Yesterday, we learned a lot of fun facts about the one trillion dollar student loan bubble! Like the fact that student loans (unlike any other unsecured line of credit) cannot be discharged in bankruptcy, so the debt will never, ever go away, not even if you die, and that banks will even garnish your social security checks to get their money. (Although the joke’s on THEM since we won’t even HAVE Social Security soon so ha!) Even though the student loan bubble is actually slowing down the housing market and the rest of the economy along with it, the Wall Street Journal thinks that best course of action is to do absolutely nothing. See, that would be socialism! You wouldn’t want there to be socialism, would you? Of course not. Also, these kids should be out creating JOBS, not trying to seek relief from the oppressive terms and conditions of their student loan obligations! If only “Uncle Sugar” wouldn’t be so focused on redistributing wealth, yadda yadda not hurting small businesses blah blah. Actually we can’t figure that part out but the argument seems to be that helping debt burdened borrowers will hurt small businesses or something. We think?
We’ll have to wait until Friday to see how slowly the U.S. economy expanded in the second quarter. But today Team Obama will tell Congress about its latest proposals to spread the wealth around—specifically from private lenders to the people who owe them money on student loans. The goal is to create new ways for borrowers to avoid repayment.
Having recently forced taxpayers to underwrite a series of such measures for loans issued by the government, the White House now wants the shareholders of financial companies to suffer even more when private loans go bust.
Not that there are many private loans left after Mr. Obama and Congressional Democrats seized control of this market with legislation that passed along with ObamaCare in 2010. With roughly $1 trillion in student loans outstanding, close to $900 billion are federal loans, and Uncle Sugar is responsible for more than 90% of recent loan originations. But the existence of a market sliver still occupied by private enterprise gives politicians a handy industry to blame for mounting troubles in a government-dominated business.
The new report says that Congress should consider letting borrowers discharge their private student loans through bankruptcy. This would reverse a hard lesson learned during the 1970s. … While we don’t doubt Mr. Obama’s sincere impulse to redistribute money, the timing of this effort suggests it is one more election-year pander to the young voters who showed up for Mr. Obama in 2008 but may be less enthusiastic this time….Young voters may appreciate Mr. Obama’s latest efforts to help them weather the Obama economy. But wouldn’t it be easier merely to encourage job creation rather than try to anticipate and make taxpayers pay for every consequence of joblessness?
Yes! Who will protect the shareholders of these corporations? Won’t someone PLEASE think of the shareholders of these corporations? And if these college grads just CREATED THEIR OWN JOBS, they wouldn’t be in this mess in the first place. Maybe they should have thought of that before they got more education than they could afford.Related