-nt

I started a "hang in there" post and cancelled it.  Going around groveling for a job in a garbage economy is just one ot those things in life that just undeniably sucks, there's no real sunny face to put on it.

...that if I was a Christian and believed that faith in Christ was the path to salvation, I would have to spread the word too.  So preach away, sir-- you seem sincere enough for me :-)

it''s certainly true that a lot of people take solace in faith of one flavor or another.

Before I discuss the distinct differences between mortgage relief and student loan forgiveness, let me be clear that I am NOT in favor of the Obama $75 billion mortgage relief package as proposed. I think it's going to be a tough sell in Congress even amongst Democrats without some sort of provision that would allow the taxpayer to share in the profits of any future sale of the home that yields a gain for the bailout recipient.  Past proposals have included such provisions.  We need to do something to attenuate the moral hazard of bailing out homeowners who have made bad investments.  And of course we also need such a provision so as to limit the cost of the program, since we are already running a staggering deficit.

Now that that's out of the way, here's the big difference between mortgage relief and student loan forgiveness:  mortgage relief is aimed at easing a crisis that goes far beyond just the homeowners who would be receiving assistance, namely the foreclosure crisis.   Foreclosed properties blight communities and cause property values for the remaining residents to plummet.  In addition, banks lose money on nearly all foreclosures.  Banks incur significant expenses to maintain and sell foreclosed properties-- on the order of 15% of the eventual sale price, which is usually far below the amount that they were owed to start with. 

There's no analogous collateral damage with student loans.  If your neighbor quits paying her student loans, you'll likely never know about it, it's won't blight your community, and it won't unduly affect the value of any asset you own.  

Any bailout is going to involve some moral hazard.  But I don't think that this means that no bailout of any kind should ever be considered for any purpose.  One minimum test that any bailout should meet, however, is that is achieves some greater societal good than just the benefit of the bailout recipient.  Blanket student loan forgiveness does not meet even this basic standard.

I fail to see how that statement is any more or less relevant depending on what type of bills are being paid.  Isn't that the point of the stimulus?  To get people to start buying, and pardon my french here, shit they don't really need?

You have a skewed view of the stimulus.  In truth, the most powerful kinds of stimulus tend to be those items where people are provided assistance for needs, not wants, for the simple fact that the person with needs is assured to spend the assistance, not save it or pay down debt.  Food stamps, for instance, is assistance targeted at need, not want.  So is extension of unemployment benefits.

At work we were talking about what little bit $15 per paycheck will get us.  I said something about student loans everyone immediately agreed that eliminating that line-item from their bills would help out more than anything.

Yeah-- because the people you are talking to have student loans!  I'm sure that if you did the math on it, student loan forgiveness would cost a lot more that $15 per week per pay period per beneficiary. 

If I can't afford my house payments, I can sell my house and, if need be, pay off the rest of the principal over time.

This is not a generally true statement.  If you can't make your house payments and are underwater on your loan, what's to say that you can afford payments on an unsecured loan for the differnece between your net proceeds from your home sale and the amount you owed on the home, PLUS pay rent on a new place to live?  Besides, in non-recourse states like Ohio, this kind of arrangement would rarely be done anyway; people aren't interested in making good on their obligations, they'd rather just default, mail the keys back to the bank and take the hit to their credit.

 

I don't know about blanket forgiveness, but cutting significant chunks would help, and doing so wouldn't be rewarding people who spent money they didn't have on stuff they couldn't afford.

Sure it would-- we'd be paying money to people who spent money they didn't have on an education they couldn't afford (and if they can afford their loan payments, there's no imperative to bail them out-- dropping cash from helicopters would be just as effective and more equitable).   The same kind of moral hazard is involved-- I worked through school rather than financing it thru loans; I had to go to the state school because that was all I could afford; my grades probably suffered because I had to spend time working; and I had to forego post-grad education because it was too costly.  And I'm now going to pay off people who did not work their way school but rather took out loans to finance their education?  Who chose, in many cases, far more costly paths thru school than I did?  Who, in many cases, went on to post-grad degrees financed by debt?  No sirreee!

Perhaps you didn't need to take out much loan debt and don't know what the average student carries these days, but I can guarantee you that what is holding my generation back is crushing student loan debt.

So you'd think that these students would have taken steps to mitigate the amount of debt that they inccured thru school-- such as going to subsidized, in-state state schools, taking a job while they are going to school, living with their parents while they go to school, foregoing post-graduate degrees, and so forth.  The ones with the most crushing student loans probably tended to do few of these things.  Their debt is of their choice.  If they took advantage of their schooling to the fullest extent, they should have career opportunities that I don't have.  For some of them, they blew off shcool while piling up student loans, and now they can't get a high-paying job that allows them to easily pay off their loans.  They made that bed; I say that now they have to lie in it.

it's easier to sling mud among complete asses :) Perhaps I should instead spend time here. You are right. Though some of the people there would be a nice addition here.

I guess I won't reply then...

Yes.  That is the correct action to take if you are at an impasse with another poster.

This impasse need not come of spite or by way of ad hominem but the debate will need to end.  If you think you're fighting a losing battle (or even a winning battle that the loser won't stop fighting), just part ways.  Otherwise we start proving Godwin's law and we get into the blue.

I do not like when we get into the blue .  What I like even less is when we get horizonal scrollbars.  The blue is God's way of telling us the discussion is over.  Horizontal scrollbars are a sign that the anti-Christ is approaching. ;-)

it's not worth replying then :)

It's not like my dealings with ML are impeccable. But it is against the mission of the site.

We (Central Ohio SCers) never did do the get-together on which we were planning.  I met skymutt that day, but never you or t'other (who is the other mid-Ohioan?).

Ideas?

You basically said Rush didn't liken 'em that way, he likened 'em this way. Right?

...why do you suspect it would be considered any more sound today?

It's simple, no matter how complicated you would like it to be, just adhere to the constitution.

1) In 1996 Congress passed and Bill Clinton signed the welfare reforms that for the first time in 20 years caused poverty statistics for black children to fall to unprecedented lows during the modern welfare era.

2) In 1996, Barack Obama was against these reforms.

3) In 2009, with his giant welfare bill he calls a “stimulus plan,” Barack Obama has eliminated these reforms.

Once again that Democrats want to enlarge welfare rolls, make everyone poorer, and create a permanent underclass that they can count on for votes.