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Student Debt Cancellation: A Good Idea and a Political Hoax
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Debt Cancellation will come whether we like it or not. So it’s in everyone’s interest to develop a sensible plan that liberates the (mostly) innocent and assigns responsibility where appropriate.

There are certain moments in history where each person—and eventually the larger community—must decide which path to follow, ultimately leading us in vastly different directions. With the U.S. student debt fiasco now approaching $1.6 trillion and 45 million borrowers, we seem to be rapidly advancing towards such a moment.

At present, one of the biggest problems regarding the student loan debacle is the dismal nature of the polarized “debate.” Not just on debt relief, but on the many dysfunctions of the college system and its financing mechanisms as well.

On one side, we have free-lunch Democrats that want to “give” everything away in order to buy votes and seize control of higher education; their Debt Forgiveness schemes merely dump liabilities onto taxpayers and give banks and colleges a free pass. Republicans and conservatives, meanwhile, prefer to lecture students on the morality of paying your bills, while forgetting that students didn’t create the corrupt system of mandatory college or its skyrocketing costs. That came from “responsible” adults. And both sides insist that federal involvement in all levels of learning is essential.

Since Debt Cancellation is one of those explosive topics that can lead to partisan bickering and empty sloganeering, I should start by saying that I disagree with nearly everything that BOTH official sides are saying. After much searching, I was able to find a few sensible voices in the wilderness as detailed and expanded upon later. But at this point, anything rational or productive on this issue remains strictly forbidden in the mainstream press, which strongly favors centralized banking and collective education, preferably sold in easily digestible sound-bites.

Taking a broader approach to this looming decision, the major themes of this essay are:

  • Weak Arguments against Debt Cancellation from the ‘Right’
  • Weak Arguments for Debt Cancellation and ‘Free’ College from the ‘Left’
  • Winners and Losers of Honest Debt Forgiveness

I’ll try to fill in some related gaps along the way, mainly to address entrenched ideologies on overall education and financing.

My conclusions are: 1) people can learn quite well without federal involvement and the suffocating strings attached, 2) after over a century of massive (over 2,000%) inflationary stresses, Americans could benefit from an overdue Inflation Dividend, and 3) student Debt Cancellation will come whether we like it or not, so it’s in everyone’s interest to develop a sensible debt re-structuring plan that liberates the (mostly) innocent and assigns responsibility where appropriate. As for culpability, I’m talking about banks and colleges, not taxpayers.

For demographics, I don’t mind saying that I turned 50 this year and never had any debt from college when I graduated in 1991, back when state school in New York was pretty cheap. I work in the private sector and find time to research and write on the side, among other things.

Washington Orthodoxy: Education Must Be Centrally Controlled

With “education” becoming increasingly politicized over the last century, it’s hard to find valuable information through the haze of overt and subtle misinformation. As usual, if you follow the money it leads back to a common theme. Total government spending for combined federal, state and local levels (K through college) came to a staggering $1.1 trillion for FY2019. That enormous pot of “free” gold comes with heavy strings attached and influences nearly all modern decisions on the topic of learning.

First of all, both parties in Washington and at the State capitols almost unanimously view individual learning as a group decision. Proceeding from that bias, public schools in America have become burdened with licensing restrictions, teacher credentials and accreditation requirements to justify accessing their “fair” share of public funds.

Those self-focused legalities have led to an inward emphasis among academics over time. For generations, there has been widespread agreement amongst ruling elites of all political persuasions: kids learn better in awe-inspiring fortresses of grand architectural triumph.

All of these accessories add enormous costs to taxpayers and stifle any meaningful academic freedom. None of those gimmicks have been shown to add value to actual education, since literacy rates were generally higher (and delinquency rates were far lower) 200 years ago when almost no one in the U.S. went to college. Modern education at the college level has become so corrupted with authoritarian ideology that two separate organizations (The College Fix and Campus Reform) are kept busy documenting the daily abuses.

The university system in particular—since its State-fueled rise in the 12th century—has always been about politically and theologically correct lectures, assigning safe books (from the ruling class point of view) and testing on recited orthodoxy. Remarkably little has changed to that ultra-conservative structure, which made more sense before the invention of the Printing Press (c. 1450), when hand-written manuscripts were rare and knowledge was centralized among political and religious elites.

The main difference today is the widespread acceptance of university-style “indoctrination” methods (a term our ancestors openly accepted) across such a wide segment of society. College no longer exists as an exclusive retreat for the idle rich, aspiring politicians and the clergy. A solid core of the middle-class now views obtaining a college “degree”—at any cost—as an important milestone in life.

As a result of its new-found popularity, the university model’s inherent shortcomings have become magnified. Longstanding concepts of dialogue and creative problem solving have been pushed aside for mass-market approaches that rely heavily on the weakest forms of teaching (one-way books and lectures). These formats invite all sorts of political correctness and appeasement of special interest groups, as evidenced by the increasingly weaponized schooling for Capitol-style awareness.

A better alternative has always been available, if people were willing to work for it. This once commonly did (and may soon again) involve community schooling for basic math and English, self-study or private clubs (aided by independent scholars where appropriate) for the liberal arts and sciences, then more mentoring and apprenticeships for professional skills (as doctors still do). These efficient, social and personalized teaching methods were crowed out over the last century from the mad rush for outside funding and superficial credentials. Mentoring and apprenticeships seem poised to make a comeback now, due to the high cost and low quality of college and the online availability of educational courses on virtually every topic.

Community schooling for K-12 is now making a resurgence as well at the grass roots level, although it’s rarely recognized as such. This positive development comes from the millions of families involved in more personalized education—often referred to as “home schooling”—which increasingly occurs in group settings with paid teachers or via co-operative bartering. Locally funded Community Colleges now attract far more students than even a generation ago. These schools are not just less expensive than their four-year counterparts; Community Colleges usually skip the exhausting “Publish or Perish” mania for boosting academic pedigree and pass on federal research Grants that do nothing to improve student achievement.

The last frontier is the privileged and isolated confines of the state and federally funded four-year college and university system, which has been resisting change for pretty much all of its existence. With the help of technology, institutional barriers may finally yield to progress. Students can now access thousands of more independent scholars at online providers such as Khan Academy, Udemy, EdX, and Coursera to help fill the need for advanced training or merely satisfy the pleasure of learning.

For the first time in decades, teacher competency matters more than artificial titles—precisely because students finally have real input in the selection process and teachers face fewer obstacles in reaching interested students. At least it does for untethered experts found on the internet, which includes some of the better Old Guard college professors, and at multitudes of privately administered classes.

These are all good developments that get little or no credit in Legacy Media. My point in mentioning the condensed history above is to dispel the myth that people can’t be educated without “help” from the federal government. That’s a lie that has gone unchallenged for far too long.

For the rest of this piece, I’ll give it my best shot at combatting the bi-partisan misinformation on student Debt Cancellation and providing reasonable arguments for true Debt Forgiveness.

Weak Arguments against Debt Cancellation from the ‘Right’

Under normal circumstances, the advice to “pay your bills” and not go into debt in the first place makes great sense. So does the advice to work… most of the time.

What so many conservatives forget is that no sane person works 7 days a week. Human beings need rest every so often (and afternoon naps are highly beneficial according to my personal research). When a corrupt financial system has been foisted on Americans of all ages and economic levels for generations, people need a break and society needs a chance to reset and stabilize.

Right-wing partisans don’t see it that way, when it comes to young people saddled with liabilities from ridiculously high college costs. All they see are lazy kids trying to slack off again, which is of course sometimes true. Professional conservatives also relish the chance to pummel career Democrats for being soft on the “crime” of not paying your debts. British debtors’ prisons followed this logic throughout most of the 18th and 19th centuries, imprisoning thousands of people for the offense of not repaying an ill-considered loan from a wealthy lender.

Over the last year or so, I’ve collected some examples from the leading thinkers on the libertarian right on the topic of Debt Forgiveness. Mind you, the screaming rants of AM talk radio and FoxNews are infinitely worse. And neo-con puppets were ignored due to their track record of irrelevance. These “thought leaders” offer the best conservative arguments I can find.

Economist and author Doug Casey abandons his usual calm analysis and offers petty insults on the “whacky” and “evil” Democratic Party “freak show” pushing for pseudo Debt Forgiveness. Mr. Casey says “Forgiving student loans would be disastrous. First of all because it would encourage more kids to go to college.” He gives no support for these illogical statements, which I address in more detail below. His angry taunts of people with student loans is classic conservative compassion: kids in debt “want somebody else to pay the consequences. I say, Tough! It’s now time to pay the piper.” Like many, Mr. Casey confuses Debt Forgiveness (resulting in far fewer loans available for future students, meaning kids will finally have to PAY for themselves) with “free college.” Those are two completely different entities, although politicians often lump them together.

An even weaker analysis of Debt Forgiveness comes from another normally good economics expert (quoted favorably much later), Martin Armstrong of Armstrong Economics. Writing about debt options in general, he states:

We either default, which will result in civil war and revolution, or you inflate your way out like Venezuela so your Social Security check will not even buy a cup of coffee. A default will result in war.

As institutional investors, both gentlemen above may have some exposure to Debt Cancellation that they neglected to mention (or at minimum, should have clarified). Ditto for this hysterical analysis from a flack working for billionaire media mogul and financier Michael Bloomberg. And for full disclosure, I’ve done some volunteer work on setting up a non-degreed professional mentoring system. If all goes well, that endeavor may actually earn money someday. If not, no big deal; I’ve got a job outside of the educational field.

Popular conservative writer Matt Walsh (like many others) settles on the classic liberal argument: it’s not fair for indebted students to get a break since so many others did not. Mr. Walsh augments his position with the claim that “it costs almost five billion dollars to operate Harvard for one year” based on a questionable analysis (his link) from Harvard. Who knew all those dusty books and opinionated philosophers cost so much?

Rounding out the attacks from the right, a libertarian critic of Debt Forgiveness and former college finance professor, Michael Rozeff, at least gets it correct on who would pay the bills under the leading Democrat proposals:

Some of our home-grown socialists/communists (like Sanders and Warren) want taxpayers to assume the debts of students. … All their proposals are outrageous. All are undiluted communism. All are unfair in the extreme. All make a mockery of contracts.

The sacred “contract” than many pro-business conservatives and libertarians talk about is not always what they make it out to be. Any written contract becomes a dead piece of paper (kind of like our Constitution) when powerful special interests poison the system for so long that words (like “education”) no longer have meaning, our fiat currency (see Roosevelt and Nixon) is nearly worthless, and true cost discovery becomes almost impossible.

We also need to factor in the mandatory licensing and degree requirements of many professions and the corporate Human Resources policies requiring college just to get an interview. Then it becomes apparent that quite a bit of coercion comes into play for a high school grad “deciding” what to do next. The act of coercion generally negates the legitimacy of any contract. When students are essentially FORCED to obtain a “degree” to get a professional job and college costs have skyrocketed due to corrupting subsidies and entitlements for decades… the students are actually the LAST ones we should blame.

Yes, many college undergraduates have been brainwashed by radical (and subsidized) professors to believe that everything should be “free.” The free-stuff ideology promoted by some tenured fanatics promotes their belief that all aspects of life should be centrally managed by remote officials and financed by voiceless serfs. But again, students didn’t create that warped mindset. College administrators, bank executives, financial counselors—like the 28,000 loan advisors at the National Association of Student Financial Aid Administrators (NASFAA)—and two D.C. parties full of pliant politicians did.

In the end, who’s the bigger fool? The inexperienced student who took on a loan they now can’t pay off, or the adult lender who offered unsecured credit to a young “slacker” in the first place? For now, most conservatives seem to side with wealthy bankers and college administrators.

Weak Arguments for Debt Cancellation and ‘Free’ College from the ‘Left’

On the other side, we have liberals and progressives who ostensibly favor some type of student Debt Cancellation. The biggest problem here is that all of their leading proposals are just bait-and-switch cover for another bailout of Wall Street banks, while funneling more taxpayer money to feckless college administrators. The associated rush to keep student “aid” flowing also obscures the overt politicization of schools already underway, which would only get worse under a system of full government control—sold as “free” education.

The fraudulence of these Debt Forgiveness schemes should be laid bare by the internal contradictions and “free lunch” mentality surrounding the plans. Before touching on the broader picture of bi-partisan support for academic control, I’ll look at the main two Debt Forgiveness proposals of the 2020 Democrat presidential frontrunners, U.S. Senators Elizabeth Warren and Bernie Sanders (with links provided to their respective plans).

According to numerous favorable press accounts (like this one which was featured in Microsoft News) “Warren estimates her plan would cost $1.25 trillion over 10 years, and Sanders says his plan would cost $2.2 trillion.” “In addition, they demanded the government make public college free.”

Bank Bailouts Posing as Debt Forgiveness

For starters, it should be apparent to any thinking reader (or competent journalist) that true Debt Forgiveness should cost almost nothing. Maybe a few million for administrative costs and the obligatory public ceremonies. But nowhere near the staggering sums of cash—and new taxes—that Warren and Sanders are seeking.

These plans amount to nothing more than another taxpayer bailout of big banks, that Democrat supporters of student debt relief plans usually fail to acknowledge. Worse yet, the bailouts would come on the backs of people who responsibly payed off their own college loans or maybe never attended college at all.

Unfortunately, it’s this type of duplicity from the left that has so many conservatives and independents disgusted with the overall concept of student Debt Cancellation. Throwing in “free” college for everyone just sinks the plans entirely in many people’s minds.

Government Advertising for More Government Schooling

The structural flaws beneath the demands for political bailouts also warrant consideration. The college and university system in America has grown to become one of our biggest industries, bringing in nearly $650 billion in revenue for the latest school year available (Fall 2016 to Spring 2017). For comparison, the total U.S. automotive industry revenue stood at $752 billion for 2018.

As detailed below, over 80% of college and university revenue now comes from outside loans, grants and direct government spending. That makes the college books-buildings-and-lectures circuit probably the most subsidized industry in America, next to the federal military.

With so much money and prestige on the line, the college and university industry spends billions to attract students into their system each year and to entice politicians to keep funding it. The U.S. Department of Education (U.S. DoE) uses tax dollars to elicit more taxpayer support for what they frequently spin as “aid” or “assistance.” The College Board (2017 report on the right) is a tax-favored organization that has been steering kids towards the university system since 1900. The College Board uses similar jargon to market the “benefits” of debt-fueled classroom instruction to prospective customers.

The U.S. DoE office that produced the 2016 Federal Student Aid report on the left has an administrative budget of $1.6 billion with almost 1,400 employees. The agency boasts of delivering “nearly $125.7 billion in [federal] aid to more than 13 million students attending over 6,000 postsecondary educational institutions” for that year.

Other common advertising tactics among the thousands of money-making colleges include images of sprawling campuses with grand buildings, action photos of semi-professional (but unpaid) sports figures, and smiling youths adorned in flowing graduation robes clutching their “degree.” The multi-billion-dollar college and university advertising blitz mainly plays up superficial distractions that have nothing to do with the quality of education. And this has been going on for decades, as college costs and student debt keep rising.

Since college was essentially federalized in 1944 from the Army G.I. Bill and subsequent legislation, schools have gone on a non-stop spending binge for enormous sports stadiums, medieval- and renaissance-style architectural displays, and posh facilities and other luxuries for students and faculty. Of course, none of this adds any detectable improvement on learning. It does, however, boost the prestige of college administrators and wealthy alumni, who may get additional titles or a building named after them, respectively.

From a cursory overview, it would seem that the government and non-profit sectors have issued at least as much or possibly more false marketing to keep students trapped in debt than their much smaller for-profit college counterparts, who brought in only $16 billion of the $649 billion annual haul for U.S. colleges and universities. In other words, the too-pure-for-profit schools reap fully 97.5% of the total college and university income stream.

But in the political world, it’s only the smaller, more modest “for-profit” schools that feel the sting of judgment. These schools largely operate beyond the control of state and federal bureaucracies, which angers some politicians. During the Obama Administration’s crack down on private for-profit schools—the meager 2.5% of the college revenue pie—managers at Corinthian College (once with over 100 campuses) and ITT Technical Institute (formerly with about 130 campuses) were investigated, vilified and drummed out of business over vague charges of wrongdoing.

Based on my review of over a dozen contemporary press accounts, the only decent reporting I could find came from Taki’s magazine, who came to the defense of ITT Tech. On the other extreme, then-Attorney General of California, Kamala Harris’s scorched-earth campaign against Corinthian College that threw thousands of students to the curb included grandstanding that the school used “aggressive and persistent internet and telemarketing campaigns… on daytime shows like Jerry Springer and Maury Povich.” Other than that, no attempt was made to put allegations (even if correct) in context with known academic fraud and financial abuses committed routinely at governmental and non-profit schools.

Really Free Teaching vs. Paid ‘Free’ Teaching

One half-truth that liberals keep repeating stems from their desire for everything to be controlled by the State and “free” to passive participants. The smidge of truth lies in the practical case for free teaching as opposed to free schooling. There is a difference.

For basic math and English instruction as well as vocational skills, science and mentoring, I can certainly see the value in using paid instructors. But within the subjective genre of liberal arts, I can see a strong argument for relying primarily on bi-vocational teachers. That is, people who actually have some experience working in the marketplace, then teaching from a voluntary or minimally paid standpoint as governed by peers, students and non-coercive standards. Tens of thousands of free internet bloggers and writers and even greater numbers of religiously motivated volunteers do precisely that, teaching important lessons on history, philosophy, theology, economics, politics and other topics of personal enlightenment.

The alternative approach of promoting tenured liberal arts professionals gave us the anti-social PC rot we face today (and also Harvard alumni’s leading role in the Salem witch trials, which they’d rather deflect). Anti-profit extremists—common at government schools, non-profit institutions and many subsidized churches—often fail to realize the importance of “serving” in the marketplace, where consumers have the free choice to buy their products or services, due to high quality and a fair price. It’s axiomatic but rarely acknowledged that people who refuse to serve in the marketplace resign themselves to a life of asking for charity, with an implicit arrangement so as to never risk irritating their benefactors (ultimately, the ruling authorities; with considerable pandering to their supporters).

So I welcome any liberal arts professors who want to teach for free. Getting paid means it isn’t free. No one needs political permission to teach for free. A college professor should understand that.

More ‘Liberal’ Smoke and Mirrors

The willful misinformation doesn’t stop with bogus claims of “free” teaching, cheesy college advertising and occasional made-for-TV show trials, like we observed with Corinthian, ITT Tech, and most recently The People vs. Felicity Huffman. Organized special interests (probably banks and/or colleges) have even paid for a “study” that promises all sorts of positive outcomes if we “cancel” student debt, so to speak. The Levy Institute of Bard College and the Sanders Institute (headed by Bernie’s wife Jane Sanders) jointly released a report called “The Macroeconomic Effects of Student Debt Cancellation.”

There’s nothing in the Levy/Sanders report to indicate these would be bank bailouts or that financial institutions would benefit in any way. Only the brief use of cryptic language (“federally funded”) offers a hint that the enormous debt “cancellation” costs will be dumped on taxpayers. Welcome to Non-profit Ethics 101.

