Student Loan Forgiveness

[highangle]

The Biden administration announced it will discharge any remaining federal student loan debt for borrowers who attended ITT Technical Institute from Jan. 1, 2005 through its closure in September 2016.

The Department of Education made this announcement based on its findings from extensive internal records, testimony from ITT managers and recruiters and first-hand accounts from borrowers. It will result in 208,000 borrowers receiving $3.9 billion in full loan discharges, including those who have not yet applied for a borrower defense to repayment discharge. Borrowers will not need to take any action to receive this forgiveness.

"It is time for student borrowers to stop shouldering the burden from ITT's years of lies and false promises," Secretary of Education Miguel Cardona said. "The evidence shows that for years, ITT's leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause.

I bet you're fkn pissed you carried that note for so long!

[J. Barron DeJong]

https://twitter.com/mattyglesias/sta...V7akN2ApJSgDKw

[J. Barron DeJong]

[Core Shot]

Yes, because you can’t have continuous inflation in an economy if wages aren’t inflating as well.

Zero inflation helps those who want to keep their money under a mattress (deflation would be even better for them).

We don’t need wage inflation if we don’t have monetary inflation

I bet you're fkn pissed you carried that note for so long!

Nope. Paid my school debt decades ago.
And it wasn’t that bad compared to minimum wage.
Or wage adjusted inflation. Or whatever the fuck you want to call it.

[J. Barron DeJong]

We don’t need wage inflation if we don’t have monetary inflation

Something to whet your appetite:



https://delong.typepad.com/sdj/2013/...on-target.html

[Hood26]

Good read.

the hawkish stance on inflation only helps the retired. I am super bummed the fed is siding with the hawks.

[Bunion 2020]

Good read.

the hawkish stance on inflation only helps the retired. I am super bummed the fed is siding with the hawks.

Uh what?

[Mustonen]

Heh



What the holy fuck?

How about no inflation. And a dollar saved is a dollar earned and a dollar that’s worth a dollar someday later.

Or. We get the inflation casino that crushes the average worker. While at the same time rewarding the fat cats.

But you need to put that dollar to work. Your mattress takes it out of the economy and that’s bad.

How does it reward the fat cats? Your average paycheck to paycheck worker doesn’t have hoards of cash to worry about losing value. The fat cat does, though.

A stagnant economy rewards those who got theirs to the exclusion of those who are still hustlin’. Why is that good in your mind? There are lots of mechanisms that hold the middle and lower class down, but inflation ain’t it. Why the fuck do you think the craven right wing party continues to rail against it? Because they’re worried about the poors?? Hahahahahaha.

Please.

[LongShortLong]

Are the feds really paying the banks the balance?

Yes. Something about a constitution in this country. "takings clause"

[Mustonen]

Wow people are really hard up about this.

Didn't we just hand out $3200 per adult + more for kids in 2020 and 2021 if you made less than 75k? On top of never ending unemployment benefits? I never saw a dime of it, worked the whole pandemic and didn't bitch. Trump cut taxes on the ultra-wealthy and I didn't really bitch. This is just another tax cut I don't get a part of.

And who is really getting hurt here? Oh no, the banks! Will someone please think of the banks! Fuck them. A 100k loan at 4.6% generates 25k in interest over 10 years; 53k over 20. So the bank is going to take a haircut on that loan and take a loss on paper. Who is the victim here again? Are the feds really paying the banks the balance?

The banks aren’t getting hurt here. Servicers might be.

Yes, the banks are made whole. But private lenders aren’t really all that involved in this marketplace to begin with. Why, though, do you have a problem with them earning interest on loans?

[schuss]

Wow people are really hard up about this.

Didn't we just hand out $3200 per adult + more for kids in 2020 and 2021 if you made less than 75k? On top of never ending unemployment benefits? I never saw a dime of it, worked the whole pandemic and didn't bitch. Trump cut taxes on the ultra-wealthy and I didn't really bitch. This is just another tax cut I don't get a part of.

