Monday, January 7, 2013
Memo to Congress: Cut the Crap About Capitalism (And Stop Pretending You Represent Us)
The "American people" you pretend to represent do not exist. It's
all of us out here in the "real America" – you know, the one outside the
beltway – who do exist. We work for a living, nurture our kids,
support our schools, obey the laws you make, and, yes, pay our
taxes. Meanwhile, the great majority of your kind (with a few notable
and indispensable exceptions), enjoying benefits, incomes, and
privileges our kind will never know, steadfastly refuse to speak for us.
You may have noticed that we are a very diverse society. This diversity is a great strength, except when it's not, like when it divides us so deeply and irreconcilably that we are paralyzed by it. What divides us as a people more than anything else now is ideology. Not religion, not race, not political affiliation, but ideology.
Watching Congress fumble, stumble, and sink into ever-deeper disrepute one could easily get the impression that the problem is partisanship: "Conservatives" and Republicans versus "Liberals" and Democrats. In fact, however, that's not the case since you've so mangled these words that they no longer have any real meaning.
So-called Tea Party Republicans using Fox News like a mass-media manure spreader are extremists incompatible with traditional conservatism in the U.S. Extremists in Congress now typically use the word "liberal" as a pejorative and absurdly label liberals as "socialists"! Terms that once framed our political discourse are meaningless, hopelessly stuck in the sludge of ugly propaganda and smear tactics thanks in no small part to such distinguished lawmakers as Mitch McConnell, Marco Rubio, Rand Paul, and Mike Lee in the Senate or Paul Ryan, Eric Cantor, Michelle Bachmann, and Steve King in the House.
You pretend to care about – and fight over – all sorts of phony
issues. You don't really give a damn about affordable health care for
the masses. You have given yourselves the best health care money can
buy and we pay for it. You ballyhoo about "choice" and "death panels"
and other red herrings that have nothing to do with the real reason you
oppose what you dismissively and derisively call "Obamacare". This is
but one of many examples of your hypocrisy and cynicism. Here's a short
list of others and a lie that goes with it:
If honest differences are not at the root of Washington's
dysfunctional state, what is? In a word, capitalism. Not the concept
we normally associate with "free markets" (a myth) or even market
economies (the true science behind the myth). What extremists in
Congress would have us believe is that "capitalism" – the ideology – is
synonymous with market forces enshrined in the discipline of economics
(often inaptly called the "dismal science").
Pure rubbish.
Capitalism as it is used in the current lexicon of extreme partisan politics in Congress has nothing to do with economics. The extremists have hijacked the term to deflect public attention from the real motives behind the false rhetoric of freedom from "free markets" to "free speech". In so doing, they have polluted political speech and economic thought to the detriment of the nation.
Words are important. We can't think without language. True liberals and conservatives alike know that the absence of efficiently functioning markets is a prelude to economic catastrophe. And that's the key: efficiently functioning markets.
Markets for goods. Markets for services. Markets for ideas. And, yes, markets for votes. It's the marketplace where Adam Smith's famed "invisible hand" works it's magic, where the forces of supply and demand theoretically generate the highest quality goods at the lowest price. Now apply that principle to our politics, to the way we elect members of the august body called Congress, and to the pathetic spectacle it has become both in our eyes and the eyes of the world.
Too many of our leaders have led us astray for too long now. That goes for many Democrats as well as Republicans. Nowhere has the damage been greater than in the way they have distorted the language of politics and economics.
Capitalism is now an ideology pure and simple, with a propaganda boilerplate and patter all its own. It is used to camouflage the real truth, which is that Congress has sold out to corporate interests; that members of Congress are bought and sold in a behind-the-scenes market where votes and money are constantly traded; that America's megabanks and corporations do not believe in competition but obsessively seek market-distorting tax favors, subsidies, federal rulings allowing "venture capitalists" to gobble up or destroy competitors and drive small businesses into extinction.