The Levy/Sanders pseudo-study claims a transfer of wealth from working Americans to Wall Street lenders will somehow boost the GDP by $86 to $108 billion and create 1.2 to 1.5 million new jobs per year. Who knew that bailing out super-rich bankers was so economically stimulating?

This type of academic artistry provides talking points for pro-college, pro-banking, pro-taxing politicians. And partisans in mass media gobbled it up. Still, it would be interesting to see if any independent economists could confirm or refute any of those figures, with more upfront declarations of input assumptions.

What does the ‘Liberal’ Media Say about Debt Forgiveness?

To see what the respectable left has to say, I searched on the topic of “Debt Forgiveness” plus various liberal/progressive news outlets such as Slate, HuffPost, Mother Jones, and The Nation (2011 and 2015). The results were mostly uninspiring.

Common themes included complaining that Debt Forgiveness favors “the rich,” bashing “shady” or “dodgy” for-profit schools and insisting even the most generous Debt Cancellation plan “does not go far enough.” Neo-liberals seem to agree that education should be tightly controlled by the federal government, forcibly financed by the masses and offered “free” to passive participants as a charade to justify political meddling.

One puzzling attribute of most “liberal” voices I could find was a conspicuous reluctance to criticize the corrupt and highly profitable banking cartel that helped create the debt fiasco in the first place. Perhaps this is a sign that neo-libs have come to appreciate fiat currency and all the wonderful programs it can finance. A rare exception to this trend was veteran journalist William Greider’s 2011 article in The Nation, which bracingly refers to “the barbaric and suffocating behavior of the nation’s largest banks” (and lots more like that) when talking about housing debt. He even cites the example of the ancient Hebrew society’s debt jubilee, among many other things. Although Mr. Greider managed to write over 20 pages on debt and banking without once mentioning the gold standard or fractional-reserve financing, it was nice to see that one liberal can still criticize the U.S. financial system in fairly straight language.

To that extent, it was also odd to see so many “libertarian” critics of centralized banking line up with Wall Street for wanting to keep soaking students with interest payments on loans that banks largely pulled from thin air. Apparently, libertarians dislike the theory of fractional-reserve loan sharking, but can accept $1.6 trillion of that stuff in practice.

Since the concept of Debt Forgiveness resonates loudly with the 45 million Americans straddled with college loans to pay off, Democrats seem to be winning this argument at the moment. Half of a plan (plus Wall Street appeasement) usually beats no plan at all. With the Republicans busy whining about “social justice warriors” and Millennial “cupcakes,” Democrats are making inroads with millions of voters who intensely want a better deal.

A Few Rational Voices in the Marketplace

Despite the dearth of quality analysis among most elements of our mass media, a few bright spots did stick out. Searching around, I could find a few sensible thoughts expressed on the general topic of student debt. A 2015 Forbes article suggested that “The dysfunctional federal student aid programs need radical downsizing and ultimate elimination. Universities need to have ‘skin in the game,’ sharing in taxpayer losses from excessive loan defaults.” Those are good points, but the piece otherwise avoids the overall topic of Debt Forgiveness.

Hedge fund manager James Rickards made more explicit arguments in favor of Debt Forgiveness in a 2012 article in U.S. New & World Report. Mr. Rickards says: “Even on moral grounds, it seems difficult to put the entire burden of adjustment on the debtor. For every imprudent debtor there is an overzealous and reckless lender.”

He adds the historical basis for Debt Forgiveness, which so many traditional conservatives (and God-hating liberals) seem to be overlooking:

The Bible’s book of Leviticus provides that every 50 years all mortgage debt is to be forgiven. This occurrence was called the Jubilee Year. This may seem like a shocking imposition on creditors and a free ride for debtors. Yet, consider the behavioral feedback loops. In the 10th year after the last Jubilee, lenders might lend freely for a 20-year term. By the 45th year it seems likely that long-term credit would have dried up because the lenders were as aware of the coming Jubilee as the debtors. This was a self-regulating system that deleveraged itself before credit bubbles grew out of control and threatened a widespread collapse. It was an orderly deleveraging that seems enlightened in comparison with the disorderly and draconian deleveraging our economy is experiencing today.

I couldn’t agree more. The self-regulating economy of orderly deleveraging should be greatly preferred by anyone wishing to avoid the chaos of hyper-inflation or uncontrolled debt implosion that would likely bring on a widespread collapse if left unchecked.

For those wishing to dive deeper into the history of Debt Cancellation, two scholarly books have been written on the topic in the past decade. The most recent is economist and historian Michael Hudson’s 2018 book …and forgive them their debts: Lending, Foreclosure and Redemption From Bronze Age Finance to the Jubilee Year. The other volume is anthropologist David Graeber’s 2011 book Debt: The First 5,000 Years.

I have only done some related digging on a recent interview with Mr. Hudson and skimmed Mr. Graeber’s book’s Wikipedia page. With the exception of James Rickards’ excellent but short article on Debt Cancellation, either book would almost certainly have to surpass the partisan drivel exhibited in the dozen or so articles cited above. With or without those authors’ insights, the topic of real Debt Forgiveness deserves a more candid explanation than what our politicians and news media have offered so far.

Winners and Losers of Honest Debt Forgiveness

When considering the challenges of the massive and rising $1,600 billion mountain of student debt, it’s important to keep straight what’s really going on. Democrat proposals to “wipe out” college debt only transfer the burden to other innocent parties. That is both “unfair” in any ethical evaluation and terrible economics as well, guaranteeing that college costs will continue to soar at other people’s expense. Republican willingness to appease wealthy bankers and rich colleges by keeping kids languishing in debt isn’t any better.

An inescapable consequence to any responsible Debt Forgiveness plan is that someone will have to pay. As Michael Hudson says: “You can’t bail out the banks, leave the debts in place, and rescue the economy. It’s a zero-sum game. Somebody has to lose.”

Many politicians want to penalize some version of “the rich,” which usually ends up meaning middle-class taxpayers. Another option would be to let the ones who created this mess (banks and colleges) bear the brunt of any solution. There is simply no “win-win” scenario where everyone goes home happy.

The anti-government fantasy that “doing nothing” will yield to marketplace magnificence is a farce to begin with, because nothing about subsidized college or centralized banking resembles natural market conditions. Any “do nothing” approach fails to realize that the kids trapped in debt aren’t going to stay quiet, keep paying their bills or even stick around forever. In other words, it’s in everyone’s interest to pursue a rational path of organized debt re-structuring. The sooner the better. The only alternative is a more random, spontaneous debt implosion and over-reaction (remember the New Deal?) that could be catastrophic.

For the remainder of this essay, I’ll focus on how Debt Cancellation would affect the banking industry and the college system, along with impacts to future and former students. Since centralized banking and subsidized colleges are two of the most influential, harmful and overrated institutions in America, I’ll include some general background for both sectors (that mainstream media tends to oversimplify).

Of course, we can feel sympathy for the millions of workers caught in the buzz saws of centralized finance and socialized education. In both cases, absentee “leaders” cause the real trouble while low-level support staff get paid to go through the motions.

Banks: America’s politically entrenched banking industry fears and loathes the idea of a true Debt Cancellation with an intensity that is hard to overstate. Their concern seems to be commensurate with the injuries they’ve caused to society. To this end, financial institutions are almost certainly behind the current funding of phony Debt Forgiveness (bank bailout) schemes to go along with their purchased loyalty of nearly every politician in Washington.

A good summation on the improprieties of centralized banking in general and the Federal Reserve in specific comes from former Congressmen and Regan-era OMB Director, David Stockman:

The Fed is the number one, the number two, and the number three enemy of prosperity, capitalism, free markets, individual liberty, and the wealth of people in the world today. Central banks have to be totally discredited and taken down.

Martin Armstrong’s economics website adds “the central banks are TRAPPED!!!!! People have NO IDEA what we face.” (bold, CAPS and punctuation in original)

So why do some folks (including me) have such a dim view of centralized finance? Since 1913, the Federal Reserve has successfully chiseled away over 95% of the value of the dollar, with all of the extracted worth going into the pockets of rich bankers who are always first in line at the Fed’s liquidity hydrant. To the average consumer, this means what would have cost a nickel in 1913 now costs over a dollar. And someone who saved a dollar back in 1913, if they were still alive today, would have under 5 cents of equivalent purchasing power. That’s our Fed!

And they’ve got some big customers to satisfy. The top four banks in the county (J.P. Morgan Chase, Bank of America, Wells Fargo, Citigroup) had combined revenues of $440 billion in 2018. Some of this money was earned by processing payments from retailers, making U.S. consumer spending all the more fluid. Some of the money comes from speculating on stocks and real estate, whose prices are inflated by the Fed’s easy-money policies. But most of it comes from the alchemy of turning a $10 deposit into a $100 loan (so-called fractional-reserve banking). The legal counterfeiting of the 90% empty “banks” in America involves corporate officers issuing their own virtual loans backed by a dime to the dollar, soaking in the long-term interest payments, then thrusting out their hands at the Fed Funds window for cheap credit to mop up the carnage when the system “corrects” itself every decade or so.

It’s like reeling in a giant tuna: pull back with all your might, then lunge forward and spin your wrist frantically to bring in the slack. Use leverage to your advantage. Crank and repeat until the mighty fish is worn out.

As a result of some hard work and lots of political spinning, the four largest banks have used their Federal Reserve privileges and fractional-reserve leverage to amass $8.6 trillion in assets. The next six biggest banks control assets of nearly $3.4 trillion. These are glorified coin-clippers that don’t add any value to education, business formation or even home construction; all of that can be accomplished without third-party financing and certainly without centralized banking. (An economics professor from George Mason University explains the safer option of open-market or “free” banking in this short video.)

Most D.C. “liberals” and “conservatives” suspiciously agree to keep the game going in order to skim off the fat with new taxes and/or new fiat currency. I’m only suggesting that Big Banks can fend for themselves—shedding a few assets if needed—when a day of reckoning finally appears and their $1.6 trillion boondoggle of unsecured student loans evaporate.

Contrary to so much hype (see Time magazine and Bloomberg below), regular human beings can actually work, save and invest without a slippery contract from a Debt Dealer. Actually, nearly everyone did just that when buying cars and homes with cash through the 1920s (and when paying for college for three full decades after that). Then politicians invented the 15-year mortgage and (now nearly empty) FDIC insurance in 1934 to allegedly “save” the housing market, a year after killing the gold-based standard of financial security. Two decades later, politicians sold Americans on the 30-year mortgage, to the delight of Wall Street tycoons.

College loans began slowly under the cloud of anti-Soviet intrigue in the National Defense Education Act of 1958. Student debt then went into orbit when the Higher Education Act of 1965 declared college as a human right, opening the door to more federal loans. Before then, people paid cash for college and tuition was cheap.

Bankers fully recognize the political and structural exposures they face from the Debt Bubbles they created, notwithstanding the breathless praise they received from Legacy Media during past financial turmoil. And they have to be aware that the ruling elites are losing their control of public information, thanks to the rise of independent news sites challenging the federal broadcasting monolith and the billionaire’s club of urban newspaper monopolies. Panicked rich people don’t play well with others. So no one should assume that the banking clans will yield one cent on Debt Forgiveness without an all-out brawl.

In recent generations, bankers were content to run their advertisements in corporate media hawking their debt products as part of the American Dream. After the unpopular bank bailouts of 2008 and now the college debt crisis, these hollow messages are wearing thin.

As a response (and a sign of desperation) some are taking it to the next level. A recent sham “study” on the virtues of endless debt in Bloomberg gives an indication how far the credit industry is willing to go to keep people dependent on their product.

Billionaire media mogul, financier and former NYC Mayor, Michael Bloomberg, paid for one of the more bizarre pieces of debt celebration I’ve ever seen. Last month, his staff produced an article titled “America’s Wealth Hinges on Its Ability to Borrow Big – or Else.” The piece offered what it called “dystopian” and “grim” warnings that “without its dependence on borrowed money… U.S. per capita income of $66,900 would be slashed to a negative $4,857 using this measure. That’s a total loss of almost $72,000 for every man, woman and child.”

Not only does that stupidity fail to receive criticism in mass media, a prominent libertarian news site featured this “study” with further hysterical ranting (in all seriousness) that “the only thing keeping us from complete and total economic collapse is the fact that debt is flowing like wine.”

Elsewhere in the think tank universe, the Brookings Institution insists that merely auditing the Federal Reserve will “threaten” everything they hold dear: absolute power of banking elites to operate in secrecy. That short Brookings article links to four separate Wall Street Journal pieces defending Fed secrecy and attacking the politicians who want it audited (what Brookings dismisses as “Washington’s latest craze”).

With big finance intertwined with broadcast media, expect the insanity and shrillness to get worse, particularly if true Debt Forgiveness ever catches on. But if the powerful banking interests aren’t confronted soon with real Debt Cancellation, Wall Street high rollers may end up owning everything. Or nothing, if they overplay their hand.

Colleges and Universities: For many generations, academic institutions have done everything in their power to extract more taxpayer funding, restrict competition and attract more kids onto their campuses. College tuition has steadily risen as a result, pushing more students into a desperate sense of “needing” a loan for the poor education they often receive.

If real Debt Cancellation ever occurs, higher ed would have no choice but to drop their prices to attract new students. With fewer loans available (since bankers would have gotten their hand slapped) some kids would probably seek instruction at trade schools or other non-college options, further decreasing demand and prices for college. Healthy colleges can certainly afford the correction.

Total U.S. college revenue was a staggering $649 billion for the Fall 2016 to Spring 2017 school year, up 14.5% from two years prior. Over four-fifths of that income stream comes from government, institutional and private student loans and grants ($253 billion per PDF page 9), plus direct subsidies for state-run colleges and local community colleges (about $300 billion in FY 2018, ignoring the $11 billion overlap from state grants). Schools have no reason to keep a lid on their outrageous costs, since very few students now pay for college with saved earnings.

It’s well known that college tuition and fees have been skyrocketing for decades—up over 1,100% (five times inflation) since 1978. A major reason for the rising costs comes from artificially stimulated demand. Even after the 1944 Army G.I. Bill attracted over 2 million returning vets into higher education, only 6.25% of Americans (male-female average) had completed four or more years of college as of 1950. By 2018, those figures jumped to 35%, according to statista. The argument of an “advanced economy” requiring college is only a partial explanation (at best) for rising attendance, since the most high-tech jobs (Google, Apple, IBM, etc.) are the LEAST likely to require a college degree now.

This increased demand comes largely from the trillions of tax dollars shoveled into the university system as well as market manipulations by State Boards of Education that work hand-in-glove with college administrators. The racket: force kids to buy our product. Their methods: make high-paying professions like doctors, lawyers, teachers, public accountants, some engineers and many others require a state license that mandates a college degree. This has little to do with quality and mostly to do with political control. State licensing consists of outlawing the competition, restricting consumer choices, gathering a steady stream of teenagers to sermonize, then raking in the cash. Some would call it “market capture.”

Compelling millions of people to buy a specific product is perhaps the greatest example of harmful racketeering allowed today. Since forcing aspiring professionals into an expensive college system demonstrably hurts the poor, it naturally has a “disparate impact” on minorities as we have long been told (and is true in this case). But the blinding arrogance of the PhD-only club doesn’t see anything wrong with this behavior.

On top of all that easy money and market coercion, Wikipedia now counts over 100 colleges with at least $1 billion of endowments to use as slush funds for naming dormitories after rich donors, building new 80,000-seat sports stadiums or pushing some politically correct agenda to attract more donations from wealthy alumni. Harvard alumnus Ron Unz put it well in describing his alma mater’s enrollment system as “paying tuition to a giant hedge fund.”

Top 10 U.S. University Endowments (FY 2016)
RankSchoolEndowment ($ Billions)
1Harvard35.7
2Yale25.4
3Univ. of Texas23.9
4Stanford22.4
5Princeton21.7
6MIT13.2
7Univ. of Pennsylvania10.7
8Texas A & M9.9
9Univ. of Michigan9.6
10Columbia9.0

The Wikipedia and U.S. DoE summaries cited above neglect to mention that all of the top 100 endowed colleges are organized as government-run or private non-profit schools. This sleight of hand (“public servants” yet filthy rich) has been achieved by successfully lobbying Congress for tax privileges that they eagerly utilize, while screaming about racial privileges to further confuse the situation.

The generous endowments at hundreds of tax-favored institutions could help them weather the storm of a downward financial adjustment that would predictably ensue from any real Debt Cancellation. But wealthy college endowments rarely come into the conversation when politicians are trolling for more tax-funded bank bailouts. And for the colleges that are wildly over-priced yet failed to save for a rainy day… whose fault is that? Not the students. Not the taxpayers.

However we approach it, organized or spontaneous Debt Cancellation will mean someone has to pay. It seems most appropriate that the ones who have partied so long at the public’s expense should be first in line for assisted sobriety.

Future Students: Here’s a category that’s often overlooked—other than scurrilous promises for “free” bureaucratic junk. Once our beloved banksters get trimmed for passing out bad loans, they will certainly be more cautious in peddling new risky credit. That should mean college costs becoming more reasonable, but also fewer loans available to usher students into that environment. No matter what, Debt Forgiveness would change the financing of college for years to come. Depending on a person’s sense of entitlement and perceived need for more classroom schooling, that could go a variety of ways.

Let’s remember that anyone who has completed Kindergarten through high school already has 13 years of standardized classroom education. There are now multiple providers of online college-level courses (Khan Academy, Udemy, EdX, Coursera, etc.) and at least a half-dozen non-degree options to help students land a professional job, plus scores of trade schools for technical training. One of the larger apprentice-based educational companies, Praxis, has been featured on FoxNews. Another one of the big boys—relatively speaking—MissionU, maintains a multi-media extravaganza at FastCompany magazine. TechStars boasts of having over 10,000 mentors and 300,000 alumni worldwide to help entrepreneurs with funding and guidance. So the message is getting out.

The next task will be connecting companies and students interested in trying something slightly new— professional mentoring and apprenticeships, now with the help of online technology, more independent teachers and some important Safeguards. The apprentice model worked for centuries, even without subsidies, so there’s no reason why it would not work again today.

Anyone who feels they need four more years (after high school) of conventional books, lectures and theoretical homework assignments from a college or university is welcome to continue down that path… and either pay for it themselves or be burdened with debt. You may want to be careful when it comes to landing a job with no experience. University loan officers sometimes forget to warn students about that. If you’re big on excuses, you can always blame the seductive college marketing campaigns: “Pay us and EARN your degree!” “Scholarships for everyone! No one pays full price!”

I know, pretty hard to resist. (I went for that too, when I was 18. But I didn’t have much choice then.) If that’s really what you want, you’ve got thousands of nearly identical flavors to indulge on. But now you have real options as well.

Former Students: It’s barely worth mentioning that college graduates with outstanding loans would be ecstatic to have their burdens lifted. That doesn’t make Debt Forgiveness a good or bad idea.

Hardcore policy wonks are probably wondering when I’m going to furnish the charts and graphs with aggregate demand curves and modeled simulations of Debt Cancellation to “prove” this or that. If I had a few million bucks to throw at my favorite think tank, I could a fund a “study” to predict any outcome I desired. But that is not my position. Since we’re at the early edge of the legitimate Debt Forgiveness debate, I’ll defer to any independent experts for more detailed economic forecasting.