And who is really getting hurt here? Oh no, the banks! Will someone please think of the banks! Fuck them. A 100k loan at 4.6% generates 25k in interest over 10 years; 53k over 20. So the bank is going to take a haircut on that loan and take a loss on paper. Who is the victim here again? Are the feds really paying the banks the balance?

Yep, I'm fine with it. Ultimately we need better solves on structural issues in higher Ed, but that won't happen with the entirety of the south still paying their college football coaches tens of millions.
That said, I still maintain that all those having debt forgiven should buy those who already paid their loans off a sandwich or taco.

[highangle]

The banks aren’t getting hurt here. Servicers might be.

Yes, the banks are made whole. But private lenders aren’t really all that involved in this marketplace to begin with. Why, though, do you have a problem with them earning interest on loans?

They say the Knights Templar formed the first banks and notes of hand with their Crusades loot. If you were traveling, you could go to the Knights, give them your money in exchange for a note or notes which any of the Knights would honor from France and Spain to Jerusalem and north to the Ionian and into Tartary, thanks to the Orthodox Cossacks who also had no love for the Ottomans.

Richard Henry Dana in 2 Years Before The Mast describes how the nominally wealthy Spanish Californians with their vast land and cattle holdings existed in a barter economy because of the lack of Spanish banks and a way for anyone to protect or earn interest on their money. Cowhides were a medium of exchange [and what his Boston ship was there for].

[Core Shot]

Something to whet your appetite:



https://delong.typepad.com/sdj/2013/...on-target.html

Wtf. That was stupid. Read it. And not even moist.
My appetite is parched.

So the 2% inflation is no good.
We need 4%.
Got it.
How about quadrillion percent. Is that enough?

We’re doomed.
==++++=

The basic point is that a higher baseline for inflation would make liquidity traps, in which conventional monetary policy is up against the zero lower bound, less likely and less costly when they happen

[dunfree]

Richard Henry Dana in 2 Years Before The Mast describes how the nominally wealthy Spanish Californians with their vast land and cattle holdings existed in a barter economy because of the lack of Spanish banks and a way for anyone to protect or earn interest on their money. Cowhides were a medium of exchange [and what his Boston ship was there for].

Inventing the American Guitar talks about the utility of commercial paper for a Pennsylvania guitar company selling expensive guitars to cash poor plantation owners prior to the civil war.

[Core Shot]

But you need to put that dollar to work. Your mattress takes it out of the economy and that’s bad.

How does it reward the fat cats? Your average paycheck to paycheck worker doesn’t have hoards of cash to worry about losing value. The fat cat does, though.

A stagnant economy rewards those who got theirs to the exclusion of those who are still hustlin’. Why is that good in your mind? There are lots of mechanisms that hold the middle and lower class down, but inflation ain’t it. Why the fuck do you think the craven right wing party continues to rail against it? Because they’re worried about the poors?? Hahahahahaha.

Please.

JFC

Where do I begin to parse that.

Rich people are rich. They game the system
Whether it’s tax laws or interest rates or inflation.
They win.

Inflation is a tax on the common man.
Milk and bread were a nickel to my grandma
I used to buy penny candy.
Oh well. My Learjet is here.

[J. Barron DeJong]

The basic point is that a higher baseline for inflation would make liquidity traps, in which conventional monetary policy is up against the zero lower bound, less likely and less costly when they happen

Yes, that’s the basic point.

When the Fed was debating setting an explicit inflation target back in the 90’s a 2% target was decided on because it was thought that it would be high enough to avoid the zero lower bound problem, and then the Great Recession happened ~15 years later, proving that thinking was incorrect. And then the lower bound was hit again during Covid, reinforcing the mistake.

