Mom's Couch, USA (Nashville?)
RE: Economics Lesson
Dear Losers:
Today I wanted to bring three articles to your attention in my continuing efforts to educate you on economics and depress the living hell out of you:
1. "Only 150 of 3500 U.S. Colleges Are Worth the Investment: Former Secretary of Education."
[Former Secretary William] Bennett assessed the “return on investment” for the 3500 colleges and universities in the country. He found that returns were positive for only 150 institutions.
...
He found college is “worth it” if you get into a top tier university like Stanford, or study an in-demand field like nuclear engineering at even a lower tier school.
2. "Sallie Mae Profit Boosts College Endowments And Pension Funds As Students Pay More."
University endowments and teachers’ pension funds are among big investors in Sallie Mae, the private lender that has been generating enormous profits thanks to soaring student debt and the climbing cost of education, a Huffington Post review of financial documents has revealed.3. "Rising Student Debt Is Slowing Growth as Young Spend Less."
The anemic economy has left millions of younger working Americans struggling to get ahead. The added millstone of student-loan debt, which recently exceeded $1 trillion in total, is making it even harder for many of them, delaying purchases of things like homes, cars and other big-ticket items and acting as a drag on growth, economists said.Ha! You see what they did there? I love journalism.
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On the other side of the equation, many college graduates now in their 20’s and early 30’s should eventually be able to make up for lost ground. Students who take on debt to pay for higher education commit themselves to paying off huge sums, but they usually lift their lifetime earnings by substantial amounts. And they are in a better position to insulate themselves against economic bad times, given the profound rewards the job market provides to the college-educated.
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For most young workers, gaining a college degree remains well worth it in the long run, even if it delays some purchases in the near term.
It's beyond obvious what's happened in American higher education in the last twenty or thirty years or so. A generation saw a generation it could exploit, and it did so. It pushed the four-year college degree as the path to middle class living and the dopey kids bought it. With guaranteed loans and hard-to-discharge debt, lenders and higher educators found a group where they could simultaneously raise the price and collect higher, somewhat-guaranteed returns on the repayment side.
This being America, we love such free-market money-minting set-ups. This whole situation could have been avoided - and could end very quickly - if legislators would have done or would do one simple thing: return purchaser/debtor-side leverage.
Not happening, fuckos!
You know why? Because myths don't end. The intelligentsia of this country simply refuses to believe that higher education behaves like other products and that it can become a bad thing to purchase at too high of cost.
So kids, here's today's ProTip: set up a four-year college. It can even be online. Heck, set up a law school if you want. Seek accreditation, and when they deny you, SUE their anti-competitive asses like you're Thomas Cooley on a rampage. Saddle students with as much debt as possible and reap the profits. Ignore the fact that you're doing nothing for their careers and act intellectually concerned when some ne'er-do-well tells you the economy suffers because of your actions. You can do all of this from mom's couch. JOIN US, YOU FOOL.
Given the pervasive myth of education as a holy good, that seems easier than getting the government to pass a one-line bill and fix its own mess, doesn't it?
Sincerely (not really),
Law School Truth Center
P.S. The guy in the Times article is a 33-year old teacher with 85k in debt. He should have gone to law school. With a law degree, he'd be making $160k in New York to start, which likely would be around $365k by now given modest raises and bonuses, and his debts would be long gone.
P.S.S.: 2014 is SO going to be a rebound year.
Let's see about these news stories:
ReplyDelete1. Bennett is correct. I can't really argue with his conclusion - except maybe by suggesting that the number should probably be lower than 150 colleges.
2. Is this supposed to be evidence of some kind of sinister conspiracy? Last time I checked, Sallie Mae is publicly traded. Anyone can buy a share.
3. Not really. It isn't a "drag on the economy" because the lenders put the monthly payments to use the moment they receive them. I promise you they are not burning the money that they receive - or burying it in the ground like pirates' gold. I think advocates of "reform" should be honest enough to admit that much, at least - not that they will. See the replies below if you want to see what I'm talking about.
2. Sure, it's publicly traded. Lots of companies are publicly traded. That doesn't mean an institution owning it is ethical. Do you think the American Cancer Society owns stock in RJR or Altria?
DeleteI think there's an ethical problem with buying such a stock given the "public service" role higher education is supposed to have.