As voters and concerned citizens we need to be clear that the "debate" over conservative versus liberal solutions is not only false but pernicious. Real liberals are no less dedicated to freedom and efficient markets than true conservatives – the ones, that is, without a host of hidden agendas that have nothing to do with macroeconomic theory and everything to do with microeconomic favoritism.
Economics is not a science dedicated to the enrichment of the 1%. It's also not simply about the 99%. It's really about the whole society. We all stand to gain from fair markets – ones that are truly competitive, where the playing field is not rigged to produce the same "winners" and "losers" every time. And that's the truth.
Readers are invited to add items to the list of issues and lies. It's not only a cathartic exercise; it's also vital to changing the way Americans have been conditioned by the purveyors of capitalist propaganda to think about politics and economics.
You may have noticed that we are a very diverse society. This diversity is a great strength, except when it's not, like when it divides us so deeply and irreconcilably that we are paralyzed by it. What divides us as a people more than anything else now is ideology. Not religion, not race, not political affiliation, but ideology.
Watching Congress fumble, stumble, and sink into ever-deeper disrepute one could easily get the impression that the problem is partisanship: "Conservatives" and Republicans versus "Liberals" and Democrats. In fact, however, that's not the case since you've so mangled these words that they no longer have any real meaning.
So-called Tea Party Republicans using Fox News like a mass-media manure spreader are extremists incompatible with traditional conservatism in the U.S. Extremists in Congress now typically use the word "liberal" as a pejorative and absurdly label liberals as "socialists"! Terms that once framed our political discourse are meaningless, hopelessly stuck in the sludge of ugly propaganda and smear tactics thanks in no small part to such distinguished lawmakers as Mitch McConnell, Marco Rubio, Rand Paul, and Mike Lee in the Senate or Paul Ryan, Eric Cantor, Michelle Bachmann, and Steve King in the House.
- Issue: Oil and gas. Lie: "fracking" is about energy independence.
- Issue: Global warming. Lie: there's no consensus among climate scientists that it's a problem.
- Issue: Gun control. Lie: The 2nd Amendment is about the inalienable right of private gun ownership.
- Issue: Campaign finance. Lie: The 1st Amendment requires Congress and the Supreme Court to treat corporations as people; giving money to politicians is a form of free speech.
- Issue: Corporate taxes. Lie: US corporations pay taxes at effective rates that are the highest in the world.
- Issue: Individual taxes. Lie: a low "capital gains" tax boosts economic growth; better to finance government with high taxes on "earned income" and payroll taxes.
Capitalism as it is used in the current lexicon of extreme partisan politics in Congress has nothing to do with economics. The extremists have hijacked the term to deflect public attention from the real motives behind the false rhetoric of freedom from "free markets" to "free speech". In so doing, they have polluted political speech and economic thought to the detriment of the nation.
Words are important. We can't think without language. True liberals and conservatives alike know that the absence of efficiently functioning markets is a prelude to economic catastrophe. And that's the key: efficiently functioning markets.
Markets for goods. Markets for services. Markets for ideas. And, yes, markets for votes. It's the marketplace where Adam Smith's famed "invisible hand" works it's magic, where the forces of supply and demand theoretically generate the highest quality goods at the lowest price. Now apply that principle to our politics, to the way we elect members of the august body called Congress, and to the pathetic spectacle it has become both in our eyes and the eyes of the world.
Too many of our leaders have led us astray for too long now. That goes for many Democrats as well as Republicans. Nowhere has the damage been greater than in the way they have distorted the language of politics and economics.
Capitalism is now an ideology pure and simple, with a propaganda boilerplate and patter all its own. It is used to camouflage the real truth, which is that Congress has sold out to corporate interests; that members of Congress are bought and sold in a behind-the-scenes market where votes and money are constantly traded; that America's megabanks and corporations do not believe in competition but obsessively seek market-distorting tax favors, subsidies, federal rulings allowing "venture capitalists" to gobble up or destroy competitors and drive small businesses into extinction.
