Our Ancestors Understood Human Nature A Lot Better Than We Do

From Vox June 23:

Sen. Bernie Sanders’s proposal to make college free in the United States just got bigger: He wants to erase all student debt too. All $1.6 trillion of it.

The Vermont senator will unveil the most ambitious higher education plan in the Democratic 2020 presidential primary so far on Monday. The proposal would make two- and four-year public and tribal colleges and universities tuition-free and debt-free, and erase the roughly $1.6 trillion in student loan debt currently owed in the US, paid for by a tax on Wall Street.

Currently, about 45 million Americans have student loans. This would cancel debt for all of them — regardless of their income or assets. That’s a notable difference from Sen. Elizabeth Warren’s free college proposal, which also provides broad debt relief but caps it for households with incomes over $250,000.

Sanders is proposing funding streams to states, tribes, and historically black colleges and universities (HBCUs) to allow them to eliminate undergraduate tuition and fees. The bill would also increase spending on work-study programs and build up federal grant programs for low-income students for additional costs related to getting an education, from housing and transportation to buying books.

The proposal would cost $2.2 trillion over 10 years, which Sanders says would be paid for with his Wall Street tax. He proposed a Wall Street speculation tax in 2016, which would raise small levies on buying and selling stocks, bonds, and derivatives; many experts estimate it could raise hundreds of billions of dollars annually. Sanders’s office cited progressive economist Robert Pollin’s projection that the tax would bring in $2.4 trillion in revenues over 10 years.

From The New York Post February 22nd:

Democratic presidential hopefuls Sens. Kamala Harris and Elizabeth Warren said they both support reparations for African-Americans affected by slavery.

Asked about the matter last week on the 105.1 FM show “Breakfast Club,” Harris agreed with the host that reparations are necessary to address problems of “inequities.”

“America has a history of 200 years of slavery. We had Jim Crow. We had legal segregation in America for a very long time,” she said on the radio show. “We have got to recognize, back to that earlier point, people aren’t starting out on the same base in terms of their ability to succeed and so we have got to recognize that and give people a lift up.”

From Alexander Fraser Tytler, Lord Woodhouselee (15 October 1747 – 5 January 1813), who obviously understood a lot more than all three of these Democrat candidates for President:

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.”
Alexander Fraser Tytler
We have a choice of where we will be on that timeline.

When Congress Becomes A Joke

PJ Media posted an article today about some recent statements by Congresswoman Maxine Waters.

The article reports:

Waters is the chairwoman of the House Financial Services Committee — the committee that regulates the banks.

During a hearing examining the practices of some of the nation’s biggest banks, Waters complained to a panel of seven bank CEOs that there are more than 44 million Americans that owe … $1.56 trillion in student loan debt.”

She added, “Last year, one million student loan borrowers defaulted, which is on top of the one million borrowers who defaulted the year before.”

She then demanded to know what they intended to do about this massive problem. “What are you guys doing to help us with this student loan debt?” she asked. “Who would like to answer first? Mr. Monahan, big bank.”

I guess she wasn’t paying attention when the Health Care and Education Reconciliation Act of 2010 (HCERA) which put the government in charge of all student loans. The band CEO’s she was questioning both stated that they had stopped making student loans long before 2010.

The article also states:

Waters then quickly changed the subject to small businesses.

The Obama administration put the federal government in charge of student lending in 2010, with the intention of saving taxpayer dollars by “cutting out the middleman,” as President Barack Obama put it.

According to the Washington Times, “student loan debt exploded from $154.9 billion in 2009 to $1.1 trillion at the end of 2017”  with current student debt “estimated at more than $1.5 trillion.”

Earlier in the hearing, Waters grilled the bank execs about their interactions with Russia.

This woman serves in Congress. She continues to be re-elected. That is beyond sad.

What Happens When Expectations Are Raised Too High?

The Daily Caller posted an article today that illustrates the problem with teaching children to expect things they didn’t earn.

The article reports:

Nearly half of all America’s college students have deluded themselves into believing that the federal government will graciously forgive their student loans despite the fact that the federal government forgives only a very low percentage of student loans.

LendEDU, a student loan marketplace website, documented this startling disparity between belief and reality in a nationwide survey of 500 students currently attending America’s colleges and universities, reports the New York Post.

The survey shows that 49.8 percent of the students surveyed think they will be eligible for federal student loan forgiveness.

In reality, only about 10 percent of all college graduates will ever see any portion of their student loans forgiven under current loan forgiveness law.

Under President Obama, the government took over the student loan program in 2010.

Yesterday Fox Business reported:

According to the New York Federal Reserve, U.S. student loan debt has soared to $1.3 trillion becoming the second highest consumer debt category, more than both credit cards and auto loans.

In an exclusive interview with FOX Business’ Liz Claman, Washington College President and former Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair said the student loan debt crisis could spark next financial crisis, since it is a “tremendous drag” on the U.S. economy.

During the financial crisis of 2008–09, excessive mortgage debt collapsed consumer spending as more families opted to pay off debt. Bair said the same dynamic could be seen if the student debt bubble bursts.

When the housing bubble burst, there were assets that could be sold (although at a loss). There will be no assets to sell if the student debt bubble bursts–a lot of the people with the debt are living in their parent’s basements.

The Daily Caller reports:

Of the $1.31 trillion in outstanding student debt, some $31 billion, is “seriously delinquent,” meaning the debtors are at least 90 days past their payment dates.

Well known economist Milton Friedman is credited with saying, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” I think it’s time to get the government out of the student loan business and give that business to the banks. Banks are better judges of how to lend money and how to get paid back. I have a strong suspicion that the taxpayers may get stuck holding the bag on this one.