For today, I’ll start with what I’ve got. The aforementioned Levy/Sanders “study” claims a tax bailout of wealthy bankers will boost GDP by about $100 billion and create over 1 million new jobs per year. Compared to that “trickle up” approach, true Debt Cancellation should only do better. That’s because we know that small businesses create jobs more efficiently than giant corporations who siphon off profits to build luxurious headquarters, fund C-suite golden parachutes and other vanity affairs.

We also know that debt-relieved college grads would now have about $1.6 trillion of cash to spend on homes, cars and patronizing large and small businesses instead of repaying principal and interest on outrageously inflated college loans. Some may even stow away savings and start their own businesses. In a $21 trillion economy, that spending could have some inflationary effect (Levy/Sanders say it would be “insignificant”). With Wall Street frightened over any hint of corrective deflation, a little countervailing inflationary pressure should make them happy. But I doubt it would.

I’ve come to view college loan forgiveness as an Inflation Dividend. Banks and colleges have exorbitantly inflated the money supply and tuition prices since 1913 and the 1960s, respectively. Americans have paid a huge price for that. So right about now would be a good time for an overdue rebate.

The alternative to Debt Forgiveness is so terrible that it could permanently cripple the nation. An implosion from multiple Debt Bubbles (college loans, housing, credit cards, pensions, national debt) bursting at once would be painful beyond reckoning. Damage would extend far beyond the collapse of the 1929 stock market crash, when there were almost no institutional investors and very few Americans owned stock.

As for the college grads who honorably paid off their school loans, how would granting Debt Forgiveness to other people harm you in any way? If the word “education” has any meaning at all, you’ve gained a great education from the discipline of working, saving and paying off your obligations. Now maybe use those skills to do something even more productive. Unlike the conservative writer Matt Walsh, who worked to pay off his wife’s student debt, there’s no reason to be bitter about “an awful lot of unnecessary sacrifices” made in the past. Look how far that great experience has got you (and him) already?

We can’t change the past. And reckless college graduates who are over their head in bills from a worthless degree won’t get a chance to learn from that particular mistake. But they may get a chance to start over. If debt-relieved graduates make the same foolish choices in the future, they will be the ones to suffer.

In both the banking industry and the college collective, wealthy adults have profited enormously from many decades of free or discounted money from the Fed that students had no direct access to. If any member of the poor or middle-class wanted a college degree, he or she usually had to take on heavy loans. That is the reality we are now faced with. Lecturing kids on (arguably) past mistakes won’t help a bit.

Debt Cancellation will come… whether we like it or not

What critics of Debt Cancellation often fail to realize is that… debt forgiveness will come, whether we want it to or not. For a few examples of what will happen without Debt Forgiveness see: “These Americans fled the country to escape their giant student debt” from CNBC.

Some people may not find the alternatives chosen by any of the three students profiled (teaching in the Ukraine or Japan, living in a remote Indian village) to be particularly appealing. But that’s beside the point. It’s a great big world and kids have options. Unless we’re willing to seal the borders and enact a police state with Fugitive Student Hunters, we can’t keep people from leaving. And even if we could keep them here, there’s no way to squeeze $300 per month (or more) of principal and interest out of a 23-year-old working as a pizza courier or Starbucks barista, even if he/she does have a college degree.

And this gets to the sensitive point of human confinement. Abusive systems may appear to “work” for those at the top, but oppressive conditions simply cannot stand for long when better alternatives exist for those at the bottom. Debt Servitude is just another form of human bondage, promoted by self-absorbed elites and ideological extremists who like keeping people trapped, desperate and easy to exploit. Students will not stay confined in the college books-buildings-lectures-and-debt system for much longer. They simply don’t have to.

There is a reason we work for 5 or 6 days, then take a day or two off on the weekends. It’s called REST. Someone immersed in a theoretical bubble and unfamiliar with reality (e.g., college professors, corporate leaders, entertainment, mass media) could argue that working for 20 or perhaps 200 days straight, without a day off, would lead to greater productivity. But human beings don’t function well in such relentless environments.

Americans need a brief rest from the corrupt system of debt dealers, certified classroom lecturers, corporate conformists and other abusive power structures that got us into the current mess of subsidized college and its associated mountain of debt. Once refreshed, we can hopefully see straight to avoid sliding backing into that pit.

Loan forgiveness doesn’t just help the younger generation, it should be noted. The 80 million Baby Boomers set to retire in the decade of the 2020s (David Stockman’s figure) have a vested interest in keeping college alumni happily working and paying into the seniors’ precarious Social Security and Medicare accounts. Old folks may want to think twice before they chase their worker bees out of the hive with harsh demands of college debt repayments that seniors themselves were never subjected to.

What can be done?

For starters, anyone wishing to engage in conversation (or interviewing politicians) could do a better job of focusing the debate. Are people talking about actual Debt Forgiveness or just transferring the bill to taxpayers? Do bankers and colleges join in paying for their reckless loans and inflated tuition, or do all cleanup costs get dumped on “the rich” (i.e., middle class)?

Along those lines, it would help to cut through the noise of heated political speeches like Bernie Sanders (and many like him) ranting that Wall Street is overrun with “greed, fraud, dishonesty and arrogance.” Good grief, so is Washington. So is Hollywood, Legacy Media, Silicon Valley and most big league colleges. A more valuable issue for public consideration would be to find where prospective candidates stand on the toxic “fracking” of fractional-reserve counterfeiting that destabilizes our entire financial system. Ditto for the ongoing secrecy of the Federal Reserve hierarchy, who refuse to be audited. If members of the Regulated Press are too frightened to ask tough questions of powerful special interests, then independent reporters could gain further credibility by stepping up to carry out this important task.

On the college front, the misguided decision of propping up this ancient institution has done nothing but increase hostilities, reduce quality and dramatically raise prices. As such, federal subsidies should be gradually (i.e., over 5 to 10 years) be brought down to zero to allow Americans to freely choose what type of personal education path to follow. The racketeering by State Boards of Education in conjunction with academia to use mandatory professional licensing to force people to buy their product is a cowardly act of desperation; it’s also a (probably illegal) restraint of inter-state commerce that should have been struck down long ago. Mandatory professional licensing is possibly the greatest example of institutional racism left in American, yet shameless college professors deflect attention to scapegoat individual students for far lesser misconduct. All mandatory/coercive licensing could be replaced with voluntary professional standards to improve quality and save consumers enormously. In the meantime, any honest professional is free to work for reform or just quit that racket and get a legitimate market job; I did that almost 10 years ago and have never regretted it.

In the end, the choice comes down to nothing more complicated than Debt Freedom or Debt Servitude. A fresh start or more financial decay.

Our leaders in Washington can forgive the innocent and punish the culprits, or they can misallocate blame and drive the economy into the ditch. Student Debt Cancellation can proceed in a rational, managed fashion or will spontaneously occur on its own, which could trigger more reactionary power grabbing that would be disastrous. In that sense, real Debt Forgiveness would benefit everyone.

And what’s in it for the bankers, some may ask? How about this trade: we’ll forgive your century of debasing, inflating and repossessions if you grant a rare (probably once in a lifetime) forgiveness of unsecured college debt. That might be the best deal you ever get, if banking executives are sober enough to realize it. I’m optimistic there are plenty of smart bank tellers, loan officers and compliance specialists who would accept that offer. The corporate suits, however, may need a bit more of a nudge.

I’m less optimistic that the proud members of entrenched super-ultra-deluxe-conservative academia will voluntarily go along with any positive reform. The medieval business model of subsidized lectures, safe manuscripts and regurgitated orthodoxy has proven to be too steeped in conformity, control and public spectacle to recognize its own dramatic failings. The best way out of that circus is to simply walk away before the mass exodus becomes a stampede.

Regardless of vocation, the older generation can lend a hand in developing a viable path out of the college debt trap. Or we can make excuses and blame the kids… as we watch them leave the country or simply refuse to pay back their unrealistic burdens.

Millions of college grads seem to agree that we’ve tried Debt Servitude long enough. If I were a former student loaded down with college debt, I’d rather try something more liberating.

Email: [email protected]

 
• Category: Economics • Tags: Academia, Debt, Student Debt 
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  1. They can’t cancel a trillion dollars of debt.

    The banks are already in trouble.

  2. Cancelling the debt is a bad idea, but something must be done. These debts cannot be cancelled via bankruptcy, so those unemployed or imprisoned for years only have it accumulate with interest plus outrageous late fees. One can qualify for food stamps but is still expected to make student loan payments, lest their meager wages get garnished.

    Since the big banks can borrow money from the Feds cheap, let’s convert all the student loan debt to a 1% interest rate. This is a Department of Education assistance program, so shouldn’t result in a profit for the Feds. This is an idea that would be supported by 90% of Americans and could get enacted, so will be ignored.

  3. nsa says:

    “Winners and Losers of Honest Student Debt Forgiveness”
    A takes a degree in Engineering, works his way through school, takes 5 years to graduate with no student debt., obtains a good job upon graduation.
    B takes a degree in Engineering, uses student loans to graduate in the normal 4 years, upon graduation gets a good job and pays his loans off.
    C takes a degree in something like Gender Equity, uses student loans to graduate in the normal 4 years, upon graduation can’t get a paying job, works as a low wage barista, and doesn’t bother to even service the student loan debt.
    The results: A is unaffected by student loans except for paying the resulting inflated tuition. B has been made a fool of. C will never pay the loans back so C like A is more of less unaffected. No winners amongst A, B, and C. THE BIG WINNERS: the banks made whole using taxpayer largesse and the schools raking in the tuition inflated by student loans. Student loans are just another example of a very sick system run on the Reverse Robin Hood principle.

    • Replies: @Amon
    , @Vendetta
  4. A big part of the student loan problem is the student profiteering complex. Here is a simple solution that 99% of students and citizens support, but will never be mentioned due to potential profits lost. From my blog:

    Sep 6, 2015 – The Textbook Racket

    One of the most powerful rackets in the USA is the multi-billion dollar college textbook monopoly. Prices have soared 1041% since 1977, and books now cost up to $400 each!
    https://www.marketwatch.com/story/400-for-a-book-why-college-textbooks-are-going-the-way-of-the-dinosaur-2015-08-05?link=MW_home_latest_news

    Some courses require students to read several books! Corruption thrives when blatant conflict of interests exist. Some professors require students to purchase an overpriced book that they authored and receive royalties off each sale! If political leaders are truly concerned with soaring college costs and the resulting student loan crisis, they should break up this monopoly.

    Pass a federal law stating that institutions whose students receive federal aid (which means all of them) must provide all textbooks and other required materials free of charge. Once powerful university systems must purchase the books they require, this racket ends instantly. Books would be purchased in volume at deep, deep discounts of perhaps $10 a book, or purchased even cheaper for electronic use. Universities may loan books to students and reuse them for years, just like public high schools.

    This would cost universities money, so a slight rise in tuition may be expected, but textbook costs would drop some 95% once the free market is required and these corrupt monopolies end.

    • Replies: @Realist
    , @Jmaie
    , @Vendetta
  5. TKK says:

    Two states, Iowa and N Dakota , suspend your driver’s license if you default on federal student loans.

    (May be Montana and not ND)

    This in addition to revoking any professional licenses and hounding you and your extended family for money.

    When contemplating the 2008 tax payer funded bailout of the premeditated gambling of Wall Street gangsters on sub prime mortgages, and their subsequent lewd bonuses, and not one negative consequence-

    their calculated reckless losses absorbed by tax payers
    their tremendous luxurious gains privatized

    -Its a marvel there was not an armed revolution with a firing squad as the closing act. There should have been.

    Down with Neo Classical Economics, Down with the FIAT- back to the gold standard.

    Super article.

  6. Here are two examples of the criminal racket that student loans have become. If a loan becomes delinquent, one is subject to wage garnishment, social security benefit garnishment, bad credit marks, and tax refund seizures. Victims are told that if they make ten consecutive on-time payments, these punishments will end. Those who comply may get shafted.

    In the long list of agreements is a provision for “debt recapitalization”. For most student loans, interest is only calculated on the loan principle. Many borrowers made no payments for decades due to unemployment, cash employment, temporary employment, welfare, or housewiving. There was also a long period until 2000 when the Feds made little effort to collect. After big tax cuts, President Bush was looking to offset these losses so went all out to collect.

    As a result, there are millions of American who borrowed just ~$10,000 for college back in the 1980s and 1990s who never made much money so never made payments, only to have Bush authorized private collectors track them down two decades later. Their $10,000 debt was now $40,000 and the Feds began seizing their meager wages. They struggled to make monthly payments and eventually “qualified” for “rehabilitation” to end the collection process. But then discovered their total debt owed soared each month as their 7% interest rate on their $10,000 principle was applied to their new $40,000 principle!

    This is never reported in the media and never mentioned (0r understood) by most reps from the Department of Education. This is outright criminal racketeering! But I know that millions of Americans don’t’ give a damn. Their college costs were covered by rich parents or the US military so they are happy that those less fortunate are preyed upon to keep their income taxes low.

    Here is yet another student loan scam from my blog:

    Dec 26, 2015 – Student Loans Become IRS Debt

    I was reading about recent bankruptcy cases in which a few judges discharged student loan debt. The Dept of Education always argued that their Income Based Repayment program makes discharging loans unnecessary since payments are limited to only 10% a income for 10 years, and even less for those with very low income. Interest still accumulates so the debt may grow for 10 years, but so long as the minimum payment is made for 10 years the debt is forgiven.

    However, as this program reaches the 10-year mark, lawyers discovered that forgiven debts are reported as income to the IRS, as required by law. So a poor working guy making $30,000 a year with four kids may pay only $10 each month as his student loan debt grows to $100,000. This is written off after 10 years, but now his income for that year is $130,000! He loses whatever welfare benefits he was collecting like food stamps, and loses around $10,000 from an annual “tax refund” via the child tax and earned income credit. Then he can’t pay the $30,000 in income taxes now owed the IRS on his one-time $130,000 annual income, so the IRS slaps on steep penalties and fees and begins the collection process, which may include wage garnishment and future tax refund seizures, plus more bad credit marks.

    His best choice is to find $1000 somewhere and apply for bankruptcy to discharge the new IRS debt, but that leaves another 10 years of bad credit reports. As a result, a couple of judges became activists and declared this system abusive debt peonage, and discharge unpayable student loans during bankruptcy like any other debt. As I’ve written before, the first step in reforming the student loan racket, from which Uncle Sam pockets billions of dollars a year, is to lower the interest rate (now up to 7%) and eliminate the outrageous 20% default penalty, which double many student loan debts within a decade! Recalculate all debt owed as principle plus 1% a year in interest to make repayment reasonable and practical. The Dept of Education would lose a few billion dollars year rather than earn a few billion, but this is a government program designed to help citizens educate themselves. To limit losses, there should be a cap on how much students can borrow.

  7. Anonymous[392] • Disclaimer says:
    @Carlton Meyer

    Why not just allow these students to discharge the debt via bankruptcy?

    We won’t need to bail out the banks then.

    • Replies: @Astuteobservor II
  8. Biff says:

    Traditionally banks lend money to the bomb makers to force the the bombed out nations to pay for the bombs that bombed them out(e.g. Germany WWI). If you don’t get bombed, and if you don’t have a gun to your head – Fuck the Banks!

    What are they going to do? Bomb the campus?

    “Ignore the credit score!”

  9. There is more than one problem here. The degrees these geniuses are getting such as Black or African Studies, Sociology, Leadership, Women’s Studies etc. are worthless. They will probably never get a job that they will make enough money to pay back the loans.

    Education in America is done; destroyed by the Marxist Left and there is no bringing it back. The indoctrination starts in Elementary School to produce brainless zombies that answer to the beckon call of the Jewish Masters who are running this campaign.

    People should home school their kids and basically bankrupt the school system. There should be a mass exodus. Look at what that idiot Deblasio has done to the New York School system. Fake grades, total fraud, students who don’t even go to class and the destruction of any standards. Good students are being destroyed to support this Marxist Game Plan of graduating and promoting these idiots. It is also occurring at the college level.

    The American Educational System is toast and there is no way to fix it.

    • Replies: @Realist
  10. EdNels says:
    @Carlton Meyer

    Usury is bad going way back including some of the religions says so. Bad so if it is usury in facto, change the laws back to the way it used to be and let the kids go chapt 8 bankruptcy every 7yrs. The fucking Banksters don’t care, they wholesale somemore funny money out of a hat, that’s just business.

    You got some sick mfrs in between the Banksters and the peeps who pick off the small change… like defaults or cashing checks, and bill collectors!!! real low lifes but they are growing in number, as the apple rots.

    Cancelling the debt is a bad idea,

    Make the banks pay back the sub par non performing student loans out of each and every bankster CEO’s loot. and publish an extensive list of their names.

    There’s a Good idea!

  11. SafeNow says:

    Not only B feels like a fool. “A” feels like an even bigger fool, because he was on the college dining hall dish crew for 5 years, and missed much of the fun and self-knowledge-growth of college, because his hands were in the pot sink for 2 hours a day. Wait, I am not done with fools. D had his college expenses paid for by his parents, who scraped the money together, and could have used it for other things while they were young enough to enjoy it. Thus, D’s parents feel like fools. E got a free ride on a football scholarship, and so is completely out of the above fool discussion, but is arguably a fool for different reasons.

  12. Implied behind all these student debt issues is the DNA point that the US is corrupt in essence. The whole Student Loan system is corruption.
    Corruption here signifies the complete failure to benefit the public interest.
    Banks should NEVER have been involved. Like housing, the cost of the product inflates at the rate banks are willing to loan at.
    Tertiary education is a public good — it should benefit the nation. (It SHOULD mean the nation has a low need for importing foreign workers).
    Government needs to determine & set a flat (real) cost of various courses — ie Medicine should cost more than an arts degree. Debts should be adjusted down consistent with that cost.
    As a public good tertiary study must be funded by & repaid to the government. Debt should only be principle & CPI adjustment. (ie the banks will no longer earn interest on their loans.) The government should collect these debt payments, not the banks.
    Private schools should be cut out of loans. They can be free to charge as they like without any government funding. Harvard is so rich it need never charge fees.
    Students should repay according to their income. As their income rises a greater repayment should be expected.
    Students/Grad’s who have a low income (say, $ 35K ?) should not be expected to pay anything. (This should automatically be deducted from their wage. Those with fluctuating income may pay one fortnight, then not pay the next, based on extrapolating a week, fortnight, or month out to a theoretical yearly income.
    Bankruptcy law must be completely overhauled. Debts that can NEVER be redeemed, even in death are bonded servitude.
    The cost of this vicious educational shambles must be spread over all parties.
    But to return to my first point — in a nation run for the benefit of the 1 % – the Oligarchy or Plutocracy – the font of corruption how could one expect sensible responses? As the author notes, both the D’s & R’s have only B.S pandering answers. Both of them with their “Bankers uber alles” views are the further entrenchment of corruption.

    • Replies: @Justvisiting
    , @Jmaie
  13. anon[382] • Disclaimer says:

    Banks don’t own student loans. They are either owned by the Department of Education or guaranteed by the Federal Government. So, they are “pre bailed out”, as it were. The government is already stuck with them.