3. Huh? The drag on the economy is because consumers can't make long-term big-ticket purchases. Home sales and auto sales are far more important to the economy than paying loan servicer bonuses in the grand scheme of things.
^ What do you think the "loan servicers" spend their "bonuses" on, exactly? Perhaps they are the ones burying all that money underground?
DeleteYou think there's an equality in giving marginal income to wealthy moneyed corporations and freeing up money for the middle class to spend on necessary goods and services?
DeleteNo wonder this country is screwed.
^ If the topic is the actual amount of stimulus to the overall economy, those two choices are positively 100 percent equal.
DeleteIf on the other hand it's your goal to extract money from the wealthy, then you should be honest enough to say so. But don't claim that your favorite (and, I suspect, self- serving) outcome is somehow better for "the economy."
Because it isn't.
^ No wonder this "philosopher" couldn't hack it in a real job.
Delete6:27 you are an idiot. Student loans are backed by the federal government, which essentially makes student loans a form of government spending. And even though it's not a 100% socialized system, any government spending is less beneficial to "the economy" than free market spending.
Delete"If the topic is the actual amount of stimulus to the overall economy, those two choices are positively 100 percent equal."
DeleteUh, economic theory and empirical evidence re: tax spending would disagree with you on that.
@923,
DeleteIf I'm the idiot, then why are you retards the ones who are drowning in debt?
Student loans are not government "spending." We're discussing whether it's better for the economy for a law school debtor to spend $100.00, or if it's better for a bank or Sallie Mae to spend that same amount. Try to keep up.
@938,
I would love to hear more about this "empirical evidence" and "economic theory" of yours. Did they fall like pearls from the lips of a law professor, by any chance?
"Student loans are not government "spending.""
DeleteSay what?!?!
You're out of your element, Donnie.
Oh STFU up, philosopher. I can't speak for others here but I am by no means "drowning" in my law school debt. And unlike you I actually work for a living.
DeleteFine, student loans are in no way government spending. Because you say so. A healthy, growing economy requires a combination of people spending and people producing. If you think that Sallie Mae turning a bunch of people into debt slaves and spending some of the money that they make from them, has the same effect on the economy as more people having more money to spend on a more diverse range of products, and also more money to produce things, then you are certainly an idiot.
^ Well ONE of us is, anyway. Um, clearly. I'm sorry for confusing you. Would it help if I bought you some crayons to play with?
DeleteA student loan is only government "spending" if the borrower never pays it back. Which - strangely enough - seems to be precisely what you are in favor of.
For a fierce advocate of private-sector spending, ahem, you seem awfully eager to add $1 trillion to America's already-enormous national debt. How much do you owe them, anyway? It's all about YOUR 30 pieces of silver, I'm guessing.
@112,
DeleteActually, it's a little-known secret that I myself am a magical supercharged economic recovery and miracle machine. When *I* spend $100, it helps the economy precisely 507.203 times more than it does when you spend the same amount. It is (regrettably) therefore only logical that I receive (and spend) all of the money that you "earn" each month.
Now pay up, dude. It's time for you to stop being such a selfish turd and to actually SUPPORT the American economy for once in your life. Pay up!
JFC, obsess over this forum much? I make enough to pay off my loans in full. But unlike you, I have a conscience and don't make my living off of a government funded scam that leads people into debt peonage.
DeleteI am not in favor of forgiving student loans. But that's a cute straw man to throw at me. Unfortunately it also leads you to admit that student loans are in many cases government spending (e.g. default, IBR), which was my point.
Still, you are clearly unable to grasp that HOW money is spent has an affect on the economy because (and I'll need to repeat this for you) a healthy, growing economy requires both spending and production. The less people spend on producing things, the less the economy grows. We could have 99 percent of Americans collecting welfare and doing nothing. They'd all be spending their money, sure, but that doesn't mean that the economy would be growing as fast as it would if some of those people were spending their money investing, starting businesses, creating things for others to buy, etc. This is simple economics. Wealth increases with a combination of spending and production. It's not a static thing that just shifts around. Your law school industrial scam is fucking with economic growth.
I look forward to your response in the next ten minutes.
"Yale or fail."
ReplyDeleteYou are right that the next Thomas Cooley will be making his riches from the couch as online courses at most junior and four-year schools cost the same as live classroom education. More profit, less product. Of course it makes sense!
ReplyDeletea jd is a versatile degree
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