Tag: debt

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deficits and debt folly national politics & policies

Relief Spelled S-U-B-S-I-D-Y

Joe Biden, emergency, inflation, student loans

In a bid to bail out the sinking ship of his party, President Joe Biden has decided he can go ahead and bail out Americans who are having trouble paying off their student loans.

Yesterday he announced that (quoting The Epoch Times) “his administration will spend hundreds of billions of dollars to pay off $10,000 in federal student loan debt for some borrowers,” with the Education Department giving the specifics: “individuals earning less than $125,000 a year or families earning less than $250,000 will be eligible for up to $10,000 in debt cancellation.” Pell Grant recipients in the same situation will be eligible for relief of up to twice as much.

The politic nature of the move is so obvious that . . . it isn’t getting enough attention from critics. 

Most of those alarmed at the move concentrate on the unfairness: rewarding those who have not met their obligations and thereby penalizing those who have. Defenders of student debt relief make the usual arguments about the need to help the under-privileged — by giving them more privilege (if anything’s a privilege it is to be able to take out a loan and then not pay it back).

You may be wondering how a president can authorize spending billions of dollars. Isn’t that Congress’s job? Well, the administration has found a semi-plausible excuse — from Congress: a 2003 higher education law that allows the Education Department to provide relief in response to a national emergency. 

And what is the emergency?

Pick one. Inflation, for example.

Which is spurred by overspending.

Which an extra $250 billion will merely increase.

You gotta wonder: isn’t it college graduates who cook up this stuff?

It’s ‘We the People’ who deserve not relief but a full refund.

This is Common Sense. I’m Paul Jacob.

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education and schooling subsidy

Education Fraud

student, debt, relief

It’s a mess.

Families are often sold a bill of goods regarding higher education.

Unless a student pursues a subject like computer science, architecture, engineering, or medicine, it may take decades to pay off student loans.

Graduates who specialized in Advanced Basket Weaving, the Sociology of Postmodern Literary Stylings, and Marxist Techniques for Making White People Feel Guilty just might snag a high-paying job as an Ivy League professor or senior manager of a corporate “antiracism” task force. But beyond those few spots, opportunities are scant.

And, of course, many people who pursued legitimate studies in the liberal arts or technical subjects also don’t make enough to emerge from massive debt any decade soon. Nor does every STEM grad necessarily cash in. Individual results vary.

What to do?

The Biden administration has decided to wipe out student debt en masse, expanding the Public Service Loan Forgiveness Program so that about 40,000 student-loan borrowers escape debt immediately and the debt of millions of others is slashed.

But is forcing others to pay this debt through their taxes — parents and children who perhaps carefully avoided taking out student loans — a just and practical answer to the problem?

The long-term solution is to get the government out of the business of subsidizing higher education in any manner, whether in the form of direct payments to schools or loans to students. Without the massive subsidies, tuition costs would decline.

The short-term solution? Launch an investigation into whether the U.S. Department of Education, colleges and universities — along with both Republican and Democratic administrations — have engaged in fraud against those who took out the loans. 

If students were defrauded, first seek redress from the perpetrators. Not the taxpayers.

This is Common Sense. I’m Paul Jacob.

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deficits and debt

Sitting on the Volcano

national, debt, federal, economics

“Wait, it gets worse.”

Over halfway through Eric Boehm’s Reason discussion of our government debt situation, he gets to a crucial point: “The federal government’s debt is particularly susceptible to rising interest rates . . . because so little of it is locked into long-term interest rates. If you have a 30-year fixed-rate mortgage on your house, rising interest rates won’t bother you much. But the federal government overwhelmingly relies on short-term debt, with an average maturity time of just 69 months.” 

So the standard approach to inflation, with the Federal Reserve raising interest rates, would hit the federal budget like an exploding volcano. 

When talking trillions, it’s hard to keep a sense of proportion. Boehm puts it this way: “A one percentage point increase in interest rates translates into a $30 trillion increase in interest costs.” 

Debt service is one of the reasons why the sages at the founding of America were, if not united in opposition to federal debt, overwhelmingly leery of it. But that leeriness did not stop federal borrowing. Only for one brief moment did the United States’ government not hold debt.

Borrowing was one thing when gold or silver fettered our finances to some limits. But paper and digital money have divorced us from a sense of reality.

We pretend that debt’s reality can be perpetually postponed, but we always “pay” — in lost prosperity; in inequality; in economic dislocation; in political unrest. But when the volcano erupts, then we really pay. 

As we awake to our indebtedness, let’s recognize that our political culture has allowed it to get so far out of hand. Fundamental political reform is imperative.

This is Common Sense. I’m Paul Jacob.

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deficits and debt folly national politics & policies responsibility

Biden Blames Business

inflation, cash, money, fire

Inflation’s up, and President Joseph Robinette Biden, Jr., thinks he knows why.

Economist Bruce Yandle, famed for his “Bootleggers and Baptists” theory of regulation, reports in Reason that the aging president blamed “the country’s three largest meatpackers” for contributing to July’s CPI rate of 5.4 percent, and the fuel industry for its part in August’s 5.3 percent annualized rate. 

Profiteering!