    It’s $1.6 trillion, roughly. Both the total US debt and the annual GDP are roughly $20 trillion.

    It averages out as around $30K per indebted student, but the median undergraduate debt is less. Most of it is performing and I think it is likely that 2/3 will be paid back. $30 K is the cost of a car. Its not an insurmountable burden.

    As a very modest proposal, I suggest that the interest charged should float based on US Treasury rates. With the maximum rate the contracted rate. In other words, give student debtors a discount based on current lower market rates.

    The stuff that will never be paid back? For small loans (under $5k), have some simplified bankruptcy light process.

    I’m OK with a bankruptcy option for Undergraduate and Grad/Professional school debt up to $30 k. With a more involved process for large debts.

    The proposed interest rate discount should also help.

    There is no reason to get hysterical about it.

  14. gotmituns says:

    Not even the “parents” understand the concept of interest. So why should the “child?” We have at least one generation of idiots and we’re in the process of developing another. We should really start thinking in terms of eugenics. The world can’t support all these idiots.

  15. Realist says:
    @Carlton Meyer

    Pass a federal law stating that institutions whose students receive federal aid (which means all of them) must provide all textbooks and other required materials free of charge.

    Is that all that needs to be done…pass a law. Then let’s pass a law that corruption is illegal, that hegemony is illegal. Just pass a law? Explain how that works???

    • Replies: @nymom
  16. Realist says:
    @niteranger

    People should home school their kids and basically bankrupt the school system.

    I agree with your comments. But the government school system is paid for with taxes, therefore home schooling will not affect public schools…you still pay taxes.

    • Replies: @Achmed E. Newman
  17. onebornfree says: • Website

    This just in:

    The State run/controlled mandatory “education” [ ie indoctrination] system is necessary/vital to the Federal Reserve system, and vice versa. They are 100% necessary to each others existence.

    Why? : because the State run/controlled mandatory “education” [ ie indoctrination] system indoctrinates/brainwashes its victims about the “necessity” of all government institutions, including the criminal scam known as the so-called “private” Federal Reserve.

    Who funds the continued expansion of the State run “education” system, ultimately? As with almost everything else, the Federal Reserve, via debt creation, of course.

    Of course, a state run “education” system is also necessary in order to not only brainwash kids about the “necessity”of the Fed itself, it is necessary to also brainwash them about the “necessity” of all of the other 100’s of 1000’s [millions?] of government scams [ eg the Pentagon, Social “Security”, The CIA, the FBI, the NSA, NASA, Homeland “Security”, the FAA, the FDA, the EPA etc. etc. etc. ad infinitum].

    Bottom line: The state run “education” system, conveniently funded by the Fed, is an extremely important government propaganda tool created to ensure the continuance and expansion of both the Fed and the rest of the very government itself, via the very deliberate brainwashing of all those foolish enough to believe its mostly idiotic “teachings”. [ eg”War is peace!”,”Freedom is slavery”etc. etc.]

    Summary: Dept. of Education and the Fed -“You Can’t Have One Without The Other”:

    “Love and marriage, love and marriage, go together like a horse and carriage….you can’t have one without the other.” Frank Sinatra

    In summary: if you fantasize about either “only” a centralized, State run banking system [and no centralized, State run “education”system], or , in reverse: “only” a centralized State run “education” system [and no Federal Reserve], its important to realize that the truth of the matter is that each is necessary to the other – both scams prop up/promote/reinforce and ensure the existence of the other, and not only that, the state-run indoctrination/”education” system and the state-run centralized monetary system are themselves vitally necessary for the mass brainwashing needed for the continued existence of not only themselves, but of all of the other entirely unconstitutional government scams, some of which I listed previously.

    So if you first have a government-run central bank system , and [somehow] no government run education system, sooner or later you’ll have a government-run”education” system eager to borrow from it.

    Or, if you like, in reverse: if you somehow first have a government run “education” system, and [somehow] no centralized banking system, sooner or later , like “cart follows horse” you’ll have a government run/controlled “independent” central bank system.

    “This I tell you brother- you can’t have one without the other” Frank Sinatra

    The Fed, the Dept.of “Education”, the NSA, the CIA, FBI, Pentagon etc. etc. etc. ad infinitum….all are unconstitutional, and all need to go, all at the same time, and the sooner the better.

    Regards, onebornfree

    • Agree: Achmed E. Newman
  18. TheJester says:

    What’s missing in your analysis is the motives that today’s college-age students have for incurring student debt in the first place. They often do it for the wrong reasons with the adolescent expectation, it seems, that they will not have to pay it back. If this assumption is correct, there is no limited to the amount of debt that young people are willing to accrue. As a friend once said about his son and his university debt, “Yeh, nothings too expensive … when someone else is paying for it!”

    I have had direct exposure to the current educational options available to Virginia residents and the options many of them chose through interplay with our daughter and her friends. I also have the experience of having to work my way through the university decades ago with an inflation-adjusted debt of $60,000. They called it “Work-Study”. I eventually paid off the debt as a low-paid junior officer in the military. I received a strange letter from the Federal Government that seemed to say, “Thank you for being one of the few people who have paid off their student loans ….”

    Cameos of Debt Psychosis:

    1. Virginia has a dynamic junior college system. Spend two years in junior college, make your grades, meet other criteria administrative criteria, and you are guaranteed admission to Virginia Tech, the University of Virginia, and other prestigious institutions. Instead, all too many young people over stress themselves for direct admission to prestigious institutions … and the cost be damned. Taking advantage of the Virginia junior college system would cut the typical student loan debt in half with no impact on their ability to post a “sheepskin” from a prestigious university on their wall. Other states have similar programs. Far too few university-age students are interested in these programs.

    2. THIS IS MAJOR. We know many young people who appear to think the purpose of university education is to get as far away from their parents as possible. To do this, they are willing to borrow far beyond their ability to pay back the loans. Easily done since the students take out the loans, not their parents. Why privy tell, would students take out $60K to $100K in student loans for degrees in recreation management, drama, video gaming, social work, black studies, woman’s studies, and LGBTxyz studies? As an adult could tell them, they are unlikely to make enough to pay back the loans … but sage advice from an older generation has no impact on their signing on the bottom line.

    3. The typical university student’s adolescent attitude toward accruing debt and paying it back is reflected in their attitude toward credit cards. Our son is an IT director at the major university. Until recently, the university allowed credit card companies to sign students up for $4,000 of credit when they enrolled. The credit card companies considered this relatively risk free. The expectation was that if the students got into debt problems, their parents, aunts, uncles, or grandparents would pay off the debt for them. This assumption was correct. Indeed, this occurred for the coed who eventually became our daughter-in-law. She maxed her credit card with no ability to service the debt or pay it off. An aunt paid off the credit card debt for her.

    4. As a university administrator, our son has continuing interactions with the university student population as well as the young professionals who work for him. He is amazed at their cavalier attitude toward debt, especially credit card debt, both before and after graduation. As he describes it, they take out a card, max the card, and then take out another card. They do not deny themselves new cars or exotic vacations … with no thought, it seems, for the future or how they will service their debts.

    Sorry, I’m going to take a pass on supporting any program that subsidizes the Millennial generation’s expectations of entitlement at someone else’s expense. I say this with the realization that university degrees are, at the same time, becoming progressively useless in the face of the politically-correct implosion of the curricula … the Sovietization of the American university system.

    I suggest a different program with a different message: “Grow up!”

    • Replies: @niteranger
  19. unit472 says:

    Education needs to be reformed. A university should not be able to dictate a student take an unrelated course just to receive a degree. A core curriculum must be offered to any student wishing to receive an accredited degree free of ‘electives’ or ‘enrichment’ requirements. You want to be a Registered Nurse, an accountant, civil engineer, botanist or whatever you can study that and not be required to take any courses outside those fields of study to get that degree.

    For some ‘on line’ classes might work but studies show person to person instruction is superior as human beings pay closer attention to the person actually speaking to them than to a video image of that same information. A live concert is superior to a recording of the same music.

    Debt cannot be forgiven except on a personal basis. If you borrowed $100 from me I can forgive that debt. A unpaid loan is a default however and must appear as a loss on some entities balance sheet. Student loans are guaranteed by the taxpayer so you cannot forgive student loans without impacting the future tax liabilities of every taxpayer including those who paid their student loans back and must now take on the loans of those who spent their student loans on frivolous courses, beer and lap tops.

  20. College now is little more than USURY culture induction.

    And –never— an issue ?

    ANYWHERE ?

  21. Wilson says:

    “state license that mandates a college degree” this applies to a small minority of graduates, and probably only a small minority of those have any problem making payments, so loans aren’t being forced on anyone, everyone involved in the scam deserves to suffer. The graduates whining about loans are still participating the primary scam, selling credentials instead of an education. They should be suing for getting a worthless product, but they are trying to pass off their fake diploma to get a fake job.
    It’s the same issue as the border, sentiment for children used to shield criminals. Put up the border wall, and wall off education from taxpayers too.

  22. The student loan debacle was created by convincing high school students that they MUST go to college in order to earn a decent living as adults. Basically, proponents of college were able to artificially increase demand for college, giving them a great reason to exponentially increase the cost of tuition and ancillaries.

    • Replies: @Jmaie
  23. @Realist

    That’s not completely true, as school districts get money apportioned based on how many kids attend. If a significant number of parents opted their children out, it would make a big difference. It’ll look bad to you and the other taxpayers, Realist*, if the schools become empty. However, I’m sure they’ll just either get homeschooling banned or increase the allotment per kid. Socialists have been getting their way for 6 decades and counting.

    .

    * OK, I know you personally already have your eyes open about it, but not most taxpayers yet.

    • Replies: @Realist
    , @nymom
  24. All the students with major debt should become expats. Leave the US and screw the bankers.

    To solve the underlying problem requires taking a hard look at the whole ‘higher education’ system.

    No one should be able to get a degree past BS or BA for one of the ‘Opinion’ fields like Law, Climate Science, Economics, Psychology, Psychiatry and a slew of other ‘Professions’ that are pure horse hockey. These fields of study can’t prove a damned thing. All they have are theories or the consensus of their ilk decade after decade.

    Once these fraudulent professions are openly outed, students will realize that entering those fields is just plain stupid and either not go to college or find some reasonable field of study if they are intellectually capable.

    All the ‘Humanities’ and ‘Social Sciences’ are BS. the world needs fewer frauds and more engineers and true scientists.

    • Agree: TKK
  25. That’s a very thorough and thought-provoking (for those not aware already) article, Mr. Penfield. You cover a lot here, and come across very fair and well-versed in economic realities. I agree with most of your thoughts on the issue of the > $1,600,000,000,000* student debt problem.

    You really did leave out one detail to explain how we got into this mess. I word-searched for both “guarantee” and “back” (for any form of “backed” or “backing”) – no, NADA besides other uses … couldn’t find it in this long article. OK, I’ll quit being snarky. Listen, Mr. Penfield, as only commenter Anon-#382 pointed out so far, these loans are backed by US Feral Gov’t guarantees. That means the banks cannot lose. Why wouldn’t they loan $73,000 to a guy who will major in Art History for 5 years … and climbing?

    Before the moral hazard of the US Gov. backing the loans, any bank loan officer who made such a move as that loan speculated-on above would be fired. It’s not a good risk. Sure, $5,000 over 4 years to help an electrical engr. student make it through, even back when tuition was $1200 yearly, yeah. That, and loans like it, are a good bet.

    That’s what started this crisis, and taking that away is the way to fix it. The other consequences of being in this big hole are things you’ve described pretty well, though this $1.6 Trillion is just a small part of the Global Financial Stupidity (scroll down) that we have been living with.

    “Moral Hazard”, people. I’ll get more into it in another forthcoming comment.

    .

    * I write the number this way often to help the all-but-completely-innumerate understand the size of the problem

  26. Dumbo says:

    State universities in European countries such as Germany, Italy and Sweden are basically free or pretty cheap, and they are doing fine. I don’t see why they are so expensive in the U.S., it’s not that they are necessarily much better. Perhaps in some areas of STEM, where they need money for expensive labs, but from what I’ve seen in the Humanities, American universities tend to be much worse, it’s just SJW nonsense all the time (European universities remain a bit more classical, even though they also have nonsense).

    • Agree: Bardon Kaldian
    • Replies: @Jmaie
  27. The. solution offered here is not a good one. It’s not that I don’t agree with the obsolescence of the traditional large University system, with your thoughts on all the new modes of learning (Khan Academy, etc), the ridiculousness of 13 mandatory years of education to even beforehand, and the latter only about to increase. That’s all good, and no matter how you must fear being called a Libertard, you are as Libertarian as the next guy. I, for one, appreciate that.

    You rag on that Libertarian bit about “this will crash the system”. Sorry, I didn’t read the information linked-to, but I don’t think they are wrong, literally, that is. Yes, something’s gonna crash the system. No matter that it WILL hurt and cause unpredictable political turmoil. it’d be better if it happened before the hole is even deeper, don’t you think?

    Back to my point in my 1st paragraph, your solution is to have a Jubilee. The difference from today and Leviticus, is that (by your writing) it sure sounds like this 50-year thing was planned way in advance. What a difference that makes! If one know the rules, one can plan accordingly. Creating this moral hazard in the first place, then creating a 2nd moral hazard by writing off debt for only certain people and for which nobody knew about it going in is not the way to go, man!. I’ll continue on this point in a bit.

    In the meantime, Peak Stupidity has a whole topic key on the Universities (sorry, scroll down again), including:

    University Bubble 101,
    University Bubble 99 – Remedial Global Financial Stupidity at the U,
    University Bubble 99 – Remedial GFS at the U – Part 2,
    University Bubble 99 – Remedial GFS at the U – Part 3, and
    University Bubble 99 – Part 4 (Conclusion, It’s not a PERFECT STORM)

  28. Mr. Wales says:

    I don’t feel sorry for anybody with large student loans. They failed to exercise their options. The parents are to blame too.

    For example, parents feeling guilty about not sending their beautiful daughter to an expensive university. She may be beautiful, but it doesn’t mean she is smart. Or ambitious. She is often just a cry baby who wants the college experience. So the parents cave and allow her to make the fateful choice of accepting expensive college loans instead of helping her understand her options.

    After the “experience” of drinking, partying, poor sexual choices and not enough attention paid to studying she graduates.

    She isn’t anymore ambitious. But she is a little more damaged and cynical. She sees herself in a way no one else does. She thinks she is unique! Like on the front line of social change, the modern woman, screwing over the patriarchy.

    Well, it turns out as her twenties come and go, she needed a man more than she thought. Steady anti male propaganda was having a subtle effect on her choices. Now in her thirties and aware of her selfishness and stupidity, she is desperate for a family.

    But men aren’t lining up. She had too much sex with other men. She isn’t as pretty. She’s heavier. And her college loans are still there along with a pathetic savings account.

    She is no longer wife material.

    But she always has that college degree!

  29. I just don’t understand US higher education policy (I’m talking about student debts).

    How that other countries like UK, Australia, Germany, Canada, France, Japan, Denmark, Switzerland, China,…..happen to have finest schools (along those in the US): https://www.topuniversities.com/university-rankings/world-university-rankings/2019 -and their students are, as far as I know- not in serious debts?

    Something is structurally wrong here…..

  30. @animalogic

    Banks and universities are the bad actors here. Their lobbyists created this mess, and are lobbying hard to make it bigger (“free” college for everyone).

    Clearly a liquidation of all university endowments and trust busting of the largest banks should be a part of any solution.

    The brick and mortar universities are part of the problem–they will never be part of the solution.

  31. This is a fascinating idea. A few points:

    a) Capital stream has been directed to unproductive use: maintaining the urban area populations and infrastructure.

    * Not to weapons (Russian Federation and PRC have better (although fewer weapons). The US has been paying other countries not to attack it or leave its coalition, as opposed to paying for superior weapons / forces.
    * Not to industry (most certainly not). US has been sending its industry abroad to pay countries not to attack it or leave its coalition.
    * Not to academia and R&D. These areas are treated as patronage jobs for people who might otherwise form a capable opposition. Richard Stallman was tossed from what the establishment thinks of as a patronage job (or income source) for political non-conformity, his accomplishments not even considered. That’s typical, and has been for decades outside of top-tier engineering and science departments. The results reported by this system are not developed; they are not funded to the engineering stage, at least not in the US. One gets endless breathless news articles about future products, but very few future products. And the few we get — ever notice how computers are finally revealed as population control devices? Ever wonder why they were permitted to develop in the first place?

    b) Nobody is going to pay off the value of the existing US debt.
    The base needed for productive work in the US has been largely destroyed. At best, debt elimination will be accomplished by the reduction in the worth of a US Dollar that we have seen since 2004. [1].
    If Trump wins his various contests, the USG will stop digging itself in deeper _but_ there is a good chance that unrealized losses may be suddenly realized in a societal “accounting adjustment” of some sort. If Trump loses, then this societal “accounting adjustment” will be deferred for several years (“kicking the can down the road”), but will of course be even more severe when it occurs.

    c) Therefore, it’s metaphorical musical chairs time, when Trump wins _if_ he wins, and a few years later if he doesn’t. Somebody ends up landing on his head.

    d) Question is “Who?”. My guess is that there are only two possibilities:

    i) The New Netherlands / Yankeedom coalition (see Woodward’s map [2]) breaks up as each coalition member loses its power base. There are already signs of this in the Western part of Yankeedom, in the opposition by Corporate Democrats of Warren’s candidacy, and by the treatment of Stallman.
    Consequences:
    The universities pretty much shut down. Their place is taken (after an interregnum) by on-line courses, possibly administered locally and reliant on a distributed trust (blockchain supported) auditing system. Take a look at Durden’s article [3] before you dismiss this. If prostitution is a likely result of sending your kid to college, well, perhaps sending the kid there isn’t such a good idea [4].
    R&D retreats into private firms (such as the various space related industries and the pharmaceutical industries). Research is greatly reduced in funding, but perhaps not so greatly in effectiveness (analogy to the Renaissance and the Western Breakout here).
    The senescent corporations (GE, GM, utilities, financial institutions) fail at an accelerated rate.
    The cities lose population as their income stays constant in USD units, but buying power drops to very little indeed. The displaced populations have trouble supporting themselves in an industrial society.
    The US Navy manages to retain some control over the seaways (primarily because nobody really wants to destroy the police force that makes trade possible) and global trade is continued on a reduced scale. Regional wars are fought, but don’t stop global trade.

    ii) The New Netherlands / Yankeedom coalition (see Woodward’s map [2]) does not break up.
    This is worse in terms of total casualties. New Netherlands / Yankeedom forms the highly directive society that can be seen forming in their 2019 Presidential candidates, and the US adopts what amounts to a centrally planned wartime economy in an effort to keep the urban areas (and their institutions) alive.
    The effort fails: the resources just don’t exist.
    The directive society ruthlessly exploits the corporations, which shed competent employees as happened in the USSR, and productivity falls. This causes a breakup of the US international coalition (which would be ruthlessly exploited as well), and the US Navy loses its control of the seaways; the US has no effective military expeditionary forces. Global trade is not continued on a reduced scale, and regional warfare grows to a much larger scale. It also spills over into the continental United States. At this point, the The New Netherlands / Yankeedom coalition fails, and we are in scenario (i), above, except starting from a much lower baseline and with much more foreign intervention in the continental United States.

    e) Frankly, I would have suggested something more sedate, but nobody asked [5].

