Just as the sun rises in the East, certain immutable facts about our government are these; No one spends other peoples’ money as wisely or as carefully as they spend their own money, and abundance leads to profligacy, they can get by with less if pushed.
I have always subscribed to the Roman Empire model of good governance; a strong military to keep the Visigoths at the border, maintain the roads and aqueducts, and occasionally throw in a religious festival where free bread is passed out at the Coliseum. The rest is left up to the local communities who understand their own problems better than a central authority. A minimalist government requires only minimalist taxation. Along with smaller government, an important factor is a strong work ethic embraced by the masses (You don’t work, you don’t eat), the freedom to plot your own course in life, and the understanding that with great freedom comes great responsibility (balancing risk/reward, and accepting either) and you have what I consider a pretty tolerable society.
But sadly, I think I’m in the minority. People want more and greater services, more social programs, more help, and essentially more free lunches. And for many such as the almost 50% of those that don’t pay the taxes that fund these programs, there is a disconnect as to where this money comes from;
In a well-functioning democracy, the people articulate their desires and grievances, and their elected officials shape these sentiments into sustainable policies. With this division of labor between citizens and representatives, democracy can be both responsive and responsible.
Like the citizens of many other democracies, Americans have recently signaled that they are tired of austerity and eager for more government action. Last April a Pew Research poll showed that for the first time in eight years, Americans favored a larger government offering more services over a smaller government providing fewer services. In the NBC/Wall Street Journal poll last month, 58% of Americans—the highest share ever recorded—agreed that “government should do more to solve problems and help meet the needs of people,” compared to only 38% who thought that “government is doing too many things better left to businesses and individuals.” Americans favoring a more active government included majorities of all age groups, races, ethnicities and education levels. (Those favoring less-active government included 63% of Republicans, 65% of Trump voters, and 51% of white men without a college education.)
Although few will admit it, many Trump supporters found his big government dream appealing. Trump campaigned on building up the military, funding massive infrastructure projects, and leaving the biggest tax revenue crushers as is with no change; Medicare, Medicaid, Social Security. And he talked about a tax cut, always popular with conservatives, although these same conservatives abhor the national debt, square that circle.
Another aspect of this “gimme stuff” mentality is the national push to forgive student debt. Despite the US government being the largest holder of student debt and that this student debt dwarfs all credit card debt held by US consumers, there is a move afoot to negate these contracts, binding or otherwise.
While folks want more spending on social services, scientific research, space exploration, environmental studies, and job training, they care less about accumulating deficits. Spend now/pay later (with somebody else’s money)- the new mantra of the day.
We are currently reaching debt limits not seen since WW2. Despite those big spenders who say debt is a good thing, we are beyond the conditions which prompted Hamilton to embrace debt , “Because if the government saw that there was a debt and it needed repaid, it would motivate the government to work hard, and collect taxes from the people to pay it off. It would also boost other country’s trusting of the new nation”. Those debt lovers also point to Great Britain, a nation in debt for the last three hundred years, but this is hardly apples to apples.
They also forget the consequences of carrying such debt;
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Lower national savings and income
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Higher interest payments, leading to large tax hikes and spending cuts
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Decreased ability to respond to problems
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Greater risk of a fiscal crisis
You can bet that when Uncle Sam is looking under seat cushions for nickels, and shaking the taxpayer down for spare change, it’s your freedoms which will certainly suffer; the freedom to enjoy the fruits of your own labor.
You should be able to declare bankruptcy on at least some student loan debt. I’m all for limiting student loans, or offering them to trade schools, or the government intervening in runaway school tuition if they’re the biggest customer of it . However, please name one other walk of life in this world where you can’t declare bankruptcy on ANY of a debt? Not even the private loans. You could do that up to 2005 but congress passed a bill (where it wasn’t even warranted or asked for) to declare private student loans a haven from bankruptcy protection. Not just… Read more »
Something you and I agree on. I think this has played a part in the stratospheric rise in higher education costs.
It’s a bad business decision papered over with even worse legislative bullying. We came out of the housing crisis faster than this and the education debacle is still ongoing. The difference here is people could default out of the home loans and they could repair their credit, which many did. These zombie student loans are still kicking around for the benefit of no one but shady debt collection agencies. Sallie Mae and any private lender wrote the debt off the books long ago, collected insurance and/or got the tax breaks.
