canada had a strong economy, and that creates a strong Canadian dollar. A video card that cost $300 US would also cost $300 CAD, so Canadians had lots of purchasing power. They could buy lots of stuff and create demand for products, which is a good thing. Oil and other commodities crashed, Canada's economy crashed, and now everything in Canada is 40% more expensive. This forces Canadians to drastically reduce spending. If you were to ask eskimospy's opinion on this, he would probably say the rampant inflation means Canada's economy is even stronger than ours.

It's just simple accounting. A debt instrument is only as good as the underlying assets. When oil prices are high, a bond issued by some shale oil company might be worth something because the assets are worth something. When oil crashes and those assets become worthless, the bonds become worthless as well. A country is exactly the same. The central bank issues money, which is a debt instrument, and it is backed by the productive assets of that country. A decline in the value of a country's money is the natural result of that country's economy shrinking.

This is a freshman in college logic error.

You are basically saying that countries with bad economies often have high inflation, therefore inflation must be bad. Not only did I never argue that high inflation was good, but it's a fundamental failure of logic anyway. High debt and inflation is usually a RESULT of economic trouble, not a cause.

Low, sustained inflation is a good thing. Pretty much all mainstream economists agree on this. I know Austrian economists may disagree, but considering how our previous discussion showed their framework has turned out to be a complete failure I'm not sure why you're still clinging to that nonsense.

Why do you hold such strong opinions about things you are so incompetent at?

 

[Mai72]

We also have over $1T in loans for an incredibly depreciable asset: cars

I'm not saying student loans aren't an issue but the focus is skewed especially when you consider that you are still likely to earn $1,000,000 more over your lifetime if you get a college degree. A return of $1M on $10-30k is pretty good. Far better investment than the $1+T in loans people have for their cars

http://www.wsj.com/articles/total-u-s-auto-lending-surpasses-1-trillion-for-first-time-1439478198

I have a friend who made millions by the time he was in his early 30s. Name me one college degree that will net you a million by the time you're 35. You can't.

A million dollars isn't that big of a deal anymore. Maybe it was 20 years ago, but not now. And, you're talking about a lifetime. By the time you can spend any of it you're an old man. You have more money than time. The clocks ticking.

Just my opinion. My mom passed away at 65, so I'm just more aware than many people that our lives are very short.

 

[Spungo]

Low, sustained inflation is a good thing. Pretty much all mainstream economists agree on this.

The mainstream economists who have been wrong about everything over the past 100+ years? They didn't see the dot com bubble even though it was one of the most ridiculous bubbles in history - Yahoo was worth more than all of New Zealand. They also didn't see the real estate bubble. Bernanke famously went on TV to talk about how he expected housing prices to rise slower than expected but not drop in price because housing prices never go down. It turned out he was wrong, and house prices cut in half. He also said the problem was "contained" right before we experienced the worst financial crisis in 80 years. Most objective measures showed the US being in recession since 2007, and the fed was completely blind to it. These are the same morons who created the roaring 20's stock bubble. Even back then, the fed thought it was perfectly normal for Radio Corporation of America (RCA) stock to go from $15 to $110 over the span of 3 years. These are people with doctorate degrees in economics, and they are consistently wrong.

I know Austrian economists may disagree, but considering how our previous discussion showed their framework has turned out to be a complete failure I'm not sure why you're still clinging to that nonsense.

Why do you hold such strong opinions about things you are so incompetent at?

I have strong opinions because I know what I'm doing. I study accounting in my free time, and I invest about 1/3 of my gross income. I take a very conservative approach to investing, and my investment returns speak for themselves.

Economists fundamentally do not understand economics because they do not approach it from the perspective of an accountant or an investor. Economists believe that lowering the interest rates causes people to take on debt and buy things they can't normally afford. That might be true for some people, but the vast majority of people who have money and good credit do not think that way. Lowering the interest rate will cause me to take on more debt. That much is true. I am as leveraged as I can be in terms of having a mortgage with the longest term I can get, I do not make extra payments, and I expect to borrow against my home in perpetuity until I am dead or until economic conditions change (rising interest rates). So far, everything I'm doing is following the central bank's plan. Where it falls apart is what I do with that money. I'm not borrowing to buy useless crap and stimulate the economy. I'm not even borrowing to start my own business. I'm borrowing to buy shares of businesses that already exist. This is where the inflation goes. The fed is puzzled why all of this credit growth isn't hitting main street because they don't understand how investors think; they are not investors. If I can borrow at 2-3% and then buy stocks that pay 5-6% dividends, that's exactly what I will do. That's what other people are doing as well. Millions of people doing this at the same time drives up stock prices, so we see stocks doubling or tripling since 2009. Ironically, this can cause decreasing demand for consumer goods if people start to think they should get in on the action in the stock market instead of spending that money on movie tickets or buying a car.

The fed makes this same error of psychology when it comes to business loans. They think lower interest rates will make IBM borrow a bunch of money and do something productive with it. What did they actually do with it? Borrow a ton of money then pay that money to shareholders in the form of dividends and stock buybacks. Financial strip mining is what it is. I don't think anyone at the fed expected that, but that's because they're not business people. They don't understand how a CEO or a CFO thinks.