    Counterinsurgency

    1] http://www.shadowstats.com/alternate_data/inflation-charts
    See: inflation charts

    2] Search terms: “Woodward American Nations .pdf” or:

    3] https://www.zerohedge.com/economics/why-are-so-many-tier-1-college-girls-turning-soft-prostitution
    Hey, “sex work” is empowering, no? Toleration of this is yet another verification of the saying “Feminists don’t hate men, they hate women”.
    Used to be that the houses would train their girls without charging them a dime. I suppose the nearest analog would be the geisha, whose training cost quite a bit. I don’t know how geisha training was financed.

    4] This started decades back with recruitment of college kids as lab rats in large scale drug tests. Said to be safe, but, guys, the tests are conducted to _check whether the drug is safe_, not _because_ they are safe. That, in turn, was closely related to using college populations (of more or less naive kids, sent there _because_ they were naive kids, for the purposes of political professionals rather than the kids. Huge abdication of institutional responsibility, rather like this manufacturer of novelty confections:

    5] If you painted a sign in Times Square that said “Warning: Pressing this button detonates a world destroying cobalt encased nuclear weapon. Press this button to end the world.” and it had a button underneath, the paint wouldn’t dry before somebody pressed the button.

  32. Arnieus says:

    I paid my loans off. Gonna give me my money back?

    • Replies: @Pontius
  33. THE MONEY “CREATION” AND THE “SYSTEM” IS EVEN WORST THAN WHAT IS DESCRIBED HERE.
    BELLOW THE BEST DESCRIPTION OF WHAT HAS HAPPENED TO US ,BY COLIN MCKAY.
    BETTER EVEN THAN MICHAEL HUDSON,RICHARD WERNER,AND DAVID STOCKMAN.

    https://psalmistice.com/2015/06/18/on-principal-and-interest-hermetic-magick-and-the-lords-of-time/

  34. Pontius says:

    Yup. I remember a 600 page textbook getting used for one course on integral calculus, before being switched back to our original text for our differential equations course. Seems Prof #2 had an agreement with the publisher to use this particular text, from which we studied approximately 2 chapters. That book was ~$300. You received naff-all for it when you resold it to the college bookstore, which got to profit it off it a few more times before the next edition cameout. I remember one Prof even threatening expulsion if he found students sharing textbooks or using the older edition instead of buying the new book that he openly admitted to profiting from as a contributor.

    As for Corinthian and it’s ilk, the sooner they are banished to outer darkness the better. They are exhibit a in generating worthless education at exhorbitant prices. The last few years they ran a college here the prices were getting to over $22k for an 8 month course to become a cardiology tech. I knew a couple of women who went through it and if not for the heroic effort of a retired nurse who took them aside an showed them what they really needed to know, they would have had no hope of passing the provincial exams. The provincial authorities advised the school that graduates from the program would no longer be eligible to write the exam soon after the second student had graduated. The entire institution went under a couple of years later after a few lawsuits were filed by ex-students who claimed they never received the education they had paid for. Many were left with nothing mere weeks before graduation. Some were taken in by other schools as a goodwill gesture to allow them to finish off their programs, but most were s.o.l.. In a moment of desperation I had attended the same insitiution in another city and could only nod my head as all the details came out.

    • Replies: @Achmed E. Newman
  35. Pontius says:
    @Arnieus

    That $60k would sure take a chunk out of my mortgage.

    • Replies: @Charon
  36. My family isn’t rich by any measure.

    Yet, we paid ever single penny of our two children’s college expenses so that they wouldn’t be burdened with debt when they graduated. It took years, many years, to pay off that debt…now paid in full.

    Are we due a refund for being responsible parents?

    • Replies: @Counterinsurgency
  37. Realist says:
    @Achmed E. Newman

    That’s not completely true, as school districts get money apportioned based on how many kids attend.

    That is true.

  38. nymom says:
    @Realist

    This book buying of assigned books by your professor is definitely a racket. I used to have book bills, sometimes per semester, of a couple of hundred dollars PER SEMESTER…

    It was completely ridiculous.

    Actually one of my professors assigned a number of books for us to read that were written by his ex-wife…I thought to myself probably an informal part of the divorce settlement…all books she wrote would be assigned reading for his courses.

    He was one of my favorite professors so I didn’t mind so much really…but it was a little much…

    • Replies: @Realist
    , @Pontius
  39. @Pontius

    Shoot, I just had to chime in here on the Great University Textbook Scam of century 21. Read that if you have 5 minutes, but let me just tell y’all – they have this shit wrapped up now.

    You need codes to run software associated with the books, for which you won’t pass the class without doing. Therefore, you can’t use used books lots of times. I’ve seen engineering revisions (this is for stuff that’s greater than 100 year-old knowledge) in which only homework problems have been changed – and only changed around in order!

    Then, many professors are in on this, requiring new revisions etc. In the meantime, printing is computerized and cheaper than ever, but you don’t even need anything printed. However, as I wrote, not much can be sold used, as they’ll have you locked out.

    I was gonna say “don’t get me started”, but hell….

  40. nymom says:
    @Achmed E. Newman

    In NYC you are allowed to homeschool but there are a number of qualifications…

    You have to have a BA from college yourself.

    You have to apply to the city to let them know around June or July of the year you are starting to get the permission.

    Your children are tested every year or six months (not sure which) to make sure they are at grade level each year.

    Actually I investigated this as I was considering doing it with one of my grandchildren but she winded up returning to live with her mother and was subsequently in a better school district in NJ…

    There is even a community of parents online who had a series of books you could buy in order to make sure you were achieving the various educational milestones in order for them to pass the testing requirements each year. They were used but in good condition according to the site.

    So its not quite as simple as it is in other states to homeschool and I think that could be a good thing…Not sure.

  41. Back to my criticism of this generally-good article. Sorry, Mr. Penfield, you’re gonna get this kinda thing on-line.

    You mentioned Matt Welch. Last I read him was in Reason magazine in the mid-oughts, as I sent back a pro-immigration issue and told them to keep the rest. (Please don’t start an argument, commenters, about all Libertarians being open-borders. Not this guy!) Anyway, whether it’s from his principles or just his personal story (sister?), the personal story is a good way to illustrate the problem.

    No, the problem will absolutely NOT go away with some loan forgiveness program, Mr. Penfield! It’s another moral hazard that will make things worse. Even if we magically didn’t run into the same bait-and-switch tactics that go back to Ronald Reagan*, which we will, dozens of millions like Mr. Welch’s sister, and those associated with them will rightfully be a bit disgruntled. Now, you say that they will have learned a good hard lesson.

    Yes, the lessons they will have learned is don’t live by the rules, don’t trust the US Gov’t (at least that’s a good thing to learn), and next time, screw the system any way you can!. It screwed you, and who knows what the next thing will be, forgiven mortgages, car loans, CC debt, what? You will created even more irresponsibility in a country that already has too much due to 5 decades of hard Socialism.

    You think there is a lack of social trust now in America. Wait until more responsible people get screwed, and that’s exactly what your solution is. Don’t try to rationalize it, Mr. Penfield.

    .

    * Yes, we’ll control the borders, after this one teensy little amnesty, and then, yes, we’ll cut the domestic budget while we raise the defense to win the Cold War. Ronnie was way too naive and trusting, not of the Soviets but of the US Congress.

  42. Realist says:
    @nymom

    This book buying of assigned books by your professor is definitely a racket. I used to have book bills, sometimes per semester, of a couple of hundred dollars PER SEMESTER…

    I agree, but passing a law will not solve the problem. And in some cases the assigned books may be the best books for the course.

  43. wayfarer says:

    If you look at a list of the professions most prone to suicide, it’s like looking a who’s who of high student debt occupations. There a bunch of different stats when it comes to white collar jobs and suicide, but all of them look awful.

    https://www.studentloanplanner.com/student-loan-debt-suicide/

  44. Tulip says:

    It would be simple to address as follows:

    1.) Allow student debt to be subject to discharge in bankruptcy (perhaps some “clear and convincing” evidence of financial hardship or inability to repay).

    2.) Phase out federal loan guarantees over 10 years (80% for 2 years, 60% for 2 years, etc.).

    Then lenders will be making rational choices and students will have a recourse. Most have not defaulted, but the concern about bankruptcy is that many will. Of course, with loan guarantees, this will cost tax payers, but cheaper than Warren or Bernie’s plan.

    Of course, overturning Duke Power and the rest of the federal court’s social justice disparate impact dreck and allowing companies to hire smart people with direct testing, rather than indirectly by having colleges admit on intelligence, and then make kids jump through hoops and take on 50K in debt, so companies can indirectly hire on intelligence wouldn’t hurt.

    Lots of criticism of the NYT’s 1619 project, and we can question the historical accuracy about claims of the larger impact of chattel slavery on the American economy, but the current American economy is solidly based on debt slavery. Debt slavery is just who we are.

  45. Amon says:
    @nsa

    works his way through school, takes 5 years to graduate with no student debt.

    Show me the person who can work their way through collage when they have to deal with these kinds of costs.

    The price of “room and board”—a.k.a. housing and meals—can range a lot depending on where you live and what school you go to. Students at public schools can expect to pay an average of $8,887 and those at private schools will pay an average of $10,089 per year. These prices are for dorms on campus.

    That’s for the College dorm alone.

    According to College Board, published tuition fees for 2018/19 at state colleges are an average of US$10,230 for state residents, and $26,290 for everyone else.

    This compares to an average of $35,830 at private non-profit colleges.

    How do you expect to pay off a college education that can run up into $50,000 per year, when all you can get as a student is a part time burger fool job with illegal immigrant level wages?

    This is why the new generations hates boomers , you all think a college education still only costs 9000 in total and that you work it off waxing cars at Honest Joe’s cheap automobiles.

    The world has moved on and all those great jobs you had as a kid has been shipped off to China or filled out by immigrants so your 401K could grow fat and heavy.

    • Replies: @Achmed E. Newman
    , @Kyle
  46. Tulip says:

    WTF are all these defenses of bankers about? What do the banks do on these deals? They make profits on loans that are guaranteed by the government. Why do students pay interest at all if the banks bear no actual risk of loss?

    How do the banks get the money to loan to students? Well, if they are federal reserve banks, they get the legal privilege to loan money to people, so it costs them nothing (since their loans are made at interest rates higher than what they have to pay the government).

    Its a tax payer subsidized scam, and there is nothing “libertarian” about defending the unjustified legal oligarchical privileges of American banking. Nor “libertarian” about bankruptcy laws that don’t allow for a complete discharge of debt.

  47. Pontius says:
    @nymom

    One of my professors had students typing up his textbooks for a few extra bucks. Much of the content was based on labs we were doing in his class. He was the main instructor in the program, and the language barrier was considerable. The school didn’t care. The whole program was dropped a few years later due to the dismal employment outcomes of the graduates trying to enter the workforce in the teeth of the tech bubble bursting. Most of the jobs we were training for were moving to China anyway.

  48. Speaking as someone who paid for my child’s education, at a moderately priced school:

    If the government makes a retroactive subsidy (paid for with my taxes) to those in the elite who went to places like Harvard to study politics of forgiving their debts, there will be trouble. Serious trouble.

    Student debt can be discharged in bankruptcy in appropriate cases, which is where the issue should be addressed, where rules can be changed so that student debt would be treated like any other debt.

  49. @Carlton Meyer

    That idea has its merits, but excessive “education” costs must come down as well, which has serious financial implications for those in that field. The problem for the banks arises from the loss of debt-service income, a loss that will further destabilize these already unstable usurers. Unless and until the monetary system undergoes bedrock changes, the financial-educational establishment will fight tooth and nail to see sensible ideas stifled.

  50. Che Guava says:

    This article is too verbose, but very interesting. I have never been in the U.S.A. education system, but I suppose the International Preparatory School reflected it . My parents place me in it to improve my English, and it seems to have worked a little.

    I will try to restrain my anger at my parents for putting me through 13 primary and secondary schools, never expelled from one.

    Modern tertiary education is a joke at best. I. am glad that my own graduation was under a less sttupid system.

    This is also true in Japan,.

    I live near one of the top five, most of the students are morons. I recommend the university scenes from Pump Six, by Paolo Bacigalupi, very apt and funny.

  51. Jmaie says:
    @Carlton Meyer

    Pass a federal law stating that institutions whose students receive federal aid…must provide all textbooks and other required materials free of charge…

    My daughter at age 12 realized that “included free of charge” simply meant “cost add to the amount paid for the main item.”

    Your idea would actually harm those you seek to help. Take the University of Washington, currently around $4,000 per quarter for tuition – every student would now pay say $4,300 / quarter and this would include those who used on-line books, bought used or had friends who already owned a copy.

    And nothing in your plan would reduce the cost of textbooks. Might remove the petty corruption of professor-authors (or move them into mutual cooperatives) but it would not remove the financial incentives which have so greatly inflated textbook costs.

  52. Jmaie says:
    @animalogic

    Government needs to determine & set a flat (real) cost of various courses — ie Medicine should cost more than an arts degree. Debts should be adjusted down consistent with that cost.

    Arts degrees should cost more than medicine if we’re basing it on the public good.

  53. @Anonymous

    Laws, loads of laws were specifically made and passed to prevent that.

    Student loans are special you see.

    Made to create a new debtor class in American society.

  54. Jmaie says:
    @MikeatMikedotMike

    The student loan debacle was created by convincing high school students that they MUST go to college in order to earn a decent living as adults.

    Unfortunately for a lot of folks this happens to be true, as a college degree is often times needed just to get an interview. And we wouldn’t be in this situation if the high school diploma hadn’t become worthless.

    The spigot of free government money is a main cause of the mass-inflation in the cost to attend.

    • Replies: @MikeatMikedotMike
  55. @nymom

    I’m not as even as sure as that, NY Mom, meaning that no, it’s a bad thing. The next thing you know the diverse city committee will be telling you that your children have failed the knowledge test on the many strengths of diversity and the ideology of Socialism. They will need to go back … to PS Hellhole #42.

    Many other Conservatives poo-pooh the 2nd Amendment defenders continual complaints about the “slippery slope”. That is quite real, and the leftists spend their lives keeping America on that slippery slope.

    I hope it works out fine for your Granddaughter in New Jersey.

  56. Jmaie says:
    @Dumbo

    State universities in European countries such as Germany, Italy and Sweden are basically free or pretty cheap, and they are doing fine.

    They don’t let 70% of the population attend. They don’t think that graduating seven humanities majors for every doctor or engineer is a good idea. They don’t really consider Angry Studies to be a real subject. And their secondary education systems (at least in Germany and Denmark) divert non-academic students into technical education early enough that they can finish with actual marketable skills.

    • Agree: Charon
    • Replies: @Jarl Carlsson
  57. @Carlton Meyer

    There’s quite a bit of BS rationalization there to make you all feel better about yourseves, Mr. Meyer. The US Gov’t does lots of criminal things, but accumulation of interest during forbearance (see the difference between forbearance and deferment here) is not criminal nor is accumulation of interest during a decade of non-payment.

    Hey, I know there are dozens of millions of former and present students who have no business being in college. Whether their accumulation of debt is their parent’s faults or their own for being naive about higher education is another story. I understand that many of these students won’t all be able to pay easily, and some never. Life’s tough – it’s tougher if you were stupid … and went to college for no benefit other than the poontang (or maybe not!) Your scams are ones that I’ve thought about, but they are not the real solution to anything.

    Let me ask you one thing. Even with the PC, SJW crap, is there any time left at college to learn how to use an compound interest table (P, A, F, Rate, etc.)? You can learn this in 10 minutes. These calculators are on-line – don’t tell me modern students don’t know how to “search it up”.

    • Replies: @SaneClownPosse
  58. @Amon

    You are right, but the author here has given many solutions for this problem. None of them involve going to a traditional college for 4-5 years, with the numbers you give. Lots of people DO understand that. Many young people go anyway. Whose fault is that?

    • Replies: @Oldtradesman
  59. Amusing discussion, but does anyone here seriously think the banks are on the hook? They’ve repackaged a lot of the risk in SLABS and sold it on to investors who bear the potential risk of any default or potential forgiveness.

    The money for the banks is not in holding the risk, rather it is in the relatively risk-free business of originating the debt and selling it to investors … just as was the case with sub-prime, so many years ago, it seems.

    • Replies: @anon
  60. EdNels says:

    Well there’s been lots of good argumentation mostly against the scams that have become attached to Education of the youngsters, also called college. (University, college, tertiary schooling, )what all costs a heap of big money since there’s never been so many dumbshits who think they need it! And… so much easy money to slide em’ into the scam… usually including some cosigners like the fam who ever.

    Well, think of it like a signifier that the sosososiutee..(society…the way Louis used to sing it) is deteriorating at a fast pace. And… most emphatically: it is a prime example of predation by one segment of the humans (Morlocks… H.G. Wells book. on the other part of the group: Eloi who get eaten. I mean, when the old eat the young! WtF is that but cannibalism?

    It’s a sign that like rats, eventually the rules of nature start to revert. Too many in a closed system and they just… go off on each other which is one reason to slow down too much population growth, in absence of any real plan, or the means and will to adhere to such Plan. That said: true well organized military society is socialism, paid for off the top by the society. The military is loved by most responsible elements of society, left ,right, through the center, yet Socialism is maintained a buzz term which is not to be understood, (Taboo). Understanding of that is contradicted by the need to preserve a buffer of mystery so that elites ride on top, and the bottom stays slave like. If there was any organized government for the benefit of all so to speak, that would be a pain in the ass to the grifters, so that must be off limits.

    The idea that every stupid tom dick and hairy shthead should go borrow thousands of bucks to pay the crooks who took over the schools…. I mean… it’s a bad sign of the times… the level of dumbity!

    We should have free education for all way to the … 6th grade, and then go to work at meaning full jobs picking peas; sweeping the streets, etc.et.

  61. @TheJester

    The Junior College System now called Community Colleges has become a total scam. The course work is more like high school and even middle school. Most of the students who go to these schools cannot do real college work even though it’s dumbed down and end up flunking most courses especially if they are even a bit rigorous. So the students are paying for credits they should had in high school.

  62. @Jmaie

    “Unfortunately for a lot of folks this happens to be true, as a college degree is often times needed just to get an interview. ”

    This is absolutely not true. An apprenticeship in the trades requires no college; the issue being of course, most young people don’t even realize that these jobs exist or how well they pay.

  63. I hope the readers don’t mind all my comments, but this is such an interesting subject/issue that brings up thoughts about so many aspects of the American economy and society. I have one more quibble, and then more praise (I had to read through again to get it all).

    The Quibble: I’m pretty sure this article was not written just for publishing on unz, but man, on the small bit of virtual signaling here, Steve, let it be! You’re not fooling anybody with:

    Mandatory professional licensing is possibly the greatest example of institutional racism left in America

    [Your bolding, making it even more stupid.] Which college graduates are you trying to impress with this crap? It’s exactly opposite from the truth, which you, yourself, almost proved, as you mentioned alternate modes of certification. A commenter already noted (along with Steve Sailer, many times) that the Griggs vs. Duke Power decision put the kibosh on that simplification of life. Who came up with this “institutional racism” bit? He is now OFF the committee.