As voters and concerned citizens we need to be clear that the "debate" over conservative versus liberal solutions is not only false but pernicious. Real liberals are no less dedicated to freedom and efficient markets than true conservatives – the ones, that is, without a host of hidden agendas that have nothing to do with macroeconomic theory and everything to do with microeconomic favoritism.
Economics is not a science dedicated to the enrichment of the 1%. It's also not simply about the 99%. It's really about the whole society. We all stand to gain from fair markets – ones that are truly competitive, where the playing field is not rigged to produce the same "winners" and "losers" every time. And that's the truth.
Readers are invited to add items to the list of issues and lies. It's not only a cathartic exercise; it's also vital to changing the way Americans have been conditioned by the purveyors of capitalist propaganda to think about politics and economics.
THE ELEVENTH MARBLE
by Michael Rivero
Any five-year old child knows that if you put ten marbles into a tin
can, you can only take ten marbles back out. No amount of wishful
thinking, dreaming, or praying, will yield that eleventh marble from
inside that can.
That eleventh marble does not exist. It never did, and it never will.
All discussions about the eleventh marble are the product of
imagination. The eleventh marble is a fantasy.
Private central bankers issuing the public currency as
interest-bearing loans operate on the belief that they can put ten
marbles (dollars) into a tin can (the world) and magically get 11
marbles back out.
Thus, we may conclude that the bankers are dumber than five-year old
children! But unlike five-year old children, the bankers will take your
home, your business, and your nation when they don't get that eleventh
marble! The spoiled child may cry and throw a tantrum, but that will be
the end
of their upset. The spoiled banker, however, in his or her arrogant rage
that they cannot have the eleventh marble their imagination says must
still be in that tin can, may start a war before they will admit that
eleventh marble was never really there.
Economies are like tin cans. Before you can take a marble out, you must have put a marble in. Nobody can give you a marble that does not exist, yet this simple reality is lost to the priests of that fantastic religion called "economics" in that unholiest of temples called the Private Central Bank. Their religious doctrine seems to be that there must always be an eleventh marble inside the tin can, and that the tin can unfairly withholds that eleventh marble, indeed cheats them of their right to the eleventh marble, purely out of spite. That faith in the existence of the eleventh marble, unseen and improvable, is the article of faith the religion of banking rests on. It is far easier to burn the heretics than to question the dogma.
Today we see the bankers, having already retrieved their ten marbles from the tin can, flogging the world for that missing eleventh marble. Greece does not have that eleventh marble, so they turn to Germany and ask, "Do you have an eleventh marble", and Germany replies, "Sorry, but the bankers already took the ten marbles they put in our tin can, and we are searching for an eleventh marble ourselves. Try the Americans." The Americans, of course, have only just surrendered the last of their ten marbles back to the bankers and are looking under seat cushions for that missing eleventh marble nobody seems able to find.
But the eleventh marble will never be found. After all that mayhem brought down on the tin can there still will be no eleventh marble. It does not exist. It never did, and it never will.
The problem with all modern reserve banking systems is that the moment the first bank note goes into circulation as the proceed of a loan at interest, more money is owed to the banks than actually exists. Ten marbles have been put into the tin can, but the bankers see 11 marbles owed back to them. Sooner or later the non-existence of that eleventh marble will create a crisis of faith. People will stop believing in the religion called private central banking, and that crisis of faith will bring the system crashing down, as did the Temple of Baal in ancient times when the Syrians saw through the priests' trickery. This evil magic of creating money out of debt was a fraud all along, as fraudulent and silly as the idea that one can put ten marbles into a tin can, and take out eleven.
In ages to come economists will look back at this failed experiment in debt-based currency, and dump it into the same category of human folly as Tulip mania, The Nation of Poyais, Credit Mobilier, the Great South Seas Company, and Mortgage-Backed Securities.
