Open thread June 1, 2012 Dan Crawford | June 1, 2012 6:21 am Tags: open thread Comments (22) | Digg Facebook Twitter |
Via INstapundit, I thought this graph on student loans owned by teh government (i.e. owed to the government) to be interesting. Just to the point of how much debt people have taken on gettinga higher education. More than quadrupled since Dec ’08. Link for the article: http://mercatus.org/publication/student-loans-held-federal-government
Is this the ‘Hope and Change” you were looking for?
Islam will change
this is getting dreary.
i am pretty sure i don’t like Obama more than you don’t like Obama. but your ability to forget that it was Bush who drove the car into the ditch leaves me in absolute despair for the future of American politics.
btw “it was Bush” is mostly a kind of metaphor. it happened on “bush’s watch” and as a result of policies that he cheerfully endorsed.
Buff–That’s about 30 years worth of accumulated debt beginning with the Reagan administration. You know, you contract out govt functions so your friends can make money lending money. No cause for complaint there–it’s how the financial industry works. The banks are guaranteed to make money so where’s the beef? NancyO
Nancy, buff is pointing out a legitimate issue, one i’ve been harping on myself; student debt is growing at a compound annualized growth rate of 56%; it accounts for almost the entirety of the consumer credit expansion the past half year…
you can see the makeup of the non-revolving credit is by scrolling to the last table in the latest Fed report, headed “major types of credit, by holder”; you can easily see that borrowing from commercial banks and finance companies was up by less than 1%, and borrowing from credit unions was down; so again, the only non-revolving consumer credit outstanding that was up substantially was that from the federal government…
hard to tell which is the legitimate issue.. student debt or federal government debt?
the tragic fact is that our leaders have decided that a college education FOR YOU is no longer as important TO THEM as Ike thought it was. And kids are still going to college because they still think it might be important…. as in “get a better job. Chances are that it won’t.
Which is too bad, because a real education should have been a pleasure and a … well, education. But even by my time that was never the point.
As for the federal government debt… even i am not sure it’s a real problem. certainly our boys in washington don’t think it is, whatever they say. lets cut taxes some more. and add on another war just in case we haven’t made enough enemies in the world.
oh, and lets cut Social Security which doesn’t have a damn thing to do with the debt.
Well Nancy it may not seem obvious but the complaint is that these numbers are far too low. We have yet to begin widespread use of school vouchers for K-12, which delays plans to rely entirely on these vouchers, which would allow us to turn vouchers into loans through banks. Privatizing K-12 will eliminate bad public school systems and their evil unions while reducing governments’ deficits and taxes in favor of helping help job-creators. If you were a well-paid economist in the right institutional setting, you might understand that individuals ought to pay for the economic benefits of education, and the economic benefits of learning the alphabet are proportionately at least as great as those of earning a high school diploma. 🙂
The rise in the costs of college dwarfs increases in health care costs while median family incomes have stagnated. As for the poor, Pell Grants have decreased relative to costs (also, Social Security survivors benefits stop at age 18 since the Greenspan commission–the logic was the Pell Grants would make up the difference hahaha.) Meanwhile, college has become increasingly important to prevent downward mobility. Student loans have become a necessity, by political choice.
Jefferson thought public education was key to democracy as well as important for many people to their “pursuit of happiness” (which he insisted was an unalienable right, unlike property). He supported free public education. As far as I know, this policy had nothing to do with the economic value of education. Ah, the good old days.
This didn’t happen on Bush’s watch. Look at the graph.
As for the largeer issue I beleive you were addressing – you’ll notice it all started to go south when the Dems took over Congress…also backed up by the AB graph-miesters…
Islam will change
No your wrong. The increase in this paticular type of debt, ALL on Obama’s watch, is what happened in the last 3 years. You can mislead and complain all you want but this bad news is all owned by the Dems.
Along with a U3 of 8.2% and rising. How’s the U6 number these days?
Islam will change
If I understand the graph in the Mercatus article correctly, the increase in federal student loans is consistent with the intent of legislation passed in 2007 before this administration began. Now, I assume that these loans kept people in school or otherwise enabled them to pursue a degree of some time. If students had to borrow to go to school, then the federal govt is an acceptable lender esp. under the favorable rates presently in effect. So, the amount of the loans did increase, but how is that a bad thing if students made proper use of them and that’s what a degree costs.