    Before that, we read about “disparate impact” on minorities…. Hell you bolded it, and what do you mean by the quotes, anyway? Most of us know that certain types of Americans, that used to be “youths”, let’s say, are very, very bad at handling money. “Disparate stupidity”, is that what you mean. Please cut out the racial virtue signaling, Mr. Penfield.

    That final quibble aside, man, this is one hell of a good treatise to this subject! All your discussion of Central Banking, Statism vs. Freedom, the outdated University system, University financing, free-for-all college spending (a lot is on new Diversity Deans and the like, along with the new gyms and dorms, BTW.) is top-notch and in agreement with everything I’ve thought about it over 3 decades. This article should be read far and wide, and even entered into the Congressional Record, for those still literate members of that august body.

    If you would change the minor quibbles, well including the more major one of the solution to the currently-outstanding (15% in default) debt, then send me a copy back for review, we could get your Dissertation signed, and get you out of here to start paying it back, dude! ;-}

    Oh, wait, I almost forgot, the only solution for the short-term problem is, as other commenters have already written, to let this debt be discharged in personal bankruptcy. What would have to go along with that, almost automatically, is a curtailment of any more borrowing of money by folks so involved, which is nothing but a good thing!

    .

    PS: Yeah, it was Matt Welch’s wife, I see, not sister. Ooops.

  64. @Achmed E. Newman

    Lack of ability to foresee future consequences of an action taken now.
    Blame the students, the parents, the educator/capitalists and/or the root financial system?

    Once the Federal spigot was opened, the usual outcome occurred.
    Tuition and other costs soared to make Big Education profitable.
    The Financiers had to get their prime cuts.
    The end product became minimally viable, but maximally profitable. The F-35.

    Students become indentured servants. Living in “coal company towns” with no savings for future. Whatever they earn goes right back to the financiers. Rockefeller Foundation played a big part in Big Ed and Big Ag.

    Compare interest paid on a T bill with interest charged on credit. Known as the spread, the vigorish. Easy money for the bankers. Making money off fiat created from promissory notes.

    • Agree: Achmed E. Newman
  65. APilgrim says:

    Perhaps we could allow ‘reasonable & customary’ educational expenses to be amortized over a decade. So, the payor, (not necessarily the student) receives some tax benefit, for credible, accumulated tuition, books, room & board.

    By ‘reasonable & customary’, I mean a Chevy tuition plan, not a Mercedes.

    By tax benefit, I mean a 5% per year tax deduction or a 2% tax credit.

    So there, we don’t disrupt the fiction of a sanctified contract or give away the national treasury.

  66. It’s really hard to buy into anything this guy is writing, but perhaps with 20,000 words the narcotic affects of a wordy manipulative narrative begin to “sink” in. Ignorance is bliss, or security in a police state.

    The Government spends trillions buying toxic assets and then selling the same assets back to the criminals for pennies on the dollar. They can get away with it because not one person in 10,000 understands squat about money. Instead morons debate whether school should cost an arm or a leg and whether or not poor people are guilty. The poor in America never will rise up because they know the cops would massacre them and because the rich and middle class have beaten them down like curs.

  67. @nymom

    Not true. You do NOT have to have a degree to homeschool anywhere in the country. You do not have to use specific curriculum. You have to notify in the beginning of the year. You have to send a list of curriculum for each subject. You have to send a year end evaluation. You can choose the test you want to use (PASS, CAT, Stanford…) and have to test twice in 5th through 8th grades and every year 9th through 12th. Other years you do a written narrative of progress with a third party of your choice. You have to teach the same basic subjects, but you choose how. You have to send in quarterly reports, but you pick the dates. So Johnny spent 200 hours on Math, etc. It’s really not that hard.

    Sometimes individual districts will lie to parents about the regs, but it’s written out clearly enough here: http://www.nyhen.org/regs.htm

    HSLDA is there to defend against school district that overstep their bounds.

    NY and MA are the worst. Most states are way easier.

    • Replies: @nymom
  68. The greedy Baby Boomer nation-wreckers are to blame for the STUDENT LOAN ATTACK on Americans born after 1965.

    Greedy and evil Baby Boomers are to blame for the student loan debt bomb about to detonate in the middle of the consumer economy in the USA.

    I blame Howard Jones for that crappy — but very catchy — pop song.

    No On Is To Blame? Bullshit!

    No one ever is to blame? That’s typical Baby Boomer distractionary horseshit!

    Baby Boomers are to BLAME for the student loan debt bomb about to detonate.

    Student loan debt slaves ain’t gonna buy cars, homes and consumer crap with the student loan debt millstone hanging around their neck and destroying their credit.

    Annie Lennox has bigger balls than that pop star turd Howard Jones. That’s a complement to Miss Annie.

    Scottish Lassie Lennox has a bigger pair than that Welsh pop star turd Howard Jones. All the experts agree.

    Tweet from 2015:

    • Agree: Kronos
    • Replies: @APilgrim
  69. I wrote this about the STUDENT LOAN DEBT BOMB in 2014:

    NH Sen. Jeanne Shaheen is currently crushing the aspirations of the young by chaining a student loan millstone around their necks.

    Shaheen is a multi-millionaire who lives in a demographically traditional New Hampshire town. Sometimes, Shaheen scoots out to billionaires’ homes to grab more cash for herself. She recently headed out to San Francisco, and not to do a Labor Day weekend show. Shaheen was at the San Francisco home of billionaire Tom Steyer, in an effort to gather more money.

    Shaheen likes to play the concerned politician when it comes to talking about the economy-crunching calamity of student loan debt. Shaheen knows that the average student loan debt load for New Hampshire students is $33,000.

    Shaheen knows that total U.S. student loan debt is now over $1 trillion dollars. Shaheen has eyes to see just like you and me. Everybody aware of financial basics could see that when student loan debt passed auto loans and credit card debt, the resulting economy of the U.S. would be in bad shape for the future. Affordable family formation is being crowded out by young people having such massive student loan debt burdens.

    Shaheen has nothing but micro-solutions to the student loan debt bomb about to detonate in the U.S. Shaheen is not dumb, she can see the student loan demographic dilemma just as well as any Pew Research Center egghead.

    Shaheen likes to pal around with Goldman Sachs billionaire “global warming” enthusiast Tom Steyer. Shaheen can also be found canoodling with new Federal Reserve Bank Chairman Janet Yellen.

    Billionaires currently have too much power in the U.S. Fed boss Yellen has the power to conjure dollars out of thin air. Somethings got to give in regard to student loan debt burdens.

    Shaheen should tell her new gal pal Yellen to purchase the $1 trillion dollar plus outstanding student loan debt. The Federal Reserve Bank has already stacked up $4 or $5 trillion dollars worth of toxic paper from its member banks.

    There was no market for the toxic sludge mortgage backed securities the Federal Reserve Bank has recently acquired. The Fed made the market. There has been, of course, more of a market for the U.S. Treasury securities(bonds) that the Fed has purchased, claiming the conjured loot helped the financing of various assets — stocks, bonds, real estate. Most honest onlookers would say the Fed just re-inflated previously collapsed asset bubbles.

    Shaheen has done nothing of real import to stop student loan debt from imploding the economy of New Hampshire and the U.S. Shaheen knows that Tom Steyer’s old stomping grounds at Goldman Sachs would have been financially obliterated if the Goldman Sachs counter-party AIG was not bailed out by the Federal Reserve Bank. When the Fed handed out all the conjured-up, printed-up loot to AIG, it was really to bail out all the plutocrat scoundrels at Goldman Sachs.

    Shaheen is a crafty, canny politician. Shaheen might be considered a political leader if she offered more than ineffectual political boilerplate to the student loan demographic disaster hitting New Hampshire and the U.S.

    Tweet from 2015:

  70. @Longfisher

    Are we due a refund for being responsible parents?

    Serious answer: In the real world you get your payoff when interest rates increase drastically, your income stays constant or you lose your job, and you are _not_ foreclosed upon. No joke. This stuff isn’t funny.

    Counterinsurgency

  71. @nymom

    Better than public school if they’re getting hashed there.
    You have to decide what you want the kids to do when they grow up — professional, managerial, blue collar — and prep them for that. If you don’t know, try different things and see what they do well in. As with the Asians, pick something that has a career path in front of it and ensure that the kids know what a career path is.
    You can try for a scholarship if you think the kids are smart enough. That’s had mixed results with me — the kids (both National Merit) got the scholarship but — in one case the college tried to kill one of them euchred him out of his field of study (4.0 GPA before the attempt) and then tried to kill him [1], and in the other case the college tried social ostracism for essentially not being vicious enough. Perfectly fine kids who’ve done well in life since, just complete malfeasance on the part of the universities, followed by an attempted cover up.
    And in yet another, the kid just didn’t like home schooling, got herself through college, and ended up single in her early thirties with a PhD (and no debt) from a top tier school and no job offers or husband. She’s just said “to hell with it” and married, so there, also, things have sort of turned out all right.

    Kids just tend to lead with their chin.

    But I could have done without the attempts on their lives and their the years wasted. So could they.

    And at this point I couldn’t recommend anything.

    Counterinsurgency

    1] No kidding. and I mean it literally.

  72. Vendetta says:
    @Carlton Meyer

    Textbooks are a racket, but at the end of the day they still amount to less than 5% of the total bill for a semester at college. If, as you say, the universities are just going to jack up tuition to make up the difference, making textbooks “free” ultimately achieves nothing.

    Any solution that doesn’t address the price of tuition is no solution at all.

  73. “We also need to factor in the mandatory licensing and degree requirements of many professions and the corporate Human Resources policies requiring college just to get an interview. Then it becomes apparent that quite a bit of coercion comes into play for a high school grad “deciding” what to do next. The act of coercion generally negates the legitimacy of any contract. When students are essentially FORCED to obtain a “degree” to get a professional job and college costs have skyrocketed due to corrupting subsidies and entitlements for decade”

    This is really the heart of the issue. Our society and job market has evolved to the point where middle aged ladies devoid of any creativity or real talent (because no one else goes into HR) screen people based on this criteria and as a result everyone needs to meet it. HR departments should be abolished.

    • Replies: @Achmed E. Newman
  74. HR departments should be abolished.

    Sounds good–but if this is going to get fixed the next step will have to be taken.

    Brick and mortar colleges will have to be abolished. They want to get bigger and richer. That is the only way to stop them.

  75. Kronos says:
    @Carlton Meyer

    Doesn’t the money made off student loans go to general federal program pools? I thought predatory college loans went to offsetting tax cuts and funding Medicare.

    • Replies: @Alden
  76. Vendetta says:
    @nsa

    Gender Studies is a meme degree that should not factor into any serious discussion of student loan forgiveness.

    Here are the actual rankings of which majors have the most students graduating with them:
    1) Business and Management (289,384)
    2) Nursing (141,632)
    3) Psychology (127,066)
    4) Biology (120,375)
    5) Engineering (117,553)
    6) Education (102,219)
    7) Communications (98,949)
    8) Finance and Accounting (98,633)
    9) Criminal Justice (63,961)
    10) Sociology and Anthropology (57,630)
    11) Computer Science (55,843)
    12) English (44,121)
    13) Economics (39,022)
    14) Political Science (38,630)
    15) History (37,640)
    16) Kinesiology and Physical Therapy (37,085)
    17) Health Professions (35,733)
    18) Art (29,022)
    19) Mathematics (28,732)
    20) Environmental Science (27,031)

    You can explore that list all the way down to 44 here https://www.niche.com/blog/the-most-popular-college-majors/

    If race and gender studies even rank at all, they only do so as a very small minority of the students majoring in sociology, or perhaps in political science.

    The top five majors are all career oriented. There are more students majoring in business than in English, sociology, political science, history, art, and environmental science combined.

    The majority of student debt is held by students who pursued worthwhile degrees, many of whom did not actually go on to find those worthwhile jobs they were assured would be there for them. You can find retail associates or Starbucks baristas with degrees in business or nursing just as easily as you can find all the art and theater majors.

    This idea that there are actually millions of gender studies majors running around and demanding all your money is a fiction peddled by pseudo-conservative Wall Street elites and the media outlets on their payroll to dupe most of their debt slaves into defending their racket instead. The vast majority of the college debt burden falls on those who pursued some sort of useful degree, so the vast majority of the benefits from canceling that debt would also go to people who studied something useful as well.

    • Replies: @Wizard of Oz
  77. @TheMediumIsTheMassage

    Our society and job market has evolved to the point where middle aged ladies devoid of any creativity or real talent (because no one else goes into HR) screen people based on this criteria and as a result everyone needs to meet it. HR departments should be abolished.

    BINGO!

    Thank you, TMiTM. I have had a sore spot about the HR Ladies for a long time. They are nothing but in the way for a professional trying to get a job that he is perfectly qualified for, even when the freaking boss wants him in!

    Peak Stupidity on “Human Resources – scourge of the Big-Biz world” (See also Part 2, an Interlude on Toby Flenderson, and Part 3).

    • Replies: @WorkingClass
  78. Dutch Boy says:
    @Carlton Meyer

    The interest burden is one big reason that student debt is so onerous. Cutting the interest rate would reduce the burden considerably.

    • Replies: @1thinkingoutloud
  79. Bullshit from a child.

    My favorite irony is how both the left and the right scream and moan about how college is nothing but a load of brainwashing.

    See: left and right are the same thing, as I’ve always said: clueless children.

    And by the way, college is not a load of brainwashing. If you think it is–you are whatever you hate: you are a leftist if you think you are a rightist; you are a rightist if you think you are a leftist.

    I know this simple, eminently clear logic is beyond you. So, just to bring coals to this Newcastle of deafdumbness, I reiterate:

    College is not a load of brainwashing.

    It is a noble but doomed attempt to impart some modicum of civilization, cultivation, and refinement to your stupid drooling sociopathic spawn (like the above writer), in the vain hope that it might make them bearable to live near.

    • Replies: @Wally
  80. @RoatanBill

    Becoming an expat (especially in a non-English speaking country) requires skills and toughness that a heavily indebted US college grad with a “studies” degree is unlikely to have and unlikely to be able to develop. They would also get to poop in their britches when faced with real immigration/work permit enforcement and real “respect” for “human rights”.

    • Agree: Alden
    • Replies: @RoatanBill
  81. @Carlton Meyer

    You, sir, are a breath of fresh air in this cesspool of stupidity. You are certainly smarter, and you cut to the chase with elan, than the childish writer of this stinktank talkingpoint piece.

    Of course. Anybody with half a clue knows that bankruptcy, or lack of the alternative thereof, and the goddammed compound interest are the immediate problem.

  82. anonymous[191] • Disclaimer says:

    By legal decree, the loans should be written off and allow the marginal universities and banks to go bankrupt. Student loans would then be made illegal and tertiary education would return to what it once was, only for the smartest. Exceptionally smart people who didn’t have the means would be able to get their tuition paid for by bursaries or scholarships. An interesting take on what goes on in the fake world of higher education in the US can be found here. https://professorconfess.blogspot.com/2019/06/more-money-to-be-wasted-on-failed.html

  83. @Robert Dolan

    Yes, they can.

    You are one of these fools who doesn’t know how money works.

    Cancelled debt increases spending and taxes. Period. Modern Econ 101.

    And moreover, the majority of that “trillion” dollars owed is in funny money–usurious compound interest accrual. And funny money doesn’t exist at all. It was not paid out to anybody. It was not spent by anybody. It’s just a nerd’s way of robbing people blind.

  84. Wally says:
    @obwandiyag

    said:
    “College is not a load of brainwashing.”

    So says a Communist who loves the brainwashing.

    • Replies: @obwandiyag
  85. @Jim bob Lassiter

    You certainly have a point.

    Anyone with no REAL skills is dead meat no matter where they are. Someone with any of the ‘Basket Weaving’ degrees is never going to use their supposed knowledge to amount to anything because they actually have no knowledge; just BS opinions not worth a darn.

    However, people with skills, be it software development, welding, any engineering field, almost any STEM degree can go almost anywhere because those skills are useful world wide. One should also recall the saying: In the land of the blind the one eyed man is king.

    The cost structure in the US is insane. Too much Federal Reserve phony money is spent on the murderers and malingerers in the military and their hangers on. What the welfare and other dependent moochers consume is also a staggering figure. One has to earn an awful lot so the Fed Gov can steal their fair share via taxes to support empire and purchase votes.

    A person with a valuable degree can leave behind their debts and start anew in a more modest country that values their education and hopefully, work ethic.

  86. nsa says:

    The best solution to the epidemic of bad debt throughout American society is very simple: BRING BACK DEBTOR’S PRISON. The creep won’t / can’t pay back his debts, jail him under very harsh conditions (chains / bread and water / flogging). If he can’t convince his relatives on the outside to pay off his debts, then the perp can just waste away and die as an an example for others. DEBTOR’S PRISON would also be the fate of corporate officers and boards of directors if their corporations failed to repay their debts in a timely manner. The Bankruptcy laws would simply be abolished. A few high profile examples (jocks, entertainers, CEOs), and the concept of moral hazard would again be entrenched in the population’s psyche, ushering in a new era of lasting financial prudence.

  87. Student loans corrupted higher education. Everybody gets a loan so everybody goes to college. The college then can jack up tuition and hire legions of overpaid staff. To demonstrate gratitude higher education is indoctrinating its students to make them more useful and less dangerous for the ruling class (Globalists/Jews). No doubt you have heard of the long march through the institutions.

    The result is a generation of indoctrinated Socialist debt slaves. Bailing out the Snow Flakes would amount to a major stimulus for the economy. Ideally, all Student Loans would be forgiven and henceforth NONE WOULD BE ISSUED. Fewer people going to college would mean fewer Communists. But that will never happen. Only banks get bail outs.

    Perhaps our rulers could go half way and make these loans dischargeable in bankruptcy. Only a fool or a crook or a high school kid would take out a such a loan. Only Satan or The Mob or the U.S. Government would offer such a loan.

    I don’t think it matters. We Americans are experiencing the fall of the Empire from within the belly of the beast. What cannot be paid will not be paid. It’s not just student loans. In future such goods as higher education will be allocated according to the applicant’s Social Credit Score.

    • Replies: @Alden
  88. “And partisans in mass media gobbled it up.”

    More like, they promoted it!

  89. @Wally

    So says an illiterate nincompoop who never even read my post. Boob.

  90. anon[240] • Disclaimer says:
    @The Alarmist

    Securitization of student loans was pre 2010. https://www.csmonitor.com/Business/2010/0330/Student-loan-reform-What-will-it-mean-for-students
    The Department of Education now directly owns the paper, thanks to Obama.

    Post 2010, banks are out of it. There is a s small private loan market, but it is a more or less normal loan and requires credit, which students don’t have mostly.

    The government doesn’t pay much to administer these. There is no money in it. The old stuff is mostly done. They are seasoned loans and either performing or not. But it is mostly history.

