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Thread: Banks want to keep students stupid and in debt. A lesson in economics.

  1. #1

    Banks want to keep students stupid and in debt. A lesson in economics.

    Banks want to keep students stupid and in debt. A lesson in economics.


    Image by Dan Zen via Flickr

    The first lesson we learned from the current economic collapse is:

    The market does not solve everything. Despite what the neo-cons like Ronald Reagan and George Dubbya told us, turning all state responsibility over to the market means that the entire country is motivated by profit and therefore operates under a value system of greed. This market-first government has not benefited most of us. In fact, it’s only really benefited the super rich, like Reagan and Dubbya.

    The second lesson is that a government unduly influenced by the market, by corporations’ and banks’ lobbying and political contributions, will not be able to fulfill its responsibility as regulator of the market.

    A case in point: student loans.

    The banking industry is lobbying Congress (and to a lesser extent, the American public) to convince us that the current system of student loans is working just fine. Last Thursday, the House passed a bill that would stop giving money to the banks so they can no longer extract wealth from students. The House bill would give money directly to the students.

    The banks are trying to convince us that this will be “bad for students” and “end competition” and “cost the US taxpayers more money.” The banks are, of course, lying through their teeth, but again, their motive is profit, not truth.

    Brainstorm – Increasingly Desperate Arguments Against Student Loan Reform – The Chronicle of Higher Education.

    The truth about student loans is that they became, under the incredibly pro-market policies of Ronald Reagan, a way to extract profit from students. At this point, the average graduating college student is about $24,000 in debt in commercial loans to banks as well as another couple of thousand dollars in credit card debt. That’s because the government student loan subsidies started going to commercial banks (rather than being distributed through Pell grants and other state-run programs) so banks could make a profit off of students and their families.

    Some will say: yes, but that college student will earn on average a million

    http://trueslant.com/laurieessig/200...-in-economics/



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  3. #2
    It's not a market force, but a fascist one, when governments remove risk, socializing losses and privatizing gains (not to mention leaving the poor students responsible for paying back the loan even after the government has paid it for them).

    Fascism is the opposite of free markets. I really hate it when people (especially liberals) redefine something to mean its exact opposite.

  4. #3
    Most student aid before then was in the form of grants which meant monies paid out to the students. When they went to issuing loans, they could get back the money given out and use that to in turn re-loan to other students making the same pool of money available to more people. This was one reason student loans grew considerably.

  5. #4
    maybe change the title:

    Colleges & Universities want to keep students stupid and in debt. A lesson in economics.

    Yes a Paradox in the American Educational system and government's interventions.

    Don't forget it was President Bill Clinton that signed the bill, you can never default on PUBLIC Student Loans in 1999.

    Don't forget it was President Dubya W. Bush that signed the bill, you can never default on PRIVATE student loans in 2005.
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  6. #5
    Quote Originally Posted by HOLLYWOOD View Post
    maybe change the title:

    Colleges & Universities want to keep students stupid and in debt. A lesson in economics.

    Yes a Paradox in the American Educational system and government's interventions.

    Don't forget it was President Bill Clinton that signed the bill, you can never default on PUBLIC Student Loans in 1999.

    Don't forget it was President Dubya W. Bush that signed the bill, you can never default on PRIVATE student loans in 2005.
    fckin democans and republicrats!
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  7. #6
    Uh, that means that you HAVE to pay them back. What is wrong with that? You borrow the money- you have to pay it back. Personal responsiblity.

  8. #7
    I am getting really tired of these idiotic bloggers spreading misinformation about the banking industry like this. If anyone looks at the FDIC, the Federal Reserve, the government underwriting and guaranteeing loans by Fannie Mae and Freddie Mac, along with TARP - those are not "free market" programs. They are government enablers to bankruptcy and they socialize the losses. When lenders don't have to put their own capital at risk by way of government guarantees, what happens? Just incredible how some of the most common and obvious aspects fly right by their heads.
    Last edited by Brian Defferding; 10-01-2009 at 05:28 PM.



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