The increase in tuitions across the board but esp. in state schools is another matter. PJR sums up the situation accurately. I would say that what you see is the intended result overall. That is, the upward mobility of middle/lower income students is rapidly disappearing. If the states are unable or unwilling to pay for public K-12 education, they certainly aren’t going to worry about raising tuition for four year degrees, and students have to borrow to pay for school. That’s what happens when state taxes are low or nonexistent as in Texas and Florida. One way or another, education is being privatized by the simple expedient of pricing many students out of the market.
I don’t think this is a good thing. But, you can’t have it both ways. Either you have taxes at a rate high enough to provide good public education and other services, or students have to borrow. From the standpoint of the financial industry, it doesn’t matter what you borrow for as long as you borrow. It’s better to owe the government than a private lender as the foreclosure market now shows. There’s no way out of this loop without increases in employment and wages. NancyO
Buff this database covers less than half the student debt that’s out there. Total student debt was around $200 billion in 2000, more than tripled by 2008, and is over $1 trillion now. Student debt has been a growing problem for a while now. Obama hasn’t fixed this–the recent growth in debt is, however, debt owed to the government instead of the private sector, isn’t that correct?
yes, but will Buff.
Buff, I guess my point is that the debt, as well as the student debts follow from the policies that were embraced by Bush. i understand that the bill came due AFTER the car was in the ditch. But i still know who was driving when it went in.
But yes, the Dems are complicit. A point that I beiieve I have made, or agreed to, before.
Nevertheless, I will recede. IF it amuses you to blame it all on the Dems, who am I to spoil your fun.
i agree with most of that… that is i agree with your sarcasm. on the other hand i am fairly convinced that a BA is no longer the ticket to success. for that matter neither is a PhD.
On the other hand, staying home and staying stupid isn’t either.
true enough. and i may be agreeing with you agreeing with me. but even by the time i went to college in ’61, it had become a cattle drive. everyone was there to get a ticket to a high paying job and the faculty treated us like dogs (dogies?). there was absolutely no spirit of we are in this for the pleasure of education. It was all conducted on the basis of “one false move and you’re outta here, with really bad things on your permanent record.”
Buff the program originated as the ‘NDSL’ standing for ‘National DIRECT Student Loan’ program. Emphasis mine. At some point some wanker thought it made more sense to pay private banks huge premiums over the rates I paid on my NDSL’s to service the loans even though they were exposed to no risk at all. i.e. the Privatization Fetish. Once those full guaranteed by US government loans were moved off the official books of the banks OF COURSE they show up on the balance sheet on the ENTITY THAT DOES AND DID ACTUALLY CARRY THE RISK.
Mercatus is a joke. It is a fully Kock/Kook/Koch funded think tank at George Mason U which itself is little more than a conduit for Glibertarian idiocies. Only hacks and shills cite Mercatus for anything whatsover, in comparison Faux News actually IS Fair and Balanced.
A college degree appears not to be a ticket to success but increasingly a means to avoid failure. The data continue to show a relationship between education level and pay level. However, as education levels have increased overall, median pay levels have stagnated overall. Does this not imply that a job at median pay (which hasn’t much changed) requires more education today? And you now need student loans to achieve this pay level–such a deal. Under these conditions, I’d expect people to increasingly see college as something they must do to avoid failure, rather than something they may optionally do to stimulate their brains and improve upon what would otherwise be a decent middle-class life.
Bruce is right. 0 changed the way the program works. He eliminated the banks lending to students with a Federal guarantee; now the Govt does it directly.
Well coberly, that wasn’t my experience.
thanks. i needed that.
the job “requires” a degree. but it doesn’t require more education. that’s why they don’t bother with the education part when you go to school.
it is possible you went to better schools than i did. but i went to a number of them. they all made it as much like boot camp as they could.
Bruce the NDSL “originally” was the National Defense Student Loan program, which began under the National Defense Education Act of 1958 as a direct loan program (as recommended by Milton Friedman back then, I understand). The name changes whenever somebody fiddles with it. The politicians, economists, and accountants started monkeying-around with the program in 1965, thinking a guaranteed loan progam would be better, and the argument gradually became politicized. A study for Bush I in the early-1990s concluded that a direct loan program is cheaper to administer than a guaranteed loan program, but political interests lined-up (Clinton v Newt) on the issue and the pols have been fighting ever since. Obama and the Dems finally made them direct loans again–for now.