    The biggest problem is that we live in disinflationary times, but most of the loans are at 5% + rates, while 19 year treasuries are under 2%. Refinance the better loans at a floating rate equal to the 10 year treasury rate and find a less punitive way to write off the bad debt. And make schools participate in their loan performance. Or some variant.

    The only person I know with a lot of debt is well paid and not very concerned. But its well known now that taking on a lot of student loan debt is not smart.

  91. Alden says:

    Great for landlords. Then we wouldn’t have all these 3 in a one bedroom 40 year old grown adults paying rent late every month because of student loans.

    Here’s how I would do it we’re if I dictator of the USA.
    The universities colleges and trade schools, not the students would have to pay back the loans on the harshest terms. Terms so harsh they’d have to go bankrupt and close down.

    • Replies: @APilgrim
  92. APilgrim says:
    @Charles Pewitt

    Charles Pewitt is big into Class Warfare.

    Baby Boomers, arguably ‘The Worst Generation’, did not borrow the Student Debt. Generation X, Y, & Millennials borrowed that $1.2T Student Debt for Liberal Art Degrees. Doctors, Lawyers, Accountants, Business Majors, Engineers, and Computer Science Majors have carried their debt load just fine. Student Athletes are fine.

    Borrowing $200k for a liberal arts degree is retarded. Nobody MADE THEM DO IT.

    • Replies: @Alden
    , @Kronos
  93. Alden says:
    @WorkingClass

    Higher education and jobs are already allocated according to race ethnic sex disability sex preference scale of weirdness etc.

    I did a Sopranos treatment after an operation because nursing homes have television and nothing to read.

    AJ GOES TO HARVARD

    The son, AJ is low intelligence mentally ill severely depressed and dropped out of high school. Parents are desperate. He was bad enough at 13 but what to do now he’s 20?

    Carmella does what many rich mommys do. She finds a college admissions counselor. Counselor looks at AJ’s grades dropping out and other problems.

    Nothing to worry about Mrs Soprano. If you can pay my exorbitant fee for extra extra special needs applicants AJ can not only go to college but Harvard.

    Tony bitches a bit but as always when it comes to money, Carmilla prevails

    Counselor fills out the application. AJ is black, gay mentally disabled. Home address is a Camden skid row address. One of Tony’s minions rented a place and comes by once a week to pick up mail from the many colleges eager to admit a genuine skid row black

    It’s the essay that gets him in. AJ AJ’s parents were murdered by the Camden NJ KKK when he was a baby. He was raised in the projects by grandma. He was beaten and abused by all those evil White boys still Surviving in Camden.

    AJ plans to use Harvard education to go to law school become an attorney and run a non profit legal foundation. His foundation will file lawsuit after lawsuit against the evil White hegemony.

    THE INTERVIEW

    Counselor hires a nice young swishy gay black actor to impersonate AJ at the all important interview. Actor reiterates the plans to become a crusading civil rights lawyer.

    Interview committee consists of actors who look exactly like Alan Dershowitz, Ruth Ginsberg, Rachel Maddow, Kissinger Schumer Karl Marx, Trotsky Lenin and other well known Jews.

    AJ gets into Harvard. Family rejoices

    THE END

    • Replies: @Achmed E. Newman
  94. Alden says:
    @Kronos

    I don’t believe anyone knows where student loan interest and payments goes.

    • Replies: @Kronos
  95. @Achmed E. Newman

    I’m old enough to remember when we were personnel. It ain’t just people. Now money is a resource too. Like coal. If I cant pay my bar tab it’s because I lack the resources.

    • Replies: @Achmed E. Newman
  96. nymom says:
    @Homeschooling Mom in NY

    I guess I am still okay with NYC being stricter than other states as I think you have to be careful about people taking kids out of school and not teaching them well. It could impact them later in life. I was willing to try it only because the middle schools in our area were so bad; but, fortunately I didn’t need to…

    Thanks.

  97. Alden says:
    @APilgrim

    Peewit’s not into class warfare. He’s into generation warfare. His denunciations of the boomers reminds me of the way the hippie boomers denounced their dull bourgeois conformist republican parents.

    • Replies: @APilgrim
  98. If only 10% of those 45 million student loan debtors chose to join the military, they could probably takeover the country and force the direction of the world.

  99. APilgrim says:
    @Alden

    Alden sets new records for stupidity. The schools are already broke.

    The schools were neither lenders, nor borrowers. The colleges sold a product, like a car, computer, or a house. The students picked the school, picked their major, picked their living accommodations and borrowed the money.

    The colleges & universities LOST their scholarship money & endowment funds, in the 2007-2008 crash, caused by: AIG, Goldman Sachs, Merrill Lynch, Lehman Bros, RBS, and other rank speculators in derivatives.

    Most of Wall Street & the Banks were bailed out. Students & Homeowners were left twisting slowly in the wind.

  100. APilgrim says:
    @Alden

    Class Warfare

    Class of 1945
    Class of 1955
    Class of 1965
    Class of 1975
    Class of 1985
    Class of 1995
    Class of 2005
    Class of 2015
    Class of 2025

    Class Warfare

    • LOL: Alden
  101. Its no accident! Jimmy Dore has done many videos on this issue.

  102. Alden says:
    @Mr. Wales

    Another repressed gay sad old bachelor heard from. Why post your sexual frustrations for anyone to read?

  103. Paracelsus says: • Website

    The is only one word that should summarize debt forgiveness.

    Fiat! – Let it be thus

    Fiat lux! – Let there be light

    Fiat currency! – Let it be money

    I hold no economy degree, I’ve never read Adam Smith or Ludwig van Mises, but I have read Eustace Mullins’ “Secrets of the Federal Reserve.” As it stands, The United States Inc., or the District of Columbia Corporation is financially insolvent and has been so since its’ declaration of bankruptcy in 1933. Prior to that it committed the most heinous economic treason and fraud against the American people with the passage of the Federal Reserve Act of 1913. It allowed a group of banks to form a central clearinghouse posing as a governmental institution and pass their speculative losses off on the work energy of the public.

    For well over a century the Federal Reserve has conducted this fraud, and every single President Senator, Representative, Governor, and General has been complicit in upholding this sham. Balking at “forgiveness” of loans that it never even had the perfected security interest to issue is absolutely treasonous. The untold trillions that the Federal Reserve has bled from the American public should damn well be factored into the equation when the student loan forgiveness question is discussed.

    This is even greater than the “Jewish Question” because it is the world finance question. It is the question of why human beings toil and for whom. This is the question of did the Roman Empire actually fall? The triumvirate of Vatican City, Londinum, and Columbia. Theology, Finance, and Military.

    For the paltry sum of electrons on a screen that no longer even correspond to a tangible sum of money the patricians could engender the ebullient gratitude of the plebs forever.

    Or is it just more sadistically gratifying to wring the last drop of blood out of the stone?

    • Replies: @Achmed E. Newman
  104. Kronos says:
    @Alden

    I’ve spent quite a few hours trying to figure it out. The accounting information is so scant. The best I could find was “general federal funds.” (Which is a maze within itself.) So I just assume it’s for subsidizing Medicare viagra or abortion clinics.

    • Replies: @anon
  105. @Alden

    Living in California should give you a leg up with your “treatment”*, Alden. As an old Sopranos fan, I think I would, if not buy it, borrow your movie from the library. I liked it. Good luck. Maybe you’ll run into one of Steve Sailer’s old former elementary school or golf-course-design buddies who can get you hooked up with a producer. It’s not what you know, it’s who you bl know, right?

    .

    * Why is it called a “treatment”, Alden? I’d only heard that when Kramer on Seinfeld went out to LA for 3 episodes.

    • Replies: @Alden
  106. @WorkingClass

    Yeah, I’ve heard that use (for money) too much too, WC. I didn’t mind being a person, but a resource? I consider myself as carbon-neutral as the next guy, so I feel kind of offended by that. I doubt you could get as much energy out of me as an oz of gasoline, unless I’ve had my double vente cappachino.

    • Replies: @Alden
  107. @Paracelsus

    Nobody had a gun to anyone’s head telling him to sign on the line. You are quite right about the evil of the FED (or any Central Bank), but don’t use it as a lame-ass excuse. When you reward stupidity, you just get more of it.

    • Replies: @Paracelsus
  108. Pure bullshit. I stopped reading after the words “free lunch.”

    So you can’t bailout students because ‘taxpayers’ can’t afford to bailout banks again, eh?

    Bull_Shit.

    I suppose that’s the same reason home owners couldn’t be bailed out in 2007/8, is that right?

    Yep, that’s bullshit too.

    The bankers will always get bailed out, whatever this shill for bankers and their econo-fascisti worldview has to say.

    Cancel all debt and watch America fluorish. Listen to this idiot’s gibberish and you will remain not just be in the shackles of a purposely-built brainwash education system, but also in the shackles of a media education system which never misses an opportunity to exploit your diminished ability to think critically about anything.

    Frankly I’m too livid to even try making additional arguments.

    Fuck you Penfield.

  109. @nymom

    Given the public schools’ record, I don’t think they’re in a position to judge.

    I didn’t want anyone to be put off homeschooling by seeing inaccurate comments on a website.

  110. @Achmed E. Newman

    Whose fault is that?

    1. Boomer/X generation employers who choose Bachelor over Associate/vocational degree candidates in hiring or promotion because it shows “stick-to-it-ism,” “knowledge/intellectual competence,” and other “preferred traits” pulled from their asses for monetary and status reasons.

    2. Boomer/X generation parents psychologically conditioned with “The Virtues of Selfishness,” “Free to Choose,” and other “keep up with/surpass the competition” lolbertariani$ms.

    • Replies: @Achmed E. Newman
  111. @RoatanBill

    “No one should be able to get a degree past BS or BA for one of the ‘Opinion’ fields like …….. Psychiatry and a slew of other ‘Professions’ that are pure horse hockey.”

    A psychiatrist is a medical doctor who specializes in treating mental illness. My brother is one After he completed his residency, he worked for a state run hospital for the criminally insane. Now he currently spends his time working for the US Army doing PTSD evaluations and treatments. Do you consider “PTSD” to be “pure horse hockey”? Do you consider people with delusional hallucinations, hearing voices and other abnormal behavior to be fraudulent? How would you treat them?

    If you are going to throw out terms, it would help if you actually knew what you were talking about.

  112. @Mr. Wales

    My condolences for your being just another ride on the “carousel”. Maybe if you had made better choices about the women you dated you would not be such a sad, bitter little man destined to die alone.

    • Replies: @Mr. Wales
  113. @APilgrim

    The colleges & universities LOST their scholarship money & endowment funds, in the 2007-2008 crash

    They did? According to the US Department of Education, in 2016, the top 20 Universities in the US had $542,240,202,000 in total endowments. In 2019, of the top 100 richest schools, the bottom 30 each had endowments of at least one billion dollars.

    Schools are awash in money.

  114. @Chris Mallory

    You are conflating the psychiatrist with the patient.

    I believe there are many mentally sick / deranged / violent / etc people in the world.

    I also believe that no one knows what to do with them besides shoot them up with mind altering drugs. From what I understand, the entirety of the DSM does not have even one ‘illness’ for which there is an empirical test. It’s all a lot of hand waving and conjecture. Psychiatry was saved from extinction by big pharma as an outlet to sell their poison. Hence, all the shootings by people on psychiatrist sanctioned drugs.

    Psychiatry is the modern Phrenology, one of many fraudulent professions that can’t prove anything past common sense. It should have been eradicated decades ago.

  115. All debts that can’t be repaid, won’t be repaid.

    Debts will be cancelled. You can either plan it and do it, or you can resist it, and watch while it all collapses.

    Any other talk about this issue is either delusion moral posturing or delusional economic theory posturing.

    Debt cancellation is coming. For you or without you.

    Yield.

  116. Alden says:
    @Achmed E. Newman

    It’s just about 2 -15 pages, no dialogue no descriptions of the setting, just the general idea. That’s a treatment. The black actor hired to be AJ would rant and rave about evil Whites and how he would defeat Whitism after law school.

    Of course he’d get full tuition room and board scholarship book voucher spending money etc.

    Could be called a plot summary, synopsis but they call it a treatment for some reason

    • Replies: @Charon
  117. Mr. Wales says:
    @Chris Mallory

    You are such a fool.

    It’s an observation. Not my personal experience.

    • Replies: @Alden
  118. Alden says:
    @Achmed E. Newman

    I’ve always hated Human Resources. Shows the capitalist pigs consider their humans same as metal wood stone tools equipment machinery.

  119. Alden says:
    @APilgrim

    Please explain how the colleges and universities are broke. UCLA’s within walking distance and it sure looks thriving to me. New buildings every year. In fact soon there won’t be any open space as the campus is filled in with more and more new buildings. It also owns the Westwood neighborhood one of the highest rent areas in the country.

    Loyola Marymount LA owns vast S California oil fields. Leases the oil fields out to oil companies.

    How can they be broke?

  120. Alden says:
    @Mr. Wales

    Right, you’ve never dated or had a relationship with a woman in your life. You observed all the other guys getting a woman. You console yourself fulminating women are all depraved sluts unworthy of you.

    If you were a woman you’d be a bitter old spinster feminist. Instead you’re a bitter old misogynist.

    • Replies: @Mr. Wales
  121. @Vendetta

    Where have you been? Or, rather, why haven’tI been noticing comments from you. I vaguely remembered “Vendetta” being mildly insulted by Ron over a detailed sensible account of matters to do with the USS Liberty affair and went looking for that exchange. I haven’t found it yet – though I have confirmed that my memory was sound because someone else referred to it – but I have found lots of stuff which confirms tht your comments are worth reading. Mind you I wonder why you go so far as to assign not just a proactive but an inititing role for Mossad in relation to 9/11. I can only get to the guess that Mossad knew more than it passed on about what was to happen. I would be interested in your reasons.

    • Replies: @Vendetta
  122. @Jmaie

    I will tell you as a Swede (and a former high school and university teacher) that the Swedish educational system is dysfunctional and have been so for decades. The Swedish educational system is rapidly becoming one of the worst in Europe at all levels. To keep this short: Universities and colleges in Sweden have been tuitions free since the 1960s. Students have been given generous grants and student loans for private consumption. There are now 48 colleges and universities in Sweden and most of them hold a internationally low quality. Since the 1960s the socialist/liberal goal has been to enroll 50% percent of the youngsters in college. Their goal has now been achieved. It has caused severe under-employment. In most countries there would be is a serious debate about having college graduates work at grocery store clerks but not in Sweden and for good reasons. With the exception of the nationalist Swedish Democrats all parties are responsible for this development. Media, government, academia, corporations are also responsible so the “educational scam” continues year after year with no real ending in sight. Closing down the surplus of worthless colleges and university programs will not happen – there are simply too many professors making a good living. In fact, just last night the socialist government wanted to expand higher education so more people could enroll. Of course – they wouldn’t open more

    If you are able get into college/university program in nursing, medicine, pharmacy, law, dentistry, education and a couple of engineering fields you will be able to find a job within your field when you graduate. However, getting into these programs (with the exception of education) is very difficult because universities/colleges keep as few spots available as possible. Getting into a university/college program in economics, business, social science, journalism, biology or whatever is actually very easy. Because of the outsourcing of industrial jobs (just like in America) most Swedish youth don’t have much choice than go to college. It is either college or making $8 an hour at McDonalds.

    There are of course trade schools (you can opt for it in high school), adult vocational training and the infamous “labour market training programs”. The last is designed for the unemployed and is made to keep people occupied while living on social welfare. The Swedish government sold for years that there was an acute shortage of welders. However, the statistics they presented were presented in a dishonest manner. The Swedish media once did their jobs and noted that just a fraction of them who graduated from a welding program actually had a welding job. It was covered up immediately. The new trade job the Swedish government is selling is carpentry because there is a shortage of carpenters. However, corporations don’t hire Swedish carpenters. Instead most of them (in) source carpenters are from the Baltic States and Poland. A growing number of tradesmen in Sweden are actually seasonal workers and work for just a fraction of the salary but as they are employed by a foreign firm so their salaries is of course not accounted for in the statistics.

    Thank God for the Swedish open borders because it about to wrack the economy and later the educational system . About 1/3 of the municipalities will go literally bankrupt within 10 years and within 20 years it is estimated that another 2/3 of the municipalities will go the same faith. The rapidly growing non-white migrant population now constitutes 1/3 of the population and most of them are either unemployed, under-unemployed or in low-skilled and low paid professions. The Nordic and Swedish population (millennials and younger) is mostly indebted and under-unemployed. Money is running out.

    Right now they the inflation take down everything from welfare payments, pensions and teachers salaries (they are very low in Sweden) but soon institutions have to be cut. With a financial crisis (the Swedish housing market is levered up to historical levels) it will smack this country hard. A lot of Swedes will be indebted for life as you cannot just leave your house like in America but has to repay your debt in full. If and when this happens the Swedish welfare state will have to be reduced and the educational system will be forced to be corrected to a market-based model instead of the current “mass-educational” system.

    I have little hope for Sweden. Last, don’t trust the left in America. The Swedish educational system is junk and I know because I worked in it for years.

  123. Kronos says:
    @APilgrim

    I’d strongly argue they had a gun to their heads. Contemporary education is a failed social science experiment from 1960s behaviorism. Most Boomers understood very well long before and after Charles Murray’s “The Bell Curve” (1994) that IQ was a genetic game. The vast majority of kids follow the rules set forth by the education establishment. One rule was to get a college degree. The Boomers cannibalized the manufacturing sector (good jobs for average/low IQ people) between middle class Boomer 401ks and High Finance. (Bill Clinton’s crowning political achievement was creating a grand political alliance between these two.) Kids are only going to choose majors they can cognitively succeed in. Mr. IQ 95 knows there is more financial reward potential in STEM, but he can’t pass Elementary math. So he’ll major in sociology or something. (These fields are no longer respected but money making safe havens for low ability students.)

    Because The Boomers allowed “progressive credentialism” to provide a buffer to protect their jobs (we require a Masters to hire you) while simultaneously expanding their government deductible 401ks; these poor young fucks went ahead to College. You can’t get a any job nowadays without a college degree. It’s simply transforming college into High School 2.0 and it’s utterly wasteful. Doesn’t matter what you major in anyway, the jobs are gone. The job market is dryer than a 110 year old’s twat. Everything really has been transformed by automation, immigration, and offshoring. Because the Boomers wanted the stock market to rise like a viagra fueled erection.

    Because IQ discrimination is de facto Black discrimination and that’s bad or something. College credentials are essentially worthless but required to partially bypass Boomer legal barb wire and machine gun turrets. (They really don’t want to train their replacement.) Thus they’re happy to screw young people and make them into debt serfs.

  124. The tenth amendment tells us that education is entirely a STATE matter. Feds should stay out.

  125. Mr. Wales says:
    @Alden

    You are such a fool.

    Can’t argue with idiots on Unz.

    Crystal ball wielding, keyboard warriors all of them.

    With zero sense of humor.

    • Replies: @APilgrim
  126. @Oldtradesman

    Your answers to whose fault the overall SITUATION is are decent, at least # 1. Regarding # 2, besides the silliness about Lolertarians or what-have-you, there’s nothing wrong with getting the best for your kids. However, get to the root of the problem, which is the moral hazard of the American taxpayers (or their children) being forced to be on the hook, backing up these loans.