Massive unemployment and the loss off goods/services and wellbeing from recessions are much more costly to society than the minimal differences in effects of a stable 2% vs stable 4% inflation rate. If a certain inflation rate is expected the market will account for that (not perfectly, but very well), from loan values, to worker compensation, to price increases of goods and services.

[J. Barron DeJong]

Milk and bread were a nickel to my grandma
I used to buy penny candy.

See, this is a very ignorant take.

Do you think if there had been no inflation during the past century, or whatever, that we’d still have penny candy and nickel bread, but ~$70k household income today?

No. Both prices and wages inflate together. But if having some degree of inflation helps avoid or reduce the severity of recessions, the economy grows faster and everyone benefits.

If you don’t like the wealth distribution in America today, I’m with you. But if you’re thinking hard money policy is what’s going to solve it, you’re very mistaken.

[Core Shot]

Where does the chart really take off?

Nixon closing the gold window? Or was that coincidence. Of course we had opec. And gas shortages. And the awesome jimmy carter years. Followed by the oooh rah Ronald raygun zap. And then the chief spook took over.

I’m a bit jaded.

Greenspan noticed the froth. But he also frothed it. Yellen is an imbicile. Powell is out to lunch.

I do get what you say about lower bound and how a hard downturn can also hurt the lower caste. But mostly I see the rich getting Uber richer.

So talk to me about gold. I don’t have any. But for ten years I bump into advertising that says I should. And yet it’s stuck around $1,800 give or take. How is that possible given inflation? And poootin has been buying. Chyna as well. A lot of this makes no sense. And yet here we are.

[Jong Lafitte]

Well the tuition for the underwater basket weaving wasn’t so bad, what ate me up was all the scuba gear and tank refills.


Sent from my iPhone using TGR Forums

[Self Jupiter]

[schuss]

Wtf. That was stupid. Read it. And not even moist.
My appetite is parched.

So the 2% inflation is no good.
We need 4%.
Got it.
How about quadrillion percent. Is that enough?

We’re doomed.
==++++=

The basic point is that a higher baseline for inflation would make liquidity traps, in which conventional monetary policy is up against the zero lower bound, less likely and less costly when they happen

In our current capital rich environment, higher inflation would potentially spur more activity as capital is actively discouraged from sitting on the sidelines. That said, the current magnitude of inequality makes cohesive monetary policy that benefits the economy and the populace difficult as you have countering problems from each end. Really you need to excise a shitload from billionaires and multi-hundred millionaires so you don't have turds in the broth of policy as often that just actively fuck with stuff for their own benefit.

[J. Barron DeJong]

Where does the chart really take off?

I don’t know.

Put it on a graph with a log scale so we can properly interpret the numbers.

Edit:

Much less scary when the numbers are interpreted correctly

[uglymoney]

AOC says not everyone has to benefit from every government program. Hmm. Such a simple point but so on point.

I flunked out of college with zero debt because both of my parents are smart and driven and had great jobs and they simply paid cash for my tuition. So I am not as driven and smart as them but find out I can work hard as fuck for endless hours as long as the work is so simple it lets my brain wander.

So at 22 I have extra cash and no debt and start investing with government programs like 401k and IRA and Roth Ira.

30 years later I'm still a working class grunt but that money has grown tax free for 30 years at the expense of the US treasury. So I have a leg up on retirement someday, maybe. If the snowflakes stop trying to wreck the country with their directed selfishning driving them toward imposing authoritarianism on all of us.

[jono]

One of the big missed opportunities over the last few years was the opportunity for the government to step in and refinance loans that are running 6-7% at 2-3 or less.

Underappreciated point. Competing with home buyers in the long space would have helped damp the real estate spike, too. Long rates should never have been allowed to fall that low in response to a temporary situation.

[Core Shot]

I don’t know.

Put it on a graph with a log scale so we can properly interpret the numbers.

Edit:

Much less scary when the numbers are interpreted correctly

Why would a log scale make more sense?

But even logarithmically it’s still insane.