The Trump Economy

[keepthefaith]

11 hours ago, billsfan89 said:

 

I don't view most people with massive student debt issues as ne'er-do-wells and financial simpletons, some yes, but most are mainly people who are caught on a pile of debt and having difficulties paying off inflated debt. I know many teachers and nurses who carry 50-100k in debt and they try and make more than the minimum payments but simply can't do much more than that due to having to support themselves on middle class salaries. These are people whose debt was brought on by trying to educate themselves into a better situation job wise. Are there irresponsible people who made bad decisions yes, but with any large scale program you are going to have people who aren't the best example. But when deciding if the money is worth spending you have to take a macro look at the problem and go beyond anecdotal hypotheticals. 

 

Just to be clear my preference to use a Wall Street Speculation tax isn't to punish Wall Street but rather a pragmatic one. I am not against a hypothetical scenario where you go after endowments and other college funds. However is there enough money in those funds to finance such a program? I don't know, I haven't seen a study or know of any information that would prove that. If hypothetically you could in part tax the "wealth" of a University to pay for it in some way I would do it. But I don't think even a 10% or 20% tax on endowments and alumni funds is going to result in the nearly trillion dollars needed to fund a full scale forgiveness system. A Speculation tax by most studies would. So to clarify my point, I would be heavily in favor of taxing the colleges if that were enough to fund a forgiveness program. However I would have to research it to see if it would be enough. 

 

I wouldn't be opposed to reimbursing people who paid off their loans in addition to forgiving those with outstanding loans. However how far back do you go? How would people on the bubble of that line feel? I just don't think it works pragmatically. Whereas alleviating those currently in debt is a solid concrete line. As far as the economic argument the idea is that the current issue with the economy by most measures and opinions is lack of demand. Corporations are sitting on record numbers of cash reserves, capital markets are throwing money at anything, and liquidity is not an issue. Interest rates and access to credit is super easy. But consumer demand is crippled. A lot of companies are just financing buybacks and dividends to grow stock prices. 

 

If tens of millions of people suddenly had 200-1000 dollars in their pocket each month they would infuse that money back into the economy or save that money or pay down other debts. Most of that money would go back into consumer goods and experiences which would generate increased investment to service that demand. Most studies done on the topic state that it would be massive finical stimulus to consumer demand. 

 

Finally would I be in favor of means testing the program? Yes, but I would prefer a program be universal. I would take a means tested program over nothing. However I think a universal program would be best as when you have a means tested program it more often than not ends up dividing people over the poor getting handouts. I think universal solutions even if they provide a moral hazard to some are in general better for this type of issue where most of the people impacted are not irresponsible actors. But once again a means tested program is better than nothing. At worst means test it and let those who acted irresponsibly (by some measure) be able to default on their loans. 

 

There is a simple answer here and that is to stop lending money to those that have a high likelihood of not paying it back.  Most Colleges and Universities are either private or state run.  They can figure out how to make college more affordable and how to make funds available.   The Federal Government has no business being involved in this beyond some grants or scholarship programs. 

Edited November 13, 2019 by keepthefaith

[row_33]

15 minutes ago, keepthefaith said:

 

There is a simple answer here and that is to stop lending money to those that have a high likelihood of not paying it back.  Most Colleges and Universities are either private or state run.  They can figure out how to make college more affordable and how to make funds available.   The Federal Government has no business being involved in this beyond some grants or scholarship programs. 

The People are ENTITLED to send their offspring to post-high school education 

 

[3rdnlng]

50 minutes ago, keepthefaith said:

 

There is a simple answer here and that is to stop lending money to those that have a high likelihood of not paying it back.  Most Colleges and Universities are either private or state run.  They can figure out how to make college more affordable and how to make funds available.   The Federal Government has no business being involved in this beyond some grants or scholarship programs. 

Perdue is working on it.

 

https://www.admissions.purdue.edu/costsandfinaid/tuitionfees.php

 

https://cbs4indy.com/2019/11/13/purdue-back-a-boiler-fund-helping-students-pay-for-school-by-selling-stock-in-themselves/

 

 

[billsfan89]

11 hours ago, leh-nerd skin-erd said:

I’m just pushing buttons on the ne’er do wells and simpletons part.  Student loan debt is a problem for some people who become ill, disabled, lose a spouse or whatever.  Your unwillingness to provide feedback on my 3 scenarios leads to believe that in your head, your universal forgiveness idea doesn’t always make sense, but your heart bleeds for all the victims.  Well, not all the victims, only the ones who can’t pay debt. 
 