Economies are like tin cans. Before you can take a marble out, you must have put a marble in. Nobody can give you a marble that does not exist, yet this simple reality is lost to the priests of that fantastic religion called "economics" in that unholiest of temples called the Private Central Bank. Their religious doctrine seems to be that there must always be an eleventh marble inside the tin can, and that the tin can unfairly withholds that eleventh marble, indeed cheats them of their right to the eleventh marble, purely out of spite. That faith in the existence of the eleventh marble, unseen and improvable, is the article of faith the religion of banking rests on. It is far easier to burn the heretics than to question the dogma.
Today we see the bankers, having already retrieved their ten marbles from the tin can, flogging the world for that missing eleventh marble. Greece does not have that eleventh marble, so they turn to Germany and ask, "Do you have an eleventh marble", and Germany replies, "Sorry, but the bankers already took the ten marbles they put in our tin can, and we are searching for an eleventh marble ourselves. Try the Americans." The Americans, of course, have only just surrendered the last of their ten marbles back to the bankers and are looking under seat cushions for that missing eleventh marble nobody seems able to find.
But the eleventh marble will never be found. After all that mayhem brought down on the tin can there still will be no eleventh marble. It does not exist. It never did, and it never will.
The problem with all modern reserve banking systems is that the moment the first bank note goes into circulation as the proceed of a loan at interest, more money is owed to the banks than actually exists. Ten marbles have been put into the tin can, but the bankers see 11 marbles owed back to them. Sooner or later the non-existence of that eleventh marble will create a crisis of faith. People will stop believing in the religion called private central banking, and that crisis of faith will bring the system crashing down, as did the Temple of Baal in ancient times when the Syrians saw through the priests' trickery. This evil magic of creating money out of debt was a fraud all along, as fraudulent and silly as the idea that one can put ten marbles into a tin can, and take out eleven.
In ages to come economists will look back at this failed experiment in debt-based currency, and dump it into the same category of human folly as Tulip mania, The Nation of Poyais, Credit Mobilier, the Great South Seas Company, and Mortgage-Backed Securities.
Inside a Failed State - Zimbabwe
Zimbabwe, once one of the most prosperous nations in Africa, now has the lowest life expectancy and highest inflation rate in the world. Life has become an everyday struggle for survival. The supermarkets in Bulawayo are all empty. According to the shopkeeper, the last time they had bread was “a month ago”. Filming secretly undercover, journalist Ginny Stein captures the desperation everywhere. “There is no water. Nothing, just nothing”, laments ‘Tony’. “Children are hungry, everyone is hungry. Our government is a monster”. Even if there were things in the shops, most people couldn’t afford them. A teacher’s monthly salary now buys the equivalent of one McDonald’s family meal. Malnutrition is taking its toll on people’s health. “Up to 75% of the people coming in have diarrhea and vomiting”, states Dr Thandazani. The fear is that these problems will only get worse. In July, the government forced businesses to half their prices. Now it’s proposing to nationalize 51% of all white-owned businesses. “The economy must be in the hands of Zimbabweans”, states Ambassador Khaya Moyo. But unsurprisingly, manufacturers and retailers feel they’re being made new enemies of the state.
Rome v. America: when nations die
It is said that those who don’t learn from history are doomed to
repeat it. While listening to the details about Congress’ latest
financial deal, along with all the hype regarding the Newtown tragedies,
several similarities between ancient Rome and these United States came
to mind. I then decided to do a little research into the reasons Rome
fell – thinking that the similarities between the gladiator games and
our violent entertainment, along with our out-of-touch bureaucrats and
Rome’s notoriously out-of-touch Senate would take center stage. I was
not prepared for what I found. The list of similarities nearly knocked
me off of my chair.
