Boo Radley
DP Veteran
- Joined
- Dec 20, 2009
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As I noted in an above post, this only makes it worse. It creates a moral hazard, and fuels education inflation.
Here's an example. You got $250K in loans to get your dream degree but which you are unlikely to ever make much money. But why you worry !! They can only compel you to pay 10% of what you earn clear of the poverty line, and then only for 20 years. So now that you have your dream degree, you can also opt for your la-la job !! Which in many scenarios, won't pay back half the loan.
Obama has chosen to address this by making it worse. This is exaclty what happened starting in 1997 with housing and sub-primes. Government sponsored moral hazards that created inflation and bad loans.
Let me put it to you this way. I'm 18, for arguments sake. I know ****. I am told I need an education, and I spend the 250 k only to find I simply can't pay it back. No intent, just a fact, I can't pay it back. **** happens.
Now, those loans have been made, the fact is they won't be paid back, pragmatically what shoudl the country do? The crash is coming.
Actually, Obama isn't doing much at all. While I would like him to, the fact is what he proposes will hardly be notice in the coming crisis.