Rhetorical question for your teacher and nurse friends.  Where are there priorities?  Do they live at the home if their parents, drive older vehicles, eliminate bells and whistles (clothes, vacations, dinners out, etc) in favor of reducing the debt?  Have they considered other careers that might pay more, or considered relocating to an area with higher wages?  Have they considered putting off having children, or toning down the wedding, or getting married (or not) to improve their tax situation? My bet is...most have not. My bet is they have priorities and paying down debt is often not one of them. It’s the American way,  

 

I’ve reached the end and pray that there are not well-intentioned but seriously misguided souls out there like you.  Alas, I know there are, and it’s just a matter of time before the takers...take more.  

 

Any universal program is going to have issues with individual examples. You have to look at the macro issue and not hypothetically one scenario. I don't really even like to bring up the people I know as evidence because that is anecdotal (I being them up to lend context to my perspective.)

 

As far as your questions about the people I know with student debt all but one aren't married (my friends wife got her masters in nursing while she was married) and none of them have kids. A couple do live at home but they have to help support their parents with rent. Of the few that live out of their parents home some of them do not have the option to live at home while one or two do but don't for good reasons (toxic environment.) They work in good fields (teaching and nursing mostly) and they live in a high income area but in the burbs where rent and cost of living is more affordable. Sadly they can't switch fields to something that would pay them more without taking on more debt and most like what they do.

 

As far as other frivolous spending I don't think anything they do is that frivolous. None take more than one vacation a year and many drive cars they paid off or bought used cars when they needed a new one (one leases a car every 3 years the only one I could say does that.) I am sure they have expenses that they could cut down on but nothing that isn't over the top or frivolous to the point where I could say their loans would be paid off of they just did X.

 

These people mostly make between 50 and 70k a year with solid benefits. They have 50 to 100k in debt trying to basically to get a practical job. I understand that the people I know is anecdotal evidence so it has zero to do with the policy but I feel many here feel like the only possible way you could be struggling with student debt is to have a degree in feminist dance theory. 

 

Would I be opposed to a means tested approach? Once again no, but I would prefer a universal one. 

[billsfan89]

12 hours ago, Rob's House said:

 

If money worked this way you could create wealth simply by printing more money.

 

Debt forgiveness is freeing up the money people earn in a free market to spend on consumer goods instead of servicing debt on loans they should not have had access to and couldn't default on. 

[GG]

3 minutes ago, billsfan89 said:

 

Debt forgiveness is freeing up the money people earn in a free market to spend on consumer goods instead of servicing debt on loans they should not have had access to and couldn't default on. 

 

There's a legal process that allows for the reduction of debt for those unable to make payments.

[Rob's House]

12 minutes ago, billsfan89 said:

 

Debt forgiveness is freeing up the money people earn in a free market to spend on consumer goods instead of servicing debt on loans they should not have had access to and couldn't default on. 

 

I don't disagree with any of that. What I disagree with is that it would necessarily lead to economic growth. There is no free lunch. It would benefit some to the detriment of others, and you could potentially make the case that the balance of equities falls in favor of debt forgiveness, but in terms of the overall economy it creates nothing.

[TPS]

16 hours ago, GG said:

If you are going to impose a relief plan, then the plan has to involve the institutions who are largely responsible for the high costs of education.  Why has the cost of higher education gone up in multiples of the rate of inflation, while most other goods and services have not?   What do you think will happen if Federal aid is cut from universities’ budgets?

The Chicken or the egg issue.  

States froze or cut support for HE, especially after the crisis, and unless costs are cut significantly, then the only solution is raising tuition.  As tuition has increased dramatically, students need more aid and (all) lenders increase the loan amounts to coincide.

 

Public institutions are still a deal. The largest part of costs are room and board, and from my perspective that is what will drive any backlash.  

SUNY tuition is $7070/year (+fees), and staying in a dorm costs about $20,000/year.  Even if you qualify for a program that covers tuition, the room & board costs are more than most can handle.  

 

The issues:

1. Cuts in State support cause public institutions to raise tuition to compensate. 

2. Rising administrative overhead has been the biggest driver of costs. Given any budget issues, College Admins hire fewer tenure-track faculty and more adjuncts.

3. Cost reduction in teaching requires raising the student-faculty ratio (watering down the instruction).  For the past 20+ years people have argued that online teaching could do this, but it hasn't... yet...

 

Making tuition "free" would help, but that doesn't resolve the room & board issue (nor the bureaucratic bloat).

I have a stepson who will go to college next year.  We are trying to convince him to go to UB or Canisius, and stay at home.  He wants to go to grad school, and our goals is to get him out of his undergrad debt-free so he can take out loans to support that next phase.

 

 

[keepthefaith]

33 minutes ago, TPS said:

The Chicken or the egg issue.  

