student debt forgiveness is back

[sk47]

Where does this money come from? If country continues to print billions it doesn't have our dollar will lose its place as the world standard and of course spur inflation.

Hello; I know some of the answer. There are a few ways I know of and while I cannot give details, here are the general things I have some confidence about.
First, of course, are the federal income taxes both personal and business types. As I understand it the federal tax code is thousands of pages of instructions. Then there are the fees the government can charge for goods imported into the country called tariffs. It is my understanding tariffs were the main source of income for the Federal government early on. Income tax came along later. There may be a few other smaller means of raising funds such as fees to enter a national park or get a passport.
I do not know the current numbers but in the past the "normal" amount of tariff, tax and fee income was just a bit over 50% of what was spent each year. My guess is this is way under 50% this last year. I may be wrong but last I heard we had a deficit of maybe four trillion in 2020.

The rest of the money the government spends is "sort of borrowed", but this is not exactly as simple as it sounds. The FED has auctions of treasury notes every so often each year. A person or other entity can buy these treasury notes in various time intervals, three year, five year and ten year, I think. There may be other forms as well.
For a three year note the government promises to repay you a small percent of profit if you hold the note full term. Five year and ten year notes promise a higher profit. So in theory the extra money, (beyond taxes, fees and tariffs), the government needs to pay for the programs the legislature enacts comes from the sale of treasury notes, bonds and such.
There are at least two catches I know of. One is not all the treasury notes get sold to entities or people outside the government itself. It is my understanding something like half the treasury notes are purchased by an "arm" of the federal government itself. My understanding of this means this portion of treasury notes actually bought by the government is in effect just making up dollars out of thin air.
The other catch is not so clear in my mind, but has to do with the Federal Reserve Banks. My take is these big banks are not exactly part of the government, but work closely with a government. They can issue money and can set interest rates. I welcome comments from those who can explain these things better.

For example, I was a saver. At a point in my adult life I began to do without so I could save for my old age. So for decades I saved with the calculation I would have a small, but decent, amount of earned interest income to add to my retirement life. Then the housing crisis of 2008 came to a bursting point. Since then the rate on interest has been set very low, less than one percent for most of the time. There was a very brief period last year when interest rates got up to a bit over 2%, but that is gone now. I figure inflation is now greater than what a savings account will yield.

So back to your comment. Yes we are headed for inflation. Hard to pin it to a number other than the inflation likely will be very bad. I had already been hearing of some big money deals not being made on USA dollars before the last year's troubles. I do not know how or if the dollar being the worlds standard will be affected, since the other countries have also been hit hard with the troubles.

One last point. The USA now has at least 24 trillions of national debt with some many more trillions of additional debt coming in the future for things already on the books. Problem is we do not pay a penny to reduce this debt. Every year a large portion of the money the government spends goes to pay only for the interest on that debt. The principal is never paid down at all. In fact each year more debt is added in the form of what is know as the budget deficit. The government will likely never default on the interest payments as they will in effect just print more dollars as needed. The dire side will be and currently is those dollars are becoming worth less and less day by day.

who have siblings who have like 5 kids, no jobs, but they have healthcare, housing, food stamps, living comfortably. I don't get it. Paid more to do nothing, and tax you to death if you earn a decent wage. there is no middle.

Hello; Don't have personal knowledge about this, but there were a few years ago some estimates that among the able bodied adult population of the USA only around half worked and the other half were on some sort of government program. Not sure if I am included in the latter half. I taught in public schools for over 30 years and get a small pension. Some tell me I earned my place, but the news often caries bad connotation of pensions. For what is is worth my state did not have a union and was at the lower end of the pay scales.

I have known families with two adults who do not work and a few children who draw more a month than I do now. I do not want children to go hungry and do without, but am not so sure about the adults. I drove a school bus in Harlan County KY. I saw a lot of poverty. I bought jackets for kids who had to stand in the cold to wait for my bus. I was in the homes of some of those kids where the parents never went without smokes or beer. Sorry about my attitude but some things are not speculation.
Taking out a loan to go to college with the goal of doing better later on is an OK choice. I had a loan and did pay it off. That was the deal I made. I got some debt forgiveness because I took a job teaching in a poor rural area. I stayed in the area long after the forgiveness period ended. I do not think the sort of forgiveness I got is what is being proposed now.

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[NFG19]

that is a state program. Federal plan is for everyone with no strings attached. It is called forgiveness for a reason. There are several plans like you describe. The military also hAS forgiveness for time served. We are talking about 2 different things. Apples and oranges. Biden's plan does not call for you to work it off.

That’s just what I found from google. Regardless you sign the papers and use the loan you are responsible for it period.

 

[Bikeman315]

Well in looks like it will happen.