The debate about all the issues that lead to the collapse of Rome is
still going on and probably will be for some time. The truth is that
there were many issues that contributed to the fall of Rome. The ones
listed below are the ones that most historians agree with and the ones
that bear disturbing similarities to conditions in America today. Read
them and weep – or get mad and do something to change the road we’re on.
Everett Hale once said: “I am only one, but I am one. I cannot do
everything, but I can do something. What I can do, I should do and, with
the help of God, I will do!”
St. Peter’s Square, Vatican City. Wide-angle view. Photo: Francois Milan. CC BY-SA 3.0 Unported License
Table: Parallels between ancient Rome and modern America
|
Factors that contributed to the fall of Rome
|
Similar factors that exist in America today
|
| Antagonism between the Senate and the Emperor | Antagonism between the President and Congress, as well as between our two major Parties |
Economic factors included:
|
Economic factors include:
|
| Decline in morals – especially in the rich upper class. | Decline in morals – especially within the entertainment and sports industries. |
| Political corruption was rampant | Political corruption is rampant |
| Constant Wars | Constant Wars |
| High unemployment within the working class, resulting in increasing dependency on government | Rising unemployment within the working class, resulting in increasing dependency on government programs. |
| High cost of the “Dole” which was government supplied bread and entertainment for the non-working poor. | High cost of government dole, including food stamps, Medicaid, extended unemployment insurance and other government entitlement programs. |
| Unrestricted trade agreements with foreign nations, resulting in Roman citizens not being able to compete with foreign trade. | Free trade agreements that have resulted in loss of American jobs, since Americans cannot compete with foreign low wages. |
| Class warfare between the rich and the poor. | Government inspired class warfare between the rich and the poor. |
| Increased government subsidies enabled citizens to live comfortably without working. | Increased government entitlements allow citizens to live comfortably without working. |
| The mob and the cost of games – the roman government provided circuses for the unemployed. | Government now supplies cell phones and many perks for those living below the poverty line. |
| Decline in ethics and values – the decline in Roman ethics and values is well-known and needs no further explanation | America has experienced a decline in ethics and values that cannot be argued and needs no further explanation. |
| Decline in morals led to the destruction of families. It was not common to have two parent households. | Decline in morals is leading to the destruction of families. It is now common to have single parent households. |
| Barbarian Invasion | For America, this can be considered to be Islamic terrorists. |
| Expansion of government – Ralph Martin Novak, author of “Christianity and the Roman Empire,” stated:“…whereas at the start of the third century A.D. the Roman emperors employed only about 300 to 350 full-time individuals in administering the Empire, by 300 A.D. this number had grown to some 30,000 or 35,000 people.” | Expansion of government. It has been said that today you will work for the government one way or another. |
| High taxes were instituted to fund growing government and its programs. | High taxes are being instituted to fund growing government and its programs. |
| Government ceased being the servant of the people and became its nanny. | The Nanny State is increasing exponentially. |
| Practices of infanticide were justified and legal. | Abortion is justified and legal. |
| Gladiator games, chariot races, and forms of violence were considered entertaining. | Violent games of all kinds are considered entertaining. |
| Paganism and religious tolerance ruled – except for Christianity. | Religious tolerance rules – except for Christianity. |
| Decline of the military and reduced incentives to join, including lack of respectable leadership. | Attempts to disrespect and underfund the military have thankfully been unsuccessful. |
| Citizenship granted to foreigners | Amnesty and disregard for immigration laws. |
| Romans became globalists instead of nationalists. | Americans are encouraged to become globalists, abandoning patriotism. |
| Decline in education, which had previously been conducted privately within homes. Prosperous Roman families began to hire Greeks to teach their children. The Greeks taught humanistic and godless philosophies. | Decline in education by government-run schools. Our government-run schools teach secular humanism and evolution, which portends that supernatural creation did not occur. |
Here Comes The Student Loan Bailout
2012 is the year the student loan bubble finally popped.
