Professor Michael Hudson writes:
Student loan debt, now the second largest debt in the US at around $1 trillion, is the one kind of debt that has been growing since 2008. It is depriving new graduates of the ability to start families and buy new homes. This debt is partly a byproduct of cutbacks in federal and local aid to the universities, and partly of turning them into profit centers – financializing education to squeeze out an economic surplus to invest in real estate and financial holdings, to pay much higher salaries to upper management (but not to professors, who are being replaced by part-time, un-tenured help), and especially to create a thriving high-profit, zero-risk, government guaranteed loan business for banks.
This is not really “socializing” student loans. Its social effects are regressive and negative. It is a bank-friendly giveaway that is helping polarize the economy.
via Government Debt and Deficits Are Not the Problem. Private Debt Is. | Michael Hudson.
write off the student loan debts write away..declare Q213 as the time to do it, for all students and their parents that got tied into it…..call it whatever you want jubilee/amnesty/no words can describe what to call it other than sanity……then proceed to the government “spending” initiatives
Why not fix the problem while we are at it. Stop the ridiculous borrowing by students to fund an education they cannot attain. We forgive the loans and then what, let them start again?
Good one. The Brits are finally talking about the ruse of the privatized money system. They are sick of it. Brought to the brink of disaster like umpteen exploited debt colonized 3rd world countries. The problem will just start again until we rid ourselves of it. The inner workings of the fractional-reserve money creation game require constant expansion and infiltration of every facet of nature, economy, and life. Adair Turner is speaking out about the alternatives. Americans had better wake up against all odds of the politburo we live in.
The real failing is the system of government. The checks and balances in Western democracies are not working. Leaving politicians free to mortgage your future to get re-elected.
yes Colin it is the government that is the problem, but who is the government. If you want to know where all the money being created is finishing up , it is not with the 635 polititions. It is with the bank owners who control the government, thay are the problem.
I am sure the banks are indirectly subsidised by government, but the problem is far wider than banks. Special interest groups are rorting the system.
I am sure the banks are indirectly subsidized by government, but the problem is far wider than banks. Special interest groups are rorting the system.
So who are they?
How is this for a start?
Opensecrets.org >> Lobbying >> Biggest Spenders
Take a look around the site. Some interesting stats.
Not bad for a start , but there is no one from the banking industry who are in my opinion the main culprits. The other thing is the list only names the organisations not the inderviduals.
If we want to really understand the problem we have to look at who owns the really big money.
A final note is that , I find it strange that the Forbes billionairs list has almost none of the families that were rich ,a century ago.
Surprised to see Insurance and Securities & Investment are present but not the major banks. Perhaps they are represented by Business Associations.
Finance/Insurance and Real Estate are racked as the second highest sector.
It appears that this generation of students will receive an education in debt. Hopefully the knowledge they gain will be useful later in life and they won’t get fooled again. It’s all good.
A lost generation can go crazy. Like being enticed into voting for a Hitler. It is no joke what this money system is setting up here. Five generations of middle class gains have been purloined upward by this system. There will be serious repercussions.
I agree.
I agree with many of the points made. However he seems to have missed the fact that the Fed is not the government. So the tax payer is on the hook for all the money borrowed from the Fed. And as a private entity it ( the Fed ) is not about to take a hair cut any time soon.
Good one. The Fed is not the government. It is a front agency for a privatized money supply. It provides cover to confuse many including him.
Fed is not the government it is the original SPV (think Enron). Shares are held by private banks but government appoints the board and profits flow to treasury.
A debt jubilee is a brilliant idea. It is as good as giving people debt free government created money. It helps employers because people will have more money without needing a pay increase, due to less of their money servicing debt.
It helps business due to more money spent in the market place. It cannot cause inflation because money is destroyed when debts are written off, while at the same time leaving more income in peoples pockets.
Negative equity would become harmless to those who already own a house and beneficial to first time buyers. It will inflate the real economy which is needed during a depression and deflate houses. Altogether an excellent idea!!
Could you send this advice to Ed Miliband and Ed Balls?
A debt jubilee could also have negative consequences, causing a sharp fall in bank stocks and forcing them to recapitalize or contract lending — which would tip us into another recession.
This could be negated by government creating money via the central bank and spending it into the economy wisely – grants for small business, public spending etc. Banks create money out of nothing – they will soon be back.
To me the government can only justify a deficit if this is invested in productive assets — that contribute to GDP growth.
There is no need for Government Debt. Adair Turner and others in the UK are coming out with it. There is no reason for a Govt to borrow the money it spends from private banks and private wealthy individuals to be permanently stuck paying out interest to them from tax receipts. They can spend the money into the economy debt-free. It doesn’t need a privatized money system to create it as a middle man. The Govt are spending the money anyway. The Brits are wising up to this. The Americans had better soon too. The debt-money system is on its usual collision course, and this time it isn’t a far off Latin American or Asian country facing the blow up.
Fed purchases of t-bonds are effectively doing the same thing. It is government buying bonds from itself and paying with freshly printed notes that are then used to pay other commitments. A little round-trip to confuse the punters.
Government deficit spending is private sector savings, period. Understand economics first, comment upon economics after doing so.
Understand economics first — I agree.
But fiscal deficit = private sector savings?
What of international funding? China and Japan hold more than $2 trillion of US Treasuries.
It also depends on how you define government debt — what if the Fed buys Treasuries? Then the money supply expands rather than private savings.