Hold on cowboy. Exactly where do you read this was actually going to happen. Don't you think assumptions have gotten us into enough trouble over the past four years.

Welcome to communist America. I wonder where and when the first concentration camp will show up?

#1 Again Communism and Socialism are two different things.
#2 Gulags are Russian prisons. Concentration camp are where the Nazi's killed over 8 million people. Do you really want to going there?

By the way I do not in any way agree with student loan debt forgiveness but let me ask you this. Where is your anger and indignation for the way the Federal deficit has gone up in the three years preceding COVID. It's OK for the Fed to go into huge debt for major corporations but not for people who do not have as much as some of us do?

 

[Bikeman315]

just did a fact check Obama phones are Obama phones. Why do they call them Obama phones?

Read again. And leave your personal bias at the door.

https://federalnewsnetwork.com/tom-temin-commentary/2017/07/a-short-history-of-the-obamaphone/

 

[bluebeastsrt]

It wasn’t very long ago. I used to love this country. I guess every great empire falls sooner or later.

 

[Crowd Hunter]

I'm glad I'm retiring in 13 years.

 

[Little Guy]

I don’t think student loan debt should be forgiven; however, college should be subsidized. They will get it back because that person will get a better job and ultimately pay more taxes.

I get so tired of people bashing each other’s political party. My grandfather told me to remember that no matter which party is president, they love this country.

 

[sk47]

When people realize they can vote themselves money the republic is over.

Hello; Have heard this is a different form, but think it likely is true. I guess the turning point depends on when the population of those looking for some sort of benefit outnumbers the population who have to pay the bill. Could be we are at or past that particular dynamic already.

 

[shogun32]

however, college should be subsidized.

Nope. tuition is high because everybody is getting loans. Remember a few years ago when Congress passed a law making it non-discharable in bankruptcy? HUGE distortion in economics right there and a GIFT to Big Ed. No banker worth a damn will underwrite worthless degrees if the so-called graduates had no future earnings potential and were going to have to write it down. When nobody can afford Bull-sh*t Studies nor opulent dorm accommodation the prices will come crashing back down to reality.

Easy Money is the root of all economic evil.

I get so tired of people bashing each other’s political party. My grandfather told me to remember that no matter which party is president, they love this country.

Your grandfather WAS right 50 years ago. A certain party if you've noticed is adamantly opposed to anything that used to be commonly understood to be America(n).

 

[sk47]

I don’t think student loan debt should be forgiven; however, college should be subsidized. They will get it back because that person will get a better job and ultimately pay more taxes.

I get so tired of people bashing each other’s political party. My grandfather told me to remember that no matter which party is president, they love this country.

Hello; I think there are likely a number of potential problems with the idea that such subsidies will pay back more than the cost. First one in my mind is the quality of the education now the norm from the education systems in the USA. I was a public school teacher in middle and high schools. Started in 1970. When I was a student in the public schools there were standards and the standards were in force. I was not given a way out of getting an education.
By the time I was finished as a teacher there was essentially no standard at all. Students were pushed thru the grades by social promotion. It was possible for a student to receive a High school diploma and be essentially illiterate. I could give some examples from personal experience to back up such a statement, but figure anyone who has paid attention already knows.
So, if we extend the K to 12 way of doing education thru the college years it follows the same sort of outcome will happen. An example. I did teach freshmen physical science at the college level for one year. I was telling a class they would have to solve equations on the exams and would be expected to show the work. They would have to not only get the correct answer but also write out the steps of solving the equations.
One student spoke up telling how in high school, because of her special circumstances, she had been exempt from that sort of test. That she should not be expected to do that sort of math. I replied that perhaps she did not belong in a college level science class such as the one I taught.
I was reported to the Dean. This was in 2001 by the way. The dean took my side in the matter, backing me up. That was refreshing after the way the K to 12 authorities approached things. My point being if college becomes an extension of public schools, then the quality of a college degree will continue to decline. In fact such decline is already the case as things stand. This student loan forgiveness will just make it worse and the payback for the investment will not happen.
Do you know anyone with a college degree who does not have a good paying job? Is it not already the case that many with a degree are struggling under the student loans they took out because they cannot get the better paying jobs. If a degree was the answer it would seem there would not be an issue about the debt. They would have good jobs and the economy would already be better off, with no student loan bailout needed.

Hello; About your grandfathers comments. Could be I am as old as your grandfather so may have some perspective. There likely was a time when such a thing was largely true. I suspect this was before the rise of the multi-national corporations and industries. Not something I can prove, but do suspect a large number of those in charge are more beholden to these world wide interests than to a particular country. A sad commentary to be sure. Feel fee to explain how this view is incorrect.