    As to whose fault it is individually, well, I’ll turn the floor over to Mark Knopfler:

    Because the heart that you break, that’s the one that you rely on.
    The bed that you make, that’s the one you gotta lie on.
    When you point your finger cause your plans fell through,
    you got three more fingers pointing back at you yeah!

    Gonna live on Solid Rock.

    • Replies: @Oldtradesman
  127. @Hang All Text Drivers

    Fuckin-A, right, HaTD!

    Thanks to Jimmah for that one, as he pushed the creation of Big-Ed (DOE) as a quid-pro-quo for the support of the teachers union’s support back in 1976.

  128. APilgrim says:
    @Hang All Text Drivers

    The Constitution of the United States has several general clauses.

    Preamble: To Promote the general welfare,

    Article I Section 8 | Clause 8 – Patent and Copyright Clause of the Constitution. [The Congress shall have power] “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

    Article I, Section 8, Clause 3 – The Commerce Clause describes an enumerated power, (The Congress shall have power) “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”

    The more ‘General Clauses’ which apply to an activity, the stronger the constitutional case.

  129. APilgrim says:
    @Mr. Wales

    Effing moron, general denunciations

  130. @APilgrim

    It’s pretty much plain English, Pilgrim. Here:

    AMENDMENT X

    The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

  131. @APilgrim

    I already know, from A.E.’s blog, that you are a serious Amendment II supporter, so why not Amendment X?

    • Replies: @APilgrim
    , @EdNels
  132. @Hang All Text Drivers

    Anybody can read the Constitution and know what it says. But only nine people are capable of knowing what it means. Can anybody see a problem with that? The Supreme Court is a birth defect. It should be replaced by a jury.

    • Replies: @Achmed E. Newman
  133. APilgrim says:
    @Achmed E. Newman

    The totality of the Constitution is my concern.

    Not merely one amendment or clause.

    The Constitution of the United States is the congealed wisdom of The Ages.

    • Replies: @Achmed E. Newman
  134. @APilgrim

    The 10th Amendment is quite clear. No clauses, penumbras, or anything else can change the clear meaning that all other powers not specifically proscribed are left to the States and the people. Period.

    • Replies: @APilgrim
  135. @WorkingClass

    That crap started way back, but nowhere in the document does it say the Supreme Court alone decides exactly what’s Constitutional and what’s not. I think our Founders left it ambiguous for a good reason. Andy Jackson had the right idea.

  136. APilgrim says:
    @Achmed E. Newman

    You disagree with every SCOTUS decision since Marbury v. Madison.

    Fine.

    I only disagree with some (progressive) rulings since 1900.

    • Agree: Achmed E. Newman
  137. Paracelsus says: • Website
    @Achmed E. Newman

    Bet you knew that they slap a CUSIP number on every application you’ve ever filled out then sold it on the securities market without ever compensating you for the use of your own signature to generate the instrument, right?

    Luckily I learned that in my college course, Examing Banking and Insurance Contracts for Hidden Adhesion Agreements and the Legal Remedies to Redress Fraud Perpetrated by Multinational Banking Corporations 101.

    I mean it’s not like a “person” would ever create a microprint signature line or borders that contain the terms and agreements of the contract. Then claim that said such terms and agreements and relevant parties to the contract and the specific liability incurred and by whom was sufficiently disclosed. All because there is no general duty requirement of “good faith” disclosure in English contract law.

    Or, that a silent ruling body would educate the populace to a common standard that makes them just intelligent enough to understand how to read but not intelligent enough to comprehend what they’re reading.

  138. EdNels says:
    @Achmed E. Newman

    The Forefathers gave up a beautiful Constitution for the new Union well written for the comprehension of the common citizens and something worth honoring and protecting… one thing that is always referred to in oaths taken by public figures and soldiers.

    somebody said:

    The Constitution of the United States is the congealed wisdom of The Ages.

    It’s pretty much plain English, Pilgrim.

    But, It needs to be interpreted by (5 majority) swamp retreads. (just a little humor.)

    The onliest way democracy can function is if the people are well informed intelligent and free to have influence on the democratic workings of the system, which is anathema to a top down paternalist, and interpretive intercession at the very core of it, installed in front of the document that is so cherished in lip service.

    • Replies: @Achmed E. Newman
  139. @Paracelsus

    Bet you knew that they slap a CUSIP number on every application you’ve ever filled out then sold it on the securities market without ever compensating you for the use of your own signature to generate the instrument, right?

    Sorry, you’d lose that one. No I haven’t. I’ve only had a small college loan out, and that was just to use as part of a down-payment on a house. I paid it back.

    Or, that a silent ruling body would educate the populace to a common standard that makes them just intelligent enough to understand how to read but not intelligent enough to comprehend what they’re reading.

    It’s their OWN job to learn what they need to know to intelligently decide whether to sign. It used to be called wisdom passed down by our fathers, but now we have the internet instead.

    No excuses. Fuck you, pay me.

    • Replies: @Paracelsus
  140. @Paracelsus

    I hope you didn’t take that last part as overly rude. If you don’t know the movie, then that could be the case. I’ve run into a bug lately in which I don’t have that 5-min. edit window.

    Let me put it this way,

    “Oh, young Johnny Paracelsus, you say you just came out of deferment with that newly-minted Master’s Degree with a $63,875 loan balance, and your wife’s pregnant, and you will be lucky to get a job paying $35,000 a year? Fuck you, pay me!”

    “Oh, so the banks sneakily put microdots over the dotted lines you signed on, and sold your debt off on the Securities Market? I’m from the US Feral Gov’t, Fuck you, pay me!”

    Haha, I just think that in the long run this is a good lesson for everyone. DON’T! DO! BIDNESS! WITH! THE! US! FERAL! GOVERNMENT! That goes for everyone, responsible American citizens, Chinese treasury bond holders, EVERYONE! Starve the beast – that’s the only way to be sure …

  141. @EdNels

    The onliest way democracy can function is if …

    That’s why we had a Constitutional Republic, ours if we could keep it. We couldn’t, for the reasons you wrote. I agree, except for the terminology.

  142. Paracelsus says: • Website
    @Achmed E. Newman

    Terms and performance agreements were never discussed. Do you accept derisive laughter as payment?

    P.S. I got the reference, can’t remember the movie precisely – I want to say Casino or Goodfellas.

  143. @Chris Mallory

    If you can stand to have your world view regarding psychiatry shattered, watch the YouTube video:

    History of Psychiatry — Marketing of Madness

  144. We bailed-out Wall Street and the banks.
    We spent trillions on foreign invasions and occupations.
    We can certainly rescue our children from debt servitude.

    • Replies: @1thinkingoutloud
  145. Any bank that received bailout money after the financial crisis should be required to cancel all outstanding student loan debt with NO COMPENSATION. They’ve already stolen our money. This will be their just desserts. I want to see those greedy bank execs living under bridges in cardboard boxes.

  146. @APilgrim

    For the last 20 years, Arizona State has been building like there’s no tomorrow while those of us who pay taxes for them to educate our kids have seen tuitions soar.

  147. @Achmed E. Newman

    Lotsa lulz, muh fellow boomer!

    Lolbertarianism refets to the uncritical acceptance, application, or propagation of business propaganda.

    The lolbertarianism of boomer/X -generation parents encouraged their children to take on increased debt for the sake of “keeping up wid da Joneses.”

  148. Rog says:

    A little understanding about how this monetary system works is in order here. The UCC is a good place to start.

    The “value” of the currency (FRNs) comes from the labor of Men and Women and from the assets of The United States of America (mineral etc.) being held in trust. In other words, your signature creates the “funds.” The People are the creditors. There is no money, not since the passage of the Federal Reserve Act, only debt notes.

    Everyone has it backwards. The Banks borrow your labor, your house, your car, in return for their worthless debt notes, trade the value of those things on the open market making heaps and gobs of “money” and then trick you into paying them back for the use of your assets. This is how it really works folks. You are not the debtor, you are the creditor and you “owe” nothing.

    • Replies: @TimothyMadden
  149. Aname says:

    I had to deal with parents who kept me in squalor saving almost all of the money they earned to pay for my college fund. If others can have their debt forgiven, they deserve to have those savings back.

  150. @DocHollywood

    Doc… I hope you were being sarcastic. Two bad ideas are not a platform for a third real bad idea. I like the way every time young adults need something they are “our children” as in socialism. Incomes, inheritances, lottery wins etc are privatized while debt, mistakes and problems are socialized. If you don’t have children who will get the benefit they are simply millions of people competing for your job.

  151. @Dutch Boy

    “The interest burden is one big reason that student debt is so onerous. Cutting the interest rate would reduce the burden considerably.”

    How can you cut the interest rate on a student loan? Any interest rate is a figging gift!!! It is the worst loan in the world and ANY interest rate is a massive risk. If the federal government stopped backing the student loans you would not see one single student loan. What banker in his right mind would loan $75K unsecured to an unemployed 20 year old with no job experience or history and not an asset to his/her name? I mean they want a parent to co-sign for a $3500 used car and they can repossess the car. Try getting a business loan for $75K and they want to sign away all your assets and micro analyze your life.

    I can just see the CEO pitching that to the Board Of Directors and bank investors.

    The student is under no obligation to complete the program or even stay in the country. They can get pregnant and go on welfare, get into drugs, commit a felony, get injured, diseases etc etc. Their supposed career could end before it starts in the blink of an eye. So many reasons that loan could go South it is insane.

    The Federal Government has to get completely out of backing these loans immediately. That would eliminate the loans and crash the higher education market forced to meet the new lower market.

  152. @Mr. Wales

    Well put Wales.

    Even if she were ambitious at that point around 30yrs old she has discovered she is sick to death of following her corporate competition of totally insane, testosterone driven, completely consumed hard charging alpha males working 16hr days 7 days a week and loving the stress. Lying, cheating and backstabbing to the top. Women are simply not wired for chasing this upper level employment for long. Not they can’t do it they just see the futility in it MUCH earlier and like you said want a man, hang up the stress, have a family, do some charity or art/music etc. They see the insanity and futility in the corporate lifestyle. But like you said at that point they have quite an uphill battle trying to start over.

  153. EWM says:

    Statists should pay the consequences of being statists.
    “The measure of the state’s success is that the word anarchy frightens people, while the word state does not.” – Joseph Sobran

  154. @Rog

    Agreed. People have been cogno-linguistically conditioned to believe that banking is money-lending, and that is the system’s core systematized delusion:

    “A “systematized delusion” is one based on a false premise, pursued by a logical process of reasoning to an insane conclusion ; there being one central delusion, around which other aberrations of the mind converge.” Taylor v. McClintock, 112 S.W. 405, 412, 87 Ark. 243. (West’s Judicial Words and Phrases (1914)).

    Banking is not money-lending at all – it is credit reinsurance.

    As and when the issuer of the promissory note executes and delivers it to the bank, they are in fact advancing (underwriting) credit to the bank. The bank (management) strips off the nominal security as a premium for itself, and then issues-back (re-insures) (in the form of a deposit liability) either a duplicate or lesser amount of unsecured (but homogenized / assignable) credit to the note-issuer directly, and / or via the merchant or vendor of the property or goods and services being purchased under the commercial transaction.

    The (pre-qualified) note issuer is the lead-underwriter and equity-creditor-in-fact, and the bank is the lead-debtor (beneficiary of the lead-underwriter’s underwriting / assumption of liability) and reinsurer.

    • Replies: @1thinkingoutloud
  155. Mr Penfield .. Great article and especially liked the parts about auditing the FED and hopefully all the big banks that were allowed to self administrate a “stress test” in 2008 when they were really totally insolvent. Then we can get a big private team to investigate and revalue the derivatives. Most of the 1% elite would be literally wiped out. Well actually they are already wiped out but allowed to operate while being insolvent seeing as there are still no audits of all this activity.

    Regarding the debt cancelation why make student loans ride solo on this? Consumer debt is over $4 trillion and everyone got screwed on every loan they ever received. There are just victims of the corrupt unfair banking and government systems. Seriously… everyone is/got screwed except the banks. If it is about getting compensated for getting screwed then everyone is in that boat but that leaves no responsible people to dump all the bad debt onto.

    The bank does not even have the money to loan in a Fractional Reserve System. They loan ten times their deposits. Then they get unlimited zero or 1% no collateral loans from the Federal Reserve who prints the money out of thin air. Then they get the federal government to back all the bad loans, free FDIC insurance, and the taxpayers to bailout all the REAL bad loans. Whatever debt is left, which is a lot, the FED puts on a secret spreadsheet on the bottom of the ocean somewhere.

    This whole circus dwarfs every banking screw job in the history of the planet put together times a million. So we are all supposed to feel legitimately indebted?

    • Replies: @Twodees Partain
  156. @TimothyMadden

    The bank does not even have the money to loan in a Fractional Reserve System. They loan ten times their deposits. Exactly what is loaned the other 90% is a mystery. It is unclear if an actual money transaction occurs or simply multiple massive gross misrepresentations of money.

    It is unclear where the FED gets the money to loan as they now buy most of the bonds themselves with more funny money washed in and out of European banks until it is untraceable. Then any debt, fines or wrong doing is taken by the fictitious entity “the corporation”. The employees “actual people” are not personally liable.

    Challenging to speculate if there was actually “money” or if there is an actually “loss” to an injured party on a loan default. It is like fictitious money was lost from a fictitious entity.

  157. @Robert Dolan

    The idea that banks will fail if their loans aren’t repaid would be valid if the banks actually had the money they loaned instead of it being loaned into existence. The Fed lends nonexistent money to Congress routinely. It does the same with banks. There will be a massive cancellation of debt once the value of the dollar finally goes negative due to money creation.

    It’s just a matter of when, not if.

    • Replies: @1thinkingoutloud
  158. @1thinkingoutloud

    ” They loan ten times their deposits. Then they get unlimited zero or 1% no collateral loans from the Federal Reserve who prints the money out of thin air. ”

    True, but it’s more like 33 times their deposits that are loaned into existence, and the Fed lends them money that doesn’t even exist until the loans are created. It’s worse than anyone can imagine, probably.

  159. Charon says:
    @Pontius

    Once you’ve finished paying off your mortgage, they’ll forgive everyone’s mortgage debt too.

  160. Charon says:
    @Alden

    Your treatment is clever, but too much like the real world. Hollywood doesn’t like that. In fact, it’ll get you run out of town on a rail. Maybe right out of the country.

  161. @Twodees Partain

    “The idea that banks will fail if their loans aren’t repaid would be valid if the banks actually had the money they loaned instead of it being loaned into existence.”

    Who cares if the banks fail? The government audits the big banks. They then take the good loans and give/sell those to the hundreds of healthy smaller competitive banks with good spreadsheets. The owners and investors of the insolvent big banks eat the bad loans just like every other bank failure in the last 500 years. The losses have already occurred. They are just not “recognized” by an audit and the banks are allowed to operate being insolvent at this point.

    This is utter insanity that owners, stockholders and shareholders only take massive financial increases and the public takes their massive losses because it is so “horrible”. It is like standing outside a casino and reimbursing losses with taxpayer money because losing is “so horrible”. Nobody is innocent. There are only the criminal and negligent investors at this point.

    • Replies: @Twodees Partain
  162. @1thinkingoutloud

    Exactly right. The reckoning has been stalled for the past 20 or so years, but it will come. It’s unavoidable.

  163. Kyle says:
    @Amon

    You can get a better paying job than Burger King, go pick up a shovel. In the mean time cut all of your unnecessary expenses. Problem solved. Blaming boomers because you’re unwilling to work and save is pathetic.

  164. @Chris Mallory

    Most of what passes as psychiatry is fraudulent.

    The vast majority of psychiatrists are charlatans.

  165. Vendetta says:
    @Wizard of Oz

    I do remember what you are talking about, I was reposting a theory of events I’d read elsewhere which assessed the attack on the Liberty as the result of gross incompetence on the part on the Israelis rather than a deliberately planned action.

    I lean toward this version of events because the weapons that were used don’t line up with a false flag action – the theory that the Israelis were trying to sink the ship and blame it on the Egyptians. For that plan to work, it would be vital to sink the ship quickly, before it can transmit any details about who exactly was attacking it.

    Sinking it quickly entails hitting it with heavy bombs, torpedoes, or anti-ship missiles. Even then, it’s a big gamble. Sinking a ship is not an exact science and you’re never going to know exactly how long it will take from point of impact to actually slipping beneath the waves. Even a very fast sinking is usually a matter of minutes rather than seconds.

    The planes that attacked the ship hit with none of those things. They sprayed it with gunfire, small air-to-ground rockets, and finally dropped a couple of napalm bombs on it. None of these are anti-ship weapons – these planes were carrying ground attack loads. Which suggests they were diverted at the last minute from ground attack missions.

    Now I suppose thy may have identified her as an American spy ship and decided at the spur of the moment to try and improvise this false flag thing with whatever they had available…but this doesn’t seem very probable to me. A false flag action is a very high-risk venture. One would expect them to be very carefully calculated and meticulously planned out, and the attack on Liberty certainly wasn’t (given that they failed to sink the ship at all).

    That said, the US government’s treatment of the survivors has been a disgrace, and the compensation Israel paid for the attack was by no means adequate. So I think that Ron and I arrive at the same conclusions, even if we don’t reach them by the same path. I personally have always cared more about the ends than the means, but not everyone agrees with that.

    As for 9/11, I don’t really soapbox on that issue much at all. It just doesn’t interest me enough to spend hours and hours discussing it. That said, I see a much stronger foundation of evidence for Israeli duplicity there.

    I’m not sure which comment you’re referring to where I asserted the Israelis initiated it. I think we have enough evidence to say the Israelis were involved, but not enough to make a firm conclusion on how they were involved.

    I see a few plausible theories as to the extent of their involvement. One is that al-Qaeda initiated the plot and carried it out on their own, and the Israelis discovered it but didn’t warn us. The next is something like that but where the Israelis went further and continuously monitored the plotters, babysitting them from a distance without their knowledge to try and make sure they weren’t caught beforehand. The third is that al-Qaeda had been infiltrated by the Mossad (as we know they’ve done with other terrorist organizations), and that Mossad played in active role in the planning of the attack (again without the knowledge of the perpetrators).

    All are plausible; if you ask me I’d say the second one is the most probable. The five dancing Israelis and the activities of Israeli spy rings point to something more substantial than the first, while in the case of the third it would be hard for al-Qaeda to not realize it had been duped and try to expose these infiltrators after all this time.

    Inside job, controlled demolition, someone other than al-Qaeda actually flying the planes, etc. all strike me as a bunch of nonsense. They complicate the plot too much and turn it into an unwieldy, improbable Rube Goldberg contraption. The five dancing Israelis are the one key thread of evidence to pull on, everything else is a distraction.

  166. Thanks. I support your approach and the unwillingness to assert certainty about the unknowable and improbable.

    MMenton of false flag in relation to the USS Liberty story made me remember that it is ridiculous to make too much of the US flag being visible or not. Can’t you imagine the message back to the pilot who reported it from a hardheaded commanding officer who is predisposed to think there is an Egyptian ship in the vicinity….

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