Wednesday, June 19, 2013

Are Student Loans Really Debt Slavery?

Our liberal friends are constitutionally unable to critique their own programs.  Whatever liberals have done, it must be good.

So that means one thing.  Conservatives must do the critique for the liberals.

Look, every ruling class thinks like God.  It looks at its creation and decides that it is good.  Then it takes a day of rest.  You could look it up: Genesis 1:31.

But ruling classes come and go.  Why is that?  Don't they see how their rule and their corruption enrages the people they order about?  No.  They don't.  As the dancer says in Shall We Dance? when he warns the sensible salaryman that's just taken up dancing: You'll be the last to know -- that everything has changed about you and it sticks out like a sore thumb.

So I was a bit shocked when I read a while back that you can't discharge a student loan in bankruptcy.  Used to be that you could get rid of a private student loan in bankruptcy, but not any more.

The standard student loan repayment is ten years from the time that you quit school.  But if your income doesn't quite measure up you can usually qualify for the Income-Based Repayment Plan. "Income-based plans provide for payment of 15% of disposable income for up to 25 years, then the loan is forgiven."

Just between you and me: A"payment of 15% of disposable income for up to 25 years" is a tax, a rather substantial income tax.  Nice, isn't it?  You get that nice student loan from Uncle Sam and then he slaps you with a 15% income tax for the next quarter century.  Of course, there are ways of getting out of paying, like disability.  And I should think that if you are a loyal Democratic voter known to powerful people there must be a way...

What should we call this insidious system of taxation?  I have an idea.  Let's call it "debt slavery."  Although the current term used by liberal experts when applied to third world nations is now "debt bondage."

Debt slavery is particularly notorious in India, where it has been practiced since time immemorial -- or at least Vedic times, which amounts to the same thing.
Bonded labor involves the exploitive interlinking of credit and labor agreements that devolve into slave-like exploitation due to severe power imbalances between the lender and the borrower.
Hmm.  "[S]evere power imbalances between the lender and the borrower."  Couldn't happen here.

But think about it.  Student load up with debt at a time when they have no idea what kind of money they are likely to make, particularly in the humanities and the social sciences.  But debt is quite simply the anticipation of future income.  You say: look, I can expect to earn $67,000 a year for the next ten years if I get a college education instead of $47,000 a year if I don't so my monthly payment will be worth it.
But what student can make a judgement like that?  Maybe an engineering student or a computer science student.

What actually happens is that high-school graduates like Susie Goodgirl go to college because it is expected of them and they load up on loans because everyone else is doing it.  And being a good girl, Susie assumes that everything will come out right.  That's what women have been doing since the dawn of time.  When things don't go right -- well that's when you get Angry Woman Syndrome.

You can see why government has gotten into the act.  It makes no sense for a lender to make a student loan, not unless it has nice government subsidies or the coercive power of government to turn the loan into a tax.  And taxes, you know, can't be discharged in bankruptcy.

Of course, there's every reason for the government to cook up a system that shovels money at government schools.  That's because the people that work at government schools and government-grant consuming research universities, from president to janitor, are good loyal pro-government voters.  They live in places like Cambridge, Massachusetts, where something like 85 percent of people vote the Democratic ticket. Is "debt slavery" too harsh a term to use for our kindly student loan system?  You make the call.

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