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Sunday, April 13, 2014

"This is conservative?"

College loans tough? Rubio will screw you harder!
WASHINGTON (Reuters) - U.S. Republican Senator Marco Rubio, a possible 2016 White House contender, unveiled legislation on Wednesday to broaden the use of financial vehicles known as "income share agreements" that students can use to fund their higher education costs.

Under the agreements, which are marketed as an alternative to traditional student loans, private investors or organizations provide students with financing for their education costs in exchange for a percentage of their future earnings.

In other words rather than address the reason that college credit hours have gone up 600% faster in cost than the minimum wage has risen, taking college from something you could buy with a minimum-wage job in the summer to something you can't, what Rubio wants to do is add more and more ways for you to destroy your financial future.

This is "conservative"?

Like hell.

The entire reason we have such a problem with college costs in the first place is that the government made "free money" the order of the day. By grossly-expanding the ability to borrow beyond Stafford loan limits and Pell Grants (which by themselves had ratcheted up costs!) the spiral was on.

The free market -- or if you prefer conservative -- solution is to remove the special privileges that these loans "enjoy." Specifically, return them to the same status as any other unsecured debt -- like a credit card...

The original push to make bankruptcy unavailable came from the outrageous amount of debt that was taken on by some medical students, who (quite-rationally) decided that the harm done by a bankruptcy was small in comparison to the economic advantage of doing so. The answer to this "problem", rather than allowing the market to work (which would have dramatically cut the cost of said education as support for that outrageous level of cost would have disappeared) was to make doing that illegal.
Rubio's plan, skewered here by Karl Denninger at the Market Ticker, is what passes for "conservative" thought these days.

Conservative thought, in the sense of deference to tradition and venerable institutions, would recognize that no more than a quarter of high schoolers are realistically qualified for college-level coursework, and the government has zero justification for involving itself in the education of legal adults. A fortiori, the government has zero justification for involving itself in the education of legal adults in the upper percentiles of intelligence.

Really, the only thing movement conservatives are conserving at this point is 20th century American Progressivism.

4 comments:

SFG said...

That'd be racist. But you knew that.

Bob Wallace said...

One quarter of high school students going to college? I'd say 10% should go to college. The rest - vocational school.

Lot of worthless degrees out there...education, journalism, business, sociology...

Anonymous said...

Except it would appear that Americans wanted their legislatures to ensure that government was involved in providing educational opportunities through grants. It's called freedom of association. Blame citizens, not leftists.

Ross Noble said...

There are four modes of productivity: Land, Labor, the public commons, and capital.

Also: Land + Labor = tool. Land + Labor + tool = machine. Land + Labor + Machine = goods.

Therefore labor and land are essential elements of all economic output.

And you wouldn't train labor to their maximum effectiveness for what reason? Let's put labor into debt for school, so they can vector their output forever to Oligarchy.

That Oligarchy maintains their position from rents. Financial rents from the Banking centers are fairly transparent. They create bank money by hypothecation, and the usury on money paretos into their hands.

Yes, government backed loans socialize banker risk. But, the real elephant in the room is rents charged by private finance. Private finance then parasitizes government It is not government as implied- you have cause and effect reversed.

Governments job is to insure low cost access to education so labor can improve itself - and hence improve the economy.