It’s time to turn the page and move forward.
OK, let’s talk about bankruptcy protections for student loans, but first, let’s stipulate that a student loan is a binding contract. Both parties agree, with no gun to their heads, that the lender will lend money to the student to pay for an education and in return the student will pay all that money back with interest once she has secured a job and is able to make payments. First, the Dept. of Education agrees with you that some exceptions need to be made in this area; http://wtvr.com/2018/02/22/betsy-devos-may-make-it-easier-for-student-loan-borrowers-in-bankruptcy/ But as always, the devil is in the details. Before I tell… Read more »
Well, of course a student loan is a binding agreement to be lent money and in turn repay the loan with interest. That’s not different than any other loan, in almost any walk of life except for two details: 1.) the repayment term of the loan begins the day you graduate (not when you get a job) and 2.) unlike any other loan in the history of this country there is no way to declare bankruptcy on the note. Just so we’re clear here. In addition there are TWO types of student loans, which have varying degrees of leniency with… Read more »
Sallie Mae might service this loan but it’s a loan under a completely unique set of rules, and at the whim of the lender But it’s not really a “whim” if both parties agree to the terms prior to signing, correct? You can’t write off either loan in bankruptcy My link said that if you can prove “undue hardship”, then yes, it can be written off in bankruptcy, are you saying this is wrong? It also said that the DOE is willing to broaden the definition of undue hardship, thus making it easier for bankruptcy relief. The private loans should… Read more »
it really seems that this push for more student loans was more to fill the coffers of Collages, universities and lending companies, rather than to help young people get educated..
My link said that if you can prove “undue hardship”, then yes, it can be written off in bankruptcy, are you saying this is wrong? It also said that the DOE is willing to broaden the definition of undue hardship, thus making it easier for bankruptcy relief. I think you should look up a little case law on how this has been treated in bankruptcy court. “Undue hardship” has mostly been met in cases of permanent illness, or physically crippling physical disabilities. In almost any other definition of this legal term it’s never been met. Hop to it! As for… Read more »
I think you should look up a little case law on how this has been treated in bankruptcy court. The guy making the statement of requirements that I linked to is a bankruptcy judge who hears these cases, are you saying he doesn’t know what he is taking about? Hop to it! While hoping, I found this; https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/bankruptcy It says exactly what my other link said, “In some cases, you can have your federal student loan discharged after declaring bankruptcy”, and then it lists the requirements. As for the “whim” comment do you consider loans under threat of extortion, physical… Read more »
Rich, I don’t care what student loan dot gov says about discharging student loan debt in bankruptcy. They can say whatever the fuck they want to because what they say doesn’t matter. What matters is how the court Find “Undue hardship” to be met successfully enough to be discharged. It’s a legal term frought with peril because “undue” means almost no decision made in your life meets this definition. What the courts have Held In these cases, for the most part, is “undue” has been through no fault of your own, which has mostly been cases of irreparable physical damage… Read more »
I did not see Goodfellas so I’m at a disadvantage. Look, it appears we are talking at cross purposes so I will leave you with this. I provided a link where an actual bankruptcy judge says that yes, student loans can under certain circumstances, be discharged. You don’t believe him. I provided a link which says that the DOE is sympathetic to the plight of the student who is having trouble paying back her loans and wants to broaden the definition of “undue hardship”, to offer her some relief. But you say it doesn’t matter because in the real world… Read more »
WHAT? WTF? It’s on Netflix. See it this weekend. That movie is perfect.
https://abovethelaw.com/2012/09/can-you-show-undue-hardship-on-your-student-loans-you-may-be-surprised/ Here’s an example for you to look at. I think you’re under the mistaken impression that after reading a couple of websites it’s just easy as pissing in the San Francisco public streets to declare bankruptcy out of student loan debt. Even if we apply the garage engineer’s solution to this scenario, why don’t people just do it more? It’s just so easy, right? Just declare bankruptcy and scofflaw your way to wealth from debt forgiveness. Sign me up! Well, that’s not how it works in application, Rich. “Undue hardship “ in legal terms has meant “certainty of hopelessness”… Read more »
Rich – clearly the rules are not the same for student loan debt vs. regular debt. Do you think the protections afforded to the lenders of student loans is warranted? Why should it be any different from any other debt when it comes to bankruptcy?