States froze or cut support for HE, especially after the crisis, and unless costs are cut significantly, then the only solution is raising tuition.  As tuition has increased dramatically, students need more aid and (all) lenders increase the loan amounts to coincide.

 

Public institutions are still a deal. The largest part of costs are room and board, and from my perspective that is what will drive any backlash.  

SUNY tuition is $7070/year (+fees), and staying in a dorm costs about $20,000/year.  Even if you qualify for a program that covers tuition, the room & board costs are more than most can handle.  

 

The issues:

1. Cuts in State support cause public institutions to raise tuition to compensate. 

2. Rising administrative overhead has been the biggest driver of costs. Given any budget issues, College Admins hire fewer tenure-track faculty and more adjuncts.

3. Cost reduction in teaching requires raising the student-faculty ratio (watering down the instruction).  For the past 20+ years people have argued that online teaching could do this, but it hasn't... yet...

 

Making tuition "free" would help, but that doesn't resolve the room & board issue (nor the bureaucratic bloat).

I have a stepson who will go to college next year.  We are trying to convince him to go to UB or Canisius, and stay at home.  He wants to go to grad school, and our goals is to get him out of his undergrad debt-free so he can take out loans to support that next phase.

 

 

 

Your room and board point is a good one.  Illinois wasn't smart enough to locate its State Universities near populations.  Most are out in corn fields scattered in thinly populated parts of the state a long way from where people live so commuting from home isn't feasible.  Meanwhile the largest junior college in the Chicago area is in the western burbs in a great commuter location but the state hasn't figured out that it would better serve taxpayers if it were a 4 year school.  Illinois has among the highest cost in state schools also.  University of Illinois tuition is over $15K/yr for in-state not including room and board and add $2K for engineering and other similar programs. A couple of the schools are a bit cheaper but compared to most state schools in other states they are pricey. 

Edited November 13, 2019 by keepthefaith

[billsfan89]

3 hours ago, Rob's House said:

 

I don't disagree with any of that. What I disagree with is that it would necessarily lead to economic growth. There is no free lunch. It would benefit some to the detriment of others, and you could potentially make the case that the balance of equities falls in favor of debt forgiveness, but in terms of the overall economy it creates nothing.

 

I agree that everything comes at a cost. A Wall Street Spec tax or a tax on college endowments/wealth would come with some positive and negative consequences. However in a economy strapped for consumer demand (liquidity, asset prices and corporate capital being at all time highs showcases that there is plenty of investment capital out there) a program that frees up cash/capital to 45 million consumers would have a positive impact on the overall economy by increasing consumer demand, that would far outweigh the negatives that come with the taxes levied on Wall Street or colleges. 

 

If you have no increase in consumer demand then capital just sits around and gets put into assets. No one is going to invest capital if they think there is zero demand for a product or limited consumer cash flow to invest in. 

3 hours ago, GG said:

 

There's a legal process that allows for the reduction of debt for those unable to make payments.

 

It is very onerous and hard to get any restructure of student loan debt let alone default on it. Of the 45 million that owe student loan debt you are talking about well below 10% that actually qualify for reduction let alone defaulting on debt.

[3rdnlng]

Perdue's:

 

Billed Expenses
Tuition/Fees+	$9,992**	$28,794**	$30,794**
Room/Board	$10,030	$10,030	$10,030
SUBTOTAL	$20,022	$38,824	$40,824
Other Estimated Expenses
Books/Supplies	$1,190	$1,190	$1,190
Transportation	$160	$320+	$2,260
Miscellaneous	$1,510	$1,510	$1,510
SUBTOTAL	$2,860	$3,020	$4,960
ESTIMATED TOTAL	$22,882	$41,844	$45,784

⁺ Tuition will remain frozen at current rates through the 2020-21 academic year.

⁺Estimated transportation costs are higher for students who fly from their home to campus.

*International students are those who hold F, J, and some other visa types

**Some programs have additional fees:

• Computer Science - $2,050
• Data Science - $2,050
• Engineering - $2,050
• Management - $1,436
• Purdue Polytechnic - $572
• Flight - Individual courses in this program have additional fees; please refer to the Bursar website or contact the department for specific flight course fees.
• Honors College - $200

  This information is subject to change without notice.

  If you enroll in classes but must withdraw before the semester starts, Purdue will refund your tuition/fees. After classes begin, refunds are reduced proportionally. Students who have certain types of federal financial aid are subject to other refund schedules.

