Student Loan Debt at Record Highs in the Worst Economy since the Great Depression risk Default

Posted by PITHOCRATES - August 11th, 2012

Week in Review

Ben Bernanke gives us encouraging news.  Government guaranteed student loan debt is at a record high.  In a time when the unemployment rate is at a near record high.  In the worst economy since the Great Depression.  With a large chunk of those unemployed being those new college graduates.  But if these college graduates default it won’t put the financial system at risk (see Bernanke Says Student Loans Won’t Cause Crisis by Jeff Kearns and Janet Lorin posted 8/7/2012 on Bloomberg).

Federal Reserve Chairman Ben S. Bernanke said record U.S. student loan debt doesn’t put the financial system at risk the way mortgages did because most educational borrowing is backed by the government…

Outstanding educational debt, which includes loans taken out by students and their parents, is estimated at $1 trillion, according to the Consumer Financial Protection Bureau. About 15 percent is private student loans, issued by lenders including banks. The rest is backed by the government.

So instead of the government using tax dollars to bailout financial institutions the government will use tax dollars to pay off these guaranteed student loans once they default.  So what?  What’s putting another Obamacare on the books?  Then again, CBO originally scored Obamacare to cost $1 trillion over ten years.  So a student loan default would be like adding ten Obamacares on the books.   In a year or two.  That would be bad.  But it could be worse.  At least it won’t put the financial system at risk.

If these students default on their student loans because they can’t get a job in this rotten economy with their useless liberal arts or social sciences degrees that aren’t in demand then perhaps we should make the universities refund their money.  Or offer them a degree in something useful at no additional cost.  Like in science or engineering.

Record debt.  Record deficit.  Record government spending.  And now a trillion dollars in student loan debt that may add to the debt pile.  It’s as if the U.S. is on a subway.  And the next stop is Greece.

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From the Democrat Playbook: When your Economic Policies Fail, commence Class Warfare

Posted by PITHOCRATES - July 9th, 2011

A Look at Future Obama in 2012

Michael Medved looks into the future.  To what a future State of the Union Address may be like.  For a president suffering low approval ratings.  And an insufferable economy (see My 2012 Obama Nightmare by Michael Medved posted 7/8/2011 on The Daily Beast).

“It’s a national tragedy when 14 million people want to work, and the rest of us see important work that needs to be done, but the big corporations that run our economy won’t match the willing people to the necessary tasks. Big companies have benefited greatly from our economic recovery, and they’re right now sitting on mountains of cash. But they apparently prefer to hoard these resources or, even worse, to use them to build new plants in Asia or Latin America, taking millions of American jobs even further away from the people who need them.

“We’ve waited three long years for bankers and CEOs to step up and do their part but when it comes to offering new jobs to their fellow Americans, these pampered plutocrats  say ‘we can’t’ or ‘we won’t.’ America deserves a better answer than this smug selfishness. The long wait for a corporate turnaround is now officially over. On the crucial challenge of providing a meaningful job to every single American who wants one, we say tonight, ‘we can’ and ‘we will.’”

At this declaration, the Democrats in the House chamber erupted in boisterous cheers, providing further sustained ovations as the president explained his bold plan. He promised to hire 10 million unemployed Americans—a full 10 million!—in federally funded jobs by the end of the year. He proposed to put them to work repairing highways and building high-speed rail, constructing and repairing schools, restoring and expanding parks and recreation facilities, planting trees, tutoring kids, providing day care, caring for the sick and elderly, policing our streets and neighborhoods, putting up new, environmentally responsible power plants, cleaning up pollution, building homes for the homeless, helping update and replace the equipment for our military.

You can actually hear the words from Obama.  Attacking big banks and corporations.  Because he has already attacked them.  And offering a huge job bill to put millions to work.  Because he already has done that, too.  The American Recovery and Reinvestment Act of 2009.  Which promised to do what future Obama is promising.  But didn’t.  So although this is a work of fiction, we have no problem in believing it.  Because we have already lived it.  And could very well live it again.

The president’s plan would tap those concentrations of wealth to fund his vast jobs program with an emergency tax increase on the wealthiest Americans—restoring the 50 percent top marginal rate that Ronald Reagan championed in his initial tax reform of 1981. “My Republican friends love to cite President Reagan’s administration as the golden age of American conservatism. And I propose to follow his great example as a tax reformer. No, I won’t raise taxes on ordinary Americans—and 98 percent of you will pay nothing more. Even the wealthiest Americans won’t see a difference in what they pay on the first $250,000 they earn each year.

“But in tough times, every family needs to reassess its economic priorities. And right now the American family needs to ask, what’s more important—new yachts and island vacations for billionaires, or providing jobs for decent people who need to work?” To underline his point, Obama cited 10 wealthy Americans, seated in the gallery, who came to Washington to express their own eagerness to pay taxes at the higher rate.