 

[fskimospy]

That is amazing.

"Economists don't understand economics but I do because I took some accounting classes and invest some of my income."

There is nothing I could possibly say that would be a bigger indictment of your position than that. If this isn't a parody post, holy shit. Inflation doesn't exist even with large injections of money due to an infinite cash preference at the zero lower bound. Ironically for someone who seems to hate Paul Krugman so much, that is exactly what he predicted and exactly how he crushed all the Austrians who thought they knew what they were doing because they were investors.

 

[werepossum]

How do you keep track of all of your idiotic straw men?
First, no one is talking about free college to anyone who can fog a mirror. There will still be admission and academic standards in order to ensure societal gain.
And if you want to talk about lowering the bar, then there is no better example of such than government protection of uncompetitive jobs. Government guarantees of employment for unskilled losers to get paid in excess of their job's value added in exchange for their votes is a disgusting and societally costly form of socialism. It's basically welfare with a job. But it's exactly what you're supporting while pretending to call it capitalism.
Like your savior, you're just a lying piece of shit.

You are literally arguing that giving people money in exchange for nothing so that they can attend university debt-free is not welfare but protecting an employee's ability to work a good job for a private third party is welfare. You haven't jumped the shark, you've cruised over him at 80,000 feet. Congrats.

 

[poofyhairguy]

Most 1st world countries have realized this and allow only the best/brightest into college while preserving low-skilled labor for tradesmen who don't go to school.

The difference is that many developed nations (especially Germany) have found a way to maintain a level of dignity for the low skilled laborer that you don't have in America anymore. Their system of apprenticeships keep people from taking out stupid college loans because they see a path to life success without college.

The reason so many kids go to college is because the benefits of college have been sold TOO hard to them for too long. Kids are basically told they will only get a job someone will respect (or will provide them economic security) via college, and that is reinforced by the destruction of union factory jobs that made going to college less a necessity and more a luxury.

So they do as told and show up to classes on someone else's dime clueless about what the real benefit of college will be for them. Instead they are there because they are told they have to be. And they do have to be there at this point, because a glut of people with "worthless" college degrees means that jobs that normally wouldn't need a college degree now do require one (because that is an easy way to cut down the resume pool). Oh except the job doesn't pay more now than it did in the 1970s (after inflation) when it didn't need a college degree, so good luck paying off those loans on a working class budget. This becomes a cycle that sucks up generation after generation of Americans, and it's going to lead to massive levels of defaults, overall slower economic growth long term, and real political/society problems.

It feels great to sit there and beat the drum that "people are stupid, people are lazy, they should have studied STEM, they should have avoided the Liberal Arts degree" but that ignores the fact that not everyone can (either logically or talentwise) be programmers, scientists, engineers, doctors and all the other STEM jobs we put on a pedestal because they are tied to higher levels of pay. At some point the leaders of this country- and not just ones with crazy ideas like Bernie- need to face the reality of the situation or face the consequences of massive loan defaults or outright riots in the streets from people economically marginalized because they weren't talented enough to "afford" college retrospectively via a high paying job when they graduated.

Trump/Bernie is just the start of it. Either we find a way to give (yes I said give, thanks to the global economy that is the best we can do) the uneducated masses a decent standard of living for just being productive parts of society, or they will find a way either politically or through violence to screw it up for the people who DID make the right choices and have the talent to kick ass at a highly valued career. That is why in retrospect I am glad we bailed out the car companies, I would rather subsidize half of a working class wage via my taxes and have that person feel the dignity of a full day of productive work than let the job go to Mexico to someone that will (can because of cost of living) take half the pay the American would and have the American be 100% on the dole doing drugs because they can't find any self respect.

In fact I wish we would go full blown China mode and have blatant (aka not too big to fail backdoor) state companies that do nothing but provide jobs for those who can't compete in a global economy but can contribute SOMETHING if they are given a chance. At some point we will hit a critical point where the masses- strung to their ears in debt- won't have much to lose if don't act. At that point they will look towards an outlet of violence (hello Trump rallies) that will tear more value of the 1% (via property destruction, stock drops, etc.) then any sort of higher tax rate ever could. The 1% would be better served just giving those Americans a chance at a decent subsidized job before we get to that point, unless they all are delusional enough to think they can all fit their mansions on the Caymans.

 

[JSt0rm]

kinda like global warming.

 

[werepossum]

The difference is that many developed nations (especially Germany) have found a way to maintain a level of dignity for the low skilled laborer that you don't have in America anymore. Their system of apprenticeships keep people from taking out stupid college loans because they see a path to life success without college.

The reason so many kids go to college is because the benefits of college have been sold TOO hard to them for too long. Kids are basically told they will only get a job someone will respect (or will provide them economic security) via college, and that is reinforced by the destruction of union factory jobs that made going to college less a necessity and more a luxury.