While on one hand the relentlessly rising total Federal student debt
crossed $956 billion as of September 30, and was growing at a pace that
will have put it over $1 trillion by the end of 2012, the one data point
confirming the size, severity and ultimately bursting of this latest
debt bubble was the disclosure in late November by the Fed that the
percentage of 90+ day delinquent loans soared from under 9% to 11% in one quarter.
Which is why we were not surprised to learn that the Federal government has now delivered yet another bailout program: this time focusing not on banks, or homeowners who bought McMansions and decided to not pay their mortgage, but on those millions of Americans, aged 18 to 80, that are drowning in student debt - debt, incidentally, which has been used to pay for drugs, motorcycles, games, tattoos, not to mention countless iProducts. Which also means that since there is no free lunch, all that will happen is that even more Federal Debt will be tacked on to replace discharged student debt loans, up to the total $1 trillion which will promptly soar far higher as more Americans take advantage of this latest government handout. But when the US will already have $22 trillion in debt this time in four years, who really is counting? After all, "it is only fair" that the taxpayer funded "free for all" bonanza must go on.
The latest debt bailout, not surprisingly is not titled "Yet another taxpayer funded bailout for those who bought things they can't afford on credit" as that would not be very politically prudent, especially for those politicians who still have taxpaying citizens as their voters. Instead, its name is the much more PC: "Pay as You Earn Repayment Plan." Alas, it really should be called the former, because what it does is it incentivizes Americans to borrow even more Federal student loans, well aware that there will now always be a cap on the associated monthly interest payment which will never leave a mark regardless what the full underlying loan notional is. It also provides for full debt discharge should the borrowers end up with cushy Federal jobs - because the one thing the US government needs afford is more debt-saddled government workers.
What is the "Pay as You Earn Repayment Plan"? The WSJ explains:
What are the terms of this new bailout?
So let's get this straight:
If there is anyone out there who thinks this will not result in a "charge it" feeding frenzy and that the Federal student loan total will not go absolutely parabolic going forward, please raise your hand.
Of course, what is not discussed, is who is on the other side of all those forgiven loans. And the answer, dear taxpaying US readers, is starting at you in the mirror. Because all the Federal government will do is transfer the unfunded obligation, which has already been used to satisfy the purchase of goods and services, from one individual to the whole group.
But when one is dealing with the government of a country that is no longer even fit to be defined as "banana", what is adding one more trillion between already insolvent counterparties.
Finally, yes, this means the Fed just tacked on one more year of QE to its $1 trillion/year in US debt monetization, which also means the Fed's balance sheet will now also be used for to fund student loan forgiveness, among so many other things.
Insolvent students of the world, unite!
Which is why we were not surprised to learn that the Federal government has now delivered yet another bailout program: this time focusing not on banks, or homeowners who bought McMansions and decided to not pay their mortgage, but on those millions of Americans, aged 18 to 80, that are drowning in student debt - debt, incidentally, which has been used to pay for drugs, motorcycles, games, tattoos, not to mention countless iProducts. Which also means that since there is no free lunch, all that will happen is that even more Federal Debt will be tacked on to replace discharged student debt loans, up to the total $1 trillion which will promptly soar far higher as more Americans take advantage of this latest government handout. But when the US will already have $22 trillion in debt this time in four years, who really is counting? After all, "it is only fair" that the taxpayer funded "free for all" bonanza must go on.
The latest debt bailout, not surprisingly is not titled "Yet another taxpayer funded bailout for those who bought things they can't afford on credit" as that would not be very politically prudent, especially for those politicians who still have taxpaying citizens as their voters. Instead, its name is the much more PC: "Pay as You Earn Repayment Plan." Alas, it really should be called the former, because what it does is it incentivizes Americans to borrow even more Federal student loans, well aware that there will now always be a cap on the associated monthly interest payment which will never leave a mark regardless what the full underlying loan notional is. It also provides for full debt discharge should the borrowers end up with cushy Federal jobs - because the one thing the US government needs afford is more debt-saddled government workers.