Of course, Reagan dropped the top marginal rate from 70% to 50% which was a substantial cut.  In this narrative, which may very well play out in real life, Obama would be raising the rate to 50% from 35%.

In case you’re not sure what this means, let’s look at someone who earns a million dollars a year.  Say a baseball player.  Different ranges of that million are taxed at different rates.  Everything over $372,951 is taxed at the top marginal rate.  That’s $627,049.  At the 35% rate, the player owes $219,467.15 in taxes on that amount.  At the 50% rate, the player owes $313,524.50 in taxes.  Or about $94, 057.35 more.  For a total tax due of $327,888.40.  Which is 32.8% of that million dollars.

Now, if you earn a lot less than a million dollars you, no doubt, don’t care.  You’re not particularly fond of rich people.  Until you become one, that is.  Suppose you win a mega lottery and they pay you one million a year.  How would you feel then?  Being paid one million dollars but only being able to keep $672,111?  Before you start paying your state and local taxes.  Which will probably take another $100,000 or so.  Sure, it’s okay when it’s the rich ballplayer.  But I’m guessing it’ll be different when they’re taking $327,888.40 from you.  To have a federal tax bill every year equaling the cost of a real nice house.  That’s why a lot of people that come into big money have tax problems.  They’re buying those houses.  Instead of giving that money to the IRS.

The above was only a work of fiction.  But should we worry?  Perhaps.

The political fiction offered above should sound alarms for conservatives who seek to extend their progress in 2012. With Obama’s campaign already on a path to raise $1 billion through donations from his diehard loyalists, he isn’t worried about losing Wall Street support. Some of his closest advisers, as well as progressive pundits like former Labor Secretary Robert Reich, have already begun pushing for a radical, vastly ambitious new job program like the one described here.

No, the Democrats will never let the failure of their policies stop them from implementing their policies.  For they are economic deniers.  They know how things should be.  And they learned how in those Ivy League universities.  Some even go on to teach those same failed economic policies in those Ivy League universities .  And sound so smart and erudite when they champion the same failing policies over and over again that people believe that they know best.  When, obviously, they don’t.

Ivy League Economic Deniers

Those on the left use class warfare because their policies typically fail.  And no one really wants what they’re selling.  They want to tax and spend.  And boy do they.  Ronald Reagan had $200 billion deficits.  Obama has $1.5 trillion dollar deficits.  So you can’t deny that they like to spend the money.  And to spend the money you have to have it.  Which means they’re constantly trying to raise taxes.  But that has never proven to be a good campaign message.  “Vote for me so I can raise your taxes.”  Hence the class warfare.  Because once they raise rich people’s taxes, it’s much easier to raise your taxes.  Which they have to.  Because there aren’t enough rich people to tax to pay for their spending.

We need to remember this when future Obama says this when he is present Obama.  Which you know is coming.  Because Democrats are economic deniers.  They look at the worst economy since the Great Depression caused by their policies and say what we need is more of the same.  A lot more.  Not because it has worked before.  But because they learned this in some Ivy League classroom.

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Europeans Wonder why Americans Don’t Love Obama as Much as They Do

Posted by PITHOCRATES - October 29th, 2010

Obama falls from grace because the American people have learned what the mainstream media wouldn’t tell them; the truth.

America, Europe, the Middle East, hell, the whole world had a love affair with Barrack Obama.  A man who did nothing but serve a partial term as a U.S. senator.  Before that?  Community organizer.  His resume had a lot of white space on it.  He is the most inexperienced person to ever become president.  Even Sarah Palin, who the Left disparages as stupid and experienced, has executive experience.  She was more qualified than Obama to be president.  Based on their experience.  Place their resumes side by side and no one can dispute this.  Yet Palin is stupid and inexperienced.  And Obama is the second coming of Christ.  And when the results of Obama’s policies reflect his experience, those infatuated express shock and disbelief (see Europe ‘dismayed’ as midterms highlight Obama’s struggles by Marian Smith, msnbc.com).

“They’re very confused as to how [Americans] could vote for Obama and then two years later turn around and vote for a completely different set of policies,” Sarah Oates, professor of political communication the University of Glasgow, told msnbc.com.

There’s a simple reason for this confusion.  The mainstream media was also infatuated with Obama.  They endorsed his candidacy.  But they never vetted him.  No one knew anything about Obama during the campaign.  They ignored his far-left associations with Reverend Wright and Bill Aires.  They didn’t discuss his criticism of the U.S. Constitution (it didn’t empower government enough).  Or his policy guide: Rules for Radicals by Saul Alinsky.  The mainstream media’s gross journalistic malfeasance hid the real man from the American voter.  The real Obama is not the Obama the American people voted for.  Hence his fall from grace.

Jimmy Carter handed off a worse economy than Bush.  But things got better when Ronald Reagan cut taxes.