I’ve always wondered how anyone can get away with this tired old accusation. Businesspeople aim to profit at all times and in every place. Profit is why they go into business. Are they making too much inflation-adjusted profit during an inflationary period but not when inflation is low? Seems unlikely.

But Biden’s looking into it! “There’s lots of evidence that gas prices should be going down,” the prez claimed, “but they haven’t.”

What evidence? Biden presented none. 

After throwing so much money into the economy to “stimulate” it after the big hit commerce has taken from state-perpetrated lockdowns, what could we expect but rising prices? “Inflation is always and everywhere,” a great economist has said, “a monetary phenomenon.”

Bruce Yandle is on that same page. Referring to Mr. Biden’s bizarre blame game, Yandle suggested that maybe — just maybe — Biden “should look inside the halls of the West Wing.”

Specifically at all the spending, like the current “$3.5 trillion spending package.” The puppet masters pulling Biden’s strings must, Yandle asserts, “be aware that calling for more spending to calm inflation is like pouring gasoline on an already smoldering fire.”

The real problem is “too much printing-press money” backing deficit spending.

Blaming excess profits? A distraction.

A big lie.

This is Common Sense. I’m Paul Jacob.

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national politics & policies tax policy

The Six-Trillion Dollar Man

spending, taxes, government

“Mr. Biden is making a six-trillion dollar bet that promoting popular programs will be popular,” offered NBC Meet the Press host Chuck Todd on Sunday, “and that he’ll be rewarded for getting things done, long before the actual bill comes due.”

That “Six trillion dollars”? New splurging “on social spending, infrastructure, climate change, health care and more.” 

The host intoned that this constitutes the “return of big government.” 

“We have to prove democracy still works, that our government still works,” Joe Biden, the 47th president, implored Congress last week, “and we can deliver for our people.”

Spend = Deliver. 
Deliver = Democracy. 
Democracy = Spend!

So goes a federal “democracy” wherein voters never get a straight, democratic choice on how much government should spend and tax.* Instead, politicians opt for their beloved “deficits forever” method. Purchase votes today — “People like it when you give them money” — and leave for future generations of voters the tax burden needed to pay that bill. No pain, all gain. 

Smart re-election strategy, some say. 

“Democratic strategists are betting that the infighting in the Republican Party, the extremism on display during the Jan. 6 attack . . . and the sheer scale of the trillion dollar programs Democrats have pushed through this year,” reports The Washington Post, “leads to a reorienting of partisan divisions that can overcome historical patterns.” Meaning Democrats avoid the traditional loss of congressional seats for a president’s party.

“Will voters care about the scope of Mr. Biden’s plans?” Todd inquired. “. . . care about the price tag?” 

Likely to the degree they notice paying that price. 

“President Trump and the Republicans may have made it a bit easier for Mr. Biden by spending big themselves,” reminded Todd.

He’s not wrong there.

This is Common Sense. I’m Paul Jacob.

* Colorado voters have such a choice: a vote on any tax increase and on government spending increases. It’s called the Taxpayer Bill of Rights (TABOR) and was passed by citizen initiative back in 1992. The politicians and lobbyists just hate it, as I detail here. 

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government transparency

Do Not Discuss This!

UFO, disclosure, media, conspiracy

Some stories linger in the background, under-acknowledged, never really addressed, driving us a bit crazy.

Example? Deficit spending and debt accumulation.

The problems that deficit financing inflicts upon us are many and devastating. We would be a lot wealthier, healthier, and wiser were the federal government not so madly out-of-control. We could invest in all sorts of great things, and prices would be more stable, and . . . and . . . and . . .

But what can we do about it?

It’s not obvious. So we don’t talk about it much. 

And the debt only grows, with destructive hyperinflation looming as an ever-increasing danger.

The other under-discussed story is even more disturbing — so we ignore it even more studiously.

Within the last several years headlines in The New York Times and on TV have covered it, yet . . . very few people talk about it, despite the startling revelations.

The issue? UFOs — a strange subject at face value, which, once you poke into it, gets even weirder.

We level-headed yokels used to deny the existence of UFOs, but now the Pentagon has confirmed their persistent plaguing of Navy jets and seacraft, and the Army has acknowledged its ongoing study of UFO-derived “meta-materials.”*

In June, the Senate will be briefed on the subject, per instructions in a recent stimulus bill. (Which brings us back to our first blank-out issue.) Meanwhile, as we wait for what could be big news, new revelations of repeated incursions by UFOs against a Navy fleet 100 miles off the California coast back in 2019 appear in specialty media** but barely make a ripple in major media.

Wait — Fox just featured a segment on a Pentagon confirmation of flying pyramids!

Will we make headway on UFOs before the debt?

This is Common Sense. I’m Paul Jacob.

 * French scientist and UFO researcher Jacques Vallee is also engaged in research on UFO-site-retrieved mystery alloys.

** See Richard Dolan discuss these recent Channel Island incursions, based chiefly on the report in The Warzone.

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previously on Common Sense with Paul Jacob:

It’s Aliens (May 30, 2019) 

The Whys Behind the Whats (June 25, 2019)

Stranger Things 2019 (January 2, 2020) 

Two Conspiracies Unearthed (December 10, 2020) 

Why We Still Live (December 18, 2020)