Costs and Financial AidFreshman ScholarshipsFinancial Aid Estimator

[keepthefaith]

24 minutes ago, billsfan89 said:

 

I agree that everything comes at a cost. A Wall Street Spec tax or a tax on college endowments/wealth would come with some positive and negative consequences. However in a economy strapped for consumer demand (liquidity, asset prices and corporate capital being at all time highs showcases that there is plenty of investment capital out there) a program that frees up cash/capital to 45 million consumers would have a positive impact on the overall economy by increasing consumer demand, that would far outweigh the negatives that come with the taxes levied on Wall Street or colleges. 

 

If you have no increase in consumer demand then capital just sits around and gets put into assets. No one is going to invest capital if they think there is zero demand for a product or limited consumer cash flow to invest in. 

 

It is very onerous and hard to get any restructure of student loan debt let alone default on it. Of the 45 million that owe student loan debt you are talking about well below 10% that actually qualify for reduction let alone defaulting on debt.

 

Why should Wall Street and investors be taxed to pay for people's continuing education? 

[GG]

2 hours ago, TPS said:

The Chicken or the egg issue.  

States froze or cut support for HE, especially after the crisis, and unless costs are cut significantly, then the only solution is raising tuition.  As tuition has increased dramatically, students need more aid and (all) lenders increase the loan amounts to coincide.

 

Public institutions are still a deal. The largest part of costs are room and board, and from my perspective that is what will drive any backlash.  

SUNY tuition is $7070/year (+fees), and staying in a dorm costs about $20,000/year.  Even if you qualify for a program that covers tuition, the room & board costs are more than most can handle.  

 

The issues:

1. Cuts in State support cause public institutions to raise tuition to compensate. 

2. Rising administrative overhead has been the biggest driver of costs. Given any budget issues, College Admins hire fewer tenure-track faculty and more adjuncts.

3. Cost reduction in teaching requires raising the student-faculty ratio (watering down the instruction).  For the past 20+ years people have argued that online teaching could do this, but it hasn't... yet...

 

Making tuition "free" would help, but that doesn't resolve the room & board issue (nor the bureaucratic bloat).

I have a stepson who will go to college next year.  We are trying to convince him to go to UB or Canisius, and stay at home.  He wants to go to grad school, and our goals is to get him out of his undergrad debt-free so he can take out loans to support that next phase.

 

 

 

Now we're getting somewhere.  Your highlighted points are the same cost pressures that every business faces day in and day out, yet the HE sector doesn't have to operate under the same rules because of the embedded revenue guarantees from student loans, for which they bear no responsibility.    The right way to fix it, is to have colleges offer the loans and bear the credit risk.

[TPS]

37 minutes ago, GG said:

 

Now we're getting somewhere.  Your highlighted points are the same cost pressures that every business faces day in and day out, yet the HE sector doesn't have to operate under the same rules because of the embedded revenue guarantees from student loans, for which they bear no responsibility.    The right way to fix it, is to have colleges offer the loans and bear the credit risk.

That would be great as long as we get access to the Fed's facilities when defaults become unsustainable, you know, like the banks...

[GG]

1 minute ago, TPS said:

That would be great as long as we get access to the Fed's facilities when defaults become unsustainable, you know, like the banks...

 

As long as you're willing to close down and have students run to other institutions (you know, like Lehman and Bear Stearns)

[TPS]

23 minutes ago, GG said:

 

As long as you're willing to close down and have students run to other institutions (you know, like Lehman and Bear Stearns)

Now, now...a forced marriage in one case and Paulson eliminating a competitor in the other.

 

Our admnistration is killing us, so it may not be too far off....

[OldTimeAFLGuy]

1 hour ago, keepthefaith said:

 

Why should Wall Street and investors be taxed to pay for people's continuing education? 

 

 

 

...because individuals are no longer responsible and need the government....ask Bernie or Lizzie......I effed up royally by putting my two through college who graduated with ZERO debt.......can I get a rebate?.....

[SoCal Deek]

8 minutes ago, OldTimeAFLGuy said:

 

 

 

...because individuals are no longer responsible and need the government....ask Bernie or Lizzie......I effed up royally by putting my two through college who graduated with ZERO debt.......can I get a rebate?.....

Play the race card! That always works. 

[OldTimeAFLGuy]

1 minute ago, SoCal Deek said:

Play the race card! That always works. 

 

 

...well, I do have the official "Italian Race Card" in my top drawer...should I?.....Uncle Nunzio promises to "support" me in his own ways.....

[keepthefaith]

10 minutes ago, OldTimeAFLGuy said:

 

 

...well, I do have the official "Italian Race Card" in my top drawer...should I?.....Uncle Nunzio promises to "support" me in his own ways.....

Ford vs Ferrari opens this weekend.  Go see it.