 

[Super-Genius]

Nope. tuition is high because everybody is getting loans. Remember a few years ago when Congress passed a law making it non-discharable in bankruptcy? HUGE distortion in economics right there and a GIFT to Big Ed. No banker worth a damn will underwrite worthless degrees if the so-called graduates had no future earnings potential and were going to have to write it down. When nobody can afford Bull-sh*t Studies nor opulent dorm accommodation the prices will come crashing back down to reality.

Easy Money is the root of all economic evil.


Your grandfather WAS right 50 years ago. A certain party if you've noticed is adamantly opposed to anything that used to be commonly understood to be America(n).

Like conspiracy theories and subverting elections ?

 

[shogun32]

if college becomes an extension of public schools, then the quality of a college degree will continue to decline.

it's already worthless. Hell a Harvard/Brown/Yale degree isn't worth wiping your ass with anymore.

Not everybody has the intelligence to go to college. And yet pretty much everybody has a degree these days. I like the Japanese model - public education ends at 9th grade. And high school costs as much as college tuition here does/did say from 25 years ago - 12-15,000/yr tuition. If all you have is a 9th grade education all you're good for is pumping gas, driving OTR trucks or working in 7-11/McDonalds and society shuns your sorry, incompetent, lazy ass for the rest of your natural life. Unless by some dint of personal effort you actually succeed in business.

I had a friend in Jr. High who was a lazy, fat-ass (another cardinal sin in Japanese society), and none too bright. He struggled to find a private high school that would take him. Cost his parents a fair amount of coin. He dropped out and went to work as a dump truck driver. He now owns a fleet of OTR freight trucks and is quite successful. I do think he got his GED along the way.

We in the USA no longer teach welding, auto maint, HVac and a zillion other Essential Life Skills in Vo-Tec schools because everyone is special, and should go to college. And the Federal gov't has maliciously made manual labor/trades more expensive (Ohsha, EPA, etc) so companies seek out slave labor and whole-sale pollution rights in shit-holes like Communist China, Vietnam, Pakistan, and so forth.

And now Big-Tech is leading the eviscerating of the last hold-out of "white educated college grads" by abusing the hell out of H1b.

So-called college grads pull lousy coffee drinks and drive for Amazon or GrubHub for minimum wage. And when Wuhan-19 malarkey is put to bed, the need for those services will crash big time. At least food service jobs might rebound some but that ignores the millions of small-business eateries that have been forced out of existence by malevolent gov't policy and action, never to return.

 

[sk47]

Where is your anger and indignation for the way the Federal deficit has gone up in the three years preceding COVID. It's OK for the Fed to go into huge debt for major corporations but not for people who do not have as much as some of us do?

Hello; Interesting side track in a way, but let me see if I have another way to look at it. In some ways colleges are "major corporations". Maybe not in the same way as the more industrial sorts. One of the things happening is with the FED backing up the student loans the colleges are indeed rolling in guaranteed funds. I can see a small college campus from my back yard in the winter. In the last ten to twenty years this small college has been building and expanding a great deal. Large new buildings and such. They have even in the last few years built a 1700's to 1800's sort of small village. Log houses and outbuildings built in the old ways just for show and possible because of the money available.
A big industrial corporation or even a big tech corporation at least makes products or services we are willing to pay for. Not so sure all college degrees are in the same category, but many anymore do not add up to being worth the cost.
I do get the distinction in the sense some individual with student debt they cannot afford to pay off is in a sense the particular victim. More easy to identify in the disaster that is having a not worthwhile degree. But who actually winds up with the money?

 

[sk47]

it's already worthless. Hell a Harvard/Brown/Yale degree isn't worth wiping your ass with anymore.

Hello; The mental image made me chuckle.

We in the USA no longer teach welding, auto maint, HVac and a zillion other Essential Life Skills in Vo-Tec schools because everyone is special, and should go to college. And the Federal gov't has maliciously made manual labor/trades more expensive (Ohsha, EPA, etc) so companies seek out slave labor and whole-sale pollution rights in shit-holes like Communist China, Vietnam, Pakistan, and so forth.

Hello; Well put. I need to try to recall this and incorporate it into my statement about multi national corporations. The USA and a few other countries built up great wealth in the past. Seems we are in some ways like an old person spending down our retirement savings. I do not think I can go into some of the ways the old middle class has been decimated without touching on forbidden topics.
Let me put it this way. In some countries people doing a job use to be paid a "decent" wage. Now those jobs can be done in places where the wages are not decent. It might seem the goal of the multinationals is to have the good wage jobs reduced to match the wages in the rest of the world. Same sort of thing when you have people come into a community who are willing to do the same job you do for less money.

 

[lonegunman]

So the Dumbercrats promised student loan debt relief and $2,000 checks to anyone who votes for them and that was okay.

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