What is the "Pay as You Earn Repayment Plan"? The WSJ explains:
A new federal program should make it easier for some recent college graduates to keep their student-loan payments manageable.Which in the New Normal, means everyone with a student loan will benefit. It also means, that courtesy of knowing this safety net is there, more and more people will take advantage of the government's latest generosity with other taxpayer's money.
The new option, known as the "Pay as You Earn Repayment Plan," lets eligible borrowers sharply lower their monthly loan payments and qualify for loan forgiveness quicker than they might otherwise.
"It's a very good safety net for students who borrow too much," says Mark Kantrowitz, publisher of the financial-aid site FinAid.org. "If your debt exceeds your annual income, you will probably benefit."
Pay as You Earn, which took effect on Dec. 21, "is designed to help offset the effects of the recession for student borrowers most likely to take a hit in this tough job market," says Lauren Asher, president of the Institute for College Access and Success, which has pushed for the creation of income-based repayment plans.
What are the terms of this new bailout?
The new program comes at a time when rising student-loan balances—amid a still shaky job market—have weighed heavily on many families.So much for student debt being non-dischargeable: borrow hundreds of thousands, but make your monthly payment of a hundred or so bucks, and in 20 years you will be debt free, courtesy of US taxpayers. Actually, scratch that: one doesn't even have to make a payment!
Typically, federal student loans must be repaid within 10 years. At current interest rates, that can work out to a monthly payment of roughly $300 for a borrower with $26,000 in debt.
Pay as You Earn, by contrast, limits student-loan payments to 10% of "discretionary income" as defined by government formulas. Borrowers who make regular payments could have the remaining unpaid amounts forgiven after 20 years.
In some cases, borrowers with low incomes could be required to make a zero-dollar payment and would still be considered current on their loan. Monthly payments can increase or decrease each year based on the borrower's income and family size.For those who think getting full debt forgiveness in 20 years is far too long, why there's a loophole for that too: just go "work" for Uncle Sam:
Borrowers with public-service jobs may qualify for loan forgiveness after just 10 years.As for eligibility "constraints":
To be eligible for the program, borrowers must have taken out their first federal student loan after Sept. 30, 2007, and received at least one federal student loan after Sept. 30, 2011. Borrowers also must meet eligibility cutoffs based on the size of their debt, their discretionary income and family size.In other words, virtually all people who were responsible for the diagonal take off in the Federal student loan total in the current depression are now eligible for what will eventually be full debt discharge.
The U.S. Department of Education's Pay As You Earn calculator, available at studentaid.gov, can help you determine if you qualify. Borrowers can apply for the program online or by contacting the loan servicer that collects their payments on behalf of the federal government.
So let's get this straight:
- go to some "everyone who applies is admitted" community college
- take on the biggest Federal loan one can get
- use the proceeds for everything besides the tuition (of course)
- be unable to find a job after graduation (naturally)
- plead poverty, accusing evil employers who don't hire those who majored in Foosball, and make "zero" payments while remaining in "compliance"
- get a job working for the government, wait ten years, and have the entire loan magically disappear.
If there is anyone out there who thinks this will not result in a "charge it" feeding frenzy and that the Federal student loan total will not go absolutely parabolic going forward, please raise your hand.
Of course, what is not discussed, is who is on the other side of all those forgiven loans. And the answer, dear taxpaying US readers, is starting at you in the mirror. Because all the Federal government will do is transfer the unfunded obligation, which has already been used to satisfy the purchase of goods and services, from one individual to the whole group.
But when one is dealing with the government of a country that is no longer even fit to be defined as "banana", what is adding one more trillion between already insolvent counterparties.
Finally, yes, this means the Fed just tacked on one more year of QE to its $1 trillion/year in US debt monetization, which also means the Fed's balance sheet will now also be used for to fund student loan forgiveness, among so many other things.
Insolvent students of the world, unite!
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