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Steve Penfield Discusses Unz Review Article on Student Debt Cancellation
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Steve Penfield is the author of Student Debt Cancellation: A Good Idea and a Political Hoax. In it he argues against standard left vs. right, Democrat vs. Republican arguments—and offers this key insight:

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.’”

So who should lose? Steve argues that Bernie Sanders and Elizabeth Warren should abandon their plan to foist the cost of student debt forgiveness onto the taxpayers; instead, he argues, colleges and universities that have profited from the loans—and above all, the banks—should share the cost.

We also discuss what Steve calls the problem of “subsidized religion.”

(Republished from Truth Jihad by permission of author or representative)
• Category: Economics • Tags: Academia, Student Debt 
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  1. Again, this ever-present notion that when banks are penalized, bankers reach into their own pockets to pay the fines. Sorry about that little fantasy. It’s our pockets they reach into. Stakeholders, depositors, borrowers, just about everyone pays. Sort of like taxes under another name.

    • Replies: @Kevin Barrett
  2. Penalize individual bankers and force them to pay out of their own bank accounts.

  3. @Mark Raven

    Fractional reserve lending is fraud. The obvious solution is to prosecute the bankers, seize their ill-gotten assets, and reconstitute the currency system to ensure that only the Treasury Department is authorized to create money, as ordained by the Constitution. Private individuals and banks may lend, but they cannot be allowed to commit fraud by lending more than they possess.

    • Agree: Enemy of Earth, Tusk
  4. That huge pile of student loan money owed is funny money. It is usury. The result of compound interest. Most of it is “money” that never existed and was never used. Thus it may safely be dispensed with with the stroke of a key. It is just an accounting trick. Student loan forgiveness would cause a tidal wave of prosperity and tax revenues for the US. You fools actually think that “debts” are actual interpersonal transactions like a stone-age farmer lending you his cow for a while. And yet even stone-age rulers knew enough to declare jubilee years. Not you. Because you are dumber than them.

  5. 76239 says:

    “An inescapable consequence to any responsible Debt Forgiveness plan is that someone will have to pay”

    It won’t be the elite. It will never be the elite. If there is any debt forgiveness, the money will come from “tax makers” the productive, the producers in society and “the little people.” And it will be poured down a rat hole to benefit the “tax eaters.”

    The jubilee is just like fiat money. Wholesale theft from the productive to the unproductive. Borrowing money and paying back with interest is a moral act.

    An individual trades tomorrow’s pay for today’s money. Money today is worth more than money tomorrow thus the rate of interest. This is just, because who truly knows if either one of us lives another day?

    The borrower gets something now in exchange for paying more in the future. No one forced the borrower to borrow. The borrower is the only one responsible. He has free will. Whether he uses it wisely or not is his burden. Scapegoating and blaming others is silly.

    • Replies: @animalogic
  6. “Quantitatively ease” the loans out of existence, then cancel all student loan programs, send the nation’s college students to work and save money, travel, or hit online programs, for a year, let the colleges go bankrupt and consolidate, re-organize next year.
    Politics is the art of “whose ox to gore?” … so the holders of US dollars take a one-time hit, all of us, and the profiteers who made a living impoverishing young people and hobbling the energy of our economy – are ruined.
    The market will do the work to reinvent higher education.

  7. The hellish part of this is that somewhere in the neighborhood of 95% of all student loans are being offered (not guaranteed, mind you offered), by the federal government. The federal government IS the bank that’s lending the money. Effectively, federal usury is a way of government backed theft. The government, the banks, and the universities are all a single complex, in which the public-private divide seems to lose all meaning. The universities are bent to the government will, as are the schools which educate children from childhood, which tell students they must seek out an expensive education in order to have the life their parents had, and must take out massive loans to do so. The government-bank-university complex is a mess, which sucks up money through taxation to fund their sucking up money through usury. It’s maddening. It’s vile. It’s impoverishing the country. Student loans are a federally backed wealth transfer from the middle class to the wealthy: the academic, banking and governing classes (and they are classes; the rest of us cannot enter these classes except for a few lottery winners),

  8. SafeNow says:

    “someone ‘will’ have to pay”

    That is future tense. However there are also two categories of losers in the PAST tense. Category one is the guy who took no loans worked his way through college had his hands in the pot sink every day missed out on some of the fun and personal growth of college. Category two consists of parents who scrimped in order to pay for college and could have enjoyed that money doing something else with it while they were young enough to really enjoy it.

    • Replies: @restless94110
    , @animalogic
  9. @SafeNow

    Neither of those two lost a thing. The guy got a college education. The parents did what gave them joy. And that’s the past. Time for you to stop living in it.

  10. Kevin is right: Fractional reserve lending is fraud. Any politician talking about “Debt Forgiveness” but failing to address the toxic “fracking” of the glorified coin-clippers is just blowing smoke.

    Regarding comment #5, the only “scapegoating” I see is assigning 100% of the blame to students. Let’s not forget that it was ADULTS (bankers, colleges, State Boards of Ed., corporate HR staff) that made college mandatory over the last few decades. If kids wanted a professional job, they were FORCED to get an overpriced college degree. That’s not a free choice. That’s not a valid contract.

    • Replies: @Kevin Barrett
  11. @Steve Penfield

    I’m glad we all agree fractional reserve lending is fraud. Here’s a more controversial claim: Usury is also fraud. Ezra Pound and the prophets (not necessarily in that order) were right. Money is by definition a medium of exchange, not a commodity. Renting it out as a commodity is a kind of fraud.

    Financial crimes such as fraud and theft involve an attempt to get something for nothing in a way that disadvantages the other party to the transaction. Using money to make more money without doing productive work is likewise parasitism and theft.

    • Replies: @Steve Penfield
  12. @Kevin Barrett

    Good points. I agree, coin-clippers produce nothing. Ditto for all money lenders. Nullifying that overgrown racket with an occasional Debt Cancellation seems reasonable to me.

  13. @76239

    “No one forced the borrower to borrow. The borrower is the only one responsible”
    Ah — the sheer elegance of creditor morality !
    Let’s ignore the fact that the borrower in many cases was a teenager. Old enough to vote or die in a war? Old enough to understand a relatively speaking complex legal undertaking.
    Let’s also ignore the college-college-college propaganda that’s been jammed down their throats for years & years — you know, “if you don’t get a great degree from a great college your life is… well, fucked. (forget about being a plumber, electrician, or mechanic — no money there (LOL!) & you know, it’s all a bit…grotty, yar?)
    And let’s also forget how the whole system has been set up to exploit students for the benefit of bankers & college “big-wigs”.
    And, most importantly, let’s forget how the whole Student debt thing is screwing up not only the lives of the students themselves (NO ONE FORCED THEM !) but the entire economy — when millions of young people are unable to set up families & contribute to the economy this has perceptively NEGATIVE effects.
    Actually , let’s just forget the whole thing, hey? After all, GOD is the ultimate creditor….

  14. @SafeNow

    I can sympathise with your view, however it’s a trap. It’s similar to saying, we can’t leave Afghanistan because so many have made so many sacrifices….. so we must continue to sacrifice lives & money for them for…….. ever?

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