While I would never recommend declaring bankruptcy (I think you should deal with the consequences of your bad decisions, and pay back debts), since bankruptcy is the law, all debts should apply to it equally.
There is no such thing as a free loan…
WHAT? WTF? It’s on Netflix. See it this weekend. That movie is perfect. I know, I still haven’t seen that last Star Wars movie. it’s now on my to do list. Since it is a gangster movie,I assume the reference is that a transaction is made between a loan shark and some mope, where if the mope doesn’t pay up on time, he gets his leg broken. If Sally Mae is in the practice of leg breaking, I would love to hear about it. Rich – clearly the rules are not the same for student loan debt vs. regular debt.… Read more »
I don’t really buy that. Someone can have $100,000+ in credit card debt, with nothing to show for it, and discharge it all via bankruptcy.
And I think that sucks. Maybe those trying to discharge credit card debt should abide by a 3 pronged test as well. Don’t misunderstand, I acknowledge that there exists different standards regarding different types of debt, we can certainly talk about these inequities. But again, my point in bringing up student debt had to do with the push for blanket student forgiveness.
Gee, and I thought the post was too boring for anyone to comment on, silly me.
This has been a great discussion, and I don’t disagree with JDPS or Zurvan about the wisdom of allowing student loan debt to be discharged through bankruptcy. I also want to say that the sooner you see Last Jedi, the better. If I could though, I’d like to get back to the heart of the post. The government either holds student loan debt or it has such an incestuous relationship with the lenders that it’s managed to guarantee the current crisis. Nevermind for a minute how hard it should be to declare bankruptcy on student loan debt. Shouldn’t it be… Read more »
The post wasn’t boring, no. I really had no idea it was going to be a free-for-all on the intricacies of US bankruptcy law though. Jeez.
Now I know what NOT to bring up around here if I don’t want to get told what’s what.
Something I disagree with completely. If you were stupid enough to pay a school $150k for an under-grad in underwater basket weaving, with a masters in nose picking, you should have to pay back every penny out of your McDonald’s paycheck.
It’s the “natural gift” one. You’ll probably enjoy my upcoming post on Black Panther’s box office performance after this weekend’s numbers come in though. I’m giving it the Ghostbusters treatment.
When people talk about “bankruptcy” they should be specific about which type. You guys seem to be referring to Chapter 7, which basically says “fuck you” to your creditors and you walk away with a mostly clean slate other than the ten year turd on your credit report. In Chapter 13 you pay back as much as you can, often 100% if you make enough money. All debt including mortgage arrears, car loans, some student loans and credit cards are paid back over 3 to 5 years through a trustee. Secured debts get paid first and the credit cards and… Read more »
I don’t know, if I had a degree in underwater basket weaving, I’d eat at better restaurants, for sure. Thanks Pfluffy for that break down.
IIRC, you are in law enforcement. Does that require a BA or BS these days? Could a basic degree get a young whippersnapper into the profession?
Was, I’m just an old tennis bum now, long retired. Each city/state has it’s own requirements. A 2 year degree will get you into 95% of all agencies, FBI/Secret Service/Justice all require B.A’s. Education is great but character, maturity, and good judgement is more valuable. If you know anyone considering that profession I can certainly give you some tips.
Not at the moment. My son has the “just the facts” personality and can do a hell of a sketch artist impression if he wants to get into forensics. Just spitballing options for him.
The question about big or small Government is misleading, as it assumes that everything the Government does is of equal value. It also means that liberals can point to the military and call conservatives hypocrites, and conservatives can point to mass surveillance and call the liberals hypocrites. The real question is ‘in what areas is it useful to have an overarching federal framework of regulation or support’. Gun rights/control is a good example. Or environmental regulation. Iowa can pass all the gun restraints and environmental protections it wants – but it’s beholden to what Illinois, Missouri and Wisconsin want to… Read more »
Hey Cress, is hackey sacks still a thing? The question about big or small Government is misleading, as it assumes that everything the Government does is of equal value. Who assumes that? I sure don’t. Do you really think the NHA is of equal value to say the Pentagon, or that the NLRB is of equal value to Homeland Security? Gun rights/control is a good example. Why do we need national gun laws? Does the 10th Amendment mean anything at all? Each state has different conceal and carry policies, aren’t they able to decide their own gun policies? So it’s… Read more »