A Quote by Michael Hudson
Just like a house is worth whatever a bank's going to lend against it, an education is worth whatever the bank is going to lend the student to pay the university. So the availability of government-guaranteed student loans has vastly inflated the cost of education, just like it's inflated the cost of housing.
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The fact that you have government-guaranteed student loans has created a whole new sector in the American economy that didn't really exist before - private for-profit universities that sell junk degrees that don't help the students. They promise the students, "We'll help you get a better job. We'll arrange a loan so that you don't have to pay a penny for this education." Their pet bank gets them the government-guaranteed loan, and the student may get the junk degree, but doesn't get a job, so they don't pay the loan.
What I want to do first with education is my student loan idea. Basically, if you go into teaching and teach for five years, your student loans should be forgiven. It doesn't cost that much.
We must fundamentally restructure our student loan program. It makes no sense that students and their parents are forced to pay interest rates for higher education loans that are much higher than they pay for car loans or housing mortgages.
Government should stand behind its currency and credit and the bank deposits of the nation. No individual should suffer a loss of money through depreciation or inflated currency of Bank bankruptcy.
In housing you have jingle mail and you can walk away and leave the bank holding the bag. In the case of student loans, the debt follows you through life, and the banks or government will turn it over to collection agencies that are not very nice people and can do all sorts of harassing things to you. It's becoming a nightmare.
Student debt is crushing the lives of millions of Americans. How does it happen that we can get a home mortgage or purchase a car with interest rates half of that being paid for student loans? We must make higher education affordable for all. We must substantially lower interest rates on student loans. This must be a national priority.
If you look at what's happened to the stock market, if you look at what's happened to housing values, if you look at what's happened to bank loan portfolios because the value of their other assets that they've already issued loans against were going down, there was a pretty good argument for trying to pass something at about this level of investment with the divisions as they were - unemployment, food stamps, and tax cuts, aid to education and healthcare, and job creation.
Part of Obamacare eliminated the private sector financial market that engages in giving college student loans. I mean, now the federal government has taken over college student loans, so I sit back and strategically look at this and say this just cannot be happening.
So we are in for years of debt deflation. That means that people have to pay so much debt service for mortgages, credit cards, student loans, bank loans and other obligations
that they have less to spend on goods and services. So markets shrink. New investment and employment fall off, and the economy is falls into a downward spiral.
If lenders are forced to scale back student lending because private student loans are subject to bankruptcy discharge, many students will be denied access to higher education.
Now, suppose that a homeowner puts down only 3% of their own money or 3.5% for the FHA. That means if prices go down by only 3%, the house will be in negative equity and it would pay the homeowner just to walk away and say, "The house now is worth less than the mortgage I owe. I think I'm just going to move out and buy a cheaper house." So it's very risky when you have only a 3% or 3.5% equity for the loan. The bank really isn't left with much cushion as collateral.
The Nike swash that cost $30 and was designed by a Portland State University art student was probably worth that when she first showed it to them. At that point it had no equity at all. None of the guys commissioning it particularly liked it, they all wanted the Adidas three stripes and they thought that was a good logo.
I just want to go to university and have fun - I want to be an ordinary student. I'm only going to university. It's not like I'm getting married - though that's what it feels like sometimes.
If I was a state, I would like to see education left to the schools themselves, but I don't want the federal government involved in education. I think that it ends up setting standards that cost you time and money and don't make any difference in education. I want to stop that.
There's no reason why one need not look at the content of education just as one is expanding the availability of school, because it doesn't cost more money to get them [a] better education. It requires better textbooks, it requires a vision, it requires a determination, but it's not very expensive to do that anyway.
We're going to build a wall and Mexico is going to pay. And the reason they're going to pay and the way they're going to pay, Bob, is this. We have a trade deficit now with Mexico of $58 billion a year. The wall is going to cost $10 billion a year. That's what it's going to cost. It's going to be a powerful wall. It's going to cost $10 billion.
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