So they do as told and show up to classes on someone else's dime clueless about what the real benefit of college will be for them. Instead they are there because they are told they have to be. And they do have to be there at this point, because a glut of people with "worthless" college degrees means that jobs that normally wouldn't need a college degree now do require one (because that is an easy way to cut down the resume pool). Oh except the job doesn't pay more now than it did in the 1970s (after inflation) when it didn't need a college degree, so good luck paying off those loans on a working class budget. This becomes a cycle that sucks up generation after generation of Americans, and it's going to lead to massive levels of defaults, overall slower economic growth long term, and real political/society problems.

It feels great to sit there and beat the drum that "people are stupid, people are lazy, they should have studied STEM, they should have avoided the Liberal Arts degree" but that ignores the fact that not everyone can (either logically or talentwise) be programmers, scientists, engineers, doctors and all the other STEM jobs we put on a pedestal because they are tied to higher levels of pay. At some point the leaders of this country- and not just ones with crazy ideas like Bernie- need to face the reality of the situation or face the consequences of massive loan defaults or outright riots in the streets from people economically marginalized because they weren't talented enough to "afford" college retrospectively via a high paying job when they graduated.

Trump/Bernie is just the start of it. Either we find a way to give (yes I said give, thanks to the global economy that is the best we can do) the uneducated masses a decent standard of living for just being productive parts of society, or they will find a way either politically or through violence to screw it up for the people who DID make the right choices and have the talent to kick ass at a highly valued career. That is why in retrospect I am glad we bailed out the car companies, I would rather subsidize half of a working class wage via my taxes and have that person feel the dignity of a full day of productive work than let the job go to Mexico to someone that will (can because of cost of living) take half the pay the American would and have the American be 100% on the dole doing drugs because they can't find any self respect.

In fact I wish we would go full blown China mode and have blatant (aka not too big to fail backdoor) state companies that do nothing but provide jobs for those who can't compete in a global economy but can contribute SOMETHING if they are given a chance. At some point we will hit a critical point where the masses- strung to their ears in debt- won't have much to lose if don't act. At that point they will look towards an outlet of violence (hello Trump rallies) that will tear more value of the 1% (via property destruction, stock drops, etc.) then any sort of higher tax rate ever could. The 1% would be better served just giving those Americans a chance at a decent subsidized job before we get to that point, unless they all are delusional enough to think they can all fit their mansions on the Caymans.

Boy, when you leave the libertarians, you REALLY leave the libertarians.

 

[chucky2]

snip

It feels great to sit there and beat the drum that "people are stupid, people are lazy, they should have studied STEM, they should have avoided the Liberal Arts degree" but that ignores the fact that not everyone can (either logically or talentwise) be programmers, scientists, engineers, doctors and all the other STEM jobs we put on a pedestal because they are tied to higher levels of pay. At some point the leaders of this country- and not just ones with crazy ideas like Bernie- need to face the reality of the situation or face the consequences of massive loan defaults or outright riots in the streets from people economically marginalized because they weren't talented enough to "afford" college retrospectively via a high paying job when they graduated.

snip

And this is why we don't need to be letting in every person that can possibly make it to the US. Except the Politicians making sure they have that funding and votes, and the SJW crowd, are doing their utmost to ensure that's exactly what we keep getting.

People need to think back to HS and forget about their peers who were in honors and/or elevated track and who now have some well paying job, and think of the folks who were in remedial just coasting through with the full support of those TeachersWhoCareAboutTheStudentsSoLetUsRunEduAndJustBeAccountableToOurselves. WTF are those kids, once graduated and now adults, going to do with 10's of Millions of needlessly here competition? Well, they're certainly not going to command higher wages and/or job perks given the flood of cheap labor. These kids soon to be adults will never, regardless of the training the Gov wants to attempt to provide, be good employees at any tech or non-blue collar job. They're destined for a blue-collar life, if they're lucky enough to be good enough for a blue-collar job they can still get.

Shit when I worked at Ford for a summer there were US Citizens who were born here, spoke some form of South Side English, who are adamant in training that they needed that high paying Mon/Fri job to feed their babies, clothe their kids, pay they rent, etc. etc. Real Day 1 on the job, 85F outside, 100something inside, WhereTF are all these people who were just acting like they were blessed to have this job going? Oh...they're going home...quitting.

I mean, WTF is the SJW Intellectual solution for these people? Gives them more free shit?

 

[poofyhairguy]

Boy, when you leave the libertarians, you REALLY leave the libertarians.

Well I eventually learned they don't have all the answers. Hell not once have I seen a real answer from the Libertarian brain trust about what to do with the huge chunk of the country that isn't competitive globally. All I hear is "retraining" and "tax cuts for job creation," seemingly oblivious to the fact that the job created is just as likely to be in Mexico than America (more likely actually).

I don't think Bernie type forced solution is the answer either. My hope is that those with means wake up to the fact that either they voluntarily guarantee a decent quality of life (for decent people, that part matters) for those in this country who can't compete, or soon their children will live in a nation that looks a lot like a third world country. I think some do care- hence all the spending on politics and charities. Some don't care unfortunately, which means eventually this country will elect someone like Bernie that will either force them to either be part of the "solution" or give up being an American. France shows a lot will pick greed over their country, but I naively hope the American 1% are a little more patriotic than the French 1% are.