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;

  • Lower national savings and income
  • Higher interest payments, leading to large tax hikes and spending cuts
  • Decreased ability to respond to problems
  • 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.

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Judge Dredd, Pro Se

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 »

Zurvan

You should be able to declare bankruptcy on at least some student loan debt.

Something you and I agree on. I think this has played a part in the stratospheric rise in higher education costs.

Judge Dredd, Pro Se

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.

Judge Dredd, Pro Se

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 »

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..

Judge Dredd, Pro Se

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 »

Judge Dredd, Pro Se

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.

WHAT? WTF? It’s on Netflix. See it this weekend. That movie is perfect.

Judge Dredd, Pro Se

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 »

Zurvan

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…

Zurvan

I think the reasons it is harder to discharge student debt as opposed to say a home loan is for the reasons already mentioned, a home loan has equity, tangible assets, where a student loan does not.

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.

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 »

Gee, and I thought the post was too boring for anyone to comment on, silly me.

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.

Zurvan

But again, my point in bringing up student debt had to do with the push for blanket student forgiveness.

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.

Zurvan

I also want to say that the sooner you see Last Jedi, the better.

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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 »

if I had a degree in underwater basket weaving, I’d eat at better restaurants, for sure

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?

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 »

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