Obama has told us ad nauseam that he inherited the worst economy since the Great Depression.  Some would argue that the numbers were pretty bad when Ronald Reagan took office.  But he followed Democrat Jimmy Carter.  So they don’t like to bring up his atrocious economy.  Because the economy he handed down to Ronald Reagan was pretty atrocious.  I mean, they didn’t use words like ‘malaise’, ‘stagflation’ or ‘misery index’ during the Bush economy.  And they’re not using them during the Obama economy.  But you repeat the lie enough, people just accept it as fact.

However, Obama remains broadly well-liked and many Europeans think the disenchantment that many American voters have been expressing is unfair.

“What he inherited was so enormous that no American president could have fixed it,” Manfred Gortemaker, professor of modern history at Germany’s University of Potsdam, told msnbc.com.

The bad economy Obama inherited was a long time in the making.  Because the Democrats were in power for a long time.  And it was their passion that caused it.  Affordable housing.  Putting people into houses who couldn’t afford houses.  Ask anyone which party you think of when it comes to affordable housing and they’re not going to say Republican.  The American disenchantment is with Democrat Big Government.  And Obama believes in Big Government.  The bigger the better.  America just can’t afford it anymore.  There isn’t enough money left in the private sector to steal to pay for it.  And Obama just wants to spend more.  But spending doesn’t work.  It didn’t help Carter.  That’s why he lost to Reagan.  Reagan cut taxes.  And, you know what?  That worked.  The electorate wants more Reagan.  Less Obama.

It’s good t be king.  As long it’s not 1790 France.  Or 2010 America where the Tea Party is spoiling a good time for the ruling elite.

The French can’t figure out the Tea Party movement.

“In all the French newspapers and magazines, people are writing, trying to figure it out,” Bacharan said.

Michelle Obama stayed at a 5-star Spanish resort while Americans were suffering near 10% unemployment and seeing banks foreclose on their homes.  There have been other vacations at very expensive and exclusive resorts.  And a lot of golf outings.  Obama has played more golf in 2 years than George W. Bush has in his 8 years.  Then there’s the latest presidential vacation.  They’re going to India.  They’ll be taking 40 airplanes.  Three helicopters.  A bunch of armored cars.  And they’ll be staying at the 5-star Taj Mahal hotel.  And only them.  The Obama party has booked the whole place.  It’s good to be king.

Now, I’m poking a little fun at my French friends.  That ‘good to be king’ line comes from Mel Brooks History of the World Part One.  But it’s something the French should understand.  While the masses are suffering, the Obamas are living like royalty.  They are detached from ordinary America.  Cold and detached.  Sort of like King Louis XVI and his queen, Marie Antoinette.  We’re just waiting for Michelle Obama to say, “Let them eat cake.”  Of course, we have the right to vote.  Unlike the people did in 1790 France with their ruling elite.  And it’s that right that the Tea Party is exercising.  Because they feel the way the French felt in 1790.  (Without the famine, of course.)

The Tea Party are not Nazis; Obama is not Hitler.  But the Nazis were Big Government liberals

The mainstream media has been falsely reporting a ‘Nazi’ element within the Tea Party.  They repeat the lie so often that many accept it as fact.  Even the Germans, no doubt sensitive to anything Nazi, are writing about it.

“The Holocaust was the result of murderous ideological fanaticism of the kind not to be found in leaders forced to face re-election every four years,” [a Der Spiegel newspaper] editorial said. “It is hard to imagine even the most hard-bitten Tea Party activist sincerely believing that President Barack Obama wants to systematically murder over 6 million people like Adolf Hitler did. And that is necessarily the implication.”

The German people elected Adolf Hitler to office in free elections.  He did not campaign on the Holocaust, though.  He did adopt what would eventually be Saul Alinsky’s Rules for Radicals.  He identified, isolated and attacked his enemies.  The Jews.  Obama has identified, isolated and attacked his enemies.  The Tea Party.  George W. Bush.  And Republicans in general.  Hitler was an environmentalist.  Obama is an environmentalist.  Hitler expanded state power.  Obama wants to expand state power.  Hitler controlled state media.  Obama has a willing and complicit mainstream media.  Hitler nationalized industries.  Obama nationalized industries.  Take away the crazy, the Holocaust and the militarism, and Hitler was just another Big Government liberal.  Like Mussolini.  Like Stalin.  And FDR.  And as Big Government liberals, they lied to their electorate to get elected (well, except for Stalin).  Then people learned the truth.

That said, Obama is no Hitler.  He is not a Nazi.  Sure, some kooks on the fringe say stupid things.  Just like some on the Left said George W. Bush was another Hitler.  Called him a Nazi.  But we need to stop the crazy. On both sides.  Obama got a pass by the mainstream media during the campaign.  They worshipped and adored him.  Got the people to vote for him.  And now people have learned the truth.  And here’s why Obama is NOT Adolf Hitler.  We can fix our mistake in the voting booth. 

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